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No central savings target has been included in the 2025 Budget after years of using one as a mechanism to try and keep a lid on public sector spending.
It comes in a Budget which sets out unprecedented levels of revenue spending, with committees being licensed to spend £650m. next year if the Budget is approved, up from £610.3m outlined in this year’s Budget, or 6.2%.
Committees will also miss the £1m. central savings target they were set in 2024, being expected to deliver £500,000 instead.
It comes as debate swirls around how to cope with the States growing financial stresses with much of the focus on the tax base, with Policy & Resources' proposed short term solution an increase in income tax from 20% to 22%, a move which will mean revenue from this is estimated to be £92m. more in 2025 than this year at £504.5m.
The Budget includes an update on the work of the Reducing the Cost of Public Services Sub-Committee, which fell out of a resolution from the GST debate.
There was an expectation to deliver £10-16m. of cost reductions over five years.
P&R opens its update on the sub-committee's work by immediately stressing other cost-cutting programmes from past years.
Pictured: Deputy Lyndon Trott, President of the Policy and Resources Committee, detailing the plans for next year's budget.
The Financial Transformation Programme ran for five years, and although it fell short of expectations was said to have delivered £28.7m. of recurring savings in a report produced in 2015.
In 2017 most committees absorbed a 3% savings target, followed by 1% the following year.
The 2018 Medium Term Financial Plan set a further target of £26m., but by the end of 2023 only around £8m. had been found.
A savings target of £4m. was included in 2024 committee budgets.
The Sub-Committee's work included getting suggestions from the public, States members and staff.
P&R has recommended the major ideas, named Tier 1 initiatives, are "investigated" by the main committees, something which in effect pushes them down the line to next term.
They include looking at the universal £12 grant towards the cost of seeing a GP, changes to prescription charges and those who are exempt and whether there should be some form of means testing for health services.
Reviewing benefits, including capping or means testing, as well as reviewing the grants issued by Education, Sport & Culture are other areas on the list.
Other States work on delivering savings has not paused because of the sub-committee's work, it stressed in its report.
"It is unlikely that all Tier 1 initiatives will proceed to implementation and the States target of £10-16m in annual savings is not certain. The States will need to continue to explore and commit to savings initiatives over the five-year cost-reduction programme to reduce the risks associated with individual project's not proceeding and improve confidence levels for savings," the sub-committee said.
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