25 April 2019
The government has published the States of Jersey Annual Report and Accounts for 2018. The report shows that the organisation maintained a strong closing balance sheet with net assets of £6.8 billion, as well as reflecting rises in expenditure – up £80 million (7%) on 2017.
The report details a healthy balance on the Strategic Reserve and Social Security Funds and a robust three-to-five-year investment outlook. That’s despite the write-off costs associated with the hospital project, and a drop in investment valuations of £95 million, consistent with the performance of markets and representing the single biggest impact on group financial performance.
The report goes on to explain that the government invests over the long-term and while this drop may seem concerning, it actually follows a run of strong annual returns. The long-term investment outlook remains positive, but there remains considerable short-term volatility, demonstrated by the valuation losses experienced being recouped by the end of February this year.
- General Revenue Income, as approved by the States Assembly, was £799 million, which is £32 million more than in 2017. This was mainly due to increases in income tax revenue, GST and stamp duty.
- Including the results of States Owned Entities and major funds, including the Social Security Funds, spending increased by 7%, from £1,167 million in 2017 to £1,247 million in 2018. This included pay awards, social benefit expenditure, healthcare costs and the one-off abortive costs associated with the hospital.
- The Strategic Reserve decreased in value by £33 million from 2017, through falls in the valuation of investments over the year of £25 million, and £8 million being transferred to fund the hospital project. The Strategic Reserve balance still remains in a strong position, at £807 million.
- The Social Security Funds decreased in value by £49 million from 2017, and now stand at almost £1,921 million.
Building on changes made last year, the Annual Report, in common with best practice, reports not only financial performance, but also what has been achieved in the year. It contains a detailed breakdown of the activities and initiatives carried out by the different government departments. It explains what the government has done with taxpayers’ money, highlighting where things have gone well and where they have gone less well and need to improve.
The States Treasurer, Richard Bell, said: “The Treasury & Exchequer has been undergoing significant transformation, including the creation of a single finance function. A considerable improvement made to the time taken to deliver the Accounts, which have been published 6 weeks earlier than previously and therefore providing timelier reporting to assist decision makers, represents tangible evidence of the improvements being made.”
Further improvements were also made to the financial accountability framework, through the Assembly making the Chief Executive ultimately accountable for the efficiency, effectiveness and economy of spending across government, through the role of the Principal Accountable Officer (PAO).
Charlie Parker, CEO and PAO said: “This has been a year in which we have focused externally on preparing for Brexit, which has been an exemplary exercise in cross-government working. Internally, in response to what we learned through the due diligence reviews, we have focused on stabilising services, processes and procedures, and we have begun to make changes to improve how we are structured and organised in order to deliver better services to islanders and stakeholders.
“This report reflects the incredible work carried out every day by our committed public servants, and I want to thank our staff on behalf of the senior leadership team for all that they do for islanders.”
The Minister for Treasury and Resources, Deputy Susie Pinel, said: “The 2018 accounts reflect a mixed year of financial performance, with a drop in investment performance offset by an increase in our general income. Despite some challenges over the year, including write-off costs associated with the hospital project, we have finished the year with a strong closing balance sheet, and a healthy financial position.”
“It is testament to the dedication and determination of people across departments that we have been able to cut the time taken to report on not just our finances, but also our achievements and activities during the year. In particular, I would like to thank the small team who coordinate the production of the Accounts who have worked extraordinarily hard to enable us to bring forward the closure of our 2018 accounts. We have therefore been able to publish our annual report considerably earlier than in previous years.”
States of Jersey Annual Report and Accounts 2018