States committees given one month to find £16m. of savings

Policy & Resources’ new savings sub-committee has set a deadline of 15 June for committees to provide a long list of services which could be charged for, run differently, outsourced or stopped.

The sub-committee, which is led by Deputy David Mahoney, intends to report to P&R by January with proposals to reduce States’ spending by at least £10-16m. a year by the end of the decade.

P&R is under direction to lead a States debate on the issue by the end of next year.

‘Realistically, there is a need for difficult and unpalatable decisions, which we would all be reluctant to take in normal times, involving stopping or reducing services, as well as delivering services differently, such as via outsourcing,’ said Deputy Mahoney, in a letter sent to all States members this week.

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‘This therefore requires much more radical thinking, together with shift change in risk appetite where this is palatable. Without this approach, the exercise stands little chance of achieving its aims.’

The sub-committee was set up following the States’ failure earlier this year to agree a tax and spending plan to deal with a projected funding shortfall of up to £100m. a year.

It contains three other deputies – Sasha Kazantseva-Miller, Carl Meerveld and Simon Vermeulen – and St Martin’s constable and long-time motor trader Dave Beausire.

The savings they hope to identify are in addition to reductions in committees’ cash budgets of between 2.5% and 3% which P&R has said it will propose in the States’ 2024 budget.

P&R intends to exclude Health & Social Care from the 2024 budget cut, but not from the cost reductions being led by the savings sub-committee.

‘We are aiming for a long list of options, captured alongside the risks and downsides that these entail, which means a healthy list of suggestions from all areas,’ said Deputy Mahoney in the letter.

‘Please now give time and consideration to how your committee and respective service areas can make significant cost reductions over this time horizon.'

The sub-committee wants committees to identify savings and estimated value under the headings of generating new or increased income; restructuring services, including outsourcing and commissioning; restricting access to services, including means-testing, and reducing or stopping services.

A previous savings programme launched in the late 2000s – known as the financial transformation programme – produced annual savings approximately double the amount being considered by the current initiative.

Deputy Mahoney said that similar savings exercises carried out previously had led to ‘a degree of salami slicing, resulting in a fixed percentage reduction being applied across services’ and that his sub-committee was ‘convinced that such an approach is not the answer for this exercise’.

Committees have been told that they – not P&R or its sub-committee – will be expected to take responsibility for identifying and delivering the savings.

The sub-committee has also said it will also be looking to the public and States staff for ideas about reducing costs.