A bitter pill?
When is a budget not a budget? That is not the start of some hackneyed musical hall joke but a serious question.
I ask it because I am not sure the proposals the States will be debating on 5 November will be a full and proper budget in the traditional sense. Despite the date it could be something of a damp squib because of what is missing from the package.
If so that will be by design rather than accident.
Why do I question whether we will really be having a proper budget debate next week? Well a normal budget, in the Guernsey context, goes something like this:
The States sets its overall revenue spending limit for the following calendar year. Within that global sum it allocates individual spending limits for each committee. It also decides how much it wants to transfer to its various reserves. These include the capital reserve, which funds infrastructure spending and – at least in good years – the core investment reserve, which provides a buffer against leaner times ahead.
This year is very different. On the surface everything looks the same but the very first question – how much should the States spend in 2020 – is being wilfully fudged.
There is a proposed spending limit of course. In fact there are two alternative ones for the States to choose from depending on how much they want to raise from commercial property taxation. And there are revenue raising measures to meet this proposed spending. So far so normal.
The difference is that this year we are being told that there are other big ticket spending items for 2020, which we are not being invited to consider and prioritise alongside the rest. Instead they will be brought forward in a separate debate a couple of months later for consideration in isolation.
We will be able to compare each of these ‘new spending proposals’ against each other but not against the hundreds of millions in revenue spending that will already have been signed off in November. Even though some of these proposals were ready in good time to be considered as part of the budget package.
Why is that a problem? Firstly, it goes in the opposite direction to the one P&R has been strongly advocating in recent years. We were told it was vital that Social Security’s non-contributory benefit package was considered at the budget meeting so that all proposed States’ expenditure could be debated holistically. That is now happening but ironically P&R are choosing to strip out other spending requests to be debated quite separately.
Secondly, because it deliberately paints the deferred spending proposals as ‘the cause’ of any new taxes that may be required, when in reality it is the generality of States spending that requires a certain level of cash to be taken from islanders’ pockets. With all taxation inherently unpopular, this risks demonising particular elements of expenditure, and the projects they fund.
That is deeply unfortunate as some of these will be proposals to help islanders at their most vulnerable and which most people would prioritise ahead of much of the ‘spending as normal’ that will be nodded through in November in the ‘partial budget’.
So far I have been talking in abstract, so let me give a concrete example and one which is very close to my heart. HSC is due to bring forward proposals from its review of drug funding. This is likely to result in a request for very significant extra expenditure. Of course we shouldn’t be in this position. We should never have allowed our funding of vital medicines to fall so far behind places like England and Jersey, but we did.
As a result we require an expensive catch-up.
So why isn’t that proposed expenditure being considered as part of the budget? The review was completed in good time to allow that to happen. I understand HSC had a policy letter ready in time too but were asked to hold off by P&R. It is as if our top committee wants to paint the provision of proper, modern, medicines for the population of Guernsey when they are seriously ill as the villain of the piece. ‘Sorry folks, we didn’t want to increase taxation but we were forced to because the States insisted on funding lifesaving treatments. Don’t blame us.’
Of course, funding Nice-approved drugs is not the only bit of new spending that has been parked, but it is one of the most expensive and, crucially, the one that was ready to be debated ahead of the budget. Had the States approved it – which they surely must have done – then it would have been P&R’s job to look at how to fund that expenditure in 2020. That could then have been considered as part of a full, rather than partial, budget.
Instead it seems as if funding medicines, which everybody else in the British Isles has access to, has been set up as the ‘Aunt Sally’ to be blamed for any new taxation. If so I hope States members will at least fully inform themselves on this crucial subject.
Recently there was a fascinating presentation in Guernsey by two leading oncologists from Southampton Hospital. Their frustration was very clear to see. Day in and day out they were using new, Nice-approved drugs on their patients from England and Jersey. In many cases these treatments were making huge differences to survival rates.
Sadly, though, in many cases, they had to deny them to their Guernsey patients simply because the States will not fund them. Therefore the prognosis for Guernsey patients is considerably worse than those of patients with identical conditions from elsewhere in the British Isles. If Guernsey is willing to accept that situation then I would be amazed and hugely disappointed.
By the way all States members were invited to that presentation. Two deputies and one Alderney representative attended. If the powers that be are going to unfairly paint drug funding as ‘the cause’ of extra taxation, I hope they will at least balance that debate by arranging and funding a repeat presentation – ideally, one specifically for States members and one for the public. Only then will everybody be able to understand not just the financial cost of funding Nice-approved drugs but also the desperate human cost of not doing so. I will then be happy to allow the community and the States to weigh one against the other.