Deputies face a choice between limiting committees’ budget adjustments to inflation minus 1%, which would cut spending in real terms, or sanctioning £15.7m. of additional expenditure above that level next year.
The alternative options A and B were published today in Policy & Resources’ draft 2027 Budget, days after the States Assembly confusingly rejected a proposed spending freeze despite having agreed an even tighter policy earlier in the year.
P&R drew up its unconventional approach in the hope of avoiding another deluge of amendments from States members and following months of budget discussions during which committees’ requests exceeded the ‘inflation minus 1%’ spending target by £33m.
‘It has become clear that achieving the 1% savings target will present a significant challenge in 2027,’ said the senior committee in its Budget report.
‘The committee considers that any decision to approve expenditure above the previously agreed target should properly rest with the Assembly.
‘However, it does not believe that a series of amendments from individual committees seeking increases to the option A budget would represent an efficient or transparent means of reaching such a decision.
‘The committee has therefore presented option B as an alternative expenditure proposal, enabling the States to consider a coherently thought-through alternative.’
Embargoed copies of the Budget provided yesterday did not make it clear how each member of P&R would vote, although treasury lead Charles Parkinson has already indicated a preference for the slightly looser spending policy in option B.
P&R’s draft 2027 Budget will be debated by the States in the first week of November.
Other proposals include setting up a new £15m. fund to support public and private sector projects aimed at economic growth, freezing TRP on commercial premises used for hospitality, retail or warehousing, and introducing discounted duties on draught beer, wine and cider.
P&R has also recommended RPI-only increases to domestic TRP and fuel duty, and adding £650 to the personal income tax allowance, also in line with inflation.
‘While we must continue to exercise restraint and improve the efficiency of public services, we also need to invest in the long-term success of the Bailiwick,’ said Deputy Parkinson.
He called it ‘a Budget for growth’ when presenting it to States members and the media yesterday.
‘That is why a central feature of this Budget is a new programme of investment in economic growth – £15m over the next three years.
‘The Budget also includes targeted support for local businesses and measures to maintain Guernsey’s attractiveness as a place to live, work and invest.
‘Taken together, these proposals are designed to support economic activity while ensuring we remain focused on the long-term sustainability of the public finances.’
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