THE ISLAND’S emergency reserves will not be getting a funding boost, it has emerged, due to limited funds and government debt.
In a Scrutiny hearing on Friday, Minister of Treasury and Resources Deputy Elaine Millar explained that previous plans for the transfer of £25 million from central coffers to the Island’s Stabilisation Fund – one of its ‘Rainy Day’ funds – would no longer be taking place due to a lack of spare funds.
Responding to a question posed by vice-chair of the Corporate Services Panel, Deputy Lucy Stephenson, Deputy Millar explained that after finalising the 2024 States Accounts, they do not have the funds to meet their previous target for excess income or departmental underspends to be transferred to the Stabilisation Fund.
Deputy Millar outlined that money was instead used to repay outstanding government debt incurred during the pandemic – almost £5 million of which stemmed from overclaimed support owed by businesses that received financial assistance during the pandemic, as of September 2024.
She went on to recognise that though the Fund has “depleted largely” since the covid pandemic, it remains a “valuable part” of government’s overall fiscal strategy and it is her intention to boost its reserves.
The Minister was further quizzed by Panel member Deputy Jonathan Renouf on the feasibility of Treasury ever gaining enough revenue to top up the fund, considering what he described as “buoyant” tax revenues in recent years.
Though the Island had seen an economic boost, Deputy Millar then explained that demands of public service meant she had to strike a “balancing act” between government costs and savings.
“Demands for spending are incessant,” she said. “Everybody [government departments] wants money.”
The Minister then denied that there is any cause for concern about the dwindling Stabilisation Fund as the island is still in a “strong financial position”, and government has extra reserves in the Social Security Fund, and is still able to borrow if more is needed.
She added that the Treasury would aim to set aside a similar amount of surplus income (£25 million) for the Stabilisation Fund in the upcoming Budget for 2026 – due to be revealed in September.
