THE States might have blown next year’s budget target. Treasury minister Lyndon Trott was speaking after a fiery debate yesterday during which Social Security won its battle against the Policy Council on the level of the States grant to the pension fund.
By 20 votes to 19, the House decided it should be £15.85m.
The council wanted to put in £13.6m., have an actuarial review of the way the grant is calculated and then make up the difference if the review found that a top-up was needed.
‘During the debate on the interim financial report, I said the target of £290m., for the 2008 budget was a tough one, but achievable,’ said Deputy Trott yesterday.
‘The result of today’s decision on the grant from general revenue next year is that it is now almost certainly unachievable. My department will not be prepared to submit a budget to this House that damages our health service or our education system.
‘Therefore, unless the Policy Council instructs otherwise, it’s probable that as a result of today’s decision, the high-level strategic targets set by the States will not be met.’
A key plank of the new tax strategy is to keep increases in States spending to RPI or less.
But deputy Social Security minister Dan Le Cheminant said the States had made the right decision.
‘Very clearly the majority understood there was a need for a comprehensive review, but we need to make sure that we know what the results of that are before the States makes any decisions.’
Deputy Le Cheminant has been staunchly against the spending targets imposed, which he believed were wrong.
‘If for example Health or Education needs funds for essential services, we need to be courageous enough to take an amount of the contingency reserve.’
Social Security argued that Treasury had got its sums wrong on the grant, basing them on 2006 figures.
Summing up on the amendment, Chief Minister Mike Torode fended off suggestions that the council’s proposal amounted to a raid on the pension fund.
He repeated time and again that the difference would be made up if the review showed it was need to keep the pension fund healthy.
But he was interrupted several times.
Much of the furore centred around an email from the government’s actuary sent to senior officers at Treasury and the Policy Council that appeared to back up Social Security’s case.
Ministers said they had not seen it and as Deputy Torode summed up Deputy Bernard Flouquet handed it to him.
Initially, the chief minister refused to read it out because he had not had time to digest it, eventually backing down to read out part of it.
But that was not enough for an animated Deputy Flouquet, a member of Social Security, who then read the rest of it.
Article posted on 29th September, 2007 - 12.00am
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