Public spending will increase next year after deputies rejected a bid to freeze expenditure in line with 2025 levels.
Debate on the States’ 2026 budget got underway yesterday and the first matter, whether to freeze government spending next year, was defeated by 25 votes to 13.
Deputy Andy Sloan, who made the case for expenditure restraint, told the States that “government is not a vending machine” and that “demand does not automatically force supply”.
He defended prospective cuts to States departments saying politicians had “lost the will to prioritise” and that “members have to collectively face the facts and grow up”.
Deputy Sloan pledged that his committee, Scrutiny Management, would improve oversight of public finances by holding public meetings to challenge the figures.
But several Committee Presidents stood throughout the debate to strongly condemn the amendment and question its supporters on what services they want to see cut.
Deputy Gavin St Pier, Vice-President of Policy & Resources and treasury lead, successfully defended his committee’s plan to increase spending by 4.8% next year, saying it would be done proportionally.
He said “salami slicing” services would end up costing more in future years – a point repeated by many – and characterised the desire for short-term savings as the “sugar rush and endorphin high of being seen to do something”.
Deputy St Pier noted that public sector spending would rise by less than the average increase of 1% over the past decade, but he did accept that the States is running out of road to continually increase taxes and duties such as TRP and fuel duty.
Health President, Deputy George Oswald warned that a real-terms cut of £9m to his budget would be playing with people’s lives.
Small amounts could be saved by closing the De Havilland orthopaedic wing and cutting the number of specialist staff, but he said these would lengthen waiting lists and mean the hospital cannot respond to the complex clinical needs of the community.
Deputy Tina Bury, President of Employment & Social Security, argued that those supporting cuts “are not involved in front line service delivery” and there was no consultation or detail on what would be cut, and what impacts that would have.
“I find it a little bit rich they will be able to turn away and not deal with the consequences,” she said.
Environment President Deputy Adrian Gabriel added that he would be forced to ask contractors to do the same work for less money which would impact maintenance of the island’s roads, coastal defences and attractions, such as the bathing pools.
But Deputy Mark Helyar, President of the STSB and former treasury lead, said the States must set an example with its finances and criticised the view that the bathing pools are an essential service.
“Do we really need Olympic standards at the bathing pools when kids jump off the harbour wall down 20 metres,” he questioned.
Deputy Helyar went on to question if cuts were approved by politicians whether they would be introduced by the bureaucracy, saying it is beyond the government’s control despite the public demanding spending restraint.
Deputy Neil Inder, DPA President, agreed saying the problem isn’t frontline staff but “the bureaucracy” as he noted that budgets which were supposed to fall away after covid, IT investment and the Moneyval evaluation remained in place.
He also criticised Forward Guernsey party politicians, including Deputy St Pier, for “backpedalling” on their manifesto pledge to cut spending by 1% per year.
Forward Guernsey member Deputy Tom Rylatt said he remained “deeply concerned about the current financial position” but said the party was satisfied that its target could be met through savings being led by the States’ Chief Executive.
He said blanket cuts are “blind and hopeful” and they would prove to be a “fiscal boomerang” which comes back with the same or worse outcomes for the States.
Deputy Charles Parkinson, tax-review lead for Policy & Resources, defended the £115m cash deficit projection in the budget saying some of it is uncollected tax from new corporate tax rules with the remaining being borrowing to fund £69m of capital spending.
He said there was “nothing fundamentally unsound” about the budget plans and said those advocating for cuts were playing “gesture politics”.
The amendment was defeated by 25 votes to 13, with one deputy abstaining.
Debate on the budget continues…