WATCH: Covid punches £280m hole in public purse

Saturday 29 August 2020

The effects of covid are expected to leave a black hole in the public purse of £280m at the end of this year.

That compares to a £19m surplus at the end of last year.

The figure was released in a six-month update to the Government Plan, outlining how a number of key public projects for 2020 had been held up by the pandemic.

It also outlined how the Government would now need to make even more savings – above the £100m planned for between 2020 and 2023 – to be able to recover.

Prior to the pandemic, civil servants had already expressed concerns about being asked to do their usual work – or more – with less.

Video: Yesterday's press conference with the Chief Minister, Dr Ivan Muscat and Dr Susan Turnbull.

At a press conference themed around the island being “covid-ready” for winter, the Chief Minister maintained that he would not be happy to borrow money to fund “day-to-day” expenditure going forward.

Asked by Express how the Government would be able to find more efficiencies and plug the forecast gap in its purse in light of this, the Chief Minister did not outline any new savings strategies, but said that he believed that the Government would be able to reap significant benefits from its investment in upgrading its IT systems in future.

He added that Ministers had this week been going through the Government Plan and reassessing which projects would be able to get back on track and which might fall by the wayside.

Senator Le Fondré declined to answer when asked which specific projects were now officially off the agenda.

But while he said he would be averse to borrowing to fund the Government’s ‘normal’ activities, he explained that this could be an option for key future infrastructure projects – such as the future hospital.

Pictured: The future hospital will likely be funded by borrowing money.

The Chief Minister said whether this would be in “one lump sum or in two tranches” remained under consideration, and that the Government would have to carefully consider a “reasonable” repayment period.

“We are not going to try and repay it in two years, but we do not want it hanging around for 80.”

He added that the Government still had barely dented its £500m overdraft provided by local banks earlier this year – the latest figures provided to Express were that just 1% had been used – but noted that more might be drawn in the winter months.

Turning to the economy, the Chief Minister reminded islanders that they should use their £100 pre-paid card – due to be issued in the coming weeks – for a “treat” to help boost the pandemic-hit local economy.

According to the Senator, longer-term stimulus measures are being considered in line with recommendations from the Fiscal Policy Panel – an independent group of advisors tasked with advising the Government on economic policy.

Pictured: The Chief Minister and an example of one of the pre-paid £100 voucher cards.

It has been suggested this could include more targeted support for industries like hospitality, which has had to deal with what has been described as “three winters” due to the health crisis’s impact on visitor numbers.

The Chief Minister did not reveal what long-term measures are in the offing, however.

It comes as the co-funded payroll scheme, which saw the Government fund 80% of struggling businesses’ employee wages up to the value of £1,600, will begin to be phased out until March 2021.

And yesterday the Government warned that the Covid-19 Related Emergency Support Scheme (CRESS) would be closing on 31 August.

The scheme was introduced by the Social Security Minister, Deputy Judy Martin, in April to provide security to those who have been working in Jersey for fewer than five years, and lost income due to covid.

At its peak, the scheme supported 450 people across 316 households per week. In total, more than £540,000 of support with living costs has been provided.

Deputy Martin says that, as the island is now in Level 1, those benefiting from the scheme should now either be able to return to work or to their home countries.

Pictured: The CRESS scheme has now stopped because those accessing it can now either work again or return to their country.

Elsewhere in yesterday's conference, the medical professionals leading the island's response to the pandemic suggested that Jersey would be highly unlikely to go into a second full lockdown, as it did at the end of March

Instead, they said that covid clusters or a spike in cases that can't be easily tracked to their original source could lead to "mitigation factors" being dialled back up separately. These could include changes to work practices, stricter rules for working in and visiting care homes, and potentially targeted and local lockdowns.

A regional travel classification system will also be in place from next Wednesday for England, Scotland, Wales, Northern Ireland, the Republic of Ireland and France.

More detail was also provided about the winter flu vaccine programme, which will be offered to children and over-50s, and how vaccinations for covid will be rolled out when a successful solution is found.

Pictured: A vaccine option being developed by Oxford University is the frontrunner.

At the moment, an option being explored by Oxford University is showing the most promise. Islanders are likely to need two doses, and the first one will be free.

The intention is to roll out the vaccine to as many people as possible - though it won't be compulsory - and frontline workers and high-risk groups will receive it first.