Draft States Business Plan 2010

21 July 2009

The States Business Plan for 2010 has kept spending within the limits agreed a year ago, while at the same time identifying savings of £17 million to fund increased spending pressures - including improvements in child protection proposed after the Williamson Inquiry, the costs of the historic child abuse enquiry and the revenue lost when the UK ended the Reciprocal Health Agreement.

States Business Plan for 2010  (PDF document, size 880 Kb) (opens in new window)

Annex to Draft States Business Plan 2010  (PDF document, size 2362 Kb) (opens in new window)

The £17 million was identified through departmental and corporate savings, and a public sector pay freeze. The money will be invested in:

• improving children’s services
• providing additional growth for Health and Social Services
• maintaining the real value of Social Security benefits
• continuing to fund the ‘Building a Safer Society’ initiative
• providing additional funds for residential care
• increasing essential maintenance of States property and infrastructure

The Chief Minister, Senator Terry Le Sueur, said: “The Strategic Plan set out our long term vision for Jersey’s future, now we want to put some firm plans behind that vision. We want to work together to create a society in which all islanders can reach their full potential. That’s why it was important to find savings from within the organisation, savings that have been difficult to identify, so we can invest in children’s services, in front line health services, in reducing crime, in supporting the vulnerable and in tackling the harm caused by the misuse of drugs.

“We want to promote lifelong health and well-being for all islanders and help people to help themselves. That is our focus and that is where we are spending the bulk of the money we have saved.”

The Business Plan also anticipates investing £215m over the next five years to improve social housing, maintain States buildings, and upgrade sewage treatment works and roads.

The Treasury Minister, Senator Philip Ozouf, said: “Setting this Business Plan has been a very difficult process. We made it clear in our Strategic Plan that any spending pressures, growth or investment must be offset by equivalent savings, service reductions or extra income. Despite this, we have managed to stick to spending limits by finding new efficiencies, controlling the public sector pay bill and some reductions in services. The Council of Ministers needs to maintain this discipline in future years.”

For the next 18 months the main priority is to deal with the economic downturn in order to reduce the impact on the Island. More than £150 million has been set aside from the Stabilisation Fund to meet the costs of a comprehensive Fiscal Stimulus Package.

Senator Philip Ozouf added: “£44 million is being invested in projects aimed at helping businesses and individuals through this difficult time. This still leaves over £110 million which will be needed to maintain public spending and services over the next two years, in the face of falling tax receipts.”

The Business Plan is focusing on the 2010 spending limits. The figures for 2011 and 2012 are still indicative, and the Chief Minister and Treasury Minister intend to start work with the Council of Ministers on a three-year business planning process for 2011 and beyond.

Senator Ozouf intends to develop three-year cash limits with departments, based on a review of their spending and a prioritisation of their activities, informed by the new Strategic Plan. Details of this process will be published later this year and will focus initially on the three major spenders – Health and Social Services, Social Security and Education, Sport and Culture.

The Business Plan also indicates that if efficiencies and savings alone would not meet predicted future deficits, a contingency plan needs to be drawn up.

The Treasury Minister concluded: “If spending cannot be contained or reduced, there would be no alternative but to consider increased taxes and charges in order to return to balanced budgets. But we have successfully managed similar challenges. Indeed our current financial position owes much to the strength of our fiscal strategy, and we can now address the next challenge with similar foresight.”