Cracks show in States finances

Two years of surpluses by this Assembly have helped create an impression of more stability, but there have always been underlying cracks in those foundations, and 2018 is lining up for a £2m. overall overspend.

Finances this term have been propped up by items such as bumper returns on investments that are an unpredictable beast at best and some tactical one-off savings, while the big spenders at Education, Sport & Culture and Home Affairs have dragged their feet in meeting efficiency targets.

Everyone is also keeping a very close eye on whether the spending on the new income support scheme introduced at the start of the month stays in line with the original projections – already the changes have had an impact on States income from rents. This creates more uncertainty over where 2018 is going.

Policy & Resources president Gavin St Pier used his financial update to remind the public that tax rises are on the way next year – something harder to swallow when at least two committees have been unable or unwilling to play their part.

He painted a picture of contrasts. Strength in the local economy being countered by global uncertainty hitting investment returns. Restraint being shown in spending in most areas being dragged back by overspends in others.

He also signposted a way that impetus will be put into joint working with Jersey, something that has consistently stalled in the past. It is likely that the 2019 Budget will include specific savings targets from this area of co-operation, a genuine goal that has been so sorely missing.

This time last year we were hearing of an unexpected surplus, but as has been consistently warned, the need for transformation has never gone away.

If Education and Home do not deliver, and if the other cause of the overspend, the legal battle taken on by the Public Trustee, is not brought under control, it is the public who will pay the price.