Guernsey in the black for second year running

Tuesday 05 June 2018

Guernsey ended 2017 with a £22.1m. surplus, the States accounts have revealed, marking the second year of returns in the black after eight years running at a loss.

The figures were published yesterday, and covered the entire economy, from States' committees and businesses to the private colleges.

They outlined a wholly strong economy, with more people being employed, earnings having grown, company tax revenue increasing (by £11.6m.) and the local housing market's conveyances increasing by 13% (resulting in a £4.3m. rise in duty receipts).

Collectively, the States committees underspent their budgets by £5.4m. - but Education, Sport & Culture overspent by £2.1m., due to a "combination of failure to meet savings targets and material overspends in certain areas".

Home Affairs also recorded a small overspend of £57,000, and Economic Development by £0.4m. Health & Social Care however underspent by £2.6m., Employment & Social Security by £1m. and STSB by £0.6m.

Other headlines included the Dairy making a loss of £354,669, half of the previous year; but there was no £700,000 payout to milk round owners to contend with during 2017, Aurigny receiving a payout to cover losses that ended up being better than expected and only £8.2m. being spent on real terms capital expenditure.

"The success of achieving a surplus for the second year in a row should not be understated, given that for the previous eight years the island's annual finances were in deficit," Deputy Gavin St Pier, President of Policy & Resources, said.

"In recent years we have managed to regain control of pubic expenditure - in 2017, we spent £6m. less than in 2016; we have weathered tough economic conditions and are now starting to see real evidence or retuning confidence across a range of economic indictors."

He did add there was no time to relax, despite the surplus, as the States had to retain the financial discipline instilled in recent years.

"However, the £22.1m. surplus does place the P&R Committee in the fortunate position of being able to examine how these additional funds can be best used to benefit our community. We will include proposals in the 2019 Budget Report, which will be published in October."

The options for the surplus' use includes: 

• Funding increases in personal income tax allowance.
• Replenishing the Future Guernsey Economic Fund.
• Helping deliver agreed policy priorities in the P&R Plan.
• Further rebuilding the Core Investment Reserve, which is currently depleted.

The accounts also confirmed that the States were able to transfer £52.5m. to the Capital Reserve, which add a balance of £240.2m. at the end of 2017. This was sufficient to meet the target of spending 3% of GDP per year on capital expenditure, but only £8.2m. of actual expenditure occurred, which Deputy St Pier admitted was of concern and was something that needed work.