Veteran States Member Deputy Sir Philip Bailhache is calling on Jersey’s next government to impose dramatic cuts to public spending and the size of the civil service, warning that the island is being left with an “unsustainable” financial legacy that will be painful to unwind.

In a blistering contribution to the States Assembly debate on the 2026–2029 Budget last night, the leader of newly rebranded political party Advance Jersey – formerly the Jersey Liberal Conservatives– claimed the current Council of Ministers had failed in its duty to restrain spending and was handing its successor an economic timebomb.

“I have been a member of this Assembly for more than 50 years,” he told his political colleagues, “but this is the first time that I have felt unhappy about the stewardship of the island’s financial affairs and the direction in which the government is taking the island.”

Deputy Bailhache said a previous description of the Budget as a “hand grenade” for the next government underestimated the scale of the problem.

“It is not a hand grenade, it is a mortar bomb, and the destructive effects of that mortar bomb are quite extensive.”

£100m per year in extra costs

Pointing to figures contained in the Budget and advice from the Fiscal Policy Panel (FPP), Deputy Bailhache said the next government would inherit more than £100 million a year in additional recurring costs.

During the Budget debate, the Deputy had suggested scrapping plans to borrow £43m to fund the first phase of Fort Regent redevelopment – but this was defeated by 34 votes to 10.

In his closing Budget speech, he warned that the leisure centre could generate £5 million a year in operating costs, with total borrowing of up to £110 million possibly leading to £8 million a year in interest and capital repayments if the site is reopened by 2028 or 2029.

Hospital borrowing, he added, would incur £15 million a year in interest in 2026, rising to £28 million by 2028.

“The additional revenue costs are already more than 100 million pounds per year,” he said. “That’s the mortar bomb that has been delivered to the next government against a background of a warning from the FPP that the trajectory is unsustainable.”

This is the first time that I have felt unhappy about the stewardship of the island’s financial affairs and the direction in which the government is taking the island

Deputy Sir Philip Bailhache

While accepting the Chief Minister’s argument that Jersey is “not in crisis” because of its strong reserves, Deputy Bailhache said recent trends were deeply concerning.

“Over the last three years, 2022 to 2025, our income has grown by 22% while our day-to-day spending grew by 49%,” he said. “Spending has soared since the pandemic.”

Deputy Bailhache added: “Our debt in 2026 will be £1.3 billion. The Chief Minister has claimed that this is a ‘Budget for stability’, but I’m afraid that is an optimistic claim.

Responding to comments from the Treasury Minister that Members were quick to demand more spending, Deputy Bailhache said the real solution appeared obvious – but politically difficult.

“So I would respond to the Treasury Minister’s challenge in this way: every member knows that the answer is to cut spending, and that will be painful,” he said.

“This government has, I am afraid, failed in that aspiration, but the next one must not. It’s the only way in which to put the economy back into balance.”

Deputy Bailhache then set out a clear programme he said the next government must adopt, including reducing department headcounts by 10% in 18 months and giving the government CEO a mandate to cut spending by £100m per year.

Deputy Montfort Tadier challenged the Deputy over whether he was, in fact, setting out a party manifesto, but he denied this.

Concluding, Deputy Bailhache said his proposals would not be easy, but were unavoidable.

“I believe the next government should be resolute, but should obviously, at the same time, be careful and thoughtful.”

But, in her closing remarks in the Budget debate, Treasury Minister Elaine Millar – who had previously said during interviews that she felt the Island was spending like a “big country” and that all States Members had a part to play in curbing growth – said the Chief Executive already had “a clear mandate” to resize the public sector.

She said that work to achieve this had already begun, including recruitment restrictions, informed by workshops held with States Members.

Deputy Millar added that States Members would see initial recommendations at a final workshop in February.

She suggested that the Budget was overall far more balanced than many Members had argued, telling the Assembly: “It reflects difficult decisions… guided by one principle, to prioritise investment in what matters most: health, housing, children and infrastructure.”

“These are the foundations of a fair and thriving society, and are at the heart of this budget,” she added.

Deputy Bailhache’s four demands for the next government

1. Give the Gov CEO a mandate to cut spending by £100m/year

“He needs the authority to make difficult decisions, and that authority can only come from the government,” Deputy Bailhache said.

2. 10% reduction in department headcount in 18 months

According to Deputy Bailhache, any department chief officers who fail to deliver this objective should be replaced: “If they fail to do that, they would clearly not be the people for the job and should give way to someone else.”

He added that ministers should also be held accountable.

“If a department failed, a minister should go too.”

The proposed reduction, he said, must be seen in the context of a 20% rise in headcount over the past four to five years.

“If we were capable of running our economy with that fewer number of people before the pandemic, then we should be able to do so now.” He said no department should be exempt, including Health and Education.

3. A review of ALOs

Deputy Bailhache said the number of arms-length organisations had “mushroomed” and that scope for “pruning” should be explored.

“Only in the most highly exceptional circumstances should any new arms-length organisation be allowed into existence.”

4. Reduce legislative complexity 

Finally, the Deputy called on ministers to “get a grip on regulation”, arguing that excessive and complex legislation was costly and unnecessary.

“Every government in Europe – even the European Union itself – is trying to do that. Regulation costs money, and if a new law or regulation is necessary, there should be a ministerial direction to lawyers and law drafters to keep it simple.

“The complexity of much of our legislation is mind-boggling. It’s not necessary to copy reams of stuff from United Kingdom acts.”

Instead, he said civil servants should be directed to produce “Jersey-centric short legislation” that was simpler and cheaper to administer.