On the eve of a debate about ministers’ proposed priorities for the next three years the Corporate Services Scrutiny Panel has urged politicians to recognise just how precarious Jersey’s financial position currently is.
It says that it has major concerns about economic forecasts, particularly given that many financial assumptions have been revised down further since the publication of the 2015 Budget.
FEW would argue with today’s assessment from the Corporate Services Scrutiny Panel that the state of Jersey’s public finances is ‘precarious’.
There is a very real possibility that there is a structural deficit on the horizon, and the panel is rightly concerned that it could be bigger than many are anticipating. Such warnings, coupled with those of independent experts such as the Fiscal Policy Panel – which earlier this month arrived at very similar conclusions, must not go unheeded.
As States Members this week discuss the proposed strategic priorities of ministers in the next three years the funding of those policies is going to be key.
The rest of the House needs real answers to the questions that are begging to be asked on this subject. And they must be backed up with tangible evidence and specifics before any firm decisions are made.
As a result, it warns that the size of the possible structural, reoccurring deficit facing Jersey, as identified recently by the independent Fiscal Policy Panel, could be bigger than anticipated.
States departments have already been tasked with shaving two per cent off budgets to help plug the gap, although the Health Department will only have to find one per cent.
And with little economic growth currently on the horizon the Scrutiny panel says it is unlikely that the Island will get the chance to top up its reserves to previous levels any time soon.
In comments lodged with the States today the panel says: ‘The panel has noted that since the publication of Budget 2015 many of the economic assumptions have been revised down further, with implications for the levels of profitability of the finance industry and tax revenue arising there from. The panel is therefore concerned that the size of the possible structural deficit facing the Island could be much larger than envisaged.
‘The panel considers it important that States Members and the public at large understand that there are very few additional sources of funds available other than the Strategic Reserve.
‘Because of the economic situation the Island now finds itself in, the panel is of the opinion that difficult and hard decisions will need to be made now in order to ensure our current and future prosperity.’
It adds: ‘The panel is concerned that additional charging mechanisms may be required in order to fund spending which seemingly cannot be funded from existing revenues.’
This week Members are due to have an ‘in committee’ debate about proposals put forward by ministers to make healthcare, education, economic growth and St Helier key priorities. No decision will be made at the end of the debate and the feedback from the House will instead be used to strengthen ministers’ policies ahead of the publication of their Strategic Plan later this year.
Other items due to be considered by States Members this week include various regulations related to a new approach to planning appeals.
Last year the States approved the new approach to make the process cheaper, quicker and fairer for Islanders who want to challenge decisions.
The existing system requires an often costly involvement with the Royal Court in order to appeal against the refusal or approval of a planning application.
Under the new system Environment Minister Steve Luce will not be involved in determining planning applications, but will remain independent so he can adjudicate over planning appeals filtered through a planning inspector.
Once the new system is in place Islanders will be able to make their case to a planning inspector who will review the arguments on both sides before making a recommendation about the appeal.
This week’s States sitting is due to begin on Tuesday at 9.30 am with question time.
SERIOUS concerns were raised last month about how ministers propose to pay for plans to put four key areas at the heart of government policy at a time when States departments are already under increasing pressure to save money.
The unveiling at the end of January of the Council of Ministers’ proposed strategic aims, which include making healthcare, education, economic growth and St Helier priorities in the next three and a half years, received a lukewarm response from backbenchers, some of whom criticised a ‘lack of meat on the bones’.
They also questioned how ministers planned to fund the policies required to see the priorities through, particularly at a time when departments have been told to find savings of two per cent – around £12 million in total annually – in 2015 and future years.
Reform Jersey, the Island’s only political party, said that spending would have to be cut further or taxes raised to fund the plan and tackle the ‘black hole’ in public finances.
Islanders were asked for their feedback on the proposals before ministers lodge the Strategic Plan, which sets government policy for the next three and a half years, with the States on 6 March.
It will then be debated by Members the following month. Deputy Jackie Hilton, who topped the poll in St Helier 3 and 4 at the last election, said: ‘I don’t think we can argue with anything they are saying but the nub of the problem is going to be, how are we going to be paying for that?
I will be very interested when the Medium Term Financial Plan comes forward in June – actually how the Council of Ministers plan to pay for everything they are suggesting they are going to do.
‘We need more meat on the bones at the moment.’
Reform Jersey chairman Deputy Sam Mézec, who is also a St Helier Deputy, said that the fact that Jersey would not have a Strategic Plan agreed and in place until at least six months into the new political term showed how inefficient the States system was and why party politics was needed.
He added that the proposals made ‘all sorts of unachievable promises’ at a time when public finances are already stretched.
‘Saying “we want to improve the wellbeing of Islanders” is all well and good, but they haven’t even attempted to explain how they will do it,’ he said.
