All committees except health asked to make budget cuts
All States committees except Health & Social Care will be asked to make budget cuts of between 2.5% and 3% next year.
Policy & Resources president Peter Ferbrache told the States yesterday that other committees would need to find savings which could total up to around £10m. in real terms in 2024.
His warning followed deputies’ recent failure to agree a plan to raise taxes by tens of millions of pounds a year. And he told the States that investment losses now projected at nearly £50m. were expected to leave a deficit in public finances of about £60m. last year.
‘The 2024 budget will be developed on the basis that there will be no overall real terms growth in government expenditure,’ said Deputy Ferbrache.
‘Given unavoidable cost pressures within HSC and elsewhere and some new service developments which we cannot avoid funding, this will lead to committees needing to deliver real terms savings of between 2.5 and 3%. We don’t pretend that will be easy but that is the reality of what is needed, assuming the States agrees [because] we can only lead a horse to water – we can’t make it drink.’
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The 2024 budget will be presented by P&R and debated by the States in the autumn. Its plan could mean significant cuts for some committees – including about £2.5m. for Education, Sport & Culture and more than £1m. for Home Affairs – at a time when inflation is pushing up prices by about 8% annually.
Employment & Social Security president Peter Roffey, who backed P&R’s defeated tax-raising plans last month, feared the senior committee was now relying too much on cutting costs.
‘Following the failure to realise any meaningful output from the recent tax debate... any attempt to balance our books in the medium term by revenue cuts in spending alone is doomed to failure,’ said Deputy Roffey.
‘Therefore, however hard and frustrating it might be, we are obliged to look once again at ways of significantly increasing the States revenue to cope with the demographic challenges that this island faces.’
Deputy Ferbrache said Deputy Roffey was ‘absolutely right’ and urged the States not to ‘sit around and be a lame duck Assembly for the next two years or so’.
He said P&R’s autumn budget would also include new proposals to increase States income, but they have not yet been finalised.
