Guernsey States 2016 budget: Healthcare prioritised

Deputy Gavin St Pier said "realism must prevail" and the island had to "live within its means"

An additional £8.2m will be put aside for healthcare in 2016 under Guernsey's budget plans.

The Health and Social Services Department has the largest budget of any States department - with an approved £116.8m set aside this year.

Treasury Minister Gavin St Pier said: "It's been clear for a number of years that health has struggled to live within the resources allocated to it."

The budget sees rises in duty, but no increase in personal tax allowance.

Indirect taxation proposals

• Property tax - rises as follows; 10% Domestic, 2.5% Retail and 5% Commercial

• Tobacco duty - 6.5% on cigarettes and 9% for other products

• Alcohol duty - 5% rise

• Fuel duty - 12.9% increase

• No change to document duty or tax allowances

Deputy St Pier said: "It is a realistic budget, which recognises the fact that our revenues for 2015 have not met the expectations that we had this time last year.

"Our revenues are expected to be £20m below our expectations a year ago, so we have to work within those parameters. If we don't have the money, we don't have the money and that's what we have to manage.

"If this shortfall is, as we believe, short term and cyclical, it's something we can manage and we can live within our means and we can produce a balanced budget. That has to be the objective: only spending what we have."

He said: "With the States having rejected the further development of GST, [goods and services tax] we have no choice but to look at the scope of all other existing taxes."

A statement from the treasury said the extra £8.2m of funding for healthcare was needed to deliver the "current service model", which a review by auditors BDO found was "costly on a comparative basis to similar environments".

It also found services could be deliver for £24m less with a different service model.

The department has recommended similar reviews be carried out of the next two biggest spending departments - Education and Home - in 2016.