Scrutiny to quiz P&R about fiscal policy proposals

The framework was published in November, proposing spending more on major projects and infrastructure over the next few years, with a knock-on impact on the calculation of the States’ structural deficit.

Scrutiny Management president Andy Sloan admitted that it was not an obvious issue to pursue, but was an important one for public finances and to enhance public understanding of the issue.

He said that the proposed framework was materially changed from earlier versions, moving away from numerical constraints towards a principles-based model.

‘The Fiscal Policy Framework might sound dull, dry and technical, but it goes to the heart of how our public money is managed,’ he said.

‘It underpins every major spending, taxation and borrowing decision the States makes.

‘It’s no exaggeration, it is the foundation on which all other fiscal decisions rest – and if that foundation is wrong, everything built on top of it is at risk.

‘Historically, Guernsey’s Fiscal Policy Framework has been built around clear, rules-based parameters, including explicit numerical limits.

‘That approach is widely used internationally because it provides transparency, predictability and a clear understandable basis as to whether the framework is being followed.

‘Given the scale of the changes being proposed, it is important to examine the framework in public. That is just good governance – Scrutiny’s role is to ensure accountability and transparency in policy-making.

‘The framework has evolved over time, and where significant shifts are proposed – as is now the case — it is right that their rationale is clearly explained and properly understood.

‘Scrutiny is not seeking to prejudge the change of approach, but it is entirely appropriate to understand why it is being proposed, how it compares with established fiscal practice, and how it is intended to maintain transparency, accountability and confidence in the management of Guernsey’s public finances.’

The Framework has put the ‘black hole’ in States finances at £98m., up from £77m. in the 2026 Budget.

It is due to be debated by the States at the end of the month.

In launching it, Policy & Resources said the central principle was about ensuring long-term financial stability.

‘This is our highest level of fiscal policy and defines what good management of our finances should look like over the long term,' said vice-president Deputy Gavin St Pier.

‘It gives us a framework against which we can determine whether our finances are heading in the right direction.

‘In agreeing the Framework, we are agreeing what the goal for our finances should be.’

The public hearing with the Policy & Resources Committee on the Fiscal Policy Framework takes place on Wednesday at the Castel Douzaine Room between 10am and noon. The Scrutiny Management panel will comprise president Deputy Andy Sloan alongside Scrutiny committee member Mark Le Page and Advocate Peter Harwood. The proceedings will be live-streamed on YouTube.