Experts say government needs to invest in savings

The Fiscal Policy Panel warned the government could go £12m into the red on its day-to-day spending next year

The government is not investing enough into its long-term savings, independent finance experts have said.

In its 2025 annual report, the Fiscal Policy Panel (FPP) - which reviews how well Jersey generates and controls its money - said the government was spending more than it was earning.

It said finances could go £12m into the red on day-to-day spending next year and the Strategic Reserve was at 20% of Gross Domestic Product, the value of goods and services in Jersey, which was below the recommended target of 30-60%.

Treasury Minister Elaine Millar said the report was not a surprise and measures such as a recruitment freeze had already delivered big savings.

The panel said income had gone up by nearly 50% since 2019 but spending had also gone up 50%, which it said would lead to higher inflation.

Sir Jon Cunliffe, FPP's chairman, said the island's economy contracted in 2024 as banking profits fell compared to the previous year, but the rest of the economy saw some growth.

He said banking profits were expected to grow at a much slower rate from 2025 while Jersey's economy was forecast to grow at a "comparatively weaker rate".

The report also showed capital spending was increasing.

It said the Strategic Reserve remained below the value the panel regarded as prudent and the Stabilisation Fund was effectively exhausted.

The FPP made five recommendations to the treasury minister and the States Assembly:

• Curtailing the unsustainable trajectory of day-to-day spending in future budgets

• Rebuild the Strategic Reserve and Stabilisation Fund

• Draw-downs from the Social Security Reserve Fund should only be made on the basis of a comprehensive actuarial assessment of future pension liabilities

• The States of Jersey needed to save more

• Pillar Two income should be used prudently

In response to the report, Millar said the government remained focused on protecting and investing in core public services such as healthcare, children's services and ageing infrastructure.