Treasury lead Charles Parkinson told the States on Tuesday that the financial position at the end of April was a surplus of £15.9m., £1.1m. behind budget.
‘Basically we’re pretty much on track,’ he said.
Revenue was underperforming by more than £4m. but that was partially offset by cost savings of £3.2m., and there was an operating surplus of £7.3m. – ‘broadly in line with expectations’, supported by stronger trading performances and lower spending on non-capital projects.
But the overall position was impacted by investment returns weaker than expected and 39% behind budget, primarily driven by the war in Iran, and income from customs duties ‘significantly underperforming’ at £3.8m. behind budget. Net spending by committees was £2.6m. favourable to budget, he said, which includes Health & Social Care, despite adverse pressure in off-island acute care.
The further forecast for the rest of the year is for the figures to deteriorate, though a full-year revenue surplus of £14m. is still expected, with the biggest spending implications once again for HSC, especially on off-island acute care, and overspends expected on digital and technology projects.
‘But Guernsey is not broke. In fact, Guernsey has a pretty robust financial position, and we can all be very glad of that.
‘That’s the result of years of economic prosperity and generally sensible States controlling expenditure.
‘That doesn’t mean we don’t have a problem, and that’s something we will have to address next month, but we’re not in crisis, the island should not be downcast or despondent about our financial situation, Guernsey is in pretty good shape, and that’s what the 2025 Accounts say.’
All members sign off on 2025 Accounts
The States unanimously approved the 2025 Accounts after little more than an hour of debate and limited questioning of the Policy & Resources Committee.
Given criticism of how easy it is to understand the Accounts, which revealed a net surplus of £106m. over the year, treasury lead Deputy Charles Parkinson defended the more modern style which, he revealed, he had proposed to the States, and had supported, back in 2012.
‘Back then we didn’t know all our assets and liabilities. We didn’t even have a list of all the properties we owned,’ he said.
Now the issue was to make the report understandable rather than a lack of information, he admitted. ‘And that is a fault on the right side.’
In response to the Scrutiny Committee’s assessment of the report, Deputy Parkinson committed to do more to explain public finances in plain language and said that a ‘chairman’s report’ would also be included in next year’s report.
Scrutiny president Andy Sloan said his committee considered that its job was to ask questions on behalf of the public. Some of the questions it had posed were not answered in layman’s terms, he added, expressing concern about the approach and explanation given on investment gains, capital expenditure and the justification for tax increases given the robust health of the 2025 finances.
‘In 2025 the States seems to have spent about 2% of GDP on capital expenditure and we have a £100m. surplus. So why does the same level of capital spending give cause a funding gap?
‘Are we living within our means or not? Answering that question shouldn’t need a lengthy public hearing, a series of accounting adjustments and references to the treasurer’s preferred narrative before the reader can understand the fiscal position. Sophistication is not the same as public understanding.’
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