REVEALED: Government of Jersey's spending habits

Thursday 23 November 2023

Jersey's Government spends less per person than the UK's – with a new report revealing that £13,753 was spent on each islander in 2021, compared to £16,396 spent per UK resident.

However, officials have said that this would be expected in a lower tax jurisdiction and where the size of the economy is proportionally higher.

The Treasury Department has published Jersey's first Classification of the Functions of Government (COFOG) report.

It breaks down the public sector's spending habits into ten internationally-recognised categories such as health, education, and public order and safety.

The report, which is designed to allow comparisons to other jurisdictions, revealed that where Jersey spent £13,753 on each resident in 2021, the UK spent £16,396 – and when that figure is adjusted to take in the size of each economy, the gap is much larger.

Pictured: Deputy Gorst presented the inaugural report. (James Jeune)

A statement accompanying the report added: "Jersey spends less per person, and less as a proportion of the economy than the UK, as would be expected in a lower tax jurisdiction.

"Whilst the standardised approach will aid transparency, it remains important to recognise that analysis of expenditure is only one part of understanding how governments use taxpayers' money."

Treasury Minister Ian Gorst said: "The COFOG classification, recognised as an international standard, is an essential tool for promoting transparency and accountability in government spending.

"By providing detailed analysis of public expenditure, the COFOG report goes beyond traditional financial reporting, allowing us to benchmark our expenditures against those of other countries."

What does the spending breakdown look like?

General public services – 10.3% (£151,170,000)

Jersey spends much less than the UK on public debt (due to low levels) – however it spends more on executive, financial, fiscal and external affairs and general Government services.

Jersey also has greater centralised expenditure compared to the UK where government departments account for own assets and functions.

Defence – 0.1% (£1,633,000)

The difference in this functional area reflects that Jersey does not maintain a formal standing defence force, though payments are made to the UK.

Public order and safety – 5.8% (£84,890,000)

Economics – 4.5% (65,972,000)

The data for this category varies significantly to reflect the introduction and withdrawal of Covid-19 financial support schemes.

Environmental protection – 3.0% (£44,016,000)

Jersey puts twice as much money into environmental protection as the UK – 3% of its expenditure as opposed to 1.5% – but this is partly due to privatisation of waste-water management in UK, something which is paid for by Jersey's Government.

Housing and Community amenities – 0.6% (£8,961,000)

Health – 28.0% (£411,059,000)

The second largest was on health services, with 28% of Government expenditure on health services in 2022, equating to nearly £4,000 per person, and 28.5% in 2021 – comparable to 20.5% in the UK.

The report states: "Unsurprisingly, this functional category accounts for a significant proportion of Government sector expenditure.

"Health care requires significant fixed cost expenditure, and the Jersey health service is required to provide a comprehensive level of service."

In 2022, Jersey expenditure on hospital services specifically included a charge relating to the Our Hospital project of £8.4m.

Recreation, culture and religion – 2.6% (38,902,000)

Education – 12.4% (£182,027,000)

Social protection – 32.7% (£480,537,000)

The largest chunk of the island's public purse was spent on welfare, which includes income support benefits and social housing, a figure largely similar to the UK.

Around 15.6% of the entire Government expenditure is on pensions – more than education.

What is COFOG?

In 2019, the States Assembly approved a proposition to which required all States' expenditure to be classified in accordance with the United Nations COFOG system which has been adopted by most large economies. Covid 19 disrupted the implementation of this project.

The objective of COFOG is to provide consistent analysis of Government spend by set categories such as health and education to enable comparison between jurisdictions and over time.

Presenting spend in this consistent way supports benchmarking and informs decision-making for those making policy decisions around the allocation of resources to competing services.