£24m deficit predicted by Guernsey's States

Deputy Lyndon Trott said 2024 had "highlighted the frailty of the States' financial position"

Guernsey's public finances are set for a £24m deficit this year, the president of Guernsey's Policy and Resources (P&R) committee has said.

Deputy Lyndon Trott told deputies the States received an "error or mistake claim" from a bank relating to previously assessed tax back to 2018 which amounts to £15m.

It follows the news, profit estimates P&R received from the same bank had a "negative impact on States' finances" of £16m for this year.

Guernsey's budget for 2025 is set to be published on 8 October and Trott said it was "time to make some tough decisions" on public finances.

When asked whether he would bring proposals for an increase to income tax in the budget for 2025 by Deputy Yvonne Burford, Trott said: "I can't tell Deputy Burford that, as we are very closely controlled by budget secrecy matters.

"What I can say is Deputy Burford is an intelligent woman, she has followed debate on these matters quite closely, and as a consequence of that it sounds like she will be less surprised than she might otherwise be should the budget have that proposal."

Last year Trott attempted to include a proposal to increase income tax by 3% as part of plans to reform Guernsey’s tax system, but his scheme was defeated by 30 votes to 10 in the States.

Glass no longer 'half full'

In his update, Trott said usually his "glass is generally full if not overflowing" but that the recent news meant "some of this has drained".

He said: "2024 has highlighted the frailty of the States' financial position.

"It's shown how little resilience we have."

As part of his update to States members, Trott said income tax reciepts for 2024 were £30m below the budgeted position.

He added: "The States Trading Supervisory Board has reported that the losses are now forecast at just over £6m."

HSC 'overspending by £2m"

One of the brighter points, according to Trott, was that most of the committees within the States had underspent on their budget by about £4m.

However he declared the committee for Health and Social Care had "overspent in the year to date by nearly £2m".

"As I reported in July, 2024 has seen an exceptional call on the budget reserve, with the whole of the general provision having been committed in the first four months of the year," he said.

"This was due to several urgent and unplanned projects requiring funding."