'Taxpayers will not be fooled' over States cuts

HANDS UP if you think the States has 'cut to the bone', as Home Affairs president Deputy Mary Lowe claims her department already has?

Because that really should be the starting point before deputies come up with ever more inventive, or simply more expensive ways, for taxpayers or the wider public to close the black hole in the States spending.

Policy & Resources president Gavin St Pier has set out a stark scene in terms of the island finances.

He has done it nice and early so that everyone has their eyes wide open going into the next four years.

The final deficit in 2015 was £24.5m. – all from a Budget that was meant to balance the books.

This year the States is projected to record a deficit of between £10 and £15m. unless emergency measures have the desired effect.

It is too easy at this stage for those old hands from the last Assembly to look misty-eyed at the work they did under the financial transformation programme and claim that is it.

That is not it, it is just the start, something the public sector heads seem to have grasped even if some of their political masters have not.

In his update on public sector reform, Deputy St Pier said that P&R had agreed a set of targets for spending reductions for 2017 to 2019.

'The civil service leadership have advised and agreed that, in their opinion, these targets are reasonable; and that the States, as an organisation, is capable of delivering them,' he said, tellingly.

It will take 3% from committee budgets, except Health & Social Care which is ring-fenced, to save around £5 to £6m. in 2017.

In 2018 it wants another 5%, and up to the same again in 2019.

There are plenty of projects under way to deliver change.

Work is happening to develop a combined collections function for social security contributions and income tax payments, something which will remove duplication and reduce costs.

A business case for transforming the services under Home Affairs is due by the end of this year.

Further digitisation of government services is under development.

Two States sites will be vacated by the end of 2017 – although cast an eye back over the ambitions of last term's strategic asset management plan and there is evidence that much more can be done in this area.

It was a big missed opportunity from the 2012 States, who, driven by a fear of centralisation, seeing ghosts where there were none, threw the plan into the long grass.

How they must regret that now as some departments still try to make the savings they promised us through other measures.

There is evidence of the headroom for the States to do more.

We know that the FTP failed to dent rising staff costs for a start – the concern remains that the culture of automatic rises through the pay grades remains in the public sector rather than rewarding the most talented.

The FTP also failed to make some £5m. of expected cross-departmental savings.

That is £5m. extra every year that taxpayers are stumping up for because of the silo working last term.

This is a prime opportunity, with the new committee structure in place, to look again at those opportunities and make them a reality.

All this comes without even looking at what services the States currently provides and asking whether it is working in the right areas in the right way.

All last term the message was that we can't impact on frontline services.

Take a step back from that, because everyone has different ideas of firstly what frontline services really are, what should be protected and what could be reduced.

For too many perhaps it became any services offered by the States.

It will dawn very quickly on members that stance will not withstand the current financial malaise.

The problem with setting committees spending reduction targets is that some see it as far too blunt an instrument, certainly that became the case when it was done to put pressure on the FTP when progress had been slow.

Some committees resented making real savings while offers simply raised a few charges to cover their share.

Or there are those that still have not hit the reductions, but with no accountability for that, just promises that it will happen eventually.

What the public needs among all of this is clear evidence that real change is happening and the States communicating that will be crucial.

Deputy St Pier has delivered a message of expenditure restraint, delivery of reform and economic growth as being the priority areas.

The growth side has been relied on too heavily in the past – it would be even more foolhardy to do so again given the shock to the UK and wider economies of the Brexit vote.

Last year there was a 20% real terms' reduction in income tax receipts from companies even though the scope of those being taxed under zero-10 was widened. Receipts from banks were down and this trend is expected to continue.

Deputy St Pier has also spoken of the need to widen the unsustainable tax base and maximise returns from the existing system.

Sometimes in politics there is a tendency to warn of the worst as a means of softening the blow when it eventually comes and being able to sell painful measures in a more positive light if they are not as bad as first thought.

Jersey did just that with its latest plans to plug the yawning gap in the deficit there. Taxpayers will not be fooled though.

Very few will be joining the politicians who put their hands up to the question asked in opening this, those deputies that would rather keep things ticking along as they are rather than face tough choices over further efficiencies, even cuts.

No one should be fooled by last term's efforts.

Already an independent report has pointed the way to more savings at Health & Social Care, expect more of the same when a proper look is taken at Home Affairs.

Savings can be made, Frossard House agrees, and they need to be to avoid the unwarranted pick-pocketing of the public.