MINISTERS have spelled out their determination that the government gets a grip on spending, particularly in relation to health, as the first Budget of the new political term was unveiled.
Total spending of £1.3 billion, including £405 million allocated to the Health Department, is spelled out in the draft Budget, which will be debated in the States Assembly in December.
Measures to help Islanders with pressures resulting from increases to the cost of living at the top of the list of ministerial strategic priorities and matched this in the Budget, which includes additional support for families with children.
Chief Minister Lyndon Farnham said: “We are providing practical support to help put more money back into Islanders’ pockets, particularly for families facing the greatest pressures.
“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.”
The range of measures will be funded through better-than-forecast income for 2027, total recurring savings of £21m and a resolve to rein in spending.
Treasury Minister Alan Maclean said the landscape in the Health Department, with its £405m spend for 2027, had changed significantly since he ended his previous stint as Treasury Minister.
“When I retired in 2018, I remember being surprised and disappointed when health spending breached £200m, so that that gives an idea of the direction of travel,” he said. “The growth in recent years has been significant.
“Health spend elsewhere around the world typically seems to run at a certain percentage above inflation, but I think the the point about health is we need to be certain that every pound invested represents value for money – just because it’s health it doesn’t mean it gets a blank cheque.
“Islanders expect a first-rate health service, and I believe we have an excellent health service, but that doesn’t mean we can just spend indiscriminately – we do need to make certain that we target our expenditure for the best returns, and that applies to health as well.”
While he recognised that some Islanders might have wished the government to go further than the freeze on fuel duty that is included in the Budget, Senator Maclean said he wanted to take a more targeted approach in using an increase in fuel income forecast at 7.2%.
“We weren’t so keen on fuel duty reductions, which were suggested by some, is because that’s not targeted, and would go to everyone, including those who probably don’t need help.
“We prefer the money to be prioritised to the areas of greatest need, so we’re taking some of the additional revenue from fuel duty and putting it into supporting families and pensioners, and those most in need – that’s what we’ve got to have in our mind looking forwards.”
He added that “the heart of this budget” is to offer greater resilience and stability in public finances but admitted that the government is at “the beginning of a journey”.
The single-year Budget, drawn up since the Council of Ministers was finalised at the end of June after the election three weeks earlier, will be the last of its type with Senators Farnham and Maclean intending that a three-year Budget covering 2028-30 will be published in 12 months time.
Senator Maclean said: “That [three-year] budgetary period is going to introduce far more discipline than perhaps we’ve seen in recent years from the annual budgetary process.
“We’re also moving away from the assumption that expenditure can simply continue to rise year after year, and what we’ve included in this [2027] Budget is a step in the right direction.”
