Are The States Cutting Spending?

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A review of how Jersey is cutting spending by £35m a year has raised doubts about the true nature of the cuts.

And there's a warning that in some cases, current parebacks on spending could be storing up even bigger bills for the future.

The Auditor General Chris Swinson has today delivered his report. In it he looks at the fundemental spending review which accounts for a claimed £20m cut in spending.

Mr Swinson says there are doubts about whether £4m of the total can really be classed as savings. Some of the cash was simply transferred to other funds; some of the reduction would have happened anyway - like the fall in school pupil numbers - and other savings could not be achieved in practice.

And the Auditor General says a claimed £2m improvement, was actually achieved by increasing departmental income rather than by cutting spending.

Mr Swinson says claimed corporate efficiency savings of £7m are well backed up by evidence, but he doubts a £1.5m cut by the property division can be sustained.

He says it's more probably simply a spending deferment on maintenance which could backfire by increasing maintenance costs later on.

As for departmental efficiencies of £8m, Mr Swinson says that's true, but that it's difficult see where the savings have been made and what effect they've had.

Jersey's Chief Minister has welcomed the first two reports.

Senator Frank Walker said: “This independent and impartial view of States spending is important in ensuring the public know how effective their government is and how wisely public resources are being used.

"I’m pleased the Comptroller has identified the fundamental changes in budget management we introduced at the start of this decade, and has found that since 2001 the trend has been to keep States spending under control.”

“I think it’s important that this review begins with a proper understanding of whether or not the States have actually made the savings they promised. This report shows that £35 million has been taken from the States’ bottom line spending, and promised efficiencies are being delivered.”

Senator Walker went on to say “the Comptroller has made some important points about improving the transparency of States’ financial reporting, and we will be taking that on board as we continue to introduce best practice in government accounting.

"Jersey will be one of the first small jurisdictions in the world to produce accounts in accordance with generally accepted accounting principles (GAAP).”

Mr Swinson has presented his findings to States members and he will be publishing an overall report on the findings and recommendations of the spending review by the late Spring of 2008.

A Public Accounts Committee Hearing on these first two reports is being held on Monday 11th February.