A MOVE by the previous government to cut the grant to the Social Security Fund and spend it on capital projects has been criticised as “poor practice” by the current Treasury Minister.
Senator Alan Maclean was asked about the matter during a hearing with the Corporate Services Scrutiny Panel on the Budget for 2027, which will be debated by the States Assembly next month.
The 2026 Budget, approved by States Members in December last year, saw £50 million taken from the grant to the Social Security Fund, which is financed through contributions from employees and employers and used to provide benefits such as short-term incapacity allowance, carer’s allowance and old age pensions.
The decision brought criticism at the time from the Fiscal Policy Panel, which described the move as “not prudent”, and by veteran backbencher Sir Philip Bailhache, who brought an amendment to the policy but was defeated by 25 votes to 15.
Facing questions from a panel chaired by Deputy Lyndsay Feltham, who was Social Security Minister between January 2024 and June of this year, Senator Maclean said that there was a formula in place for the recommended grant and that the previous Council of Ministers had decided to diverge from the formula.
He acknowledged that the formula had been in place for around 15 years and that the results of a review were expected in early 2027, but made clear that he disagreed with the decision taken by the former Council of Ministers.
“The reduction of the grant is not something that I would support or have supported historically,” he said. “I think to use that money for revenue expenditure is poor practice – we may well change [that] when we have the review, but to have done it in advance of that is something I think was not a good decision at the time.”
Senator Maclean said that while he had not felt able to restore the grant to the recommended level for the 2027 Budget, his intention was that this would happen by 2030.
While Deputy Feltham did not return to the Council of Ministers after the June election, Senator Lyndon Farnham has remained in the role of Chief Minister, while Senator Elaine Millar has shifted from Treasury to Social Security.
In the build-up to last year’s Budget debate, Deputy Feltham defended the decision, saying that use of the money to support the government’s capital programme and living wage transition plans was a matter of “inter-generational fairness”.
The Treasury Minister, who has expressed his determination to avoid deficits on the Island’s balance sheet and to bring greater discipline to departmental spending, was also asked about spending on preventative healthcare. Deputy Hilary Jeune pointed out that there was evidence that investment in areas such as cutting child obesity would save money in the future.
Senator Maclean said: “I’m a great fan of preventative health, I think it’s definitely the right way to go.
“The difficulty for Jersey, and for most jurisdictions, is that this type of investment doesn’t really align very well with political cycles – you invest in preventative now and it’s going to be beyond the next election, and probably the one beyond that, before you start seeing the benefits.
“But I think it’s the right thing to do for the long term, and that’s why we’re supportive in principle of the direction that the Health Department have taken in looking at that matter.”
