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Medium Term Financial Plan Addition 2017-19

30 June 2016

Jersey is one of the world’s most successful small jurisdictions. It is a great place to live and work, and compares extremely well with other places in the OECD’s Better Life Index for things like overall life satisfaction, personal safety and social support networks.

As we enter a period of increased uncertainty as a result of the UK’s decision to leave the EU our economy is performing well and our public finances are in a much stronger position than most other places.  We have considerable reserves, minimal debt and assets of nearly £6 billion. 

Jersey is in this position because we have consistently looked ahead and prepared for the future, and we want to keep it that way. The States Strategic Plan and the Medium Term Financial Plan set out how Jersey can meet the challenges and opportunities of a changing world and maintain this success for future generations.

The package of proposals in this Medium Term Financial Plan (MTFP) aims to keep Jersey successful by planning prudently for the future. Its strategy is to focus the available funds on priority areas and balance budgets by 2019, as advised by the Fiscal Policy Panel.
Last year we published proposals for total annual income and spending from 2016 - 2019 and detailed departmental spending for 2016. Now we are proposing detailed departmental spending for 2017-2019.

Improving health

By 2035, there will be sixty-five per cent more people over the age of 65 than there are today, and twice as many people over 85. It’s positive news that people are living longer but as the population ages our income will come from a smaller proportion of working age people.

We will need to fund complex new health technology, and drugs and treatments to keep islanders healthy. We will need to spend more on helping people to stay well, and more on the early years of life which are so important to lifelong health and well-being. We are also investing more in mental health services as a person’s quality of life is about more than their physical health. 

So we are allocating £40 million of annual growth funding for health and social care by 2019. That includes:

  • £19 million more each year to meet increased demand and new care standards
  • £4.5 million to support vulnerable families, safeguard children and improve the first critical 1001 days of a child’s life, including improved antenatal preparation, perinatal mental health care and early literacy
  • £1.5 million more for mental health services
  • £4 million more to treat people at home and in community settings
  • £8 million more each year to redesign services at the hospital so emergency patients can be treated safely on the same day.

This spending will be supported by the introduction of a new health charge which will be phased in, raising £15 million per year by 2019.

We have identified a site for a new hospital and more detailed proposals will be presented to the States Assembly before the end of 2016.

Improving education

We want to help all our children reach their full potential, so we are focusing on raising standards, updating the curriculum, supporting families and giving head teachers more freedom. A key project is the Jersey Pupil Premium, which will help children who are at risk of under-achieving. Alongside this we are ensuring we have enough places for pupils in our schools and we are building stronger links with businesses, so young people can leave school ready for the world of employment or their next steps in education.

We are allocating nearly £11 million of annual growth funding for education by 2019, which will cater for an increased number of young people in education and fund planned improvements in standards. Since last year we have added an extra £2 million per year which will help more families with the cost of higher education.

Improving St Helier

We are regenerating our capital, St Helier, so it is a great place to live and work. We are making sure that quality public space is included in new town developments and we are working closely with the parish to improve services. That includes paying rates on States properties from 2017.

Andium is investing more than £200 million in new and improved homes over the coming years, improving people’s lives and transforming areas of St Helier. In 2015 Andium built 88 new homes and refurbished existing homes at developments like Hampshire Gardens to meet the Decent Homes Standard.

The States of Jersey Development Company plans to invest more than £150 million in St Helier over the period of the plan - building grade A office space to meet the demand of expanding businesses and to ensure that we can attract valuable inward investment business. These new office developments free up older office buildings to be transformed into homes, a process that has already begun in some areas of St Helier.

As part of the College Gardens development SOJDC is also providing 40 affordable shared equity apartments and, on behalf of Jersey Homes Trust, 40 social rented homes.

Improving infrastructure

We are continuing to invest in vital public infrastructure, much of it in St Helier, by spending £168 million on capital projects in the four years of the plan. Some of the largest expenditure will be:

  • £43 million for the Department for Infrastructure, much of it for a new sewage works 
  • £56 million for Les Quennevais, Grainville and St Mary’s Schools
  • £21 million to replace essential IT systems and enable the modernisation of public services
  • £14.3 million for replacement of equipment operated by the Department for Infrastructure
  • £14 million for replacement of equipment operated by Health and Social Services
  • £3.5 million to extend Jersey Archive.

Supporting economic growth

We are maintaining the right environment to boost the economy and provide extra revenue for our public services.

Last year we set aside £5 million for projects that could demonstrate they would improve economic growth, productivity, skills and job opportunities.

We have set aside a further £13.5 million for 2017-19. This is for projects from all sectors of the economy that can contribute to economic growth and productivity improvements.

£3 million of this funding has been used to protect the budgets of External Relations, financial services, digital, innovation and competition. Maintaining Jersey’s reputation abroad and in key international organisations is vital to ensure the long term health of the financial services industry, particularly as the UK and EU enter a period of uncertainty created by the decision to leave the EU.

The Back to Work programmes have been successful in getting Islanders into employment, so we are proposing to maintain much of this funding to help people who face extra barriers to work.
We are, to a large degree, maintaining existing budgets for tourism, agriculture and other business sectors, reflecting their important contribution to our economy and island life.

Funding priority services

We are funding our key public services by reprioritising spending, reducing costs, reforming the public sector to become more efficient and introducing some charges.

  • £73 million of savings and efficiencies by 2019
    - £46 million through efficiencies
    - £25 million through pay restraint
    - £2m of savings by reducing services
  • £4m of User Pays charges
  • £10m per year saved through benefit changes (agreed last year)
  • £15m per year raised through a new health charge
  • £11m per year raised by charging for the disposal of commercial waste

The Chief Minister, Senator Ian Gorst said “This plan is an important one for Jersey. It tackles the challenges that are emerging across the world, and sets a direction for the island for the next three years. It enables us to invest in our future, while encouraging inward investment and supporting businesses to create the jobs and generate the taxes that pay for essential services. We are strengthening Jersey’s economy for future generations.

The Treasury Minister, Senator Alan Maclean said “Our society is ageing, global competition is intensifying, and we are seeing rapid technological and environmental change. Jersey has a clear plan, substantial reserves and a proven track record of fiscal discipline. We are dealing with tomorrow’s problems today by investing in our priority services while promoting economic growth and balancing our books by 2019.

“We are determined to keep government costs under control so we are reducing spending in some areas to invest in the priority services agreed by the States Assembly – health, education, St Helier, economic growth and our essential infrastructure. We have been assessing which services are essential and reforming the public service to meet the changing demands of Islanders.

“We are putting in place the right environment to maintain a healthy economy so it becomes increasingly competitive, innovative and technology-driven, and can provide the extra revenue that will help pay for services, balance budgets by 2019 and sustain a successful future for Islanders.”

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