When Policy & Resources (P&R) pitched its tax package, it came with a commitment to limit annual spending growth to 1% below inflation to help keep the States’ finances under control.
But less than a month after the package was approved, several deputies are already lining up to spend more money. Quite a lot more.
In fact, the States’ budget could take a £22.5m hit if all the spending increases and tax cuts proposed ahead of November’s Budget debate get the green light.
A whopping 30 amendments have been submitted, with committees asking for millions more to fund everything from frontline healthcare and emergency services to free buses.
Under P&R’s preferred Option A, the States is set to spend £700.4m, leaving a modest £4.2m surplus. That’s 3.3% up on last year’s £678m budget.
But if all the proposed spending increases and tax cuts were approved, that surplus would be wiped out overnight, replaced by an £18.3m deficit.
And there’s no shortage of committees with their hands out.
Top of the list is Health & Social Care, where President Deputy George Oswald is asking for an extra £6.1m.
That includes £3.1m to cope with growing demand for frontline services and another £3m ringfenced for off-island acute treatments, including cardiology.
Close behind is Deputy Marc Leadbeater’s Home Affairs, which has lodged three amendments asking for nearly £4m in total.
The cash would pay for more police officers, firefighters and prison staff, help clear population permit backlogs and keep the Sexual Assault Referral Centre running .
Deputy Tina Bury’s Employment & Social Security wants another £3.8m under Option A to cover increases in non-contributory benefits, warning that without the money, Family Allowance limits could face significant cuts otherwise.
Meanwhile, Education President Deputy Paul Montague is seeking £1.6m for autism services and primary school Family Support Workers.
And Deputy Simon Rochester wants £1.9m for a year-long trial of free bus travel, a proposal which was seconded by Deputy Ross Le Brun.
More spending, less tax
And it’s not just the extra spending that could leave P&R with a financial headache.
While deputies are seeking another £19.56m in spending, they also want to knock £2.93m off the States’ planned income from taxes and duties.
Deputy Aidan Matthews wants to halt the phase-out of mortgage interest relief, costing £1m, while Deputy Gavin St Pier wants to raise the threshold at which higher earners begin losing their personal allowances, at a cost of £800,000.
Deputy Lee Van Katwyk, meanwhile, wants to freeze fuel duty, leaving another £500,000 out of the States’ coffers.
Together, the extra spending and lost revenue would leave P&R facing a £22.5m financial headache.
Not everyone is pushing for more spending, however.
Deputy Simon Vermeulen wants to scrap P&R’s higher-spending Option B.
If approved Option B would set the budget at £716.1 million, rising to £721.1 million once the £5 million multi-year allocation for economic growth initiatives is included.
Meanwhile Deputy Rob Curgenven wants to cut the Overseas Aid budget by nearly £600,000.
A track record of overspending
If P&R is hoping to keep a lid on spending, history suggests it has its work cut out.
Since 2017, the States has only managed to come in under budget once overall, spending £105m more than originally planned over nine years, an average of around £11.7m a year.
While extraordinary events such as the pandemic played a part, the accounts paint a picture of a government that has consistently struggled to stick to its own spending limits.
Over the past 20 years, departmental overspends have averaged £2.2m annually, and there hasn’t been a single year when every department managed to stay within its budget.
Healthcare has been a particularly expensive headache, accounting for four of the five biggest departmental overspends in the past two decades, including £13.4m in 2013 and £8.2m last year.
Whether P&R can keep its spending plans intact, or whether deputies will blow another hole in the States’ finances, will become clearer when the Budget debate gets under way on Tuesday.
