The States 2022 accounts have been published with a dire warning from the island's finance lead that we must deal with our deficit urgently.
With the States of Guernsey's overall deficit for 2022 sitting at £135m, its operating deficit (the difference between its expenditure and its income) was £3m.
Deputy Mark Helyar said this needs addressing, as we’re not bringing in enough money to cover the cost of public services. He's also warned that the continuing rise in demand for health services is impacting public finances and that "this is not a problem for the future anymore".
The Treasury Lead on Policy and Resources also said the accounts should put paid to any claims that the island's accounts weren't accurate. That claim was made repeatedly during the Tax Review debate earlier this year.
Pictured: Deputy Mark Helyar has made repeated warnings about the island's finances, including when he presented his 2023 budget last autumn.
“We have an operating deficit of £3m meaning we’re already not bringing in enough to cover costs," said Deputy Helyar. "The continuing rise in demand for health services is impacting our public finances now, this is not a problem for the future anymore. International recruitment challenges and the impact of the war in Ukraine add to the already very difficult situation we’re in.
"What is positive is that we continue to move forward in our transition to International Public Sector Accounting Standards. And as we get nearer to completing the transition, I hope it puts to bed the myth that the Accounts, which are independently audited, aren’t accurate or cannot be relied upon. This has never been the case, but it’s become a way of distracting from the genuine problem of our deficit which we must deal with urgently.”
The States of Guernsey Accounts 2022 are published HERE.
For the first time 'fixed assets' are included to reflect the value of things like States-owned land, buildings, vehicles and equipment. This also means that depreciation of these assets is included in the accounts, and in 2022 this totalled around £30m.
The value of Social Security Funds has also been incorporated for the first time.
These changes have been made as part of the transition to International Public Sector Accounting Standards. The States is making this change in phases with the Trading Entities (the dairy, ports, and others) all presented separately for 2022 but due to be incorporated into one accounts spreadsheet in the future.
The States said these changes in how the Accounts are presented 'have the benefit of showing the States overall financial position, rather than having different aspects separated out'.
The States of Guernsey's overall deficit for 2022 was £135m.
The overall operating deficit - the difference between its expenditure and its income – was £3m in 2022. However, once depreciation, interest payable and received, and investment losses are included, the overall deficit is £135m.
P&R says "2022 was a particularly bad year for investments as markets were impacted by global events, including the war in Ukraine, rising energy prices and in turn, rises in the cost of living".
The return on Guernsey’s investments of -11.63% is described as "not out of step with the weakness seen in markets, despite Guernsey having a well-diversified portfolio of investments".
P&R urged for investments to be "kept in context, as losses in one year can be recouped as markets bounce back" stating that "a much more long-term view is taken for the performance of investments".
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