Revealed: Details of States plans for next four years
TAX, spending and savings plans for the next four years have today been unveiled with the publication of the Island’s first ever Government Plan.
Bringing together proposals for income generation and spending for the first time in years, the document includes plans to increase spending, while at the same time making millions of pounds of public sector cuts annually and increasing a number of taxes – including contributions to the Long-Term Care Fund.
And it includes proposals to invest in everything from new schools and education systems, mental-health facilities and arts and culture, to the environment, affordable housing and overseas aid.
At the same time ministers plan to plough tens of millions of pounds into the Island’s Stabilisation Fund to replenish previous withdrawals and protect against future economic uncertainty.
The plan, which will be debated by States Members in November, proposes:
- £100m efficiencies by 2023.
- Government spending up to £924m by 2023.
- Islanders’ Long-Term Care contributions up 1% from 1%.
- GST de minimis level down from £240 to £135.
- Duties on alcohol, tobacco and fuel all up – 6p on a litre of fuel, 49p on 20 cigarettes, 23p on a bottle of ‘strong’ wine and 6p on a standard-strength bottle of wine.
- Increases in personal tax allowances.
- £84m over four years ploughed in to the Stabilisation Fund.
- £349m capital programme.
- £10m affordable housing scheme.
- Overseas aid spending up.
- Creation of Climate Change Emergency Fund, with £5m initial deposit.
- Consideration given to creating an Infrastructure Fund.
Chief Minister John Le Fondré said he could not guarantee that the efficiency programme, which follows a major overhaul of the public sector since the arrival of chief executive Charlie Parker, would not lead to job losses but that he hoped there would be other solutions.
‘We cannot give a guarantee that there are never going to be any job losses,’ he said. ‘But what we can say is the focus is trying to deliver good frontline services for Islanders.’
He added that there were around 2,500 public sector staff due to retire ‘over the next few years’ and said: ‘It may be that we just do things differently.’
Asked if front-line services would be impacted, he said: ‘That is not the intention. It is to make sure services for Islanders are improved.’
The Government Plan sets out a four-year vision but the detail will be proposed by ministers, and considered by the Assembly, annually. Ministers say the new way of working provides the flexibility to deal with challenges as and when they happen, including those related to Brexit and a potential day one no-deal departure.
Ministers say that the increases in duty – which will represent more than 12%, or £2.08, on a litre of spirits – coupled with the changes to the GST de-minimis threshold would raise around £6m in revenue annually but would be balanced out by a similar amount going back into the pockets of Islanders thanks to increases in income tax allowances.
The proposed increases in Social Security and Long-Term Care contributions, 0.5% and 1% respectively, would raise ring-fenced revenue that would protect the funds into the future – in the case of the LTC without the need for further rate rises for 25 years.
According to John Quinn, who is leading the efficiencies programme, £20m of proposed savings for 2020 have been found, with the same amount again being worked on. Ministers will be updated about those proposals later this year and States Members informed ahead of debate on the plan.
The savings identified so far include reviewing supplier contracts, ‘smart’ purchasing – for example Health buying non-branded goods where possible – bringing back-office support services together and the more efficient collection of taxes.
Ensuring the Island’s largest collections of records – tax and health – are digitalised rather than kept in paper form as currently would also save money, he said.
More details in today's JEP