Covid-19 2020 response bill was £60m less than expected

- Advertisement -

Recent figures released by the government indicated that the total spend on the crisis for 2020 was £190 million. This compares to £250 million set out in the financial document, which was approved by the States in October and set out public-sector income and spending forecasts for 2021 to 2024.

An example of actual spending turning out to be far lower than predicted was the Nightingale Wing, which eventually cost £9.6m during 2020, compared to the £17.9m forecast two months before the year end.

Explaining the wide variance in the figures, Treasury Minister Susie Pinel said that the government had set its forecasts based on the worst-case scenarios.

‘The Covid-19-related figures given in the proposed Government Plan 2021–2024 when it was published last October were based on forecasts, and were produced when we were still uncertain of the ongoing impact of the pandemic on the Island and the livelihoods of businesses and individuals,’ she said.

‘For example, the forecast spend on the Nightingale Wing was based on the facility being used and occupied, which meant that the figures included running costs. The Nightingale Wing was built as an insurance policy and as it has not had to be used, and is due to be removed soon, the actual costs are much lower.

‘It was prudent for us to plan for a worst-case scenario and we’re obviously pleased that the final figures for 2020 are much lower than anticipated.’

When the Government Plan was published last year it was forecast that Jersey would end up £336 million in debt this year due to additional spending on Covid-19. A £500 million loan agreement, known as the revolving debt facility, was agreed between the government and a consortium of local banks to accommodate the borrowing.

The minister would not say whether the government would now need to take out less debt than anticipated but confirmed that loan facility had not been used during 2020.

‘The costs of responding to Covid-19 were largely funded by additional resources made available through the [government’s] emergency powers [to combat the Covid-19 crisis],’ she said.

‘These funds were over and above the Government Plan budgets and could only be spent on responding to Covid-19. Some of the funds budgeted for, but not spent in 2020, are being used to manage the ongoing Covid-19 costs this year, and they cannot be used for other government spending.

‘As we continued to do throughout the Covid-19 pandemic, the government has planned for the worst-case scenario, and acted to avoid it.

‘I’m pleased that this underspend and better-than-expected income receipts means that the government did not have to draw down on the revolving credit facility in 2020 in order to fund the response.’

- Advertisement -
- Advertisement -
- Advertisement -

Latest Stories

- Advertisement -

UK News

- Advertisement -
- Advertisement -

Read the latest free supplements

Read the Town Crier, Le Rocher and a whole host of other subjects like mortgage advice, business, cycling, travel and property.