States awakes from savings dream

Don’t worry about the millions being invested, it is all going to come back – and so much more – in lucrative efficiencies.

Worryingly, it became clear this week that deputies have big doubts about whether the promised transformation of the States is going to return its ‘reform dividend’, at least in the short term.

With savings on public sector reform falling far behind schedule after just four years of a 10-year programme, the ‘cost versus benefit’ sums are already looking challenging.

Policy & Resources urged deputies not to lose their nerve. Committees must keep their foot on the pedal and the savings will come, albeit much delayed, thanks to technology and cuts to staff costs.

The argument was undermined, however, by predicted savings of £5.2m. this year already being forecast (with no guarantee) to fall £3m. short.

Critics of P&R’s bid to set aside yet more millions chasing the reform dividend at the end of the efficiency rainbow point out that the failure to meet the savings target for this year puts 2020 and 2021 under severe pressure.

Based on the history of States savings schemes it is hard to disagree with the sceptics. It will be a minor miracle if P&R comes back with anything like the £20m. due by the end of 2021.

How quickly confidence can evaporate. Only a year ago the Assembly was presented with a Budget which claimed that the three-year target of £10m. savings from the reorganisation of the public sector was a prudent estimate. If all went well, that work stream alone could cut £17m. from States expenditure.

But with predicted first-year savings of £1.7m. from reorganisation now forecast to bring in just £110,000 (the entire savings programme barely amounts to £2m. in 2019) such optimism looks misleading.

Deputies say it is wrong to give islanders false hope by overestimating how much fat can be trimmed from the public sector bone.

And with even P&R saying the dragon of States overspending is a myth, the mood music from deputies seems to be to manage expectations and prepare taxpayers for shouldering a heavier burden as promised savings fail to materialise.