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Draft Public Finances Law (States Funds) (Jersey) Amendment Regulations 202- (P.24/2026): comments

Published on: 17 March 2026

Presented by: Corporate Services Panel

Debate date: 24 March 2026

Reference: P.24/2026 Com.

This content has been automatically generated from the original PDF and some formatting may have been lost, therefore it should not be relied upon to extract citations or propose amendments. Please see the PDF for the official version of the document.

STATES OF JERSEY

DRAFT PUBLIC FINANCES LAW (STATES FUNDS) (JERSEY)
AMENDMENT REGULATIONS 202- (P.24/2026): COMMENTS

Presented to the States on 17th March 2026 by the Corporate Services Scrutiny Panel

STATES GREFFE

2026  P.24 Com.

COMMENTS

Introduction and Context

  1. The  Draft  Public  Finances  Law  (States  Funds)  (Jersey)  Amendment Regulations 202- [P.24/2026] ("the draft Regulations") proposes to amend the Public Finances (Jersey) Law 2019 ("the PFL") to establish the Jersey Capital Investment Fund ("the JCIF") and incorporate it into the operations of public finances, as previously agreed in-principle through the Budget (Government Plan) 2026-2029 [P.70/2025] ("the Budget"). Thereby replacing the existing Consolidated Fund ("the CF") with two separate Funds - the General Revenue Fund ("the GRF") for day-to-day spending and the JCIF for investing in capital.
  2. The structural change is intended to protect and stabilise funding infrastructure and regeneration projects over a 25-year horizon, underpinned by the Long- term Capital Plan ("the LTCP") which will initiate a shift of capital planning to a longer-term view in line with Investing in Jersey.
  3. The  Corporate  Services  Scrutiny  Panel  ("the  Panel")  first  considered Government's proposals to establish the JCIF as part of its review of the Budget, recognising it as an important step toward stronger long-term financial and capital planning. The Panel highlighted that while initiatives such as the JCIF, the LTCP and multiyear planning represent positive progress, they are still in early development and would require sustained political commitment, clear governance and robust performance monitoring.1
  4. In its report [S.R.6/2025], the Panel made findings confirming that the JCIF is intended to centralise, protect and manage longterm capital investment through ringfenced funding, structured governance and oversight mechanisms to help address unsustainable expenditure growth and restore longer-term investment capacity.  The Panel also recommended  that future States'  Propositions to establish  the  JCIF  must  include  detailed  information  on  governance, transparency, funding sources, risk management and performance measures. This recommendation was accepted by the Chief Minister and Minister for Treasury and Resources,2 who confirmed that further detail would accompany the enabling legislation and future updates made to the Public Finances Manual ("the PFM"). Detail pertaining to this is provided in the accompanying report to the Proposition.
  5. The Panel has engaged extensively through briefings and a public hearing and emphasises that approving the draft Regulations is only the first step toward longerterm reform. The Panel notes, at this stage, that the draft Regulations seek  to  provide  the  legal  framework  for  the  JCIF  within  the  PFL,  with substantial detail to be determined by a future States Assembly ("Assembly") following its establishment. To establish the governance arrangements, the PFM will need to be amended. Further decisions will also be required on the proposals for future developments (not impacted by the draft Regulations) including a potential move to multi-year budgeting, embedding longer-term

1 S.R.6/2025 – Findings 37 and 28 and Recommendation 18 2 S.R.6/2025 – Ministerial Response  

financial planning and forecasting and articulating a  longer-term financial strategy.

Impact of the Draft Regulations

Changes not related to the creation of the JCIF

  1. The draft Regulations will amend the PFL to establish the JCIF and incorporate it into the operations of public finances. At the same time, the opportunity has been taken to propose miscellaneous amendments to the PFL - these are not related to the creation of the JCIF and are as follows:
  1. Rename the term "Government Plan" to "Budget".
  2. Amend the requirements relating to States Trading Operations.
  3. Remove Schedule 4 (which relates to specific withdrawals from the Strategic Reserve Fund for the previous Future Hospital" project and Hospital Construction Fund).
  4. Amend Article 24 (authority to withdraw a specified amount).
  1. Amending the requirements relating to States Trading Operations will provide a future Assembly with the opportunity to explore how Jersey Car Parking and Jersey Fleet Management could function as part of the JCIF portfolio. Although this amendment ensures that the PFL would be able to provide for this through a future Assembly decision, no immediate changes will be brought by the draft Regulations.[3]
  2. The Panel understands that the removal of Schedule 4 reflects a Budget decision where it was agreed to wind up redundant States' Funds, which included the Hospital Construction Fund[4]. The Panel was informed that by amending Article 24 as specified in the Proposition, should Islanders be faced with a significant threat to health and safety, the required emergency powers to transfer funds from the Strategic Reserve Fund are provided for by the PFL.[5]

Changes related to the creation of the JCIF

  1. Approval of the draft Regulations will bring forward amendments to the PFL, which are related to the creation of the JCIF:
  1. Remove the CF and establish the JCIF and GRF.
  2. Amend the Articles relating to the Budget to reflect the JCIF and GRF.
  3. Remove the definition of Major Project.
  4. Amend the powers relating to legal approvals.

Changes to Fund Structure and Purpose

  1. The draft Regulations will delete the CF and create the GRF and JCIF in its place, this will change the Funds' structure and purpose.
  1. The GRF will be the States' operational fund moving forward. Thereby, the GRF will receive all General Revenue Income, other departmental income and pay out day-to-day expenditure. It will also be used to transfer funds into other Funds, including the JCIF. 6
  2. The JCIF will incur both capital and revenue spend relating to assets, receive rental/lease income from assets, investment income and proceeds from asset disposal. Capital expenditure will be ring-fenced in the JCIF to safeguard and invest in States' assets held in the Fund. The JCIF will be able to receive funds from the GRF and other sources (including through approved borrowing) to undertake capital and asset related spend. 7
  3. Despite the removal of the CF, the JCIF and GRF will jointly provide a consolidated' view of States' finances. This means that the combined income and expenditure of the GRF and the JCIF will be equivalent to the current CF. Therefore, transparency in budgeting and the overall position of States' finances will not be reduced through this action, instead additional transparency is made possible.
  4. The Panel found when reviewing the Budget that: The Consolidated Fund is currently in a weakened position, with working capital demands exceeding available  balances,  leaving  it  cash-negative  and  reliant  on  an  overdraft. Historical buffers that previously absorbed income fluctuations have been depleted, reducing short-term contingency capacity of the Fund. The future of the Consolidated Fund is under review as a result of the potential establishment of the Jersey Capital Investment Fund (JCIF). Should the establishment of the JCIF be approved, the Consolidated Fund could be split into the JCIF and a General Revenue Fund which should create opportunity for reducing overdraft in future years. The proposition to establish the JCIF will clarify the detail.8  
  5. The Panel recognises from its Budget review that together the current Fund structure and annual budgeting process have weakened the position of the CF, with spending consistently exceeding income. This has prevented rebuilding the Fund's balance and resulted in capital allocations being diverted to cover overspends. The Central Reserve is also very low at £5 million, limiting fiscal flexibility without relying on alternative funding sources (like redirecting funds from capital budgets and other Funds). While the draft Regulations aim to improve the longterm fiscal position, the Panel examined how creating the JCIF and ringfencing funds might affect flexibility, potential risks and what measures will ensure adequate contingency is maintained.

Deputy H.M. Miles :

you have explained how the new structure is going to strengthen the financial position for the investment so that money cannot be taken out, but that is going to reduce the flexibility that you have at the moment to move money around. So, for example, money has come out of the capital budget in order to fund overspends in health, for example. So

6 P.24/2026 – Explanatory Note 7 P.24/2026 – Explanatory Note 8 S.R.6/2025 – Findings 53

what else are you going to have to put in place to make sure that you have that flexibility? Where else will the money come from if you cannot take it from the capital?  

The Minister for Treasury and Resources:

Well, we would have to fund that through general revenues. I think that feeds into the underlying ethos that we have been trying to work towards in the last couple of years is really trying to rein in spend, revenue spend. We are arguably spending more than we should be, given the state of our income. So we do just need to look ... it will require  more  discipline  around  revenue  spending  and  everybody remaining within budgets. If there were growth, if we did need more money, then we would be looking to fund that from revenue income or other charging or other sources of income.[6]

  1. The Panel recognises that Government must adopt more disciplined spending, using general revenues for daytoday costs while directing capital investment through the JCIF. It was advised that the Central Reserve will still hold general contingency funds, but further work is needed to determine the appropriate reserve size for a mediumterm plan, especially under potential multiyear budgeting. Government also acknowledged that the Central Reserve would need to be maintained at higher levels to ensure sufficient fiscal flexibility in future.

Treasurer of the States, Treasury and Exchequer:

We need to do a piece of work in terms of how big the reserve should be for a medium-term plan. So as we intend to bring forward the regulations to the next Government, should they decide to back it, to have a 3-year plan after the first initial year of a Government, that will require us to hold a larger reserve to span the 3 years. It will be possible, subject to what we do there, to take into account if income were to go up during the period and we will need to think about how the mechanics work in terms of the Stabilisation Fund in the event that future income drops off. In answer to your question, we do hold the position as officers the reserve needs to be higher. That number is roughly the same provision that we have had since I can remember and it is fair to say that it needs to increase. But what we also need to do is, therefore, make sure that those funds are there for use for urgent and unforeseen  in  accordance  with  the  policy.  So  greater  financial discipline around the use of the funds would give you greater flexibility should you need it further down the line for urgent and unforeseen matters.[7]

  1. The Panel notes that structural changes to Government Funds alone will not be sufficient; a broader cultural shift toward stronger financial discipline is also essential to deliver the Investing in Jersey vision. A future Assembly will need to make a key policy decision on how the JCIF should be funded, as the

accompanying report outlines potential options but makes no recommendations, and the draft Regulations do not implement any specific funding approach.

Recharging to the JCIF

  1. With regard to staff payments as a result of the structural change to the Funds, the Panel noted the proposal within the accompanying report to the  draft Regulations that it was presumed that all staff will be paid through the GRF, however, where staff work to deliver capital projects or maintain assets, the appropriate costs will be recharged to the JCIF. The Panel sought to understand what mechanisms were in place to prevent potential misuse of recharging to the JCIF and explored this during the hearing.

Deputy H.M. Miles :

In respect of the net revenue expenditure, page 8 of the report on the proposition, there are a couple of lines there: "It is presumed that all staff will be paid through the G.R.F. (General Revenue Fund) and where staff work to deliver capital projects or maintain assets the appropriate cost will be recharged to the J.C.I.F." (Jersey Capital Investment Fund). Can you just clarify exactly what is meant by that statement and the rationale behind it?

Interim Group Director, Finance Business Partnering and Analytics:

The intent here is that alongside the capital spending needed for a major refurbishment or extension perhaps to buildings that we operate that we would also be protecting funds that are for the day to day maintenance, net revenue in nature, typically what they would feature in a departmental budget today, but they have been targets during times of efficiency cuts, soft targets for departments. So we want to make sure that  that  spending  is  maintained  and  protected.  It  gets  a  little complicated when you reflect on the fact that staff are involved in maintaining  buildings.  So  while  you  would  protect  the  budgets associated with them, you do not want to start necessarily moving staff to be paid for by different ... by a Capital Investment Fund. So it would allow for the recharging. That would be codified in the Public Finances Manual or potentially through a Ministerial policy. I think it is really important  that  we  have  robust  governance  that  defines  what  is legitimate in terms of transfers so that it is not an outlet for spending from the fund.

Deputy H.M. Miles :

Exactly, and I think that is where the panel were thinking. Because arguably the entire Department for Infrastructure has staff who work to deliver capital projects or maintain assets. So I think the question we were thinking is: what is to stop the General Revenue Fund cross- charging for the entirety of the staff budget from the Capital Investment Fund?11

11 Transcript – Public Hearing with the Minister for Treasury and Resources – Pg 6

  1. The Panel accepts that any recharges to the JCIF must be evidencebased and justified. While noting a minor potential risk around crosscharging, the Panel is reassured by Government's commitment to prevent inappropriate use of the JCIF. It was advised that all recharging will be subject to internal audit and that a clear, codified process - either within the PFM or via Ministerial policy - will be established to define legitimate transfers and ensure the JCIF cannot be used as an unintended outlet for general spending, which would go against the principle for the Funds creation.

Removal of the Definition of Major Project

  1. Currently, the PFL defines a Major project by its total cost of more than £5 million.[8] The draft Regulations will remove the definition for Major Project and will provide that all projects of a sufficient size or importance be allocated a Head of Expenditure and be treated equally. Therefore, moving forward Budgets will approve project budget totals for all projects and grouped Heads of Expenditure. The provisions in the PFL which currently apply to Major Projects will also apply to these. Therefore, provisions will no longer depend upon the above £5 million threshold.
  2. The Panel notes that the above £5 million threshold for defining Major Projects has not worked well in practice. Since all projects - regardless of cost - require certainty  of  funding  and  cannot  easily  have  allocations  removed  once underway, budget totals and interyear flexibility are already routinely approved for all projects. The draft Regulations therefore aim to update the PFL to reflect these  existing  practices  rather  than  continue  relying  on  the  £5  million distinction. [9]

Amending of the Powers Relating to Legal approvals

  1. The Panel notes that the draft Regulations will update legal approval powers to align with the creation of the GRF and JCIF. These changes strengthen the Assembly's control, as ringfenced JCIF funds cannot be transferred out by the Minister for Treasury and Resources or Council of Ministers, and any capital underspends will remain in the JCIF. Any movement of JCIF funds will require explicit approval by the Assembly.

The Long-term Capital Plan Underpins the Jersey Capital Investment Fund

  1. The Panel found when reviewing the Budget that: the Jersey Capital Investment Fund (JCIF) is being designed as a centralised, legislatively backed mechanism to safeguard and finance long-term infrastructure and capital projects. The Fund aims to operationalise the Long-Term Capital Plan, provide strategic protection  for  capital  budgets,  and  ensure  sustainable  investment  while mitigating short-term budget pressures. The JCIF is considered a more robust mechanism than fiscal rules or existing processes for ensuring disciplined, sustainable and transparent capital investment.[10]
  1. The Panel recognises that the JCIF will be supported by a LTCP, which is essential for delivering the Investing in Jersey vision. Developing the LTCP carefully - with clear identification of assets, maintenance and depreciation needs, and a strong governance framework - is crucial to ensure investment decisions are sustainable, evidencebased and properly prioritised to deliver both core public services and meet future challenges. The framework must ensure transparency, accountability and effective scrutiny over the 25year horizon. The accompanying report to the draft Regulations (on page 4) outlines this framework and its governance approach in more detail.
  2. The  Panel  notes  that  the  accompanying  report  also  sets  out  a  phased development and management approach for the LTCP. It explored how capital needs will be assessed and sequenced across the 1-4 year, 5-10 year and 11-25 year phases, and sought clarity on who will be responsible for prioritising projects. The Panel focused particularly on how transparency and accountability in decisionmaking will be maintained over the full 25year timeframe.
  3. The Panel was informed that the LTCP serves as the framework for setting out both essential and improvementfocused capital needs. While the LTCP itself does not change how projects are prioritised, it strengthens the existing process by  extending  planning  horizons  and  ensuring  decisions  are  transparent. Prioritisation will continue to follow established methods for assessing needs, strategic importance and deliverability but the LTCP makes any changes to priorities or funding requirements much more visible to the Assembly. If essential projects are delayed, removed, or inadequately funded, Ministers will need  to  clearly  justify  these  decisions,  promoting  greater  discipline, accountability and thorough longterm planning.15
  4. The Panel further explored how longer-term investment would work in practice (beyond the first Budget phase 1-4years) by underpinning the JCIF with the LTCP. The Panel was informed that a key aim of the proposed approach is to improve visibility and embed a stronger culture of longterm capital planning. It was explained that, historically, capital programmes have changed frequently, creating  instability  and  undermining  confidence.  Moving  forward,  the "essential spend" for the first decade of the LTCP should remain relatively stable, with fewer shifts in priority. Although it will take time for processes to mature, the intention is that Ministers will publish robust, credible longterm plans that Islanders can rely on and for which they can be held accountable. Departments will therefore need to plan more rigorously, and Ministers will be incentivised to deliver consistency - something that has not been achieved under the existing fouryear planning framework.16
  5. The LTCP enables essential capital spending (investment to deliver current services at current levels) and change and improvement spending (investment that extends the scope, user experience or quality of public services). Together this approach proposes to encourage a shift to more considered and longer-term investment. The Panel understands that the LTCP will be supported by the proposed future development elements (not affected by the draft Regulations)

15 Transcript – Public Hearing with the Minister for Treasury and Resources – Pg 20 16 Transcript – Public Hearing with the Minister for Treasury and Resources – Pg 27

including  multi-year  budgeting,  reviews  of  fiscal  measures  and  other opportunities to consider how the PFL and fiscal framework could be further enhanced to improve the Island's financial resilience and sustainability.

  1. The Panel was advised that the approval process for the prioritisation of projects in the LTCP will follow the existing established process for capital budgets. It was explained that although the LTCP mechanism would be able to adapt to accommodate unexpected essential capital spending needs, it was emphasised that the LTCP should not be seen as a vehicle for changing the prioritisation criteria. Ultimately, the LTCP aims to embed planning on a longer-term basis, while ensuring transparency across the Assembly. So any changes agreed to the LTCP will be visible and would need to be justified to the Assembly. The Minister for Treasury and Resources highlighted her view: the big change is the long-term capital plan providing a greater evidential basis for what projects should be prioritised.[11]

Transfer of Assets and Liabilities to the Jersey Capital Investment Fund

  1. By replacing the CF with the GRF and JCIF, specified items would need to be transferred appropriately into the JCIF. The accompanying report to the draft Regulations proposes that the items relating to assets and capital be moved into the JCIF which include those concerning the Balance Sheet, Capital Projects and Net Revenue Expenditure (further detail of these can be found on Page 8 of the accompanying report to the Proposition).
  2. Considering that the transfer of assets would come forward through the Budget 2027-2030 process, the Panel sought to understand whether this aspect would be amendable by the Assembly and was informed that in terms of assets, the shift from the CF to the new Fund structure is mainly an accounting and definitional exercise. All existing assets recorded on the Government's balance sheet - classified in accordance with accounting standards - will simply move from the CF into the new structure; they are not being transferred from the GRF. While asset classes will be listed and valued, there will not be an exhaustive linebyline public list of every individual asset, as this would be extremely long and impractical. [12]
  3. Although amendable, the Panel understands that the transfer of assets into the JCIF would primarily be a decision defined by accounting standards and would be in alignment with the LTCP. Therefore, this would be a technical matter, which would not warrant amending by the Assembly.
  4. The Panel notes that the accompanying report indicates the JCIF could, in future, support the introduction of a Corporate Rent Model if approved by a future Assembly. Such a model could allocate the full cost of asset use to the departments using them, increasing transparency around the full cost of service provision. However, the draft Regulations do not implement this model.

New Funding Sources for the Jersey Capital Investment Fund

  1. The future Assembly would need to decide the appropriate funding strategy to sustain capital spend at the higher level required going forward and this would involve consideration of further funding sources to fund the JCIF. The Panel heard that existing capital budgets and capital receipts will form part of its funding, but additional decisions may be required on whether to reprioritise spending, deliver efficiency savings or instead use such savings to strengthen central  reserves.  Future  political  choices  will  therefore  need  to  balance maintaining  the  JCIF,  supporting  wider  fiscal  resilience  and  managing competing financial pressures. 19
  2. The accompanying report to the draft Regulations outlines potential options for funding future capital spend, however, the draft Regulations do not seek to make a recommendation of any options shown. Any funding options would need to be approved by the Assembly in the Budget (further detail can be found on page 14 of the accompanying report to the draft Regulations20).

Fiscal Rules

  1. Replacing  the  CF  with  two  separate  Funds,  means  that  moving  forward consideration  must  be  given  to  both  the  GRF  and  JCIF  when  balancing Government's finances.
  2. Under the current PFL, the Council of Ministers must ensure that the CF remains in positive balance across the Budget period, and the Assembly cannot approve a Budget showing a negative CF balance in the first year. The draft Regulations strengthen these rules by extending the requirement to maintain positive balances to both the GRF and the JCIF for all years of the Budget cycle. This means the Assembly would no longer be able to approve a Budget that leaves either fund in deficit at any point, ensuring that any amendments made by the Assembly must be fully funded and fiscally sustainable.
  3. To accommodate the shift to longer-term planning (25 years), a review of the current fiscal measures is also needed. A key measure considered by the draft Regulations is how the operating balance should be calculated moving forward to ensure financial sustainability. Recent Budgets have included a key fiscal measure to achieve an Operating Surplus after depreciation' so that asset value is maintained at a minimum.
  4. However, the creation of the JCIF will change how the operating balance of the GRF is calculated. The operating balance will be considered after the base transfer to the JCIF as opposed to considering the balance after depreciation (the current position), considering that the base transfer to the JCIF should be sufficient to fund the essential components of the LTCP.
  5. The Panel explored the rationale for this change and the implications thereof and  was  informed  that  the  proposed  approach  introduces  a  strengthened, "triplelock" method for determining whether the Government is genuinely running a sustainable surplus. In good economic conditions, budgets should already aim for an income surplus and should also cover depreciation to reflect

19 Transcript – Public Hearing with the Minister for Treasury and Resources – Pg 5 20 P.24/2026

the ongoing use of assets. The new element is requiring a baseline transfer to the JCIF, representing the minimum level of investment needed to maintain the Island's existing infrastructure as set out in the LTCP. By incorporating this base  transfer,  alongside  income  surplus  and  depreciation,  the  framework provides  a  clearer  and  more  accurate  measure  of  longterm  financial sustainability and ensures adequate maintenance of public assets.[13]

  1. The accompanying report to the draft Regulations (on page 15) outlines recent experience relating to the operating balance using the current calculation. It explains  that  from  2020–2024,  operating  balances after depreciation  were broadly in balance, with a small overall deficit of £23 million. However, this was only achieved because additional income was used for daytoday spending and the States Grant to the Social Security Fund was suspended between 2020 and 2023. Capital investment has been financed by drawing down the CF, with spending consistently exceeding depreciation, but the reduced fund balance means this is no longer sustainable. The establishment of the JCIF proposes changing the operating balance calculation to use transfers to the JCIF instead of  depreciation,  ensuring  that  achieving  a  balanced  budget  will  generate sufficient cash to fund required capital investment rather than just covering depreciation levels.
  2. The Panel understands that the change in calculation of the operating balance (needed for embedding longer-term financial planning) aims to effectively ensure that there is sufficient cash generated from incomes to fund both revenue and essential capital expenditure, an amount which should never be less than forecast depreciation.
  3. Considering that the overall Financial Principles would also need to be agreed by the next Government (a set of core principles are shown on page 10 of the accompanying  report  to  the  Proposition),  the  Panel  sought  to  understand whether any consideration had been given to the use of statutory fiscal rules as is implemented in the United Kingdom rather than using guiding principles. The Panel understands that primarily fiscal rules (use of legislation to constrain) are suited to larger jurisdictions and that so far fiscal principles, for guiding political decisions, have been broadly accepted. The Panel notes that any introduction of hard' fiscal rules would need to be a decision of the Assembly. The Panel highlights the importance of abiding by the guiding fiscal principles to ensure that budgets are managed appropriately within those fiscal principles, which may also necessitate a cultural change politically.

Governance, Oversight and Transparency

  1. Should  the  draft  Regulations  be  approved,  the  Minister for  Treasury  and Resources will consider any changes required to the PFM to implement the appropriate controls and governance arrangements in advance of the Budget 2027-2030, where it is expected that full implementation will occur.
  2. The Panel sought to understand the changes to governance arrangements and was advised that any changes to the PFM are expected to be limited and mainly to amend definitions and terms of reference (e.g. for an Officer Capital Group

that will feed into the Regeneration Steering Group). It is expected that the changes will largely be a technical exercise to split out the existing powers, responsibilities and rules that currently sit in the CF into the GRF and JCIF. This would be carried out internally and consultation would be carried out with the Comptroller and Auditor General. Once finalised all changes of the PFM would be provided to the Public Accounts Committee.22

  1. The Panel heard that project approvals will still be the responsibility of the Assembly as part of the Budget process and that the current approvals process and its governance structure (management of rules) would continue unchanged, only the funding structure would change through the approval of the draft Regulations.
  2. The Panel also explored how the establishment of the JCIF underpinned by the LTCP would improve transparency and accountability. The Panel heard that the creation of the JCIF would provide the necessary structure to enable visibility of a more transparent, detailed list of all works required to sustain the Island's asset base, ensure public buildings are fit for purpose and that infrastructure is maintained at the level expected by Islanders for the longer term. The Panel was informed that the current position did not provide the same long-term visibility, only  a  4-year  snapshot  through  Budget  funding  allocations  was  visible currently. However, the new structure and process aim to provide an objective view  and  the  associated  funding  approvals  would  be  underpinned  by  an evidential basis and investment appraisal process. That evidential basis could be used to hold Ministers and departments to account. Additionally, the rules around the use of the JCIF will ensure that the funding provided is protected for the longer term and this will also be transparent to Islanders and industry. This transparency will assist suppliers in building the pipeline needed to make provisions for delivery over time.23

Proposed Future Developments

  1. The accompanying report to the draft Regulations also indicates the potential direction for future development to embed longer-term financial planning. Although the draft Regulations are not dependent on these developments, they are considered fundamental in fulfilling Government's ambition for Investing in Jersey, of which the JCIF and the LTCP are the initial foundational steps. Should the draft Regulations be approved, there is an intention to develop and bring forward proposals for:  

• Multi-year budgeting

• Longer-term financial planning and forecasting

• Articulation of a longer-term financial strategy (to take into account fiscal and other risks)

Multi-year Budgeting

  1. When reviewing the Budget, the Panel found that the current Budget cycle limits flexibility, whereas multi-year planning would enable a more robust

22 Transcript – Public Hearing with the Minister for Treasury and Resources – Pg 12 23 Transcript – Public Hearing with the Minister for Treasury and Resources – Pg 24

buffer for both expenditure and income variability.[14] Furthermore, the Panel found that Government's recognition of the limitations of the current annual Budget process was encouraging the consideration of a return to a three-year Budget cycle to improve financial predictability, support long-term capital planning and strengthen income management.[15]

  1. The Panel sought to understand how a multi-year budget aligned with the draft Regulations, also the advantages of reintroducing it. The Panel was informed that the move to establish the JCIF is independent of any shift toward multiyear budgeting.  However,  returning  to  multiyear  budgeting  would  offer departments, charities and funded organisations greater certainty and stability. It would support better planning, allow for clearer treatment of carryforwards, help manage timing differences such as those between the school year and financial year and reduce the need to restart funding discussions each year. A multiyear approach would enable more coherent planning of initiatives over a full period rather than introducing new measures annually. However, while it brings benefits for delivery and financial stability, it also introduces challenges, particularly  around  income  variability,  which  may  require  adjustments  to contingency reserves or the role of the Stabilisation Fund.[16]
  2. The  Panel  notes  that  reintroducing  multiyear  budgeting  is  separate  from establishing the JCIF, meaning the draft Regulations do not require or trigger a move  to multiyear budgeting.  Any return  to multiyear  budgeting  would require further amendments to the PFL, with draft Regulations expected to be developed in early 2027 so proposals can be brought to the Assembly after the 2027 Budget. Government's preferred approach is a "1+3" model with Budget 2027 covering one year, followed by a threeyear Budget 2028–2030 period. However, certain elements, such as tax measures, inflation assumptions and the detailed Capital Programme, would still be approved annually.

Longer-term Financial Planning and Forecasting

  1. When reviewing the Budget the Panel found that a multi-year integrated fiscal model to support short (4-5 years), medium (5-10 years) and long-term (10-25 years) financial planning is being developed, which aims to strengthen long- term fiscal planning and enhance the Government's ability to respond to economic shocks. The initial phase, expected to be operational in 2026, will cover  the  Consolidated  Fund  and  link  departmental  expenditure  and  tax revenues. Later phases will expand to include major funds such as the Social Security Fund and Long-Term Care Fund, integrating actuarial data and demographic trends. The approach is still in early stages and will require ongoing development to fully capture interdependencies across Government finances.[17]
  2. The Panel understands that the financial planning required under the PFL relates to the short-term with annual approvals on income and expenditure and a 4-year forecast.  The  intention  is  to  embed  longer-term  financial  planning  and

forecasting (10-25 years), to support sustainability of States' finances over the medium and long-term, provided for in the PFL. This project is already being worked on by Treasury as a key objective of the Minister for Treasury and Resource's  Business  Plan  for  2025/26  -  To  enhance  strategic  financial planning, we will create an affordable and deliverable long-term capital plan and improve financial forecasting over an extended period to support better decision-making during the budget process.28

  1. The  project  for  Longer-Term  Financial  Planning  ("LTFP")  will  take  into account revenue, expenditure and capital (informed by the LTCP) and impact of borrowing and reserves based on current policy. Consideration will also be given to the longer-term challenges that the Island will face such as an ageing population, healthcare costs, climate change and population demographics.
  2. It is the Panel's understanding that consideration will be given to how the LTFP will interact with a multi-year budget to ensure that decisions consider the current and longer term as well as their impact on financial sustainability. The future Assembly will need to decide the model and monitoring measures for actioning this (e.g. considering debt according to General Value Added).

Longer-term financial strategy

  1. A wider Longer-term Financial Strategy ("LTFS) intends to set out the policy choices  and  associated  timelines  that  Government  can  use  to  respond  to identified longer-term challenges and risks in a way that any impact on current and future well-being of Islanders is appropriately considered.

Other changes to the PFL

  1. There will be future opportunities to amend the PFL. It is noted within the accompanying report to the draft Regulations that further future changes to the PFL will include review and consideration of articles relating to sustainable wellbeing in the planning process, process for inclusion of allocation for non- ministerial and other bodies and whether amendments to a spending plan or Budget should formally consider the impact on financial sustainability.
  2. The Panel notes that when reviewing the Budget, many of these areas were considered, in particular in relation to embedding sustainable wellbeing in the Budget process and improving financial sustainability, and associated findings and recommendations made.29 The Panel urges Government to reflect upon these when considering any future changes to the PFL.

Conclusion

  1. The Panel is supportive of the draft Regulations as a key foundational step on the wider journey for Investing in Jersey. The Panel maintains its view, as concluded when reviewing the Budget, that - the development of a long-term capital investment strategy through Investing in Jersey, the proposed Jersey Capital Investment Fund and the move towards an integrated multi-year fiscal

28 Minister for Treasury and Resources Business Plan 2025 29 S.R.6/2025 – Ministerial Response

model for longer-term financial planning represent positive progress towards strengthening strategic planning. However, these initiatives remain at initial stages and will require sustained political commitment, detailed governance frameworks and robust performance monitoring to ensure they deliver the intended benefits.[18]

  1. The Panel stresses that the draft Regulations only provide a legal skeleton framework' for the JCIF within the PFL. Significant further development - particularly  detailed  governance  arrangements  in  the  PFM  -  will  still  be required, and the overall direction will depend on decisions made by future Assemblies. While the draft Regulations represent the first step toward the longerterm, more strategic approach envisioned in Investing in Jersey, their success will rely on political discipline and future policy choices. The next Assembly will need to consider:

• The level of political ambition for capital investment and how to sustainably fund the JCIF;

• whether to reintroduce multiyear budgeting; and

• how best to address longterm risks (e.g., ageing population, healthcare pressures,  climate  change  and  demographic  shifts)  through  an evidencebased longterm financial strategy.

  1. If approved, the draft Regulations will come into force on dates set by the Minister for Treasury and Resources by Order. Additional Regulations will be required in 2026 to allow the Budget to be prepared under the new Fund structure, with the remaining provisions taking effect at the start of 2027, when the CF will be replaced by the GRF and the JCIF.

[3] Transcript – Public Hearing with the Minister for Treasury and Resources – Pg 34

[4] S.R.6/2025 – Pg 133

[5] Transcript – Public Hearing with the Minister for Treasury and Resources – Pg 34

[6] Transcript – Public Hearing with the Minister for Treasury and Resources – Pg 4

[7] Transcript – Public Hearing with the Minister for Treasury and Resources – Pg 5

[8] Public Finances (Jersey) Law 2019

[9] Transcript – Public Hearing with the Minister for Treasury and Resources – Pg 31

[10] S.R.6/2025 – Ministerial Response – Finding 38

[11] Transcript – Public Hearing with the Minister for Treasury and Resources – Pg 21

[12] Transcript – Public Hearing with the Minister for Treasury and Resources – Pg 22

[13] Transcript – Public Hearing with the Minister for Treasury and Resources – Pg 5

[14] S.R.6/2025 – Ministerial Response – Finding 35

[15] S.R.6/2025 – Ministerial Response – Finding 36

[16] Transcript – Public Hearing with the Minister for Treasury and Resources – Pg 25

[17] S.R.6/2025 – Ministerial Response – Finding 56

[18] S.R.6/2025 – Pg 145

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