JERSEY’s most senior civil servant painted a problematic picture of Jersey’s “aspirational” and “non-prioritised” politics – and the costs stemming from it – during a Scrutiny hearing earlier this week.
But what exactly was Dr Andrew McLaughlin’s diagnosis, more than two years after taking up his position as government chief executive, and prescription for remedying Jersey’s ills?
“Inflationary” level spending
A senior banker by trade, Mr McLaughlin told the Public Accounts Committee that the importance of “prioritisation” was something he had tried to communicate during his time in the role.
“I do think that a Budget of £1.35bn, which has grown by £650 [million] in about eight years, there’s serious questions to be asked there,” he said.
“In prioritising, one of the ways we can improve our resilience is to spend less and I think the level we are spending at – according to the chief economist – is inflationary in its own right.”
Approved by the States Assembly in December, the latest Budget includes planned spending of £1.28bn on delivering public services in 2026.
Mr McLaughlin said: “I genuinely struggle to understand why the public service has to spend more than £1bn to run in Jersey.
“So that means to me there’s a couple of hundred million which might be best going into reserves and then doing stuff when you have to.”
Be more disciplined with the Rainy Day Fund
He noted the “repeated” advice of the Fiscal Policy Panel, which has regularly raised concerns that the Island’s Strategic Reserve, known as the Rainy Day Fund, has not been sufficiently topped-up over the years.
“If you think about your own personal finances, that’s like putting a lump sum into a pension and then not putting any more in,” Mr McLaughlin continued.
“Most people each month would say, okay, put a little bit in trying to get the thing to go over time.”
He acknowledged that “we’re not going to double the reserve in one government because the money’s not there”, but added: “We should have the discipline to say, let’s just make sure every year we stick £50 million, or whatever the number is, doesn’t matter, into that thing, into the rainy day fund.
“Hopefully we never have to use it – but if we do, try and get it up to the sort of size that would be required.”
A political system that is “additive”
“Aspirational” and “non-prioritised” politics
One the reflections that Mr McLaughlin highlighted throughout the hearing was that “Jersey’s politics is additive and aspirational”.
He warned this approach has caused the Island to import the standards of larger jurisdictions that “take us beyond our actual risk appetite”, having already told the Committee that “government takes on stuff it probably doesn’t have the budgets or the capacities to do really well and it turns into operational risk”.
And he contended that “the aspirational, non-prioritised nature of Jersey politics has led us to a position where things that really need [to be] funded sometimes don’t get it, and things that I would regard as discretionary do get money”.
All politicians want to do is tax and regulate…
Another issue raised by Mr McLaughlin was that “we are addicted to the hard levers of government”.
He explained that ministers could makes changes through taxation, spending, regulation and legislation, but that they could also “convene, communicate and provide oversight”.
He described the latter three as “soft levers” and stressed that: “One of my concerns about Jersey and its current politics and political system, is the preponderance of hard levers and the under-use of soft levers by ministers and assistant ministers.
“If there’s one thing you try and change quickly, it would be to try and get people to be better with the soft powers and not be drawn to the hard powers.
“Because people seem to come into office wanting to either tax, spend, legislate or regulate. They don’t seem to come into office wanting to convene and discuss and to shape things without using those hard levers.”
We are not a big country!
The concluding theme touched upon by Mr McLaughlin was that the Island has been “behaving like a big country”.
“I just think you’re taking a very technocratic approach to an Island that hopefully everyone loves,” he said.
“You have to start with you and work your way out, not start with the world and work your way in. And I think that’s one of our problems. We’ve adopted all this stuff – let’s be honest, we’ve had a lot of people come into the Island from bigger places, informed by their experience of bigger places.”
As an example, he said Jersey had “effectively” adopted UK fire standards that the local service needed to source extra resources to meet.
“Even if you took the smallest fire service in England, there’s still many things that we would ask our firefighters to do here that they wouldn’t have to do.”
