Concerns over use of fund for living wage support

Jersey's government plans to use the social security fund to help businesses transition to a living wage

Jersey ministers have been questioned over plans to reduce the amount of money the the government puts into the social security fund so that it can instead be used to help businesses transition to the living wage

The social security fund provides old age pensions and a range of working age benefits

Government contributes to the social security fund through the states grant, but will redirect £20m from that grant to support businesses and charities in 2025 and 2026 while the living wage is implemented

The living wage is the amount considered necessary to meet living costs and the government plans to introduce it in 2026.

Deputy Jonathan Renouf said the States had been "very resistant" to using the social security fund in the past.

He warned Economic Development Minister Deputy Kirsten Morel there was a risk the funding may not be approved.

Mr Morel said he "seriously hoped assembly members don't try and remove that funding".

He added: "If we do not provide that support, we could see significant business pressures."

'New evidence'

Chief Minister Deputy Lyndon Farnham said it was possible "to reduce the supplementation to the fund, while still providing enough money for the fund to meet its commitments."

"So it was decided to that it would be prudent to use that money for the economy to help businesses deal with the living wage," he said.

Mr Renouf said Mr Farnham had previously voted against "plundering the social security fund".

He responded by saying he was "happy to change his mind when presented with new evidence".

'No repayment mechanism'

According to government accounts, the balance of the social security fund at the end of 2023 was £85m.

Speaking to the BBC after the debate, Mr Renouf said he was "concerned the government failed to make a case for using the social security fund".

"Furthermore there was no repayment mechanism in the government plans to use the fund," he said.