Sound public finances

I am deeply concerned about the trajectory of Jersey’s public finances. Public spending has risen sharply in recent years, and public sector employment has expanded at a pace that is simply not sustainable. This has happened without a corresponding increase in the value or quality of public services. If we do not act now, we risk placing an unacceptable burden on future generations and undermining the Island’s long‑term stability.

The Fiscal Policy Panel’s 2025 Annual Report sets out the scale of the problem. Between 2022 and 2025, government income grew by 22%, yet day‑to‑day spending grew by 42%. This gap has been bridged not through improved efficiency or economic growth, but through additional borrowing and a reduced contribution to the Social Security Fund. Government borrowing has risen from the equivalent of 5% of national income in 2020 to a projected 17% this year.

The current government budget anticipates further increases in public expenditure, from £1.24 billion in 2025 to £1.48 billion in 2029. The Fiscal Policy Panel has issued a stark warning: “The trajectory of day‑to‑day spending is unsustainable given Jersey’s revenues, and will need to be curtailed in future Budgets.” And the Island’s Chief Executive has publicly stated “I genuinely struggle to understand why the public service has to spend more than £1 billion to run in Jersey”.

The growth in public expenditure has been driven largely by a rapid expansion in public sector employment. In June 2019, there were 7,700 public sector employees. By June 2025, the number had risen to 9,940 – an increase of 29%. As a share of the total labour force, the public sector has grown from 12.8% in 2018 to 15.2% in 2025. This level of expansion is not compatible with a sustainable fiscal position.

Reducing public expenditure is far more difficult than increasing it. It requires discipline, planning and a willingness to make tough decisions. But it is essential if we are to restore financial stability. The initial task will be to halt the growth in public spending. This requires that:

• No proposition is brought before the States Assembly without a full analysis of its planned benefits and likely costs.

• No proposition is approved unless funding has been identified within the agreed budget.

These principles must apply across all departments and all areas of government activity.

Once spending growth has been halted, there needs to be a multi‑year programme of expenditure review. Every area of government should be examined within a framework that requires real reductions in public expenditure over time. This does not mean cutting essential services. With efficient management, clear priorities and a focus on outcomes, it is possible to reduce costs while maintaining – and in some cases improving – the quality of public services. Much government activity is of a nature that efficient use of Artificial Intelligence should massively reduce the time and resources needed to develop policy and deliver services.