THE introduction of a new fund to underpin the government’s 25-year capital investment programme will create a need for “more discipline around revenue spending” and sticking within budgets, a scrutiny panel has heard.
Treasury Minister Elaine Millar made the comments during a hearing with the Corporate Services Scrutiny Panel yesterday afternoon.
Earlier this month, the minister lodged regulations to amend the Public Finances (Jersey) Law 2019.
If approved, the restructuring will replace the existing consolidated fund with two new funds – the general revenue fund for day-to-day public services and the Jersey capital investment fund for infrastructure and major assets.
The latter fund will underpin the ‘Investing in Jersey’ programme announced by the government last year.
The 25-year-initiative includes plans to invest in new homes, transport networks, water and drainage systems, coastal defences, schools, public spaces and other infrastructure improvements.
Commenting on the intended structure of the Jersey capital investment fund during yesterday’s hearing, Deputy Millar said: “We’re proposing that monies cannot come out of that fund for revenue spend.
“If there were underspends in the revenue fund, those underspends could go into the capital investment fund, but not the other way around. So it’s really about trying to preserve capital budgets for capital projects.”
Panel chair Deputy Helen Miles questioned whether this would “reduce the flexibility that you have at the moment to move money around”.
“For example, money has come out of the capital budget in order to fund overspends in health,” she added.
“So what else are you going to have to put in place to make sure that you’ve got that flexibility? Where else will the money come from if you can’t take it from the capital [fund]?”
Deputy Millar replied: “Well, we would have to fund that through general revenues.
“That feeds into the sort of underlying ethos that we have been trying to work towards in last couple of years, is really trying to rein in revenue spend. We are arguably spending more than we should be, given the state of our income.
“It will require more discipline around revenue spending and everybody remaining within budgets.”
