States spending set to increase in 2024
STATES spending is expected to increase by 1% above inflation next year.
Property owners face a hike in rates, higher earners can expect to pay more tax, and smokers and drinkers are likely to see inflation-busting increases in duties.
Deputy Mark Helyar announced the proposals yesterday as he unveiled his fourth budget as Policy & Resources’ treasury lead.
The draft 2024 Budget also includes a 7% increase in the personal tax allowance, which would raise it to £13,900, and a continuation of the pause on withdrawing tax relief on mortgage interest payments.
P&R has estimated that the measures will result in a general revenue surplus next year of £24m., but a deficit of £13m. once depreciation of States assets is taken into account.
‘We’re in an extremely difficult financial situation and the Budget which covers the year ahead is not able to provide all the solutions.
‘That’s really down to the longer-term decision the States will need to make in the funding & investment plan debate [next week].
‘But we’re looking to do what we can to minimise the deterioration of our financial position in 2024, while not impacting people on lower and middle incomes,’ said Deputy Helyar.
P&R is proposing an average increase of 17% in domestic property rates with lower increases for smaller homes and higher increases for larger properties.
Commercial property rates would go up by 7.5%, except commercial car parking buildings, which would increase by 20%.
A new tariff – set at five times the standard tariff – would be introduced for unoccupied properties and derelict glasshouse sites.
And higher earners would face a reduction in the level of their annual income at which they would start to lose personal allowances – down from £90,000 to £80,000.
P&R asked most committees to reduce their budget requests by 2.5% below inflation, but this failed in almost every case.
However, P&R rejected a request from the Health & Social Care Committee for an additional £10.4m. on top of an inflation allowance of £5m., and instead proposed an additional £4m. while acknowledging that HSC faced ‘an enormous challenge’ to remain within budget.
The States will debate P&R’s draft Budget in November.
