Guernsey States Accounts 2009 released

Friday 07 May 2010

The 2009 States Accounts are published today and reveal an overall deficit of £19 million allowing for appropriations to the Capital Reserve of £20 million.

While this is an improvement of some £9 million on the original budget the Department is extremely concerned that total net revenue expenditure increased in 2009 by some £29 million or very nearly 10% against the target of a real terms freeze on aggregate States revenue expenditure established by the States when approving the Fiscal & Economic Plan last July. This lack of restraint on expenditure is unsustainable and Departments
need to demonstrate more financial discipline at a time when the States are facing a £40 million deficit in public finances for 2010.

An increase of 8.8% in annual payroll costs compared to 2008 is also concerning although the overall cost does include incremental drift, the re-grading of some posts and overtime as well as pay awards. Nevertheless, rising payroll costs is indicative of increasing staff numbers and the full-time equivalent number of employees shows an
increase of 170.

The Department is conducting further investigations into staffing numbers and its findings will be included in the 2011 Budget Report and will form the basis of any recommendations on the possible reintroduction of restrictions on staff numbers which were ended in 2007

Key factors contributing to the overall outcome for 2009 include: -

· Other income tax headings delivering ahead of budget (although £3.9m of this
income is timing whereby transitional company tax has been received earlier than
expected which will have an opposite impact on the 2010 position) (£29.6m)
· An improvement in Departmental operating income of £2.4m
· Employees’ Tax Instalment Scheme (ETI) income achieving only 97% of original
budget (£5.3m less than anticipated)
· Other taxes (including document duty, company fees and excise duties) returning
less than anticipated (£2.9m)
· Both pay and non pay outturn being greater than indicated within original budgets
(£2.5m and £2.6m respectively)
· Higher than anticipated spend on formula led expenditure by £1.4m