Calls For Investigation Into £200m Government Underspend

The head of Scrutiny is calling for an independent investigation into 'a serious error of budgeting' which saw £200 million set aside last year before going unspent.

The Treasury Minister, Deputy Susie Pinel, says the money will be carried over to be used this year and spent reducing borrowing, repaying debts and completing unfinished projects.

She says Jersey's Public Finances Law has strict rules on overspending, so having some money left at the end of the financial year is normal:

“The Government Plan 2021-2024 included amounts allocated for unforeseen pressures, which is especially vital given the uncertainties we face as a result of the Covid-19 pandemic.

Last year, £84 million held in the Reserve, and £18 million held in the COVID Head of Expenditure, did not need to be used.

In addition, the timing of some Government projects means that £78 million which was allocated to be spent in 2021 will now be needed later than planned. We also saw some modest underspends in departments.

The Public Finances Law includes strict restrictions on overspending, which means that some level of underspend is normal: overall the amounts were similar to 2020."

Jersey's Treasury Minister, Deputy Susie Pinel

The Minister went on to explain how the reallocated money will be used, saying it will help the government complete outstanding projects and provide the 'flexibility' needed to deal with any uncertainty.

Deputy Pinel says the Government Plan agreed by States Members sets out what should be done with unspent funds at the end of the financial year, stating it should be placed in the Consolidated Fund and used to repay any government debt.

She says paying back loans sooner is 'good news for our public finances'.

But Senator Kristina Moore, the chair of the Scrutiny Liason Committee, says there should be a debate on how much should be saved or spent:

"A £200 million budgeting discrepancy is an extraordinary sum which should have been disclosed sooner.

Under the rules, all departments have to provide regular monthly accounts and keep Ministers up-to-date with their expected income and expenditure.

This monitoring would be even more important given the extraordinary events and spending of the last two years."

Senator Kristina Moore in a Scrutiny hearing

The move was agreed by Deputy Pinel in a Ministerial Decision published on the government website. Senator Moore says it should have been communicated better:

"Government ministers are accountable to the States Assembly and the public. They have a duty to keep the people informed, especially in the event of a significant departure from what has been agreed by the Assembly.

Although the Ministerial Decision explains some of these numbers it is difficult to understand exactly why it happened, some of it was because projects weren’t completed last year, so the money will be spent this year instead, but further clarity is needed as to what is being done with the unspent public money."

The Senator says there should be 'an independent investigation' into the underspend, as well as a debate on how the money should be used.