Proposed Budget 2026-2029 Review (S.R.6/2025): Joint response of the Chief Minister and Minister for Treasury and Resources

Findings

Comments

1

As the Budget is the final Budget of this Council of Ministers ahead of the parliamentary elections in 2026, no notable changes have been made to the  Budget  design  and  its implementation.  However,  further steps have been taken to improve the communication  of  the  Budget  to Islanders including Jersey's youth.

Noted.

2

Children's  Rights  Impact Assessments  were  undertaken  by Ministers  when  developing  the Budget and these were published as an addendum to the Budget in a timely manner.

Noted.

3

No  gender  responsive  budgeting process or gender sensitive analysis was  explicitly  applied  when developing  the  Budget.  The Government is  of the  view that its existing approach of framing policy development  by  the  Discrimination (Jersey) Law 2013 provides fairness in all funding decisions and is meeting the  needs  of  all  parts  of  the community.

All  policy  decisions  –  this  includes  the development  of  the  Budget  –  include  a consideration  of  the  effect  on  the  different sexes,  alongside  the  other  protected characteristics,  under  the  Discrimination (Jersey) Law 2013.

4

The  Council  of  Ministers  is  taking steps  to  increasingly  encourage  the embedding of Sustainable Wellbeing in  Jersey's  budget  process,  with longer-term  impacts  also  being considered  when  making  decisions. The Ministerial Submission template has  been  revised  to  encourage  the explicit  assessment  of  community, economic, and environmental impacts and  the  Organisation  for  Economic Co-operation  and  Development (OECD)  Better  Life  Index  also provides a benchmark for monitoring overall wellbeing.

Noted.  As  the  C&AG  has  previously  stated (Jersey  Performance  Framework  Report, published  14  October  2024):  "Jersey  is  a leading jurisdiction by enshrining into law a requirement to consider sustainable wellbeing in  Government  decision  makinglegislation requires  the  Council  of  Ministers  to  take account  of  sustainable  wellbeing  in  the Government Plan [the Budget].

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5

Risk  Management  is  coordinated through the Government's Corporate Risk Register. Risks are monitored, escalated as appropriate and applied to  the  Budget  process  when  an immediate response is required. The Budget  decisions  are  therefore informed by assessment of emerging risks which would affect current and future generations if not addressed.

Noted.

6

Mechanisms used to track the delivery of the Budget initiatives, including for the Common Strategic Policy (CSP) and department - specific priorities, include the Corporate Risk Register, quarterly CSP reporting and quarterly departmental reporting. The Council of Ministers is satisfied with that level of  progress  reporting  for  tracking progress against the Budget.

Noted.

7

The Future Jersey Vision 2017-2037 (FJV),  following  a  two-year  public consultation was established as a 30- year vision to deliver on Jersey's ten Island Outcomes. It continues to work as an effective framework to guide policy-making  decisions  and Government  priorities,  particularly the  establishment  of  the  Common Strategic Policy (CSP). Although the framework's themes remain relevant and reliable for Jersey, the order in which they are prioritised may benefit from  a  reordering  to  better  align decision-making with Jersey's current circumstances.  The  FJV  was developed  in  a  manner  to  enable individual Governments to prioritise aspects of it depending on the nature of the circumstances at the time.

Global events may contribute to changes that can be seen in the Island Outcome Indicators over time.

In the ordinary course of events, a long-term vision  would  not  be  expected  to  change quickly.

A future government may wish to revisit and refresh that long-term vision, in consultation with Islanders. However, as the outcomes are still  just  as  relevant  today,  so  there  are  no current plans to change it.

8

The Future Jersey Vision has gaps in areas  including  Cost  of  Living, inclusion  and  environment  and  has resulted  in  these  themes  not  being

The Future Jersey Vision covers the full range of  outcomes,  including  affordable  living, natural  environment,  and  an  inclusive community.

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explicitly reflected as priorities in the Common Strategic Policy.

Similarly, the Common Strategic Policy's 13 priorities support these outcomes areas, such as, keeping fees,  duties and  charges as low  as possible  to  help  islanders  with  the  cost  of living',  reduced  cost  GP  Visits,  extending nursery care, Violence against Woman and as well a specific priority to assist in addressing environmental wellbeing': the implementation of the Carbon Neutral Roadmap.

The existing Ministerial Submission Template includes requirements to consider all aspects of sustainable  wellbeing,  including  diversity equity inclusion issues.

9

Jersey's progress for delivering on the Future  Jersey  Vision  is  monitored locally  through  the  Service Performance Measures and compared against  other  jurisdictions  by Statistics Jersey submitting the Island Outcome  Indicators  to  the Organisation  for  Economic  Co- operation and Development (OECD). The Classification of the Functions of Government is also used to compare Jersey's public expenditure with that of other jurisdictions.

Noted.

10

Investing  in  Jersey  2026-2050  is  a long-term  vision  which  aligns  with the  Future  Jersey  Vision  and  the Island  Outcomes.  Jersey's participation in the Organisation for Economic  Co-operation  and Development  (OECD)  Better  Life Index  also  provides  a  data  driven approach  for  benchmarking  the Investing in Jersey priorities.

Noted.

11

It is the Government's intention to tie the decision-making for Investing in Jersey priorities (what to invest in) and  their  delivery  to  the  Island Outcome  Indicators  for  the  Future Jersey Vision.

Noted.

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12

The  absence  of  a  central  strategic performance management function in Government has resulted in unclear oversight, significant data gaps, and limited capacity to monitor whether services are contributing to the Island Outcomes of the Future Jersey Vision. While  Statistics  Jersey  provides valuable data, it cannot substitute for the  performance-focused  role previously fulfilled at the centre of government.

The  Jersey  Performance  Framework  is  an authoritative mechanism in which to measure progress towards  sustainable  wellbeing. It is split into two parts, measuring progress against long-term  measures  (Island  Outcome Indicators) and short-term indicators (through dedicated Service Performance Measures). The current Framework works well without the need of  a  dedicated  performance  management function.  This  Government  has  focused resource on the delivery of frontline services, not increasing layers of administration.

13

All  United  Nations  Member  States adopted  the  2030  Agenda  for Sustainable Development in 2015 and since then several Governments have taken  steps  to  embed  the  17 Sustainable  Development  Goals (SDG) in their legislation and policy, which are core to that agenda. SDG are  a  common  standard  for sustainability reporting globally.

The Government has not formally adopted the United Nations Sustainable Development Goals (SDGs). Instead, it has developed the Jersey Performance  Framework,  which  provides  a structure  for  measuring  progress  towards sustainable wellbeing.

Sustainability  reporting  is  prepared  in accordance with the Jersey Financial Reporting Manual (JFReM), which incorporates the UK sustainability  reporting  framework  as  a  best practice,  though  it  is  not  a  mandatory requirement. As outlined in the written report accompanying  the  JFReM,  an  appropriate standard for sustainability reporting is currently under review and will be determined in due course.

14

The review of the Outcome Indicators streamlined  the  indicators  to  72, retaining the 10 main Outcomes from the Future Jersey Vision and nearly all original  indicators,  while  removing redundancies.  New  indicators  were also introduced in areas such as digital services. The improved presentation via  the  dashboard  with red/amber/green status, dynamic time periods,  and  enhanced  accessibility supports wider Government use and enables  more  effective  real-time performance management.

Noted.

15

While  departmental  dashboards  are used  to  inform  the  Executive Leadership Team and the Council of

The  size  and  complexity  of  Government Departments  range  significantly  and  so  it should be expected that the amount of analytical

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Ministers  on  performance,  there  is significant  inconsistency  in  their sophistication  and  data  richness across departments. Departments with strong in-house analytics have richer dashboards,  while  smaller  or  less data-intensive  departments  maintain simpler dashboards.

resource and the dashboards would be different. Nevertheless, the responsibilities in law and in the  PFM  for  Accountable  Officers  remains consistent,  so  it  is  a  matter  for  individual Departments as to how to mitigate these issues proportionately.

16

There  is  an  uneven  distribution  of analytical  capacity  across departments. Departmental analytical resources are reported to be prioritised based on need and impact rather than even allocation. Insufficient data in certain  areas  therefore  risks  under- measurement,  meaning  some  needs might  not  be  identified  or  funded appropriately  through  the  Budget cycle.  Although  risk  registers  and Island  Outcome  Indicators  flag priority  areas  for  investment,  areas lacking data may not be highlighted, potentially  leaving  gaps  in  policy attention and resource allocation.

Response to point 15.

17

Departmental performance is largely assessed  against  the  department's business  plan  objectives,  including policy  delivery  and  operational outcomes.  While  departments  link their business plans to the Common Strategic Policy and Island Outcome Indicators,  cross-cutting  oversight relies  primarily  on  informal mechanisms  such  as  dialogue, collaboration  and  shared  resources, rather  than  a  formal,  systematic framework  for  monitoring  and evaluating  performance  across departments.

Cross-cutting  oversight  is  achieved  through rigorous  performance  management  of  the leadership, starting from the CEO and Chief Officer  objective  setting  and  applied  down throughout the organisation.

Cross- c18

While  Government  departments  are aligning performance monitoring with Island  Outcome  Indicators  and tracking both inputs and outputs, the full  principles  of  Outcomes  Based Accountability  are  not  yet

Noted.

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consistently  applied  across  all departments. Moreover, engagement with  the  community  to  understand collective  impact  and  partnership contributions to outcomes is currently limited.

19

Government  provides  no  formal, government-wide  training programme  in  Outcomes  Based Accountability (OBA) for Officers or partner  agencies.  While  some departments  with  strong  analytical capacity  are  actively  using  OBA principles in partnership with external agencies and charities, this practice is inconsistent  across  Government. Central policy teams do not provide training or guidance, and support for embedding  OBA  across  all departments has largely stalled.

Noted.

20

Jersey's  economic  outlook  remains fragile  and  uncertain.  In  2025, Jersey's inflation is edging upwards and the gap with the UK has widened, the  labour  market  is  tight,  and domestic price and wage growth is outpacing  productivity  in  some sectors. The economy contracted by 0.7% in 2024, and the housing market is experiencing its largest annual fall since  1986,  negatively  affecting construction  and  related  industries. These  conditions  highlight vulnerabilities  in  Jersey's  economy and the need for caution and readiness to respond to deteriorating economic conditions.

Government continues to monitor the economic outlook, including the views of the FPP.

21

Jersey's  public  finances  are  under pressure due to a persistent imbalance between  rising  day-to-day expenditure  and  slower-growing revenues.  The  operating  balance  is projected to move into a £12 million deficit  in  2026,  with  the  overall balance remaining  negative  through

The Budget shows broadly balanced budgets across the plan, with the £12m technical deficit (after depreciation) in 2026 moving to surpluses in future years.

It is the Council of Ministers' priority to curb the growth in the public sector, and work is ongoing to outline options to reduce costs to increase  the  size  of  surpluses  available  for

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2026-2029 due to cumulative deficits, continued borrowing and rising debt servicing costs. The Strategic Reserve remains critically low, below 20% of GDP,  which  is  well  under  the recommended  30–60%  range.  The Stabilisation Fund is exhausted, and reductions in the Government grant to the Social Security Reserve Fund is being used to cover overspends. These factors collectively increase Jersey's fiscal  vulnerability  and  reduce resilience  to  economic  shocks  or adverse interest rate movements.

investment into infrastructure or our reserves (including growing the Strategic Reserve).

The temporary reduction in the States Grant to the  Social  Security  Fund  is  a  prudent,  and pragmatic measure to ensure vital investment now, whilst protecting the sustainability of the fund.

The Island's finances remain strong and form a platform with which we can meet the challenges that most developed economies are facing.

22

The proposed reduction of the Social Security grant in 2025, combined with ongoing  reliance  of  a  £50  million reduction  to  balance  the  Budget, highlights  that  Government  is  not spending within its means. While the Social Security Fund is projected to remain  financially  sustainable  long- term, the decision reflects a short-term measure to cover a structural deficit caused  by  day-to-day  expenditure growth  outpacing  revenue  growth. This  approach  contrasts  with  the Budget's stated principle of spending within  means  and  raises  concerns about reliance on temporary funding to support ongoing expenditure. The Fiscal Policy Panel has also advised that  reducing  contributions  to  the Social Security Funds before a full actuarial review is completed is not prudent.

The  proposed  reduction  in  the  States  Grant represents  a  sensible  and  pragmatic reprioritisation  of  resources  –  enabling immediate  investment  without  the  need  to increase taxes for Islanders.

Curbing  the  growth  in  the  public  sector  is outlined in the response to Finding 21.

23

While the Government maintains an annual  stakeholder  engagement process and demonstrates a continued commitment  to  consultation  in  the Budget,  the  current  approach  has limitations.  Engagement  is  stronger with sectors that have representative bodies  and  monitoring  of  revenue- raising  or  relief  measures  is

The  Government  strikes  a  correct  balance between policy appraisal, including stakeholder engagement, and value for money in its use of limited resources. It is highly unlikely that any tax policy could be "responsive to the needs of all Islanders and businesses."

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inconsistent, depending on the scale of  the  policy.  This  may  limit  the Government's ability to ensure that policy outcomes are fully evidence- based and responsive to the needs of all Islanders and businesses.

24

The  Budget  seeks  to  balance supporting  the  hospitality  sector through  tap  relief  with  moderate alcohol  duty  increases,  while recognising the limits of fiscal policy in influencing alcohol consumption in Jersey.

The Government is confident that tap relief will assist a broad range of retailers of alcohol in keeping  prices  lower  while  not  encouraging unhealthy  or  irresponsible  levels  of consumption.

25

Tobacco  duty  policy  in  Jersey increases  tobacco  duties  above inflation,  as  part  of  its  health  and fiscal  strategy.  However, opportunities  to  adjust  duty-free limits are constrained by international rules and industry practices.

The Government agrees and considers it would not be possible to derogate from the general worldwide approach to duty-free shopping for excise goods in ports and airports and onboard ships and aircraft.

26

Vaping liquid tax seeks a balance to support  public  health  goals  by preventing uptake of vaping among youth  while  facilitating  smoking cessation.  The  increase  in  vaping liquid tax shown in the Budget for 2027,  2028  and  2029  is  not  a reflection  of  increased  tax  in  those years but recognises that the tax will only be implemented in Q2 2026. This will  follow  the  development  of Custom's systems, engagement with stakeholders  and  training  in  early 2026.

As discussed at the last CSSP hearing, the T&E Revenue Policy Unit will undertake a policy evaluation of the vaping liquid duty in a few years'  time  when  sufficient  data  becomes available to judge its impact on young people and persistent smokers.

27

The Budget seeks to balance restoring fuel duty in line with inflation with ongoing  support  for  low-emission alternatives  including  Hydrotreated Vegetable  Oil  (HVO).  Although Islanders  continue  to  face  Cost  of Living pressures, it is the view of the Council of Ministers that fuel duty increases are justified in 2026 due to lower inflation and lower and varied

Revalorisation  of  excise  duties  by  RPI maintains their real value and collateral health and  environmental  impacts.   This  provides important symmetry to support revalorisation of tax allowances and reliefs.

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fuel prices across Jersey, so consumer impact should be minimal.

28

The principle of annual increases to Vehicle  Emissions  Duty  (VED) established under the Carbon Neutral Roadmap  continues  to  function  as both a fiscal and environmental tool, generating  funds  for  the  Climate Emergency  Fund  and  incentivising lower  emissions.  However,  the remaining demand for high-polluting vehicles  limits  its  effectiveness  in changing behaviour and any further VED  adjustments  to  those  vehicles must  consider  interests  of  niche vehicle markets like collectable and vintage cars.

The  Government  already  will  bears  the highlighted factors into account in future policy development.  There  is  already  a  VED exemption for vintage cars that are more than 50 years old.

29

The  1%  reduction  in  second-home stamp  duty  for  2026  is  based  on evidence from housing market trends and  Fiscal  Policy  Panel  guidance, balancing  revenue  stability  with affordability and market signals. The decision  aligns  with  both  Treasury analysis and housing policy oversight.

The  Government  is  grateful  for  the  CSSP's support for this measure.

30

The  proposal  to  expand  the  civil penalty regime to cover incorrect GST returns  aims  to  simplify  and standardise penalty regimes across tax types, providing clarity and equity for taxpayers  while  maintaining operational  efficiency.  It  has negligible fiscal impact.

The Government is grateful for CSSP's support and this measure was passed within the draft Finance (2026 Budget) Law 202-.

31

The  work  to  develop  a  Fuel Replacement Policy has been deferred however,  a  lot  of  the  policy groundwork has been undertaken and preserved  for  future  use.  The complexity  of  designing  a replacement  policy  has  been acknowledged.  It  is  likely  that  this workstream  may  need  to  be progressed by the next Government.

The Government agrees that work on the Fuel Duty Replacement Policy remains important. Fuel  consumption  will  continue  to  be monitored,  and  work  will  continue  to  be progressed after the General Election, subject to Ministerial direction.

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32

Revenue  Jersey  is  progressing  with the implementation of the Pillar Two regime,  including  registration  and payment systems. While the Budget cycle forecasts remain aligned with the base case, uncertainty continues due  to  unresolved  negotiations between  the  United  States  and  the Organisation  for  Economic  Co- operation  and  Development,  which may influence the final structure of global  minimum  tax  rules. Confidence in the forecasted revenue is  underpinned  by  the  stability  of banking  groups,  which  contribute most  significantly  to  the  base  case estimate.

The OECD published the Side-by-side package on January 5, 2026. The "side-by-side" Safe Harbour currently applies only to the USA from 2026.   The  Government  will  continue  to monitor the Pillar 2 landscape. We have always taken  a  prudent  approach  to  our  forecasted revenue. Accordingly, these proposals are not expected  to  impact  the  Pillar  Two  revenues identified in the Budget. Jersey has a wide range of groups in our Pillar Two taxpayer base: the majority of these groups will remain within the scope of Pillar Two following this Side-By-Side Agreement.

33

There are no current plans to broaden the  tax  base  beyond  Pillar  Two taxation.

The Government confirms that it has no plans at this time to broaden the tax base beyond Pillar 2 taxation.

34

Reviews  of  formula  driven expenditure  are  instigated  at  least annually through the Budget process, with  the  requirement  in  the  Public Finances (Jersey) Law 2019, that the Council of Ministers cannot lodge a Government  Plan  with  a  negative balance in the Consolidated Fund for any of the four years.

Noted.

35

£5  million  contingency  is  allocated centrally in the General Reserve for unforeseen  expenditures  in-year  in 2026, which is very low compared to previous  years.  Previously contingency funding was maintained at  a  much  higher  level  in  the Consolidated  Fund,  however,  was reduced  post-Covid.  The  current Budget  cycle  limits  flexibility, whereas multi-year planning enables a more  robust  buffer  for  both expenditure and income variability.

The Government is supportive of a move back to multi-year budgeting.

36

Government recognises limitations in the current annual Government Plan

The Government is supportive of a move back to multi-year budgeting. The Minister plans to

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process,  which  encourages  short- termism  and  drives  departments  to seek  growth  funding  upfront  rather than  planning  sustainably  over multiple years. A return to a three- year Government Plan cycle is being actively  considered  to  improve financial predictability, support long- term capital planning and strengthen income  management.  However,  the shift requires significant operational and  legislative  changes  and Government has not yet set out a clear timeline  or  framework  for implementation.

instruct the Law Draftsmen on changes to the Public Finances Law this year, for debate by the next Assembly.

37

The Investing in Jersey vision relies on the States Assembly approving the Jersey Capital Investment Fund. The Council of Ministers considers both the  Budget  and  the  Jersey  Capital Investment Fund to be foundational steps  in  addressing  unsustainable expenditure  growth  and  restoring long-term  investment  capacity.  The shift  in  focus  towards  structural reforms  intends  to  ensure  that investment  is  protected  and prioritised.

Noted – changes to the PFL to create the JCIF will  be  lodged  early  in  2026  to  be  debated before the election.

38

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. While the  JCIF's  structure,  governance

Noted – changes to the PFL to create the JCIF will  be  lodged  early  in  2026  to  be  debated before the election.

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framework and operational details are still being developed the Fund intends to:

--protect  and  ringfence  capital funding,  with  legal  and  procedural safeguards,

--be primarily funded through annual transfers  tied  to  depreciation  and supplemented by borrowing, --employ  structured  project management,  business  cases,  Key Performance  Indicators  and  audit functions to monitor delivery, --maintain central financial oversight (Treasurer  of  the  States),  strategic oversight (Council of Ministers) and project  level  accountability (Officers).

39

Information Technology (IT) has been recognised in the Budget as an area of increasing  risk.  The  funding  being proposed for 2026 intends to address areas of risk for failure of frontline IT services  and cyber  defence  through modernising  legacy  systems  and protecting  critical  services  from emerging threats.

The  Government  continues  to  maintain,  and where beneficial, increase, its investment across the Information Technology estate.

40

The major project Cyber Programme

2.0  continues  in  2026  to  enhance Government's cyber resilience. Focus has  been  on  tactical  defence enhancements  in  response  to heightened geopolitical and security risks.  Although  funding  has  been rephased  to  prioritise  immediate protections,  the  overall  programme remains  within  existing  expenditure limits, ensuring continued progress on long-term resilience objectives.

Please refer to the comment to Finding 39.

41

The  IT  Major  Upgrade  and Replacement Programme continues in 2026.  Government  is  developing  a strategy to balance in-house capability with  selective  use  of  external providers,  aiming  to  strengthen

In line with the Common Strategic Policy and the  Government's  commitment  to  curb  the growth in public expenditure, further focus is being  put  on  enhancing  in-house  capability,

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resilience,  retain  internal  expertise and avoid displacing local companies. The  project  is  sufficiently  funded, with  the  budget  rebalanced  to prioritise efficiency and continuity in Government IT operations.

rather than relying on external consultants. This approach is not unique to Digital Services.

42

The Digital Government Platform is technically  ready  and  nearing  full implementation,  with  final  testing underway. No firm go-live date has been set. While current expenditure aligns with the Budget forecast and ongoing  operational  funding  is considered  sufficient,  any  future expansion of the platform is likely to require additional funding.

The  Digital  Government  Platform  has  gone through routine testing. It will be launched by the end of this term of Government.

43

The proposed 2026 budget allocations for  the  Office  of  the  Children's Commissioner,  Jersey  Care Commission and Jersey Advisory and Conciliation  Service  are  barely sufficient  to  maintain  core  services which  risks  compromising  service delivery.

The approved Budgets, as adopted by the States Assembly in December 2025, are sufficient to maintain  service  delivery.  Where  further funding is required, this will be considered on a case-by-case basis. Just as Departments have done, ALOs will need to give greater thought to prioritising their work programmes, ensuring that taxpayers' money is being used in the most effective manner.

44

The  completion  of  Phase  3  and progress in Phase 4 of the Revenue Transformation  Programme represents  substantial  modernisation of  Jersey's  tax  administration infrastructure.  The  reforms  have streamlined  processes,  enhanced compliance,  and  strengthened international  reporting  capability. Delivering  these  improvements  is positioning Revenue Jersey as a more efficient,  integrated  and  digitally enabled  service.  The  programme remains  on  track  despite  minor timeline adjustments.

The Government, Treasurer and  Comptroller thank CSSP for its recognition of the progress made  in  reforming  Jersey's  tax  system  and administration.

45

The  major  project  Pillar  Two Implementation has made significant progress in implementing the OECD Pillar Two regime, with the system aligned  to  global  minimum  tax

Noted.

Findings

Comments

requirements.  Implementation  was operational from 1st January 2025 and is  on  track  to  meet  reporting  and payment  obligations  in  2026. Revenue Growth funding is proposed for 2026 to grow a Pillar 2 Tax Team to further facilitate this workstream. The successful implementation of the Pillar  Two  reforms  relies  on specialised skills. To date, a cautious and staged approach for recruitment to roles has been adopted, reflecting the uncertainties and the complexity of the workstream.

46

The  Fiscal  Policy  Panel  notes  that total  borrowing  has  increased significantly in recent years and the need to service the higher debt will absorb  a  larger  share  of  revenue, thereby increasing sensitivity of the Budget  to  future  movements  in interest rates.

Whilst this is not inaccurate, the Government's financing strategy does plan to refinance the existing  RCF  with  longer-term  debt  when market  conditions  are  suitable,  effectively mitigating this risk.

Existing bonds are fixed interest.

47

Government's  borrowing  strategy primarily  relies  on  the  Revolving Credit Facility for short-term funding and  deferring  large-scale  debt issuance until a significant borrowing quantum is required. The strategy is actively  managed,  with  regular reviews of debt structure, duration and interest rate options with the aim to maintain cost-effectiveness and fiscal prudence.

Noted.

48

The  funding  strategy  for  the  New Healthcare Facilities (NHF) combines short-term  borrowing  through  the Revolving Credit Facility (RCF) with projected Pillar Two tax receipts as the preferred option, while retaining the Strategic Reserve as a fallback. However,  assuming  the  drawdown from  the  Strategic  Reserve  as  a fallback, the Fiscal Policy Panel notes that the Prior Year Basis tax receipts appears as an asset in the Strategic

The funding for Phase 2 of the Fort will be decided once the plans have been agreed and costed.

Findings

Comments

Reserve but will only be realised in income terms over time (20 years). The funding strategy for Phase 1 of the Fort Regent redevelopment is also proposed  to  utilise  the  Revolving Credit Facility for short-term needs. However,  Phase  2  funding  has  no current  budget  allocation,  which reflects  an  approach  that  secures funding  only  for  contractually committed works.

49

Progress  is  being  made  to  review States  Funds,  with  four  redundant funds  being  closed  and  balances reallocated  through  this  Budget. Further reviews are planned for the Criminal  Offences  Confiscation Fund, Insurance Strategy Fund, Social Security  Fund,  Long-Term  Care Fund, Technology Accelerator Fund and  Climate  Emergency  Fund  to ensure their objectives, policies and operations remain in alignment with strategic goals.

Noted.

50

The  Strategic  Reserve  remains significantly below the recommended level of 30–60% of GDP, currently standing at 20%, leaving the Island potentially vulnerable to economic or financial  shocks.  While  the  Budget commits to use Pillar Two receipts above the base case to strengthen the reserves,  there  is  no  formal mechanism  or  additional  action  in place to accelerate this, and liquidity risks exist due to the inclusion of non- immediately liquid assets (Prior Year Basis  revenues)  in  the  accounting value of the Strategic Reserve.

The Budget was clear on the strategy of using Pillar 2 receipts in excess of the base case to strengthen reserves.

The transfer of PYB debt improves the fund position – providing a cash flow across many years.

51

The proposed £50 million transfer to the  Stabilisation  Fund  in  2026  is uncertain. The past attempt to transfer funds (£25 million in 2025) was not possible due to the Consolidated Fund being in a cash-negative position. The

The implementation of Pillar 2 increases the likelihood that this transfer will be possible.

Findings

Comments

Consolidated Fund remains in a cash- negative position, so the transfer is contingent  on  budget  management and  any  potential  upside  income, which  under  the  current  position appears unrealistic.

52

Although  the  Stabilisation  Fund's primary objective which is to support countercyclical  fiscal  policy  and promote  economic  stability  will remain unchanged, work has begun to review how the Stabilisation Fund can effectively fulfil its purpose. This is being  given  particular  focus  in  the context  of  a  proposed  return  to medium-term  financial  planning, which  will  influence  the  Fund's operational framework.

Noted.

53

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.

54

Despite long-recognised pressures on the  health  system  the  Budget  2026 does not set out immediate, concrete measures to address these challenges. While  Health  is  a  top  priority  for Islanders,  particularly  younger

Work is actively underway to forecast Jersey future health and care funding requirements. It is envisaged this will be completed before end Q1  2026  to  allow  the  incoming  future

Findings

Comments

generations,  the  Government  has framed responses as part of ongoing work to develop a sustainable, long- term funding model. The resolution of critical  health  pressures  are effectively  left  to  the  next Government.

Government  to  determine  the  options  for change to be presented to the Assembly.

55

The  recurrent  overspends  in  health have  led  to  the  reprioritisation  of funds from other services, which is distorting the  Budget's  portrayal of future spending and indicating that the current growth in health expenditure is not sustainable without impacting other sectors.

An analysis of growth in public sector spending shows that most, if not all, services have grown in  real  terms  in  recent  years.  This  will  be published in the Spring of 2026, as part of the next  all  States  Members'  workshop  on  the public sector growth.

Much of the recent growth has been focused on prioritising essential services. This is consistent with the Common Strategic Policy, as adopted by the States Assembly.

Ensuring  the  Funding  for  Healthcare  is sustainable remains a key strategic area, with work ongoing. In the shorter term the Financial Recovery  Programme  is  working  to  deliver better  financial  control  and  mitigate  cost pressures.

56

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.

Noted. This a key Treasury project for 2026.

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

1

The Council of Ministers must  consider  taking meaningful  action  for implementing  a  formal Gender  Responsive Budgeting  Framework for  Jersey.  This  process should  aim  to  identify gaps  for  improving  the targeting of resources to address  inequalities  and support  inclusive, sustainable  development for all Islanders through the  Budget  cycle.  The Council  of  Ministers should  report  back  to Scrutiny on the trajectory for  progressing  this workstream by Q3 2026.

Reject

The  future  Council  of  Ministers  may wish to consider this recommendation when  developing  the  Budget  2027  - 2030.

As noted, above, all policy decisions – including  the  development  of  the proposed  Budget  –  include  a consideration of the effect on protected characteristics  as  defined  under  the Discrimination (Jersey) Law 2013.

N/A

2

The Council of Ministers should consider whether there would be benefit in reordering  the prioritisation  of  the themes within the Future Jersey  Vision  to  better align  decision-making with the circumstances at the time. This should be undertaken  ahead  of establishing  the  new Common Strategic Policy in  2026  and  to  inform

Reject

In the ordinary course of events, a long- term vision would not be expected to change quickly. The future Government may wish to revisit and refresh that long-term vision, in consultation with Islanders. However, it is still just as relevant today, so there are no current plans to change it.

N/A

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

other significant strategic policy direction including for  the  development  of the next Island Plan.

3

The Council of Ministers should consider whether there would be benefit in assessing  the  Future Jersey  Vision  (FJV)  to identify  any  gaps  in themes. A gap analysis of the Future Jersey Vision should be undertaken and consideration  given  to including  themes  to address  the  gaps identified, with particular focus  given  to  Cost  of Living,  inclusion  and environment. This should be  undertaken  ahead  of establishing  the  new Common Strategic (CSP) Policy in 2026 in order to reflect  these  priorities appropriately  with  the next CSP.

Reject

Please  see  the  above  comment  to Recommendation 2.

Cost  of  Living  and  the  Environment were both appropriately factored into the Common Strategic Policy, as approved by the States Assembly.

The  existing  Ministerial  Submission Template  includes  requirements  to consider  all  aspects  of  sustainable wellbeing,  including  diversity  equity inclusion issues.

N/A

4

The Council of Ministers must  action  the Recommendations, Work planned  that  should  be prioritised and Areas for consideration  from  the Comptroller and Auditor General's  review  of  the Jersey  Performance Framework  reported  on in October 2024. Scrutiny must be formally updated on the delivery of these by Q3 2026.

Reject

The  recommendations  of  the  C&AG have been appropriately considered.

As the C&AG considers Jersey to be a leading  jurisdiction'  in  considering sustainable  wellbeing  (i.e.  the community,  economic  and environmental  wellbeing  of  Jersey), which  is  the  core  benchmark  for assessing  whether  Government measures  are  improving  the  lives  of Islanders, it is not envisaged that further work will be progressed. This will be for the  new  Government  to  consider,  as necessary.

N/A

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

5

The Council of Ministers should  re-establish  a central  performance management  function with  responsibility  for setting  performance standards,  coordinating data  collection  and providing  whole-of- government performance analysis.  This  function should  work  alongside departments  and Statistics  Jersey  to provide  strategic  cross- departmental coordination,  strengthen oversight, close data gaps and ensure that progress towards Island Outcomes is consistently measured and understood.

Reject

The  future  Council  of  Ministers  may wish to consider this recommendation.

Nevertheless,  the  Jersey  Performance Framework  is  an  authoritative mechanism  in  which  to  measure progress towards sustainable wellbeing. It  is  split  into  two  parts,  measuring progress  against  long-term  measures (Island Outcome Indicators) and short- term  indicators  (through  dedicated Service  PeformancePerformance Measures).  The  current  Framework works  well  without  the  need  of  a dedicated  performance  management function. This Government has focused resource  on  the  delivery  of  frontline services,  not  increasing  layers  of administration,  cost  and  bureaucracy. This  recommendation  will  be  for  the next  Government  to  consider,  as necessary.

N/A

6

A  review  of  the  Future Jersey  Vision  should compare  Jersey's framework  to  those  of other  jurisdictions  to consider any best practice that Jersey can learn from and whether there would be  any  merit  in embedding  the  17 Sustainable Development Goals  of  the  United Nations  Member  States 2030 Agenda in a manner that  is  proportionate  to Jersey's size.

Reject

Jersey's  progress  against  sustainable wellbeing  is  considered  within  the context  of  additional  monitoring frameworks, such as the OECD Better Life Index.

N/A

7

The Council of Ministers should  consider standardising  dashboard functionality  across  all departments  to  ensure consistent  quality,

Reject

Please see commentary against Finding 15  above.  Further,  this  would  be  an additional  administrative  requirement for Departments.

N/A

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

accessibility  and  data richness, while providing support  to  departments with  fewer  analytic resources.  This  will enhance  Government- wide  performance monitoring  and  ensure that all departments can effectively  inform strategic  decision- making.

8

A  Government-wide strategy  for  ensuring consistent and sufficient data  collection  and analytics  across  all departments  should  be established.  This  should include  identifying  and addressing  gaps  in indicators,  ensuring  that all  policy  areas  are measurable  and  that investment decisions are fully  informed  by comprehensive evidence.

Reject

Please see commentary against Finding 15 above.

N/A

9

The Council of Ministers must  provide  Statistics Jersey  with  sufficient resources so that it is able to  appropriately undertake  its  cross- Government  role  to support,  develop  and improve  the  cross- departmental  Statistics function in line with its statutory obligations.

Accept

This is in place. It is a legal requirement to  ensure  that  Statistics  Jersey  is sufficiently resourced.

N/A

10

A  structured Government-wide performance  oversight

Reject

The current system is sufficient.

This Government has focused resource on the delivery of frontline services, not

N/A

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

framework  that systematically  monitors cross-departmental outcomes  should  be established.  This framework  should complement  existing departmental  reporting and  ensure  consistent alignment  with  the Common Strategic Policy and  Island  Outcome Indicators,  enhancing accountability  and facilitating  decision- making  at  a  strategic level.

11

Government  must develop  a  consistent approach  to  Outcomes Based  Accountability across  all  departments, incorporating  qualitative measures,  community engagement,  and partnership  evaluation. This  should  ensure  that performance  monitoring not  only  measures activity  and  outputs  but also  the  real-world impact  on  communities and  long-term improvement  in outcomes.

Reject

The  existing  arrangements  are proportionate and suitable.

The  Jersey  Performance  Framework exists already and sustainable wellbeing is  built  into  it.  These  issues  are considered at the earliest stage in policy development,  through  the  Ministerial Submission  template,  through  the requirements  of  the  PFM  and  are scrutinised through audit processes.

Additional actions here are deemed less proportionate for a public service that is seeking to curb unsustainable growth.

N/A

12

Government  should establish  a  formal, centrally  coordinated training and development programme in Outcomes Based  Accountability (OBA).  This  should target Officers across all

Reject

Existing  processes  and  training  are sufficient.

N/A

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

departments and relevant partner  agencies, ensuring  consistent understanding, application  and evaluation  of  OBA principles.  The programme  should  also include  guidance  on using  partner  data  and dashboards  to  monitor and report on outcomes, enhancing accountability and  the  impact  of Government-funded services. This should be implemented  by  Q3 2026.

13

The  Treasury  and Exchequer  should strengthen  stakeholder engagement  by proactively reaching  out to  underrepresented groups to ensure broader input  into  policy development.

Reject

Appropriate  stakeholder  engagement takes place every year in relation to the Budget. Within the context of limited resources,  T&E  will  always  seek  to engage with all stakeholders who have been  identified  to  have  a  stake  in  a material policy change.

N/A

14

The  Treasury  and Exchequer  should implement  systematic post  -implementation monitoring  of  all revenue-raising,  relief and  significant  policy measures  to  evaluate effectiveness and inform future  decision-making and  to  ensure  that measures are  responsive to the needs of Islanders and businesses.  

Reject

As explained at the last CSSP quarterly hearing, the T&E Revenue Policy Unit will  normally  undertake  Post Implementation Reviews of major new implementations; and Policy Evaluation Reviews at a later stage. It would not represent value for money routinely to undertake PIR and PER of ALL changes.

N/A

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

15

The  Treasury  and Exchequer  should conclude its review of the alcohol  licensing  and duty  system,  engaging with the hospitality sector regarding off-licence and on-licence  taxation,  to develop  measures  that balance  public  health objectives  with  the economic  sustainability of licensed venues. This review  should  consider the cumulative impact of duties, operational costs, and  market competitiveness to ensure policies  effectively support both responsible drinking and the viability of  the  local  hospitality industry.  This  work should be completed and any  proposals  brought forward in the subsequent Budget.

Reject

The Draft Alcohol Licensing (Jersey) Law 202- which is to be debated in January 2026 seeks to reduce the operational costs on businesses and provides an opportunity to simplify the existing fee structure. Should the Law be adopted, T&E will work with interested stakeholders (in Government and across the economy) to review both the longer-term future of alcohol excise duties following the 2026 General Election.

N/A

16

When  a  future Government  progresses the  development  of  the Fuel Replacement Policy meaningful  industry consultation  must  be undertaken at all stages of policy development.

Accept

As a major tax-policy change, any Policy Appraisal  will  include  extensive stakeholder consultation.

TBC

17

Government  must maintain the adoption of a  clear  fiscal  rule governing  the  use  of Pillar  Two  revenues, ensuring  that  only  base case  income  is

Accept

This  is  consistent  with  the  prudent approach set out in the Budget.

N/A

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

incorporated  into standard  budgeting processes  while  any excess  or  volatile revenues  are  directed exclusively towards one- off  investments.  This approach  will  help safeguard  fiscal sustainability and prevent the  creation  of  new structural  spending pressures  linked  to  an uncertain  and  evolving global tax framework.

18

Should  the  States Assembly  approve  the establishment  of  the Jersey Capital Investment Fund  in  principle,  the Proposition  lodged  for States  Assembly  debate must  include  explicit detail for:

--the  governance  and operational  framework, including  investment principles  and  risk management measures, -- the interaction between the JCIF and the Long- term Capital Plan,

--  the  reporting mechanisms  and prioritisation process,

--  transparency  of  the funding sources, planned transfers  and  borrowing arrangements,

-- how performance will be measured and reported to  demonstrate  the

Accept

These  areas  will  be  covered  in  the accompanying report, to the legislation. The full package reflecting all of these

January 2026

aspects  will  follow  in  further

[legislation] and updates, as necessary,

to the Public Finances Manual.  

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

effectiveness of the JCIF in  delivering  on  the Long-term  Capital  Plan, protecting  long-term infrastructure investment and  delivering  on  the Jersey Island Outcomes.

19

Government must review the funding requirements for  the  Office  of  the Children's Commissioner for Jersey, Jersey Care Commission and Jersey Advisory and Conciliation  Service  to ensure  they  are adequately  resourced  to fulfil  their  statutory responsibilities, maintain independence  and support  the  effective delivery  of  critical regulatory  and  human rights  functions. Consideration  must  also be given to provision for necessary  external expertise where on-Island capacity  is  insufficient. The funding review must be  undertaken  by  Q3 2026  and  ahead  of  the subsequent Budget.  

Reject  – already in place

This has been considered extensively by the Public Accounts Committee's work on ALOs and the Chief Officer Cabinet Office's contributions to that enquiry.

Reviews  of  capacity  and  capabilities already  happen  on  a  quarterly  basis, including discussions of risk.

The approved Budgets, as adopted by the States Assembly in December 2025, are sufficient to maintain service delivery. Where further funding is required, this will  be  considered  on  a  case-by-case basis. Just as Departments have done, ALOs  will  need  to  give  greater consideration to prioritising their work programmes,  ensuring  that  taxpayers' money is being used in the most efficient and effective manner possible.

A further additional funding review is not necessary.

N/A

20

The Council of Ministers must  strengthen  its commitment to prioritise transfers to the Strategic Reserve  and  the Stabilisation  Fund  to establish  them  at  the appropriate  levels  as advised  by  the  Fiscal Policy Panel. This should

Accept

The  Budget  2026  already  set  out  the policy of prioritising Pillar 2 receipts in advance of the base case to strengthen reserves.

In  addition,  work  on  how  growth revenue expenditure can be reduced is being  prepared.  This  would  enable surpluses to be run, which could be used

Ongoing

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

also include returning to the  position  of  the preceding  Budget  to allocate a portion of the base  case  Pillar  Two revenues to increase the balance  in  the Stabilisation Fund.

to  invest  in  capital  or  strengthening reserves.

Balancing transfers to reserves against the need for investment will continue to be a key consideration for the next COM (and Assembly).

21

The Council of Ministers must  strengthen  its commitment  to  address known  health  system pressures  in  2026  to ensure  that  immediate pressures  are  mitigated while  longer-term sustainable solutions are developed.  This  must include the development of  accurate,  evidence- based  health  spending forecasts to ensure fiscal discipline,  support sustainable  allocation of resources and  provide  a realistic picture of future budget  pressures.  This work  must  commence immediately  to  lay  the groundwork for the future Council  of  Ministers  to progress.  The  detailed proposals  should  be included  in  the subsequent Budget.

Accept

The Health Minister is actively working to:

- mitigate immediate pressures by reducing waste and ensuing that available resources are targeted at need

- develop  accurate,  evidence- based forecasts for future spend, with a view to presenting this to the future Council of Ministers post-election,  and  to  bringing forward  proposals  to  the  next Assembly,  either  as  separate proposition or as part of the next Government budget.

Ongoing