Making a black hole transparent

Columnist Horace Camp is confused to the point of exasperation today and it’s not too difficult to see why. The States has finally caught up with public demand – from a small but apparently knowledgeable and technical section of the community – to update its accounting standards and though some might now like what they see, others will struggle to understand.

So the operational deficit, the day-to-day trading figures, was £3m. last year. If the States bundles in depreciation, interest payable and received, and investment losses, as demanded by the International Public Sector Accounting Standards, then the ‘overall deficit’ balloons to £135m. And that was printed in bold in Policy & Resources’ press release. If investment returns had been positive, we are sure that the States would have reflected so.

It said yesterday that this newspaper hadn't sought further clarification on the numbers. But it has been put on notice that we will be doing so.

The Treasury did restrict its inevitable comment in the press release on the need to raise more income to the £3m. deficit, before adding that moving to new accounting standards was a ‘positive’ and would trash the line that the accounts aren’t accurate or can’t be relied upon.

Let’s agree that transparency is good. But clarity and context is also important.

If the States rightly wants to avoid ‘distraction from the genuine problem of our deficit’, then it should do its best to ensure that islanders understand the true picture of public finances, and what really matters.