States to spend 5.3% more without Covid cost

The 2021 Budget outlines £469.5m. in revenue spending, £17m. of which is connected to Covid-19.

Stripping out the spending related to the pandemic, promised savings yet to be made and service developments to come, a like-for-like comparison still leaves a rise of 5.3% on this year.

The States also failed to hit its overall £4.2m. savings target this year, falling £1.7m. short.

‘The Covid-19 pandemic resulted in several workstreams being placed on hold for a number of months, which has consequentially delayed the delivery of savings,’ the Budget says.

Within the Budget is a proposal to let Education, Sport & Culture and Home Affairs off previously promised savings amounting to £3.1m. because they have not been delivered for several years.

As the UK Government considers a pay freeze to help balance its books in the wake of the pandemic, Guernsey’s Budget has put aside £17.9m. for unsettled public sector pay awards from last year and an allowance for 2021 deals.

There is a £10.18m. allowance in the Budget for new services, such as £5m. for new drugs and treatments and £275,000 for the nature strategy, with P&R turning down requests for a further £590,000 from committees.

But a warning has been issued that this type of spending from last term cannot continue.

‘While the Policy & Resources Committee is recommending that funding is provided for all service developments approved by the States since consideration of the 2020 Budget report, either within recommended cash limits or as part of the service development allocation.

‘This has increased the deficit in 2021 by approximately £6.5m. and continuation of such increases is no longer possible within the revenue confines of the States’ current tax base.’