Exceptional 2021 does not affect long-term

The latest figures show a greatly improved financial position, but the foreword to the document states that ‘the exceptional circumstances experienced in 2021 are not expected to continue’.

Accumulating cost pressures are anticipated to put pressure on budgets as service demands increase.

This includes addressing the waiting list for operations, which has increased significantly as a result of lockdowns.

There are also unquantified costs for ‘living with Covid’.

A lack of affordable housing is another issue which could impede economic growth.

But in the here and now, 2021 will go down as an exceptional year, the Policy & Resources Committee said.

And Mark Helyar, the treasury lead, paid tribute to the hard work of the community in stepping up to meet the challenge.

‘That performance is down to the behaviour of the public and they should be commended for the way they responded to calls for lockdown and the self-discipline.

‘One of the big differences in numbers is the cost of the first lockdown compared to the second lockdown. Fewer people asked for support, lots of businesses decided they wouldn’t request support, and the savings that we made as a result of that are reflected in this Budget.’

However, looking to the future Deputy Helyar said there was still a big deficit looming, albeit with some money trimmed off it.

‘For the projections over the term it takes us to £5m. to £10m. better off over that period, it doesn’t close the gap significantly, and the gap we’re talking about closing is £87.4m., but with £5m. to £10m. off that now.

‘The strong results in 2021 will not all translate into our baseline, and we must not forget that we are facing economic headwinds and have pent-up demand in the system creating cost pressures.’

The States-owned airline Aurigny is forecast to make a loss of just £1m. next year, compared to £16m. this year.

P&R president Deputy Peter Ferbrache said the £1m. figure was uncertain, because a lot will depend on post-Covid economic recovery.

‘It depends how far the economy bounces back and if people start getting on aeroplanes and whether they can fly to certain places. A lot of people won’t fly if they can’t get to America or South Africa, so it depends on that.’

The Budget in three words

HELEN BOWDITCH asked the two P&R members and the States treasurer which three adjectives they would you use to describe the Budget?

Deputy Peter Ferbrache, the president of Policy & Resources:

Good, solid, and pragmatic

Deputy Mark Helyar, treasury lead for Policy & Resources:

Exceptional (looking backwards at this year), prudent and efficient

Bethan Haines, States treasurer:

Strong, cautious and planned (because all of this was planned out in the Government Work Plan)