P&R has addressed 14 new written questions from Deputy David Goy, who has repeatedly raised concerns about transparency surrounding the use of consultants in formulating tax policy.
His earlier questions focused on consultancy costs, while the latest set challenged what he described as a ‘technical’ framing in P&R’s previous answers which allowed the committee to claim that no external consultants were engaged in the projections for the structural deficit.
Deputy Goy’s concerns included the role of the Fiscal Policy Panel, a three-member body of external economic experts commissioned by P&R to provide independent commentary on Guernsey’s fiscal framework.
P&R said the panel was better described as a ‘standing independent review body’ rather than a consultancy.
Its role was evaluative, not prescriptive, and its work was intended to offer challenge, scrutiny and governance safeguards, rather than produce solutions or policy design.
The panel’s retainer-based contract cost the States approximately £55,000 per year across 2023/24 and 2024/25.
Deputy Goy also highlighted a report by Deloitte, commissioned in 2021 as part of the Tax Review, arguing it formed a major part of deficit-related modelling.
But P&R said Deloitte’s work did not extend to calculating or projecting the structural deficit itself.
‘The vast majority of the analysis supporting the Tax Review was conducted internally by Treasury officers,’ the committee said.
This included all revenue projections, household impact modelling and inflation analysis relating to a potential goods and services tax.
Deloitte’s remit, it said, was limited to assessing the shortlisted tax options’ potential impact on the wider economy.
The contract with Deloitte cost £125,000.
Ernst & Young was also paid nearly £200,000 for a corporate tax review commissioned by a States resolution.
P&R said EY did not make recommendations on GST itself, but the firm’s analysis formed part of the broader evidence base considered during Phase 2 of the Tax Review.
The committee confirmed no other external parties were engaged to analyse, advise on or model the structural deficit.
All numerical projections were produced in-house.
Deputy Goy had argued that references within P&R’s reply documents, including links to external reports, contradicted the committee’s earlier claim that no consultants were involved in deficit-related projections. He queried what the approximate £430,000 outlay on external parties was for if the engagements played no part in deficit analysis, projections, or the GST proposal.
‘What precisely were they commissioned to deliver? Was their ultimate intention to provide external validation for a GST conclusion the Tax Review Steering Group had already reached?
‘I will leave it to islanders to judge for themselves what the nearly half-a-million pounds of fees paid to external parties are actually for.’
