Guernsey's States facing £16m budget shortfall

Deputy Lyndon Trott gave an update to States members about the work of the Policy and Resources Committee

Guernsey's States will have £16m less to spend than it planned for next year, according to the President of Policy and Resources (P&R).

Deputy Lyndon Trott told States members in an update on the work of P&R that profit estimates his committee received from one bank had a "negative impact on States' finances".

He suggested that, despite this, across the banking sector "it was expecting improving profits, largely due to a rapid increase in interest rates".

Mr Trott said before then he would give a statement on the wider state of public finances later this year, but suggested "2024 is proving to be a difficult year financially".

The States of Guernsey budget for 2025 is set to be published on 7 October.

During his statement he said "there has been one recent event which has had a material negative impact on the 2024 position".

He said: "Whilst previous discussions with the banking sector highlighted that it was expecting improving profits in 2023, there has been a material downward adjustment required to both the 2023 and 2024 interim assessments for one bank.

"This has had a combined material negative impact in States' finances on the 2024 position of nearly £16m.

"This could not have been reasonably foreseen."