Guernsey’s finances are looking in good shape with an estimated £36,000,000 surplus for 2025 – but the island’s money man is warning of “risks with these numbers”.
Deputy Gavin St Pier, the Policy and Resources Vice President and lead for finances and resources, gave the States a fiscal update this morning.
He reminded deputies that last year the States was dealing with a deficit of nearly £31m from 2024.
“I am fortunate to be able to share better news,” Deputy St Pier said this morning. “Strong receipts in 2025 have reversed that position and I can report an overall net surplus for the year of £36m. This is very welcome news, but I would not be doing my job properly if I advise members of some of the risks with these numbers.”
Those risks include warnings that revenue from income tax and duties varies each year and that 2025 saw unexpected payments of large sums of tax including £11m relating to a voluntary disclosure from one bank which had calculated an underpayment of tax over the preceding seven years.
“Consequently, that £11m includes a hefty interest surcharge,” he explained. “A further £12m relates to tax from 2023 which was assessed and paid in 2025. Therefore, £23m of the £37m in additional revenue is exceptional and it cannot be built into our baseline and relied on in future years.
“It’s a windfall, significant for this year, but unlikely to be repeated next year or in future years, and not significantly material to the long-term financial position of the States.”
Deputy St Pier said “there were strong receipts from tobacco duty at the end of the year” which added to the island’s coffers.
“This does not mean our community are smoking more,” he said. “Tobacco imports are subject to duty on arrival. Imports are lumpy and can be influenced by the timing of duty increases.”
In terms of how much the States spent last year, the annual accounts will confirm the estimated figures when they’re published this summer. In the meantime, Deputy St Pier said most committees spent within their cash limits.
There were overspends by Health and Social Care and the States Corporate Services department which deals with IT functions.
Insurance costs were up too, and recruitment remains a challenge with many vacancies being covered by overtime or agency staff at a higher cost than full time or permanent employees.
Deputy St Pier said Employment & Social Security spent £1.2m less than its budget allocation “due to lower income support costs”.
He said together, the situation is looking positive with an overall General Revenue Surplus of £36m. But Deputy St Pier did warn that the island’s fiscal challenges continue.
“The welcome additional revenue in 2025 more than compensates for the poor performance in 2024,” he said. “It’s a useful contribution to our depleting reserves but does not, without wider reform, change their trajectory.
“The 2024 and 2025 experiences highlight that having such a high dependency on whether banks have a good or bad year is neither sensible nor sustainable, especially given that the performance of individual banks will fluctuate from one year to the next, depending on their business models and on global as well as domestic factors. That is not a basis on which to build sustainable and reliable public finances.
“This statement has been given to ensure the States has the draft results as soon as they are available – as we have committed to keep the States informed on our financial performance. The final numbers for 2025 will be published, following audit, on 2nd June this year.”