‘A small piece of good news’
‘A SMALL piece of good news’ is how the Policy & Resources Committee has welcomed the latest update on States finances, which has shown that the government is £18m. better off than it expected to be.
And so, unsurprisingly, it has moved to counter interpretation, or as it will see it, misinterpretation, that this spot of good financial news changes anything with regards to the bigger picture of States finances.
It was good of P&R to provide the financial update but, frankly, naive to think that simply publishing figures wouldn’t be interpreted one way or another. The committee believes public finances are ‘broadly in line with where we expected to be’ and as it goes into next month’s funding & investment plan debate, nothing has changed as a result of the latest financials.
£18m. doesn’t move the needle significantly, certainly given the long-term demographics and trends of public finances, but those concerned at the P&R package will obviously seize on whatever evidence they can to question it.
The biggest question now is over the sustainability of the capital spending plans. P&R’s new obsession with infrastructure flies in the face of historic States spending – bumbling along at £60-70m. a year at best on capital projects, far from the £500m. spending wishlist and targets of 2% of GDP.
Clearly no infrastructure spending is a route to hell, but this rampant enthusiasm for capital spending is one of the most vulnerable areas in P&R’s plans.