Alderney States vote leaves it with a hole in its Budget

The Policy and Finance Committee will now need to find other ways of balancing the 2021 Budget, either by finding further efficiencies or cutbacks, or by increasing other fees and charges, or a combination of the two.

A lower Alderney Property Tax increase may also be considered.

With occupiers’ rates and tax on real property combined for 2021 as a new APT, members were asked to approve a 5% increase on 2020.

Finance Committee chairman Chris Harris told members the purpose of the proposed increase was to allow flexibility in meeting spending requirements as well as starting to build a ‘modest’ contingency reserve to help manage expected fluctuations in income and expenditure.

With Alderney empowered to collect its own property tax and duties in 2021, the island is no longer reliant on Guernsey for half of its revenue budget.

The estimated yield from these revenues was assessed against the grant that would have been received had the financial relationship not changed.

A transitional grant of £300,000 will be made by Guernsey in 2021 and no further non-emergency grants will be received by the States of Alderney to support the revenue budget from 2022 onwards.

‘Except for emergencies that are outside our control, we no longer have the opportunity to go back to Guernsey for support if we have exceeded our budget,’ Mr Harris told the States meeting.

‘Now we have financial independence, our challenge is to promote high standards of financial governance, budget responsibly within our means, and demonstrate value for money in how we use public money.’

Members also voted to maintain water rates at 2020 levels and agreed that rates of fuel and document duty, both Alderney’s responsibility from January, will remain consistent with Guernsey’s for next year.

The 2021 Budget agreed by members shows a surplus of £77,000 after a contribution to reserves.

The island’s capital programme, funded mainly by Alderney Gambling Control Commission surpluses, has been subject to a review resulting in around £3m. of potential savings while ring-fencing essential projects.

The commission’s contribution has been falling. It was expected to put in £1.23m. in 2020, but revised figures put this at £1m., while the 2021 Budget shows its contribution at £912,000.

The budget shows £2.246m. being spent on capital projects in 2021, down from the £5.789m. budgeted in 2020 which was revised down to £3.26m. in the latest figures.