Benefits and staff cuts planned as deficit rises to £145 million

Tuesday 14 July 2015

The deficit in public finances has grown to £145 million and ministers are now planning even bigger cuts in the States’ wage bill and a freeze on benefit spending to fill the gap.

The pensioners’ Christmas Bonus and TV Licence scheme for the over 75s will also be casualties next year, and new charges on households worth an estimated £1,000 per year are being planned by 2019.

Chief Minister Ian Gorst and Treasury Minister Alan Maclean have unveiled their spending plans for the next few years, including an extra £40 million funding for health and an extra £9 million for education, and cuts to the States’ wage bill worth £70 million.

The plans include £168 million worth of capital projects between 2016 and 2019 including a new Les Quennevais School and sewerage works – but huge projects such as the new hospital (estimated at more than £450 million), States office consolidation and improvements to Fort Regent have not been included.

The ministers say that the deficit has grown from £135 million to £145 million because tax receipts dipped again – and they have added that there’s still a risk that it could keep growing.

And although no details have been released of planned charges that will be levied on Islanders to help to fill the gap, ministers have confirmed that they’re aiming to make £35 million from a “health charge” and a further £10 million from charges on waste.

That combined £45 million, divided by the number of households in Jersey, mean that as a very crude calculation, each household would have to find another £1,000 to pay in charges to the States by 2019.

Chief Minister Ian Gorst said: “Even though our economy has experienced difficulties due to the recession since 2008 we are now going to come out of that.

“Despite the difficult backdrop this is a positive plan that will deal with important social priorities that we face alongside all other western democracies, and at the same time it’s fiscally prudent and will balance our books over the period.”