£145 million "Black Hole" plan approved - now the work begins...

Friday 09 October 2015

Plans to cut £70 million from the public sector pay budget and introduce a £35 million health charge have been approved by politicians, after ministers got their four-year financial plan through the States.

Although there were defeats for the ministers on a few points – an extra £263,000 per year for Education, the retention of means-tested free TV licences for the over 75s and the introduction of French language assistants in primary schools – the major parts of their Medium Term Financial Plan passed unscathed.

That means that ministers’ plans to tackle the £145 million black hole in States finances have been approved – although this week’s debate only covered next year in detail and an outline plan for 2017 to 2019.

In June, ministers will come back to the Chamber with the detail for the following three years.

Treasury Minister Alan Maclean – who steered the plan through the States Chamber after inheriting the deficit from his predecessor – said that although the cuts had gathered most attention in the run-up to the debate, it also included plans to invest almost £100 million in health and social services, and £168 million worth of capital investment.

He told Bailiwick Express this morning: "I'm very pleased that the States have given their support to the plan, which is the right plan for our time. It is a challenging plan, it's certainly not a plan for austerity as some have suggested, and there is some significant investment into our key priorities.

"We have the framework, the direction and the target. There was talk about voting individual years but we need the target so that the organisation has a cap on expenditure. That is now in place to ensure that we have the focus on the key aim, which is the necessity of driving public sector reform and modernisation.

"Getting the plan through is one thing, and I am delighted with that, but the most difficult element is going to be the delivery.

"It is going to be difficult to deliver and we need to get on with the hard work of that delivery and put the Island in a position of sustainable public finances for the long term."