States announce £30million savings to plug black hole

Wednesday 10 October 2018

£30million expected to be saved as a result of sweeping public sector reforms – including a permanent reduction in the size of the States workforce – will help stave off an impending black hole in public finances, the Chief Minister has announced.

In a speech given to members of the Chamber of Commerce this lunchtime, Senator John Le Fondré said that he expected a large-scale restructuring of the public sector spearheaded by new States Chief Executive Charlie Parker would save the substantial sum.

It’s the first time a price tag has been placed on Mr Parker’s ‘One Government’ proposals, which have included the hiring of a new team of Director Generals – many of which come from the UK – and the creation of wholly new States departments.

He previously promised that the changes would break down “silos” and cut “duplication” of work, but had only ever labelled the savings he expected to be in the “tens of millions.”

Now, for the first time, those savings have been quantified as totalling £30million – close to the amount of money the States were expected to be in the red yearly, as revealed this week in the 2019 Budget.

A full house @RadissonJersey for @jerseychamber #ChamberLunch with the Chief Minister. He pledges ‘to work differently to the past administration’ #Jersey #ChamberofCommerce pic.twitter.com/l3N8GXyP54

— Jersey Chamber (@jerseychamber) October 10, 2018

“As the Treasury Minister announced on Monday in the draft Budget, the forecasts point to a structural deficit in our public finances of up to £30-40 million by 2020-23 unless we take action. So we are taking action,” Senator Le Fondré told a packed room of the island's business leaders this afternoon.

“In 2019, to bridge this forecast gap between our expenditure and our revenues, the public service will make sustainable savings totalling £30 million. These are not one-off efficiencies, but a permanent reduction to the costs of the public service.”

Explaining how those savings would be achieved, he said that some of those savings would come from a “permanent reduction” in the size of the States’ workforce.

Delighted to be addressing Members at the @jerseychamber October Lunch, and to announce sustainable savings of £30million across the public sector in 2019. #ChamberLunch pic.twitter.com/FZUEcw1bnK

— John Le Fondre (@John_Le_Fondre) October 10, 2018

He added: “I should point out that the States is currently carrying around 600 vacancies, and has a staff turnover rate of 12%, so responsible headcount management is a realistic and pragmatic approach. The remainder of the savings will be achieved as a result of modernising the States – by improving processes, better commercial contract management, consolidating assets, stopping the duplication of effort, and through the digitisation and automation of routine tasks and services.”

However, the Chief Minister pledged that this was “only the start” and that his Council of Ministers aimed to “refine our work on efficiencies for 2020 to 2023.”

An update on that work is expected in the Treasury Minister’s Budget speech in December.