Guernsey Press

States must fulfil promises of reform

WHILE Guernsey basks in the sunshine of widespread praise for its swift emergence from lockdown it would be foolish to imagine the pain is all behind us.

Published

No economy can go into hibernation for three months and not suffer grievous long-lasting wounds.

It could have been much worse. The finance industry has once again shown its worth.

But even a quick glance at the States of Guernsey accounts for 2019 is a sobering reminder of what has been lost.

It will be some time before the island can once again claim to have a budget surplus, substantial reserves, modest borrowing and a good credit rating.

2020’s accounts in particular will be a grim read.

But the battle for recovery has begun. Hundreds of island firms and thousands of employees are already fighting it. They cannot wait for the conclusion of a Revive and Thrive debate. Cash is urgently required through the tills.

Each business will look to its revenues and costs, determined to mitigate the damage and end the year strongly.

For many that will require wholesale changes and a radical rethink of the business plan. There can be no sacred cows.

The States must take the same approach. For, despite the positives to be taken from last year’s accounts, there are the usual negatives.

Year after year government has promised to get its costs fully under control. Year after year it has failed.

Which is why States expenditure was almost £9m. higher that budgeted and increased by £29.5m. between 2018 and 2019.

And why pay costs continue to take up an ever larger share of the States costs (now 51.5%) with an extra 84 full-time staff compared to 2018.

For Guernsey’s recovery to be as swift as possible it needs to deliver on its plans to transform. A heavy investment in technology must pay dividends within months not years.

With greater public sector efficiency allied to development of digital industries, connectivity and new green businesses the island has some chance of making good on its plans to turn around the economy within three years.

Otherwise, we will continue to look back on the 2019 accounts as halcyon days.