THE previous government was ‘too lax with the purse strings’ and promised efficiencies were ‘not appropriately delivered’, the Treasury Minister has said.
Deputy Ian Gorst – who served as External Relations Minister in the previous administration – also reiterated his stance that the Island should not be preparing to borrow huge sums, which could potentially change the approach to funding for the new hospital project.
This week, the Treasury Minister, alongside Social Security Minister Elaine Millar, unveiled an emergency budget designed to help Islanders tackle the growing cost-of-living crisis. It featured increased tax breaks, social security cuts and benefit hikes and will be debated after the summer recess.
Beginning his four-year term in charge of the Island’s finances, Deputy Gorst said that delivering ‘value for money’ would be his key aim after years of overspending.
He said: ‘I think over the last four years government was too lax with the purse strings. Too much money was baked into the bottom line of departments, efficiencies were not appropriately delivered and I said I think we were planning to borrow too much.
‘That doesn’t mean to say that underlying strength of public finances isn’t strong – there are billions of pounds in reserves and we have got increasing revenues.’
Last year, then Senator Gorst brought an amendment to the Government Plan to cut borrowing by £345 million. His proposal was defeated.
Deputy Gorst admitted that the pandemic had meant ‘difficult decisions’ had been made in the spending of hundreds of millions to support Islanders through Covid and that that was ‘exactly the right thing to have done’.
Jersey has traditionally been averse to borrowing, but the previous government confirmed plans to take on hundreds of millions of pounds in debt to cover pandemic-related costs as well as refinancing the Island’s public sector pension fund liability.
And with interest rates sky-rocketing in recent months, the bill for the new hospital could suddenly be far greater than initially thought, should the government continue with the plans to borrow the full £800m – although Deputy Gorst suggested that the funding for the project would have to be rethought.
‘The challenge moving forward is addressing increased spending, delivering value for money, how we can better deliver on the efficiencies that were agreed that haven’t all been delivered,’ said Deputy Gorst. ‘How can we move forward, particularly with the hospital, without needing to borrow at the levels currently thought of? I am committed to delivering value for money for government.’
He added that, as Treasury Minister, he would challenge how public money was being spent by departments.
‘Treasury is a lot about facilitating other departments in an appropriate way. That should not automatically mean we are just going to find new money for them. What it should mean is together we undertake rigorous processes to make sure that it is not being duplicated already. That is necessary for delivering value for money,’ he said.
‘We have got to get away from departments saying “we have got a pressure, we need some money” and simply saying “we cannot do anything but give them some more money” – I have heard the majority of those arguments before.
‘You challenge each other so you can rebuild trust and Islanders can think government is delivering value for money.’
The minister said that he wanted to see the Treasury Department’s position ‘restrengthened’ across the civil service so that it was more ‘in control of the money and the spend’ but admitted that there was a ‘lot of work to do’ before Islanders were satisfied with the services provided by the department and Revenue Jersey.
He said that the need to deliver an emergency budget had focused minds around the Council of Ministers’ table and created a ‘positive dynamic’.
‘I think it was really important that this government and Chief Minister committed to listening to Islanders and what we have shown and she has shown is the new policy objectives that we want to get to grips with straight away,’ he said.
‘The cost-of-living crisis that the Island is facing was talked about during the election. When it comes to the general strength of public finances, the economy is performing incredibly well.
‘We have to seek to take action to ensure we do not go into recession, which other economies are forecasting they will.’
