States finances ‘better than expected’ but deficit still forecast

Guernsey States’ finances are looking “better than expected”.

It said it expected to end the year about £18m better off than planned based on the last seven months and forecasted spend.

It attributed part of it to better than expected income tax from employed individuals (ETI).

The States said it would probably still see an end of year deficit of £20m after including required spending on infrastructure.

The States said it had seen both median earnings rising faster than anticipated and an increase in employment levels.

The improvement in ETI income alone was likely to see an additional £10m against the States’ budgeted position.

Deputy Mark Helyar, vice-president and treasury lead for the policy and resources committee, said his department was asked for an update on the year’s financial performance so far.

“I am happy to provide it, as it is timely, and helps to keep our community informed about how the States and the economy are performing.”

In addition to the positive forecast, the States’ said “document duty” was likely to finish the year £7m below the budgeted figure.

It said it was due to a “slowdown in the housing market following extremely buoyant years since Covid”.

Other areas of income were said to be largely in line with budget expectations.

Looking at expenditure, the States said its costs, excluding pay, had been heavily affected by inflation leading to several committees forecasting small overspends.

Health and social care, for example, faces an overspend of £2.4m on staffing, it said.

The overall improved position means the projected surplus for 2023 is now around £24m.

It said it had taken into account proceeds from the sale of property and the loss at Guernsey Ports as well as the required spend on Guernsey infrastructure.

The increased income meant the forecast position for the end of the financial year would be a reduced deficit of £20m.