Black hole now £135m. after investments take big hit

The government also ran at a loss, but this was just £3m.

States finances were crippled during the year by a collapse in investment income, which recorded an £88m. loss, compared to a £84m. profit the previous year.

Income for the year was well down on forecasts as a result, but the States actually spent less than expected during 2022.

The operating deficit of £3m. came despite income tax receipts running ahead of budget and 7.7% up year-on-year.

States committees also generally spent less than expected, apart from Health & Social Care, which overspent by £3.7m., reflecting high demand for services and its heavy use of agency staff to cover vacancies.

‘An operating deficit of £3m. means we’re already not bringing in enough to cover costs,’ said States treasury lead Mark Helyar.

‘This continuing rise in demand for health services is impacting our public finances now – this is not a problem for the future any more.’

The States’ gradual move to presenting accounts in line with international public sector accounting standards is responsible for some of the variance in figures.

It has included fixed assets for the first time, reflecting the value of States-owned land, buildings, vehicles and equipment, and so the accounts also include the depreciation of these assets, totalling some £30m. for 2022.

This depreciation, interest payable and received, and the investment losses made up the overall £135m. deficit.

‘What is positive is that we continue to move forward in our transition to international public sector accounting standards,’ Deputy Helyar added.

‘As we get nearer to completing the transition, I hope it puts to bed the myth that the accounts, which are independently audited, aren’t accurate or cannot be relied upon.

‘This has never been the case, but it’s become a way of distracting from the genuine problem of our deficit which we must deal with urgently.’

P&R has now asked islanders to assist in the planning of cutting spending of £16m. a year within five years.

It is asking for every person to submit three suggestions in a survey which can be found at gov.gg/costreductionpublicsurvey