THE new government has unveiled its proposed spending plans for the next four years – including a multi-million-pound package of measures aimed at relieving some of the cost of living pressures Islanders are facing.
The intended 2027 to 2030 Budget, described by Chief Minister Lyndon Farnham as “measured and responsible” sets out plans for around £1.3 billion of spending on public services next year.
This marks an increase from 2026 when total expenditure sat at £1.28 billion, which the government primarily attributes to “inflationary pressures” in the document.
If approved, the biggest departmental spends in 2027 would be on health at £406 million and education at £253m.
It is the first Budget to be put forward by the new Council of Ministers, who took stewardship of their portfolios earlier this year following the election.
Treasury Minister Alan Maclean, speaking to the JEP, said: “What we’re seeking to do is to ensure there is greater resilience and stability in public finances – it’s a stronger financial level of discipline in the way in which we manage our finances.
“Looking into the future is what’s at the heart of this budget, it’s the beginning of a journey.
“We start with this and then we move on to a three-year budgetary period running between 2028 and 2030 – that period is going to introduce far more discipline than perhaps we’ve seen in recent years from the annual budgetary process and we’re also moving away from the assumption that expenditure can simply continue to rise year after year.
“What we’ve included in this budget is a step in the right direction – there’s a modest but important level of recurring savings at £21 million, and while delivering those savings, we are still prioritising spend into frontline services, which is really crucially important.
“The emphasis has to be on, and is on, value for money, productivity, prioritisation, and stopping unnecessary budgetary creep.”
Cost of living
A number of changes have been drawn up in a bid to support Islanders with the cost of living, which Senator Farnham pointed to as “the most immediate concern” held by many households.
For 2027, ministers are proposing to increase personal income tax thresholds and child allowances.
The changes would see the low-income threshold climb to £21,850, while child allowance would increase to £4,050. Additionally, childcare relief and enhanced childcare relief would rise to £8,300 and £21,550 respectively.
Fuel duty – a heavily discussed topic this year in the wake of the Middle East conflict’s impact on oil prices – would be frozen next year. Deputy Lucy Stephenson recently withdrew a proposition which, if approved, would have axed 10p per litre on fuel duty for the rest of the year following what she described as “constructive discussions” with ministers.
Other support measures put forward include a rise in subsidised nursery care for two to three year-olds by £2,150 per child, up from 15 hours to 20 hours a week.
Further targeted support would be provided through a family support payment of £250 per school age child for households earning up to £80,000 a year, as well as a one-off £200 top-up to the Community Cost Bonus.
The Budget also seeks to extend the free school meals initiative to secondary school pupils on the Jersey Premium funding scheme.
Alongside these measures, Social Security Minister Elaine Millar will propose that the Parental Grant is doubled to £1,800 for families with newborns or adopting a child.
However, the new Budget would also see some duty increases implemented, including rises of 1p and 5p on a pint of beer at the tap and a 75cl bottle of wine respectively.
An extra 88p of duty on a pack of 20 cigarettes is proposed, as well as a £347 jump in Vehicle Emissions Duty for the most polluting vehicles.
“Practical” support
Introducing the Budget in the document’s foreword, Senator Farnham said it sets out “a clear approach” for the years ahead, “supporting Islanders with today’s pressures while investing in Jersey’s long-term prosperity and maintaining responsible public finances”.
“The 2026 election gave Islanders the opportunity to make clear the issues that matter most to them,” he continued.
“They expect us to continue with policies and projects that are working, but also to be
prepared to make changes where improvements are needed.
“For many households, the cost of living remains the most immediate concern. Housing,
childcare and everyday living costs continue to put pressure on family budgets. Businesses
are also dealing with higher costs and an increasingly competitive environment.”
Senator Farnham added that the government was providing “practical support” in a bid to “help put more money back into Islanders’ pockets”.
“At the same time, we must ensure that the measures we introduce are affordable for the public finances and do not simply pass costs on to future generations.”
Infrastructure spending
The Budget outlines investment in buildings, infrastructure, IT and the new hospital totalling over £221 million in 2027.
Nearly half of that – £103.7 million – is earmarked for the government’s New Healthcare Facilities Programme.
The Budget is also the first to implement the Jersey Capital Investment Fund, a ring-fenced fund that underpins the government’s Investing in Jersey programme unveiled last year.
It is intended to protect infrastructure investment from short-term budget pressures and ensure resources are allocated for maintaining and renewing public assets.
In addition to the new healthcare facilities spending, over £102 million is allocated to capital and projects expenditure in 2027.
As has been the case with previous Budgets, an estimate of £10 million to be raised through liquid waste charging from 2028 onwards is cited – with receipts to be paid into the Capital Investment Fund.
Savings and a new Budget format
Writing in the document, Treasury Minister Alan Maclean noted that £21 million of recurring savings had been allocated for 2027, stating that the government “will continue to reduce unnecessary complexity and costs across government”.
Senator Farnham recently revealed that the civil service recruitment freeze introduced in 2024, which targets back-office functions and prioritises staff recruitment to frontline services, will continue into next year.
Senator Maclean said: “Departments will be expected to improve productivity, stop or reduce lower-priority activity and redirect existing resources towards areas of greatest need before seeking additional funding.
“Value for money is not measured by how much government spends, but by what Islanders
receive in return.”
Senator Maclean also highlighted the Council of Ministers’ plans to move to a three-year Budget from 2028.
“This will allow us to look more fundamentally at how government operates, how services are delivered, where productivity can be improved and how resources can be better directed towards the priorities that matter most to Islanders,” he continued.
“It will also provide a clearer long-term approach to expenditure and investment and set out a credible path to strengthen the Strategic Reserve and rebuild the Stabilisation Fund.”
The minister acknowledged that the three-year Budget would “involve difficult choices”, but contended that “it also gives us the opportunity to do things differently”.
“Controlling costs must go hand in hand with growing the economy. Without both, the choices become progressively harder: higher taxes, increasing debt, weaker services or greater pressure on our reserves,” he added.
“Budget 2027 starts that change. The three-year Budget for 2028 to 2030 will take it further: towards stronger public finances, a more productive government and a more resilient and competitive Jersey economy.”
Inflation and the state of the economy
States Treasurer Richard Bell added that the “level of geopolitical instability” is threatening the worldwide economy and causing inflation rates to spike.
“The non-banking finance sector has grown last couple of years, which is great to see – while banking sector profits are slightly down, real earnings have also risen over and above the rate of inflation, over and above the cost of living on average, and our balance sheet is a good place,” he said.
“The strength of the financial sector dominates the landscape in terms of the success of the economy going forward.
“We expect inflation to peak about 4.1% next year and then start to come back down, although we’ve probably heard that a few times before in recent years, and we are very much influenced by what’s happening across the globe.
“Unlike the past two years, when we’ve been talking about slight falls in the income forecast, we have an increase for 2027 income above the forecasts that were made in previous years.
