The States had an operating surplus of £45m. last year and has said that the annual funding gap narrowed over the course of the year from £58m. to £50m.
‘Two things can be true at the same time, and this is a good example – it’s great that income exceeded our expectations and we have an accounting surplus for 2025, but when we look at that bigger picture, we’ve still got a shortfall, or funding gap,’ said Deputy de Sausmarez.
‘It feels a bit paradoxical that there’s a funding gap, or structural deficit, when the 2025 Accounts show a surplus, but that’s because they’re two different things.’
The Accounts, she said, were a retrospective ‘snapshot’ of money in and out in a single year including one-off windfalls. Investment gains of more than £100m. over the year have increased income on paper but does not translate to money available for the States to spend, with the investments not cashed in.
‘When it comes to calculating the funding gap, however, we need to look at a bigger picture and longer-term trends going forward.
‘For example, our Accounts show by how much our assets such as our infrastructure have depreciated in a year, but that’s a lot less than what we need to spend on maintaining and improving our infrastructure so that it’s fit for purpose.
‘That amount we’ll need to spend in future is obviously not included in the Accounts, but is included in the funding gap calculations.’
The committee’s preferred options for the Tax Review are due to be published next week.
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