States in danger of taking its foot off the FTP pedal
ARE you sitting comfortably? Well, after the political events of last week maybe you shouldn't be.
ARE you sitting comfortably? Well, after the political events of last week maybe you shouldn't be.
Turn your attention to States finances, especially now we know that there are some that seem to have thrown in the towel on the financial transformation programme.
Remember that, all the promises of efficiencies? Well, now the going is starting to get tough, and the States has plucked all those delicious low-hanging fruit, there is a lot of feet shuffling going on.
Predictions for how much the FTP will save have fallen below £30m. and a request for departments to come up with more ideas has drawn a resounding silence.
Several things have happened with the FTP since the consultants first came in and identified 298 opportunities for savings worth around £45m.
That list was whittled down in a second report and the amount expected to be saved cut.
And then a decision was made to decouple the whole programme from the savings identified in those reports to allow departments to come up with their own ideas.
With that a certain amount of clarity and accountability was lost, the public could no longer track the progress being made or what was around the corner, and the States took its foot off the pedal somewhat.
Departments were allowed extra time, allowed to make one-off savings instead of recurring ones fudging the situation and storing up problems for later.
Now the Treasury minister Gavin St Pier has performed a U-turn from insisting a plan B was not needed to conceding one was.
Deputy St Pier's statement to the Assembly last week was one of those classics for packing in so much information that it at times bamboozled – one where it was worth re-reading and then reading again between the lines.
He opened up with the good news.
'In the first five months of 2013 FTP projects have released £5.35m. of savings bringing the total saved by the programme to £16.15m. This is on track and an increase of almost 50% from the end of last year and represents a significant improvement in the momentum of the programme. I am also pleased to inform the Assembly that the majority of these savings, some £3.85m., or 72%, have come from improvements in our efficiency, as opposed to increased fees and charges or changes to grants and subsidies,' he said.
But he then conceded the States was not out of the woods – 'not by a long shot.'
Delivery of large projects, and those that cut across departments, remain a significant challenge.
Predictions on what will be saved by the end of the programme have dropped below £30m. – the target was a minimum of £31m. and departments were asked to overshoot that by 10% – so £34.1m. of recurring savings.
One of the responses has been to ask Social Security to save £2.4m. from its formula-led budget, which includes supplementary benefit and family allowances – the question has to be how it will achieve that and this is one point the speech was silent on.
He also detailed problems with the new States computer system that are at times laughable.
And then look at States' revenues and there are some worrying economic signs.
ETI receipts, essentially personal income tax, are widely used as a barometer of how the economy is performing, are £2m. down on what was estimated for this time of the year.
This trend is being forecast to continue, although balanced by an increase in tax being taken elsewhere, for example banks,
Custom's duties and document duty receipts are currently under budget, but the projection is that they will recover.
Overall income is still in line to come in at £373m., he said.
Both Health and Social Services and Social Security are predicting an overspend – the former by at least £2.5m. and the latter by £500,000.
This month Treasury and Resources and the Policy Council will draw up plan B so that the States hits its 2013 budget.
Plan B will not be palatable, indeed its hard to think of it doing anything but either costing the taxpayer more or cutting services, all because the States got to within a year-and-a-half of the end of a five year efficiency programme by deferring major decisions.
Some politicians seem to have lost faith with the process, or never really had it in the first place.
The FTP failures and budget problems were first highlighted by written-rule-six questions by Deputy Matt Fallaize.
But it is the kind of information that should not need to be pulled, it should be proactively released.
The answers to his questions and the treasury minister's subsequent speech means that there should be no sudden shocks that did for the Health and Social Services board last time.
Equally there will be no illusions that it is time to sit back and take the armchair ride.
