Last week it was announced that a deficit of £56.2m. was forecast by 2025, and in yesterday’s States meeting Deputy Peter Ferbrache said it could be worse.
‘The deficit is without taking into account inflation, many new reserve aspirations and significant pay increases.
‘The message is we simply cannot continue to increase spending in this term, and we will have to rigorously and ruthlessly prioritise the things we want to spend money on.
‘There is no time or money for vanity projects.
‘When we debate the Government Work Plan in July and consider funding and investment, we will need to carefully consider costs and benefits associated with our agreed priorities to ensure we can invest prudently and wisely within our scarce resources over this term.’
He referenced a States debate, driven by his predecessor Deputy Gavin St Pier, on assisted dying, as an example of vanity projects because it ‘took away resources’.
No indication has been given yet on which public services the axe will fall, but discussions with the community are planned, and briefings will be given to States members.
One body which will survive any cuts is Guernsey Finance, which promotes the island’s finance sector worldwide, and is in line to receive a significant uplift in funding.
The centrepiece of Deputy Ferbrache’s speech was the bleak financial outlook, but he remained committed to kickstarting the island’s economic engines.
‘It is of paramount importance though, that we ensure we invest in economic recovery, and just as important, where practical, that we enable investment in economic recovery from outside government.’
The island’s Covid response and returning passengers levels at the airport and harbour were embraced as proof that the economy can return to pre-pandemic levels.
During questions following the statement Deputy Ferbrache confirmed to Deputy Sasha Kazantseva-Miller that austerity was not the committee’s goal.
‘The word I would choose is realism, it sends a measure of realism, you cannot in your private life if you want to lead it prudently, spend more money than you’ve got coming in over a long period of time.
‘There will have to be realism which means that not everyone can get everything that they want, but there will still be, compared with most other places, much that can be done.’
Deputy David De Lisle asked for a post-Covid lightening of the tax burden on island residents.
Deputy Ferbrache said that the tax review panel would be publishing its findings in a few months’ time.
‘It is not the intent to increase the burden on anybody more than is necessary’.
Next week, under the heading of public sector transformation, a new online service called mygov is likely to be launched.
Digital personal tax returns will be the first part of this.