Call for independent investigation into £200m Gov underspend

Friday 25 February 2022

The Chief Scrutineer is calling for an "undisclosed" £200m Government underspend to be investigated.

Senator Kristina Moore said the “budgeting discrepancy” was an “an extraordinary sum which should have been disclosed sooner" and meant that December’s debate about the Government Plan - the document setting budgets between 2022 and 2025 - was held on “fictitious grounds”

Treasury Minister Susie Pinel recently signed a Ministerial order transferring the unspent money into various pots for 2022.

£115.7m of budgeted money was not spent by departments or on projects, while the General Reserve, the Government’s savings account, underspent by £84.2m last year.

An amendment to the Government Plan said that the Treasury Minister had to return unspent funds to the Consolidated Fund – the current account - be used to “minimise the borrowing requirements for Covid-19 and the Fiscal Stimulus Fund and support the repayment of debt.”

More than £80m will be used to reduce borrowing, while £67.5m will be spent on projects and £32.9m will go to various reserves, including £5.3m for two projects that were pulled from the Fiscal Stimulus Fund: Oakfield Sports Centre and the Opera House.

Senator Moore, who chaired the Government Plan Review Panel, is not happy. 

She said: “The States debated the Government Plan in December. We spent days debating how 2022 monies should be raised and how expenditure would be allocated for public services for 2022.

“These discussions were based upon the figures that the Council of Ministers had disclosed which included estimates of public expenditure and income based on the 2021 out-turns. 

“The Alliance led government even voted against amendments on the basis of what they claimed to be ‘fiscal prudence’.”

She added: “Under the rules, all departments have to provide regular monthly accounts and keep the Treasury and Chief 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. 

“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.

"Instead an opaque Ministerial Decision described as ‘2021 End of Year Flexibility’ has appeared, with no public statement or explanation from the Treasury Minister."

Pictured: £2.237m will pay for urgent repair work to the Jersey Opera House, which lost is Fiscal Stimulus funding.

Senator Moore continued: “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. 

“This is not a minor rounding issue, this is a serious error of budgeting which must have been known about in advance of the Government Plan and if it wasn’t, we need an explanation. 

“Accountability matters; government cannot simply evade their responsibilities because the issue is uncomfortable nor is government allowed to undertake pre-election stunts.”

Senator Moore said she was calling for an independent investigation to explain why “such a massive budgeting error came about and why it was hidden from Scrutiny, States Members and the public until now”. 

She added: “There should also be a debate to discuss how this underspend should be used. 

Every minister should publicly explain what their role has been in this underspend and I call on them individually to confirm if they knew about it and if they did, whether they discussed how or where it should be allocated. And if not why not.”

Treasury Minister Susie Pinel, said: "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, £84m held in the Reserve, and £18m held in the Covid Head of Expenditure, did not need to be used.

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

She added: "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."