A PUBLIC sector recruitment freeze should be retained throughout the entire four-year term of the next government amid increasing pressures on States finances, the head of the Island’s civil service has said.
Dr Andrew McLaughlin said the next set of policy makers will have to be disciplined around the size, spending and strategic future of the entire public sector and its arms-length organisations.
The Island is due to go to the polls in June, with Dr McLaughlin warning the next Council of Minister that they will need to consider how Jersey can sustainably support itself, grow and become more efficient in a changing global landscape.
He said the government needs to continue avoiding expenditure in recruitment fees, adding that he would recommend the freeze “continue for the whole of the next government, but certainly for the rest of this calendar year”.
And, speaking at a Public Accounts Committee hearing yesterday, Dr McLaughlin – who is a trained economist – said the next government should take into account the “titanic” risk Jersey faces of heavily relying on public revenue generated by the finance sector – which equates to around £600 million.
He said: “The titanic issue for the public finances is the extent to which [Jersey’s] business model relies on [being] an international finance centre and the tax revenues it generates.
“Any disturbance to that industry, and therefore to the tax yield from that industry, is the level one risk to economic growth in Jersey.”
He added: “I don’t think we should be relying on that £600 million as it stands today. I think it’s risky to assume that money is for keeps.”
The chief executive said that several of the Island’s fiscal challenges were as a result of a lack of long-term strategy or multi-year plans and suggested a return of four-year government spending models rather than an annual budget system to prevent repeating departmental overspends.
“[An annual budget] adds to the tendency to overspend and fiscal ill discipline,” Dr McLaughlin told the committee.
“I’ve recommended strongly that the next government move back to one plus three, but effectively a four-year budget.”
He also stressed the need for a review and re-structure of the “expensive” arm’s-length organisations.
“I think the next government would be better off taking a step back and thinking: why, in a place the size of Crawley, have we created 23 [arms-length] bodies since 2011?
“Why in a place the size of Crawley, have we created five chief executive positions at the equivalent of my level in that time to be able to run this tiny place?
“We need to figure out if we still need all these things delivered because it’s a very expensive.”
