Growth bids

2025.12.08

2.3   Deputy J. Renouf of St. Brelade of the Minister for Treasury and Resources regarding the decision-making process for growth bids in the Proposed Budget (Government Plan) 2026-29 (OQ.266/2025):

Will the Minister detail the decision-making process in relation to identifying the total amount of money available for growth bids in the Proposed Budget (Government Plan) 2026-29, and on what basis the different growth allocations were decided?

Deputy M.E. Millar (The Minister for Treasury and Resources):

I thank the Deputy for his question. The Budget was developed using a process that will be familiar to both current and any former Ministers. A series of workshops were held that considered the latest financial forecasts, based on the assumptions provided by the Fiscal Policy Panel. From there, decisions focused on how best to balance the Budget, while prioritising areas requiring urgent investment. It is important to note that we do not automatically allocate every available penny that we have to growth, and so there is no fixed calculation of how much is available for growth. This year, there was a very limited growth process and there was no open invitation for departments to submit business cases requesting additional funding. Instead, political discussions were focused on delivering the Common Strategic Policy and addressing key risks. This approach was iterative, with Ministers working together until a consensus was reached. Formal decisions were then recorded and the Budget lodged.

1. Deputy J. Renouf :

I think it is clear from that answer that the total amount of growth bid was decided, as the Minister says, in an iterative process and that therefore the money that was to be taken from the Social Security grant was not determined by looking at how much the Social Security grants could afford to pay. It was a result of determining how much the Government wanted. Can the Minister explain why the Government did not start with how much money might be available rather than how much it wanted to spend?

Deputy M.E. Miller:

As I said, we do not run a growth process. We have financial rules, like the need to keep the Consolidated Fund positive, and principles around running balanced budgets.

[10:00]

We should not be spending everything, so we do not start with a calculation of how much is available for growth. As I have said, the need for investment drove some very difficult decisions about how it could be funded. Again, we have focused on things that are most important, so healthcare, children and key risk matters. Having agreed that we needed that investment, it was then a matter of looking at the funding options.

2. Deputy K.L. Moore :

Given F.P.P. (Fiscal Policy Panel) advice, the global outlook and the state of the Island's own finances, what conversations did the Minister have about reducing expenditure rather than allowing any growth at all? Deputy M.E. Miller:

I think we have explained that we have had decisions about reducing expenditure and we are looking to deliver savings in 2025. I do not have the number in front of me but I think in the region of £20 million; a similar amount of savings was delivered last year. The hospital has its own financial recovery programme which, from memory, may not be accurate, stands at about £18 million. So we are asking departments to make savings. Departments have been told that there is not new money and that they have to work with what they have. Departments are constantly being asked to make sure that they are driving efficiency and making savings.

3. Deputy K.L. Moore :

I think the point is about overall expenditure and whether that can continue at current levels or should not be reduced on a year-by-year basis.

Deputy M.E. Miller:

There is a difficult balance to be reached between having no growth and making cuts. We are trying. We have sought to constrain spending. We have shown that. We have reduced headcount. We have reduced the reliance on consultants. We are reducing unnecessary management layers, and we are trying to take out extra activities. But the problem is that people still want us to spend money. Even in this Assembly, people are still coming forward with requests for additional funding. Yes, we do need to cut spending. We need to do that in a careful and sustained way, and we need to really start all of us thinking about what we really need rather than what we want.

4. Deputy M.B. Andrews of St. Helier North :

The Minister spoke about limiting the number of growth bids, however £52 million has been proposed in this forthcoming Government Plan, so I want to ask the Minister: what consideration was given to reprofiling existing government expenditure over that of putting forward growth bids?

Deputy M.E. Miller:

I am sure that that was considered. As I say, there were some very difficult decisions. There were clear needs for investment in healthcare and Children's Services and certain of the emergency services that we knew we had to deliver. You then have to look at how to fund those if the money is not clearly available from revenue. We have done that in the best way we can. Nobody wants to cut front line services. Most of the growth has been in health and education. We want to continue services at a level while reducing back- office numbers and looking at how we spend money as best we can, but reprofiling will always be a part of that rerouting.

5. Deputy M.B. Andrews :

The words: "I am sure it was considered", surely the Treasury Minister can confirm whether she is aware that the Council of Ministers did consider reprofiling government spend, and if that is something that she is not aware of, why is that the case?

Deputy M.E. Miller:

Yes, of course we talked about reprofiling. Reprofiling happens in appropriate places, but the Deputy is asking me to remember discussions that happened over many months and were very, very wide-ranging. Yes, reprofiling takes place. It takes place with revenue spending, and it takes place with capital spending. I am sorry if I was not clear on that, but yes, we have looked to reprofile.

6. Deputy J. Renouf :

At a public meeting recently, when she came under pressure from public criticism of the Budget, the Minister told the audience that the Budget was not her Budget. Can she confirm whether she fully and unequivocally supports all the growth bids - health, education, et cetera - that made it into the Budget. Therefore, those bits are at least hers.

Deputy M.E. Miller:

I think that what I was trying to do on that occasion - I do not think that the Deputy was actually present - was explain that this is a Council of Ministers' Budget. The law changed in 2019. It is not a recent change. I believe that it changed going back to 2019, when the Budget became the responsibility of the Council of Ministers, and it is lodged by the Council of Ministers and not by the Minister for Treasury and Resources. That was the point that I was trying to make, and the reporting of that has been slightly different. Yes, I support the Budget. The Council of Ministers approved the Budget as it is lodged, and I support it completely.