Guernsey Press

‘Unavoidable delay’ to work to deal with financial black hole

Replacing the Policy & Resources Committee late last year has caused long delays to numerous projects aimed at dealing with a looming black hole in States finances.

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Deputy Peter Ferbrache faces the media after the Policy & Resources Committee he led was ousted just before Christmas 2023. (Picture by Peter Frankland, 33245321)

Key policy reviews on motoring taxes, a visitors’ levy, the labour market and reducing public sector costs are behind schedule.

P&R has already missed deadlines set by the States for submitting proposals on the first three issues and has refused to answer questions about when they will be submitted.

The previous P&R, which was ousted by a vote of no confidence just before Christmas, intended to submit proposals on the fourth issue – reducing costs – this summer, but a sub-committee of P&R leading the work recently delayed its recommendations, although the Assembly’s deadline of the end of the year may still be met.

All the work was directed by the States Assembly early last year when it threw out proposals for the largest tax rises in decades.

The current P&R freely acknowledged that the replacement of the senior committee mid-term had slowed down the work.

‘P&R, working with other committees, is progressing the resolutions from the 2023 tax review debate,’ said P&R president Lyndon Trott.

‘Some of this work, in particular that which was due to report back in the early part of 2024, has been unavoidably delayed as a result of the change of membership of the committee.

‘The new committee has had to review the considerable work carried out so far and undertake further work to consider if it intends to continue in the same direction.’

States financial planning has previously assumed that one of the issues under review – additional motoring taxes – would generate £10m. annually from the middle of next year, which would require the approval of the Assembly.

Since its election, the current P&R has consistently set increasing the supply of housing as its number one priority, and it is understood to be prepared to accept slower progress in some other areas of its mandate if it helps to accelerate work to alleviate the island’s housing crisis.

However, it said it still hoped to comply with States directions from the tax debate where the deadline for making recommendations was later this year – notably on reducing costs by £10-16m. a year and a review of States employees’ terms and conditions.

The presidents of other committees involved in various aspects of the projects now delayed – Deputies Lindsay de Sausmarez, Neil Inder and Peter Roffey – declined to comment further beyond P&R’s replies.

P&R said it was important to develop the right proposals, rather than the quickest, to deal with the hole in States finances which treasury officials have estimated could be as much as £100m. a year by 2040.

‘The committee fully appreciates the urgency and importance of finding solutions to the sustainability of public finances, but is also conscious that the right proposals need to be taken forward in order to secure support from the Assembly,’ said Deputy Trott.

‘Proposals brought forward in haste which fail to find support will only mean the broader problem is unaddressed for longer.

‘The committee therefore believes it is right and reasonable that it takes a sensible amount of time to review and discuss what the appropriate recommendations are, mindful the members were appointed only at the very end of last year.’