Senior politicians battle over how to cut spending
SENIOR figures in the Tax Review debate are locked in a battle over spending cuts as the States enters the fifth day of its landmark tax debate.
Heidi Soulsby and Gavin St Pier – proposing the ‘fairer alternative’ option D – urged the Assembly to be more ambitious about reducing expenditure.
But Peter Ferbrache and Peter Roffey – backing Policy & Resources’ GST-laden option A – claimed that demands for larger spending cuts were unrealistic, and a risk to public services.
‘It is a counsel of despair to say that growth in government spending above the rate of inflation, particularly in health and care, is unstoppable and there’s nothing we can do about it,’ said Deputy St Pier.
‘Saying all we have to do is keep taxing more to fund it is flawed and we should not succumb to that thinking.’
Option D includes spending cuts in committees’ budgets of £4m. next year and another £4m. the year after. It also suggests that savings could be made by reviewing capital projects, staff terms and conditions, and the way services are provided.
‘£4m. of real terms savings in 2024 and 2025 out of a general revenue budget of nearly £600m. should be eminently achievable,’ said Deputy St Pier.
‘Given that nearly all cash limits in the last 10 years or so were underspent by committees, for us not to be able to shave off just over 1% in each of the next two years is under-ambitious.’
Deputy Ferbrache challenged the proposers of option D to state where they would make spending cuts.
‘Where do they see these savings of £8-9m. coming from? Tell us because we need to know,’ said Deputy Ferbrache.
‘When Deputy Soulsby was a very able president of Health & Social Care, employees went up by over 11%, the budget went up over inflation, and there was £4.3m. spent on transformation costs.
‘My vision of Guernsey in 2040 is that kids have got a decent school to go to, people have got jobs, we’ve got financial prosperity, our streets are clean, we’ve got a good health system, we’ve got a good police force and border agency.
‘People are living longer and they are going to need more medical care.
'The cost of that is not going to go down. We’ve got to decide what sort of society we are.
'I don’t want my grandchildren being in a Guernsey which is second-rate and tatty.’
Deputy Soulsby said savings could be made in health and social care costs without cutting the quality or range of services to the public.
‘There are further transformational changes which need to be made. Things are horrendous now, but we can’t allow the current position to continue,’ said Deputy Soulsby.
She criticised expenditure of around £11m. on agency nurses in 2022 – double the previous year – and said that consultants’ advice that savings of up to £25m. a year could be made was being largely ignored.
‘We need to look at the universal offer to look at what we should be providing free, what should be subsidised and what should be commissioned out – an intensely important piece of work,’ she said.
‘Saying we don’t need to bother about that and the savings aren’t there is really doing a disservice to the public.’
Deputy Roffey said that some of the alternative options being put forward in the tax debate – including option D – tried to ignore increasing pressure on services.
‘We really do have a problem of a large and growing structural deficit created by our demographic changes,’ said Deputy Roffey.
‘I do not believe it is being invented by officials at the Treasury or exaggerated by officials at the Treasury. I do know the first instinct in life, when faced with really bad news, is always denial, but it very rarely helps.’
