They would affect everybody from teachers and nurses to civil servants, manual workers, police officers and firefighters.
They will only get more money if savings are made through job cuts and efficiencies.Committees will also have to cut budgets as Finance and Economics try to deliver on their promise to reduce spending before increasing taxation.The plan would save £33 million over four years from 2005.
Finance believe it is not only deliverable but will be politically acceptable, as health and education budgets will still be allowed to grow.States Members and chief officers spent yesterday working on financial forecasts to the year 2009, when a zero rate of company tax is introduced, leaving a £100 million gap in income.Faced already with growing budget deficits, Finance president Senator Terry Le Sueur says it is vital to identify savings in expenditure now.He wants the States to commit to the plan when it is included in the 2004 Resource Plan, which will be debated in the House in September.His committee plan to limit overall growth in the next four years to a below-inflation 3%, but the proposals still allow the vital public services of health and education to increase their budgets by 4.5% and 2.5% a year.Members were told that the bigger the deficits, the harder the public will have to be hit through taxes and charges.
Public sector job cuts, restrictions on pay rises and efficiency savings are inevitable if the impact on the taxpayer is to be lessened.’It is a hard message but Members accepted that it is necessary if we are going to live within our means, which is what the public are constantly telling us to do,’ said Senator Le Sueur.’We are doing what the public want us to do, which is to make efficiencies and savings before considering putting up taxes.’By 2008 the Island will face an estimated £15m deficit if they limit growth in States spending to 2.5%.
But if it grows at 5% the deficit will be £75m – and that is before the £100m hole which will follow the zero-rate move a year later.The Finance plan will save £33 million over four years, which will be achieved by:Pegging increases in the States wage bill to 2.5% a year.Forcing committees to make 1.5% cuts in their budgets.Finding a 0.5% cut through corporate efficiency savings.Restricting overall expenditure growth to 3% a year.At yesterday’s workshop States Members were shown the committee’s financial plans and were able to use a computer programme to consider the impact of their own alternatives.It was the first exercise of its kind and although only half the States Members turned up, Senator Le Sueur was pleased with the outcome.’This is the first time we have really involved all States Members in a process of addressing difficult and sometimes conflicting pressures by a consensual approach,’ he said.’States Members’ response was informal, helpful and realistic.’This is the spur for the States to look more closely at the way it spends money.
It is not an easy thing to achieve but the consequences of not achieving it are even more unpalatable,’ he said.But while Finance may be confident of having political backing it is highly unlikely that the public sector pay groups will accept below-cost-of-living rises without a fight.
Only last week nurses rejected a 5.1% increase for this year.