Approved Budget (Government Plan) 2025 - 2028 and Annex

DECEMBER 2024

Budget (Government Plan)

2025 -2028

GP

GPloavnernment  R.188/2024

CONTENTS

Budget in Brief  3 Foreword from the Chief Minister  6 Foreword from the Minister for Treasury and Resources  7 Economic Context  10 Sustainable Wellbeing  15 Financial Strategy  23 General Revenue Income  27 Public Sector Spending 2025-2028  41 Capital and Other Projects 2025-2028  53 New Healthcare Facilities Programme  72 The Government of Jersey Balance Sheet and States Funds  76 Financial Matters Under Development  94 Appendix 1: Key to Abbreviations  99 Appendix 2: Proposition and Summary Tables  101 Appendix 3: Supplementary Financial Tables  114 Appendix 4: Administrative Tax Measures  120

Budget 2025-2086 (P.51/20242) as amended

On 29 November 2024 the States Assembly approved the Budget 2025-2028 as amended (a list of adopted amendments is included in Appendix 2).

This document sets out:

• The final Budget as amended by all amendments agreed by the States

Assembly, together with any necessary consequential and minor factual corrections.

• The P.52/2024 Proposition and Summary Tables, as amended by the States Assembly (see Appendix 2).

Change of Title

Under the Public Finances (Jersey) Law 2019, each financial year the Council of Ministers must prepare a Government Plan. To aid public understanding of the nature and purpose of the Government Plan 2025 – 2028, and to encourage public engagement, the report has been renamed to the "Budget 2025 – 2028". This does not impact upon its legal status as a Government Plan for the purposes of that Law. The Budget 2025 – 2028 fulfils all the requirements of a Government Plan under the Public Finances (Jersey) Law 2019.

Budget in brief

The Budget sets out the income and expenditure proposals for the next 4 years. It also shows how taxpayers money is spent on delivering services, infrastructure and facilities to Islanders. It builds on the Council of Ministers Common Strategic Policy 2024-2026.

For more information on the government s priorities for 2025, visit gov.je/GovernmentProgramme.

2025 Highlights:

General Revenue Income: Increased single person  2025 balance in the

tax allowance in 2025: Strategic Reserve:

£

£1.3bn £20,700 £1.2bn

Government spending on  Support for business and  Investment in Health: delivering services to Islanders: charities through the transition

to a living wage:

£

£31m

£1.2bn £20m * In addition to

inflation and pay

Investment in buildings,  Investment in New  Purchase of the new infrastructure & IT: Healthcare Facilities: government HQ:

£93m £710m £91m

Budget measures for 2025

Personal income tax thresholds and child allowances

£700 £150

Increase for individuals Increase in child allowance

£200

£1,150 Increase in additional allowance Increase for married and civil partners £ £250

Increase in childcare tax relief £250 £700

Increase for second earners Increase in higher childcare tax relief

Alcohol duty Fuel duty

No  No Increase Increase

on a pint of beer per a litre of fuel

(frozen for 2025) (frozen for 2025)

Tobacco duty Vehicle Emissions Duty

25%

+83p

increase for highest

CO2 emitting vehicles per 20 pack to support the Climate

Emergency Fund

(201g/km or more)

Government Finances 2025

£322m Health and Community Services

Departmental Spend

in 2025:

£93m Capital expenditure

in 2025 including:

£481m social  benefits expenditure  from Social Security  Funds  

£335m  £62m Health in 2025 including: Pensions and other benefits  benefits (Health

(Social Security Fund) Insurance Fund)

Foreword from the Chief Minister

Introduction from the Chief Minister

The Budget 2025-2028 prioritises our essential services and seeks to deliver practical solutions to the immediate challenges facing Islanders, with a focus on the cost of living, health care, hospital facilities, and housing. In short, it is the Government's financial plan to achieve the commitments of the Common Strategic Policy (CSP), as approved by the States Assembly in May 2024.

At the same time, the Budget serves as a plan to maintain sound public finances and prevent unnecessary expenditure. Maintaining strong finances is essential to our long-term financial security, economic wellbeing and international competitiveness.

Inevitably, as the cost of goods and services increases there will be some increase in Government spending. We are also committed to ensuring our health service has the money it needs to deliver good quality services. In addition, this Council of Ministers is committed to curbing excessive growth in the public sector. Revenue expenditure will increase overall in 2025 by 5.7%, compared to 9.4% in the previous plan.

Other than maintaining the operation of quality essential services, increases in funding have been restricted to delivering the thirteen priorities of the CSP, ensuring the effective use of taxpayers' money over the next two years.

Subject to approval by the States Assembly, this Budget will mean:

• The construction of the new hospital buildings at Overdale can begin.

• We can extend nursery and childcare provision.

• The transition towards a Living Wage for Jersey, with appropriate support for businesses, to ensure Islanders are afforded an enhanced quality of life,

• Islanders will see a freeze on alcohol and fuel duty to help manage cost of living pressures

The Budget provides stability, demonstrates fiscal responsibility and ensures that public funds are used in a targeted and controlled way to the benefit of islanders.

Foreword from the Minister for Treasury and Resources

I am pleased to present the Government of Jersey Budget 2025, setting the course towards a more prosperous and financially secure future for our Island.

This is a financial plan for the remaining two years of this administration.

While we cannot achieve everything Islanders may wish for in two years, this is a plan that puts the money available where it is needed most. It is a Budget that curbs growth and seeks to reprioritise spending in line with the Common Strategic Policy. It also aims to meet our priorities by removing management layers, cutting unnecessary expenditure and reducing our costly reliance on consultants and contingent labour.

We have a plan to implement the changes needed for our community. We want to make a tangible difference to Islanders' lives, whilst ensuring that our actions are affordable and maintaining the financial resilience of the Island.

Increasing Tax Allowances and Freezing Duties

The Government will continue to support Islanders through increases to tax allowances. The Budget will increase the single person tax allowance for 2025 to £20,700, ensuring that islanders keep more of their own money before paying tax.

This budget freezes alcohol duty, providing support to the hospitality industry and encouraging economic activity within the sector. In addition, the budget once again freezes road fuel duties in 2024, ensuring that cost-of-living pressures on motorists are reduced.

This approach helps maintain stability for businesses and consumers alike, alleviating some of the cost pressures and contributing to a more favourable economic environment. It is also intended to help those small businesses that rely on cars and vans to provide their service.

Addressing Healthcare Structural Deficits

Recognising the importance of a high-quality health service to Islanders, this Budget has provided an additional £31 million to meet structural funding issues in health. This will ensure that services can continue to be provided at the standard expected by patients.

We must ensure that this service is delivered efficiently to support the work of the Financial Recovery Programme, which plans to deliver £25 million of savings to help offset some of these additional costs.

Turning around the health service to allow it to meet its current challenges is an important short term action, but we are also continuing the policy of providing an additional 2% investment in Healthcare each year, which is broadly in line with the expectation for cost increases in Health over and above inflation.

Investing in our Island

We must continue to invest in our Island's assets, including our buildings, our technology and our physical infrastructure. However, the ambition of the previous programme has exceeded our capacity to deliver and this plan delivers a refocussed, deliverable Capital Programme for the next four years.

There is a twofold emphasis on renewal. We will deliver on our promise to revitalise and redevelop St. Helier . We will also prioritise the renewal of the core assets we already own, rather than allowing them to deteriorate in favour of new projects.

Commencing construction of New Healthcare Facilities

We are set to begin construction of the Acute Hospital at Overdale, with a completion target of 2028. This £710 million project is critical for our health infrastructure and public consultation has shown strong support for swift action.

As part of the Budget, we are presenting a new plan to finance the Programme, with the previous financing strategy no longer being affordable due to the changes in economic conditions, in particular increased interest rates.

Implementing Pillar Two

Next year, we will be introducing the new Pillar Two global corporate tax framework. This will result in some additional income, which must be used prudently. Pillar Two income will help to cover the costs of financing our New Healthcare Facilities and will also allow us to invest in the ongoing competitiveness of our Island economy.

The Budget also allows for the consideration of part of this revenue being used to replenish the Stabilisation Fund - in line with Fiscal Policy Panel advice - which ensures Government can support the economy during a future period of downturn.

We cannot be sure on the levels of receipts we may receive from Pillar Two, especially as they will likely fluctuate in the initial years. Accordingly, we should not expect to be able to spend this money on a recurring basis, but instead utilise an opportunity for us to strengthen our economy, resilience and infrastructure. With targeted investment, we will ensure that businesses continue to see Jersey as a competitive place to invest and operate.

Growing the Strategic Reserve

For a number of years, the Fiscal Policy Panel have also been recommending that we grow the value of the Strategic Reserve – a key part of our financial infrastructure. Jersey's success is built on stability and prudence, and this approach is embodied in the existence and value of the Strategic Reserve.

As we borrow for the new hospital and invest further in public services and the public realm, we need to maintain and grow the Strategic Reserve if we are to retain our hard-earned fiscal credibility. This budget takes positive action towards this goal, through the transfer of revenue resulting from the move from Prior Year Basis Taxation.

We have set out a clear intention to use additional Pillar Two receipts (over the base case) to further strengthen our reserves and competitiveness, in line with our commitment to the prudent use of this revenue.

We will also take advantage of the opportunity to own the new Government Headquarters, with the Social Security (Reserve) Fund investing £91 million. This arrangement prevents funds leaking outside of the wider States investments and will provide a stable return for the Fund for years to come.

In addition, any end-of-year underspends will be allocated to the Stabilisation Fund alongside any contribution from forecast Pillar Two receipts in future years. Maintaining sound public finances is paramount, ensuring long-term stability and the ability to support vital services sustainably

This is a responsible budget. It is a budget for investment, prudence and growth. It builds on the principles that have delivered a successful economy over many years and can give us confidence for the future.

Economic Context

The International Economic Outlook

The International Monetary Fund's (IMF) World Economic Outlook (April 2024[1]) showed that the global economy grew by 3.2% in 2023 and forecast global economic growth of 3.2% in both 2024 and 2025. The IMF suggested that Inflation has peaked and that whilst the global economy avoided a recession, growth prospects are unbalanced, and significant challenges remain. The IMF is forecasting low growth in the medium-term in many advanced economies, including the UK, with China experiencing and economic slowdown and continuing to present a downside risk to global growth.

8% Advanced economies

7% Emerging market and developing

economies

6%

5%

4%

3%

2%

1%

0%

2021 2022 2023 2024 2025 Figure 1: Economic growth forecasts. Source: IMF

Geopolitical tensions in the Middle East threaten price volatility in the energy and commodities market, posing another risk to global growth. Inflation (measured by the Consumer Price s Index) in the UK continues to fall, standing at 2% in June 2024, from a peak of 10.4% in 2023. UK growth is forecast to increase from 0.1% in 2023 to 0.5% in 2024 and 1.5% in 2025.

Jersey's Economic Outlook

Jersey's economy grew by 6.7% in 2022 in real terms and at basic prices. This growth was faster than other advanced economies and meant that at £5.8 billion, Jersey's economy, in 2022, was larger than it was pre-pandemic. Growth was driven by profits in the financial services sector – specifically in the banking sub-sector. Following strong growth in 2021, hotels, restaurants and bars continued their recovery from Covid-19, with the sector growing by 20% in 2022. The rest of the economy saw more mixed results.  

The Business Tendency Survey (BTS, June 2024) reveals that business activity continues to be strongly positive for the finance sector and neutral for the rest of the economy. The number of those actively seeking work (ASW, June 2024) remains low at 670, indicating that Jersey remains at or near to full employment.

100

Hotels, Bars and Restaurants Finance All sectors 80

60

40 20 0 -20 -40 -60

-80 -100

Figure 2: Weighted net balance of response to 'Business Activity', BTS. Source: Statistics Jersey

2,500

2,000 1,500 1,000 500

0

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Figure 3: Actively Seeking Work. Source: Statistics Jersey

In its Spring economic assumptions[2] for Jersey, the Fiscal Policy Panel (FPP) revised its profile of financial sector profits upwards, with considerably higher profits expected for 2023. Growth in financial services profits is forecast to slow over the period 2024 to 2028. With higher profits and stronger earnings growth, the forecast for real Gross Value Added (GVA) growth in 2023 has been increased from 1.7% to 9.3% and is forecast to remain positive over the period 2024 – 2028.  

125 120 115 110 105 100 95 90 85

2019 2020 2021 2022 2023 2024 2025 2026 2027

Spring 2024 Forecast Summer 2023 Forecast

Figure 4: GVA forecast (Index 2019=100). Source Fiscal Policy Panel

Inflation is forecast to fall throughout 2024 with the Retail Price s Index (RPI) expected to fall below 2% in 2025. RPI(X), which excludes mortgage interest payments, is forecast to be higher than RPI in the second half of 2024. The FPP also forecast real wage growth with forecast growth in average earnings exceeding forecast inflation.  

14.0% 12.0%

10.0% 8.0% 6.0% 4.0% 2.0%

0.0%

RPI RPI(X)

Figure 5: Inflation forecast. Dashed lines represent forecast. Source: Economics unit

700 600 500 400 300

200 100 0

1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020 2023 Average Earnings Index Retail Price s Index House Price s Index

Figure 6: Average Earnings, RPI and House Price Index. Source: Statistics Jersey

The gap between earnings growth and house price growth has widened over the last 25 years. However, higher mortgage rates have contributed to a slowdown in the housing market, with transactions reducing by 42.9% and prices decreasing by 2.6 % in 2023. The FPP forecast transactions to grow back to pre-pandemic levels by 2026, whilst prices are not expected to increase until 2025.

Fiscal Framework

The Fiscal Policy Panel is established by the Public Finances Law, which enshrines its independence and sets requirements for it to provide an annual report on Jersey's economy and Government finances, and to inform the preparation of the Government Plan. The Council of Ministers or the Minister for Treasury and Resources can also request other reports on specific subjects.

The FPP will continue to be responsible for monitoring the application of the fiscal guidelines.

The fiscal framework remains an important pillar of Jersey's economic and fiscal policy and sets the medium and long-term aims that help to inform budgetary decision making, with particular regard to the balance of income and expenditure (i.e. budget deficits or surpluses).

The key guidelines identified in previous Government Plans are to:

• Seek to increase the Strategic Reserve over the long term and public sector net worth, while heeding the advice of the FPP on borrowing and net financial assets.

• Run a structural current balance or surplus in the long-term until the Strategic Reserve is judged large enough to meet its objectives.

• Borrow only to finance investment (or refinance liabilities), except under times of economic duress, and monitor the impact on net financial assets.

The Fiscal Framework continues to be kept under review and will be updated if necessary.

Sustainable Wellbeing

Island Outcomes and Sustainable Wellbeing

The Common Strategic Policy[3] (CSP) of the new Council of Ministers was approved by the States Assembly in May 2024. It sets out 13 priorities that are aligned with the long-term vision set out in the Future Jersey report[4] and the ten Island Outcomes arising from it. The Budget document sets out how the Government will deploy its finances to deliver these priorities, as well as the wide range of existing government services that support the ongoing well-being of Islanders.

As part of the prioritisation of community well-being, the Social Security department has allocated £391,215 of funding to the Connect Me project for the year 2025, to ensure the continuation of the project and support the introduction of social prescribing[5].

Future Jersey vision

The long-term vision for Jersey in 2037 was produced by the Future Jersey consultation and is captured by the vision statement:

"An Island loved for its beautiful coast and countryside, rich heritage, diverse wildlife and clean air, land and water. An Island where a sense of community really matters - a safe place to grow up and enjoy life. An Island that offers everyone the opportunity to contribute to, and share in, the success of a strong, sustainable economy."

The Future Jersey vision focuses on long-term progress and measures community wellbeing, environmental wellbeing, and economic wellbeing. This provides a way of measuring Jersey's quality of life.

Island Outcomes

The Island Outcomes are split across three wellbeing aspects: Community, Economic and Environmental.

Figure 7: Island Outcomes

Similarly, the Public Finances (Jersey) Law 2019 requires the Council of Ministers to take into account the sustainable wellbeing (including the economic, social, environmental and cultural wellbeing) of the inhabitants of Jersey ("Islanders") over successive generations when preparing the Government Plan each year.

Progress over time towards the Island Outcomes and the sustainable wellbeing of Islanders over successive generations is monitored using the Island Indicators which are updated over time and published on the Jersey Performance Framework.

Jersey Performance Framework

The Jersey Performance Framework[6] is used to report on the Government of Jersey's performance. It is underpinned by a shared ambition for the sustainable wellbeing of current and future Islanders.

The Jersey Performance Framework comprises:

• The Island Outcome Indicators; and

• The Service Performance Measures

The Island Outcome Indicators have been refreshed over 2023-24 and a new visualisation has been published on gov.je.

Common Strategic Policy 2024-26

In the Common Strategic Policy 2024-26 (CSP), the Council of Ministers set out its priorities for delivery in its two-year term of office, which span all three facets of wellbeing. The CSP was developed after Ministers reviewed the detailed data from a number of sources, including the Jersey Opinions and Lifestyle Survey and the Island Outcome Indicators. The individual priorities are linked to the Island Outcomes.

Ministers and their departments will also be guided by the Island Outcomes in delivering all of their business-as-usual activities.

Figure 8: Common Strategic Policies

Sustainable Wellbeing and the Budget

The Budget contains approvals for the Council of Ministers' income estimates and spending proposals for the next 4 years. These spending allocations include some additional allocations needed to progress with CSP priorities, but importantly also continue to fund the wide range of activities that Government is already delivering to provide services and support positive outcomes for Islanders.

The Budget approves heads of expenditure ("budgets"), the majority of which are used to fund the provision of public services which support the sustainable wellbeing of Islanders. This includes, for example the provision of education to our children, provision of healthcare to Islanders and ensuring public safety through blue light services and the justice system.

Further detail on the amounts allocated to each head of expenditure is set out in the public sector spending section of this document. Supplementary detail for each Department will be provided in the Annex to the Budget.

The cost and affordability of the 13 priorities agreed in the CSP was considered during its development. Many are addressed through existing revenue and capital budgets. Where additional funding is required, this has been prioritised in this Budget, alongside funding to address key risks.

In their business-as-usual activity, Ministers continue to be guided by the Island Outcomes. This can take many forms. For example, when considering policy issues within their remit, Ministers take into account the well-being of Islanders and the long-term impacts of the policy. This is expressed through policy documents published by Ministers. Information on key public policies is published on gov.je, grouped by the Island Outcomes.

The link between the three wellbeing aspects (Community, Economic and Environmental) and some of the specific activities in the Budget is set out below.

Figure 9: Community Wellbeing

Figure 10: Economic Wellbeing

Figure 11: Environmental Wellbeing

Ministerial Priorities and Business Plans

Alongside the 13 priorities set out in the Common Strategic Policy, Ministers and departments will continue to deliver essential public services and business as usual activities. Key objectives for Ministers and departments, the legislative programme and areas of policy development will be published in department Business Plans. The Business Plans will also include service performance measures which show how government departments are performing in the delivery of key public services. Information on the operational activities and structure of Government departments is available online at gov.je[7]

Risk

Alongside the sustainable wellbeing of the inhabitants of Jersey over successive generations, the Council of Ministers also consider key risks to Jersey and to the running of the Government of Jersey when considering how best to prioritise and allocate its resources. Whilst many of our key risks will be being addressed through existing resources, we set out below how certain risks are being addressed in the Budget.

Community Wellbeing

Figure 12: Community Wellbeing Risks

Economic Wellbeing

Figure 13: Economic Wellbeing Risks

Environmental Wellbeing

Figure 14: Environmental Wellbeing Risks

Corporate Performance

Figure 15: Corporate Performance Risks

Government continues to develop its long-term financial planning, but already considers a range of scenarios to manage financial risk in both the medium and longer-term. We have a well-established fiscal policy, supported by the business planning process which continues to prioritise resources against the highest areas of priority and risk.

Financial Strategy

Financial Principles

The Council of Ministers agreed the following financial principles to be used as a framework for decisions making in preparing this budget.

1. The Budget must take into account the sustainability, stability and wellbeing of public finances.
2. Public services should be funded through balanced budgets.
3. Investment should be affordable and deliverable.
4. Expenditure and assets should be used to deliver value for money.
5. Fees and charges should be reasonable.
6. Restrained approach to borrowing should be adopted.
7. The value of our balance sheet should be preserved.

Tax Policy Principles

The following tax policy principles established in previous Plans continue to be used in this Plan.

1. Fair and sustainable
   1. Taxation must be necessary, justifiable, and sustainable
   2. Taxes should be low, broad, simple, and fair
   3. Everyone should make an appropriate contribution to the cost of providing services, while those on the lowest incomes should be protected
2. Support broader Government Policy
   1. Taxes must be internationally competitive
   2. Taxation should support economic, environmental, and social policy
3. Efficient and effective

3.1. Taxes should be easy to implement, administer and comply with, at a reasonable cost

No individual tax measure will meet all these principles. But overall, the Island's tax regime should represent a sustainable balance of them.

Financial Strategy for 2025-2028

The Council of Ministers developed a Common Strategic Policy (CSP), that focuses on delivering sensible, practical solutions to make Islanders' lives better. This Budget builds upon the foundations set out in the CSP to ensure funding is in place to deliver on real outcomes that will benefit our Island community.

The Budget has been prepared against the backdrop of heightened geopolitical risks and global economic uncertainty. Inflation levels have peaked, and are expected to return to more normal levels, along with interest rate projections, however, there remains pressure on both Government and household finances.

In developing the Budget, the Council of Ministers have restated their commitment to the principles agreed in their CSP

• Underpinning all our work is a steadfast plan to maintain sound public finances, and prevent unnecessary expenditure, with no significant increase in spending beyond what is affordable.

• Budgets will be reprioritised where appropriate to deliver objectives.

• We will curb the growth in public sector spending and rely less on consultants, instead developing local talent within the civil service and redirecting monies saved to those areas where it is most needed.

The financial strategy for 2025 – 2028 is based upon these principles and actions agreed in the CSP, the key elements of the medium-term financial strategy for this Budget, are;

• Curbing growth in the public sector by focussing available resources towards priorities agreed in the CSP and only where existing budgets and resources cannot be reprioritised.

• Further funding provided to address further structural deficits in Health and Community Services which cannot be met through the Financial Recovery Programme (FRP) and without an impact to health services.

• A focus on preventing unnecessary expenditure, delayering management, and reducing reliance on consultants and contractors. The savings arising will be reprioritised to assist in funding CSP objectives and additional healthcare deficit funding.

• Proposals are included to transition from the minimum wage to a living wage through 2025 and 2026, with a package of measures of support provided to businesses and charities over the period of that transition.

• Duties on alcohol and fuel have been frozen for 2025 to support Islanders with the ongoing challenges of the cost of living and support the hospitality sector.

• The capital programme has been right sized to a more deliverable level, focussing on those projects that are most impactful to Islanders and mitigate key risks. A more deliverable and realistic programme also reduces our reliance upon consultants and contractors and costs.

• Funding to build the new hospital at Overdale and complete phase one of the new healthcare facilities programme are included.

Although the focus of the Budget is on immediate delivery over the next two years of office the Budget also seeks to address longer term strategic challenges.

• The Budget sets out the financing strategy to deliver those new healthcare facilities. The Budget also sets out the strategy to grow the Strategic Reserve towards recommended level in the longer-term, including the transfer of Prior Year Taxation (PYB) debtors to the Strategic Reserve Fund.

Whilst the forecasting of the impact of the introduction of the Pillar Two tax framework remains uncertain, this Budget also sets out how the Government plans to use any additional revenues to help ensure the long-term sustainability of both the Island's economy, and its public finances.

Sustainable Public Finances

The Public Finances (Jersey) Law 2019 (PFL) sets out a requirement for the Budget to have regard to the long-term sustainability of the Island to ensure that we safeguard it for future generations.

This plan delivers budgets that are broadly balanced across the plan. This is important to ensure that we are spending within our means and making adequate provision for the replacement of our assets.

Whilst income forecasts have improved across the plan, spending has also increased above inflation to fund further deficits in Health and Community Services, and CSP priorities. The recurring impact of revenue expenditure growth is a £41 million increase in departmental expenditure by 2028, most of which is for Health and Community Services and commences in 2025, which is offset by £47 million of planned savings per annum by 2028. This Budget takes actions to restore balanced budgets across the period of the plan, with a largely inherited deficit in 2025 followed by transition to surpluses in subsequent years, which are used to fund investment in capital projects.

Approved  £'000  Estimate  Estimate  Estimate  Estimate 1,190,589  General Revenue Income[8]  1,270,276  1,296,801  1,330,310  1,371,283 1,162,591  Net Revenue Expenditure  1,229,715  1,238,649  1,260,912  1,294,099 27,998  Net Operating Surplus/(Deficit)  40,561  58,152  69,398  77,184 56,131  Depreciation and amortisation  58,934  58,919  58,919  58,919 (28,133)  Forecast Operating Surplus/(Deficit)  (18,373)  (767) 10,479  18,265

Table 1: Forecast Operating Balance

The financial forecast above excludes the impact of the introduction of the Pillar Two tax framework for accounting periods beginning on or after 1 January 2025. The receipts will not be available to spend until 2026 onwards.

Whilst forecasting the impact accurately remains extremely difficult, a prudent "base case" of additional tax receipts has been estimated upon which we have a high level of confidence will be received on a recurring basis for the foreseeable future.

These additional recurring receipts are proposed to be used primarily to meet the financing costs for Phase 1 of our New Healthcare facilities (NHF) and maintaining and enhancing the competitiveness of our international financial services sector. A more detailed package of support and investment will be made in the next Budget.

There is considerable upside potential for the receipts arising from the implementation of Pillar Two, however there is also significant uncertainty as to the scale of the extra receipts and how long the Island can expect to receive this income. Accordingly spending plans have not been developed which depends upon those receipts, particularly on a recurring basis. These receipts will be an opportunity to further invest in critical Island infrastructure, including phase one of the New Healthcare Facilities, and assist in growing our reserves – in particular the Stabilisation Fund and Strategic Reserve, in line with FPP recommendations. These receipts should not be used to fund recurring expenditure.  

This Budget also presents how we will pay for phase 1 of the New Healthcare Facilities, a critical project to the future wellbeing of islanders. We will use a sensible plan that blends borrowing and the use of reserves, with Pillar Two receipts being used to service the borrowing into the future.

The phased approach to providing New Healthcare Facilities is designed to ensure that each phase of the project is only committed to once an affordable financing strategy has been determined. This protects the public finances from being over-committed, helping ensure their long-term sustainability.

Whilst this Budget proposes the use of the Strategic Reserve to assist with funding the NHF, it also takes action to increase the value of the Strategic Reserve towards the target recommended by the FPP in the long-term, by proposing that, from 2026, all receipts from the payments of Prior Year Basis be allocated to the Strategic Reserve. The balance in the fund (excluding PYB Debtors) is forecast to be broadly maintained over the plan period, subject to short-term volatility, but the transfer adds an additional income stream into the fund. Pillar Two receipts also present an opportunity to build the reserve, as well as to rebuild the Stabilisation Fund.

Work is underway to develop a more detailed understanding of the longer-term forecast for public finances, which will consider the impact of changes to population size, demographics, and the economy over longer timescales. This will build on existing work, including the review of the sustainability of the Island's health and care costs.

General Revenue Income

The Government funds ongoing annual expenditure and investment in assets through three main sources: general tax revenues, other government income and departmental income. These three sources of revenue are paid into the Consolidated Fund.

General Tax Revenues

General tax revenues provide the main source of funding for the Government, with four main tax types.

Figure 16: Tax Types

Other Government Incomes

The Government also receives income from four other sources, as set out in the table below.

Figure 17: Other Income Sources

Departmental Income Sources

In addition to amounts paid directly to the Consolidated Fund, Government departments receive money from fees and charges for individual services. These amounts are included within individual net revenue expenditure allocations and are estimated at £120 million in 2025. The number of diverse sources of income reflects the variety of services provided by the Government. This includes fees for private patients at the hospital, school fees, fees for the disposal of inert waste, planning fees, and income from rents and our sports facilities. This income is included in department heads of expenditure.

A challenge for the Infrastructure department is the loss of income arising from the reduced capacity at the inert waste site. This loss of income will not result in associated expenditure savings, resulting in a sizable cost pressure. Over the medium term, the Minister for Infrastructure intends to bring forward commercial waste charges to recover the costs of treatment and to encourage improved environmental outcomes. To continue the shelter business and Islanders recovering from the recent impacts of the cost of living and doing business, Ministers propose to provide additional sums to the Infrastructure Department for the next 2 years.

Special Funds, including social security funds also receive income designated to them, as well as the investment returns on fund balances. This is then used for expenditure in line with the purpose and objectives of the funds.

Latest Income Forecasts

The Income Forecasting Group (IFG) advises on the forecasts of all States income from taxation and social security contributions. Membership of the group includes senior civil servants, the Government's chief economic advisor as well as four external members.

Since the previous forecast (Summer 2023) used as the basis for Government Plan 2024- 2027, the IFG have produced a new income forecast (Spring 2024). This reflects the latest economic assumptions produced by the independent Fiscal Policy Panel in May 2024. The forecast is published alongside the Budget 2025-2028.

The global macroeconomic outlook continues to evolve in a rapidly changing environment. Since summer 2024, the IFG revised forecast reflects slight improvement in the global economic outlook, but that growth prospects remain below historic averages with many advanced economies, including the UK forecast to experience low growth in the medium term.

The FPP economic assumptions reflect the latest local and international developments to May 2024. The main variations to the economic assumptions used in the IFG forecast for Spring 2024, since the previous Government Plan include:

• Interest rates are expected to have peaked and should fall over the forecasting period. The FPP has increased their forecast for growth in financial services profits in 2023 with slowing growth (from a higher base) expected for 2024 to 2028.

• Inflation measured through the Retail Price s Index (RPI) is forecast to fall more quickly in 2024 than previously expected, however, upward revisions were made for 2025 and 2026.

• The forecast for average earnings has been uprated in 2024 to 2026, driven by the public sector pay deal and higher forecast remuneration in the financial sector. The forecast for employment growth remains largely unchanged at 1.4% in 2023 and between 0.4 - 0.5% thereafter.

• House prices are not expected to increase until 2025 and transactions are expected to return to pre-pandemic levels by 2026 with modest growth thereafter.

• The IFG's Spring 2024 forecast has been developed as a central forecast' to represent the IFG's view of the most likely outcome.

In addition to the economic assumptions forecast by the FPP, the IFG's latest forecast reflects;

• Taxation and duty income results for 2023.

• Initial information on taxation and duty general revenues income for the first quarter of 2024.

• Forecasts from Treasury for other income; and

• Market and local sectoral intelligence from the IFG and gathered buy the Economics Unit.

The spring 2024 forecast covers the years 2025-28, the forecast assumes existing tax policy and long-standing policy for rises and changes where relevant.

Table 2: IFG Income Forecast

£ Millions IFG Forecast Range  1,600

 1,500 1,400 1,300 1,200 1,100 1,000 900

2023 2024 2025 2026 2027 2028 Central Upper Lower Summer 2023

Figure 18: Range of IFG forecast. Source: IFG

The overall changes from the summer 2023 forecast are:

Personal Income Tax

The forecast for personal income tax is expected to grow at a slower rate than previously forecast. This is based on the latest available results, data and the FPP assumptions, including an increase in average earnings assumptions.

Corporate Income Tax

The Corporate income tax forecast has increased compared to the summer 2023 forecast. This is driven by a reprofiling of the growth in financial services profits, based upon direct and confidential engagement directly with the major taxpayers in the sector, indicating significant growth in 2024. The forecast corporate income tax revenue from other sectors remains stable.

GST and International Services Entity Fees

The forecast for Goods and Services Tax (GST) has increased in each year of the plan. The FPP's economic assumption for compensation of employees, the main determinant of GST receipts has been revised upward and is the main driver for the increase in receipts.

Impôts Duties

Impôts (excise) duty reflects a decrease from the Summer 2023 forecast due in part to lower- than-anticipated excise rates in the 2024 budget following the freeze to alcohol and fuel duties in 2024. Tobacco duty has seen large fluctuations since the Covid-19 pandemic, with changing consumer behaviours and remains challenging to forecast. The 2025-2028 forecast across alcohol, tobacco and fuel relies upon long-term consumption trends.

Stamp Duty

Stamp duty has been revised to incorporate the updated FPP economic assumptions. The Stamp duty forecast has decreased in each year of the forecast from summer 2023. This is principally due to the FPP economic assumptions forecasting a slower return to pre-2019 housing marketing activity than the previously forecast.

Budget Proposals

Income Tax (Personal Taxation) Exemption Thresholds and Child Allowances

Income tax exemption thresholds set a limit below which an individual, married couple or couple in a civil partnership do not pay income tax or Long-Term Care (LTC) contributions. Other family circumstances may increase an individual's or couple's exemption threshold through additional allowances, such as the second earner's allowance and allowances in respect of children and childcare fees.

Previous policy has been to uprate the main tax allowances by the lower of the growth of June RPI and average annual earnings. Allowances were increased by 7.7% in 2024, based on average earnings, following a higher increase of 12% in 2023 to support Islanders through the cost-of-living crisis.

Following these substantial increases, Ministers are proposing to uprate the main tax allowances in 2025 by 3.6%, based on the economic assumptions produced by the FPP. This is part of a balanced package of measures, including the freeze of alcohol and fuel duties, the move towards a living wage and other support for the lowest earners. The increase to tax allowances will benefit the 90% of taxpayers who pay at the marginal rate.

In comparison, the UK personal allowance has been frozen since the 2021/22 tax year at £12,570, whilst the personal allowance threshold in Guernsey is set at £13,900 for 2024.

Income Tax Exemption Thresholds

Tax 2024  2025  Proposed  Reduction

£ Actual   Proposed   Increase @ 26% Single person  20,000  20,700  700  182 Married couple/civil partnership  32,050  33,200  1,150  299 Second earner's allowance  7,950  8,200  250  65 Child allowance  3,700  3,850  150  39 Additional allowance in respect of children  5,550  5,750  200  52 Childcare  7,600  7,850  250  65 Childcare (enhanced)  19,700  20,400  700  182

Table 3: Income Tax Exemption Thresholds

Excise Duties

Ministers' proposals for excise duties on tobacco, alcohol, road fuels, and motor vehicles, if approved by the Assembly, will take effect at midnight on 31 December 2024.

Tobacco

Ministers recognise that smoking represents a significant threat to the health and wellbeing of Islanders and continues to place a burden on our health care system. Having taken the advice of Public Health officials, Ministers are proposing to increase duties on tobacco products by 8.6%, which is the sum of the forecasted June 2024 RPI (3.6%) and an additional 5% escalator. This increases the duty on a standard packet of cigarettes by 83p. Cigars will be subject to an increase of 11.6% in line with existing policy to close the gap between the duty charged on cigars and cigarettes.

Alcohol

The hospitality industry continues to face challenges. In addition to an expansion of small distillers' relief, Ministers are proposing to freeze alcohol duty in 2025. This will be the fifth year in a row that indexation of alcohol duty has been either frozen or held below inflation, also assisting with the ongoing cost of living pressures of Islanders.

Fuel duty

Following the freeze on road fuels duties in 2023 and 2024 to help with the cost of living, fuel duties are once again frozen in 2025. Ministers maintain the commitment to allocating 9 pence per litre from fuel duty receipts to the Climate Emergency Fund.

Proposed Changes in Excise Duties

Table 4: Changes in Impôts (Excise) Duties

Vehicle Emissions Duty

Vehicle Emissions Duty (VED) is charged when a vehicle is first registered in the Island. The amount of VED payable depends on the vehicle's CO2 emissions data, meaning that the charges are higher for the most polluting vehicles. The increase in income from VED proposals is transferred into the Climate Emergency Fund.

From 2025, it is proposed to increase the three highest emission bands for non-commercial vehicles. From 1 January 2025, the highest three emission bands will be increased by 5%, 15%, and 25% with no increases for most vehicles, which fall into the less polluting bands.

Commercial vehicle rates have not been increased since the category was introduced on 1 April 2022 and at the time reflected the rates from 2018. It is proposed that for commercial vehicles, VED will increase by forecast RPI (3.6%) across all bands to maintain the rate in real terms. Restricted Speed Agricultural Tractors VED rates will not be increased for 2025.

The Government will continue to keep VED rates under review in future years to encourage the importation of more efficient petrol and diesel vehicles, as well as electric vehicles.

Excise Duty Relief for Craft Spirits Producers

Small distillers can currently benefit from lower rates of excise duty. Ministers are proposing to make two changes to the regime. First, a new category of relief will be created for small producers who use base spirit from an external supplier during the manufacturing process. Second, the maximum amount that can be made by a small producer to qualify for the lower duty rates will be increased from an average of 10,000 litres of pure alcohol over five years to 20,000[11] litres annually.

These changes will enable more local artisans to benefit from reduced rates and provide them with room to grow their business. The measures will also lower costs for pubs, restaurants, and hotels that stock these products, while promoting Jersey as a centre of high-quality spirits production showcasing our Island's distinctive botanicals, agricultural products, and other natural resources.

Group Relief for Stamp Duty

The Government Plan 2024-2027 committed the Government to considering group relief for stamp duty, which would allow companies within the same corporate structure to transfer properties between themselves without incurring full stamp duty charges. The Budget will introduce a new relief to reduce the stamp duty or Land Transaction Tax payable on eligible intra-group transactions. From 1 January 2025 these transactions will be charged a nominal rate of £90 per transaction. The change will facilitate corporate restructuring and asset management between connected companies.

Second-hand Bicycle Margin Scheme

The GST legislation allows suppliers of second-hand motor vehicles to apply a simplified calculation for GST based only on their value addedthat is, the difference between the price at which they sell a vehicle and the price they paid for it.

To encourage the growth of businesses that deal in second-hand bicycles, the GST regulations will extend the simplified scheme for motor vehicles to pedal and electric bicycles.

GST Refunds for DIY Home Builders

Currently, do-it-yourself (DIY) builders can apply for a GST refund on building materials if they are building a new home.

Recent assessments of the DIY home builder scheme have highlighted the risk of claims that extend beyond the original objectives of the policy, particularly in the context of high-value projects. To address this risk, it is proposed to cap reclaimable expenditure on home construction at £1 million. This will ensure that the scheme remains targeted to individuals personally building an average house.

Summary of Budget Proposals  

Table 6: Summary of Budget Proposals

Future Tax Measures Under Consideration

Net Zero Financing Strategy for the Carbon Neutral Roadmap

The net zero financing strategy for the Carbon Neutral Roadmap includes the need to raise additional revenues to allow the funding of the transition to net-zero by 2050. More detail is provided in the section on the Carbon Neutral Roadmap Net Zero Financing Strategy.

Carbon Tax or Charge on Private Aircraft

Following an amendment to Government Plan 2024-2027, Ministers are committed to investigating "an appropriate carbon tax or charge relating to the operation of private aircraft." The Government continues to engage with Ports of Jersey to consider the options available.

Fuel Duty Replacement Policy

The vehicles seen on Jersey's roads are changing in response to our carbon reduction ambitions and an evolving global market. In response to Government policies, and Islanders' own choices, receipts of road fuels duty will decline, with scope for the Government's income to reduce by up to £26 million. It will still be necessary for the Government to meet the costs of road maintenance and improvement along with the wider costs arising from road usage. The income will also be used to support wider policy initiatives, such as the sustainable transport policy, the Carbon Neutral Roadmap and to fund other essential services.

Ministers are working to devise alternative charges which, over time, will begin to make up the funding lost from declining road fuel duty. Alternative charges being considered include a form of Vehicle Ownership Charge and a Road User Charge. It is not expected that any new charge could come into effect until 2026 at the earliest (with the law passing to give effect to the change in 2025).

Interest Deductions for Landlords

Following an amendment to Government Plan 2024-2027, Ministers continue to examine the case for removing the ability to claim deductions for interest paid in respect of residential properties that are rented out. This work will give consideration of the timing and cumulative impact upon Jersey's housing market of any potential change.

Taxing Vaping Products

The Government is committed to safeguarding the health of Islanders and minimising the harmful effects of nicotine consumption in all its forms. The potential role for taxation in reducing the consumption of nicotine through vaping is being studied. Any recommendations made as a result of this work will ensure that vapes remain an affordable alternative to tobacco that support smokers in quitting for good.

On Premises Retail Alcohol Sales: "Tap relief"

Ministers are further supporting Jersey's hospitality industry by laying the groundwork for tap relief - that is, a separate category and lower rate of duty on alcohol sold from large containers in bars, restaurants, and hotels. A similar policy was recently introduced in the UK. Legislative changes will be made to provide the capability for future governments to offer a preferred duty rate to qualifying sales made on licenced premises. The intention is to improve the competitiveness of prices within the hospitality sector against prices off-licence and in low-cost destinations. The option will not be immediately necessary due to this year's freeze in duty. However, Ministers are legislating the framework to offer tap relief in future years.

The introduction of tap relief would benefit both businesses and consumers. For establishments, a preferential duty rate will provide room to reinvest in their services and customer experience and reduce prices for patrons. This, in turn, can stimulate local economies by attracting more visitors and encouraging higher spending within the community. For consumers, it means more affordable prices, enhancing the appeal of dining out and participating in social experiences. This policy underscores the commitment to fostering a thriving hospitality industry, which is a cornerstone of Jersey's economy and Island life.

Review of International Services Entities (ISEs)

The ISE regime is available for use by (largely financial) entities mainly providing services to overseas customers. Entities listed as ISEs pay an annual fee in consideration for which they remain outside the normal GST regime.

A limited review of aspects of the ISE regime will be conducted before the next Budget, with a view to simplifying the legislation and fee structure, while maintaining broad revenue neutrality.

International Tax Reform

Over the past four years, the Organisation for Economic Co-operation and Development (OECD) has been working to establish a new global tax framework, aimed at addressing the tax challenges arising from the increasing digitalisation of the economy. The Government of Jersey has been closely engaged in this process, through Jersey's seat on the OECD Steering Group of the Inclusive Framework on Base Erosion and Profit Shifting and other related OECD fora.

This international tax reform project is targeted and limited in scope, focussing on the world's largest Multi-National Enterprises (MNEs). It comprises two pillars of OECD work which are explained in more detail on gov.je[14].

• Pillar One (when finalised) will be made up of two parts, Amount A and Amount B. Amount A would create new profit allocation rules for the world's largest Multi-National Enterprises (MNEs), with global turnover in excess of 20 billion and profitability in excess of 10%. Importantly for Jersey, the Pillar One Amount A rules would exclude Regulated Financial Services. For the relatively small and targeted number of MNEs globally that are impacted by Pillar One, certain of their profits would be re-allocated to market jurisdictions. Amount B of Pillar One requires jurisdictions to implement certain transfer pricing principles into their domestic law, intended to simplify the taxation of MNE groups. Pillar One would be implemented via a multinational convention, which requires a critical mass of jurisdictions to ratify in order to come into force. Jurisdictions committing to the multinational convention on Amount A would also commit at the same time to implement Amount B. Both regimes would ultimately require Jersey to introduce legislation, notwithstanding the minimal practical impact.

• Pillar Two establishes a framework for a 15% global minimum corporate income tax that applies to MNEs with annual global revenues of at least 750 million. The 15% minimum rate is calculated in a specific way based on financial statements and on a country-by-country basis. Importantly for Jersey, it contains a carveout for certain investment entities (such as funds). A number of major economies have already

introduced legislation making this minimum tax effective from 2024.

• Under Pillar Two, a treaty-based rule has also been introduced which ensures that double tax agreements do not prevent certain payments made from developing countries from being taxed at a rate of at least 9%. As only one of Jersey's double tax agreements is in scope of this rule, Jersey will implement the changes, if asked to do so, by way of bilaterally negotiated protocol to the agreement.

Jersey is implementing the 15% Pillar Two regime from 2025

On 21 May 2024, the Government of Jersey announced[15] that it is proceeding with plans to implement the Pillar Two 15% minimum tax framework for accounting periods beginning on or after 1 January 2025. It will apply only to the large in-scope MNE groups, as set out above. Jersey's existing corporate income tax regime will continue to apply to all other companies.  

Draft Pillar Two legislation is expected to be lodged by the Minister for Treasury & Resources at the end of July 2024, for debate by the States Assembly in October of this year.

The other Crown Dependencies (Guernsey and the Isle of Man) are also proposing to introduce the Pillar Two regime to a common timeline with Jersey - for accounting periods commencing on or after 1 January 2025.

Forecasting Pillar Two Tax Receipts

The implementation of Pillar Two in Jersey will increase tax revenues from in-scope Pillar Two groups in relation to their accounting periods ending on or after 1 January 2025. Tax receipts will be included in the Budget from 2026 (i.e. a year in arrears in common with existing Corporate Income Tax).

Forecasting the future revenue impact of Pillar Two implementation is a complex exercise for all 147 jurisdictions in the OECD Inclusive Framework. The Pillar Two regime is still in its inception phase and the pace and manner of its roll out varies across the globe. Future Pillar Two revenues are contingent on both the implementation of Pillar Two by other jurisdictions and on the behavioural responses of multinational groups affected by Pillar Two.

Therefore, Jersey has developed a "base case" approach to the forecast of the additional corporate income tax expected to be received from taxpayers in Jersey, following implementation of Pillar Two. This is the revenue that we are reasonably confident will be raised on a recurring basis for the foreseeable future. We will continue to assess the situation as it develops internationally over the coming months and years.

Pillar Two Forecast Revenues  

Table 7: Pillar Two Forecast Revenues

It is proposed that receipts from the Base Case are applied based on the following priorities:

• Servicing of borrowing for the NHF Phase 1 (as set out in the section "New Healthcare Facilities Programme")

• Funding investment to improve the competitiveness of the Island with a specific focus on funding the delivery of the Sustainable Finance Action Plan and supporting the transition to a net-zero economy[16]

• Funding the costs of implementing and administering Pillar Two

• Strengthening Reserves – including consideration of transfers to the Stabilisation Fund or the Strategic Reserve, in line with FPP recommendations

The international tax landscape continues to evolve, and it is necessary to look at the jurisdiction's offering and competitiveness holistically in order to maintain Jersey's revenues from the finance sector. We need a focus on providing businesses that are investing and operating in Jersey with regulatory certainty and improvements to the ease of doing business here. Ensuring that funding is made available to support the transition to a net-zero economy through the promotion of Sustainable Finance. This will support these goals and provide a clear action plan and delivery framework, embedding sustainability into all financial practices[17]. This is essential for maintaining (and growing) our revenues from the international finance sector which will, in turn, benefit the wider Jersey economy.

A competitive Pillar Two compliant package of support of £15 million per annum will be earmarked from base case receipts, will be used to boost the productivity, digital capacity and skills of the financial services sector and the wider economy, while seeking to reduce operating costs. Specifically, making funding available for drivers to a net-zero economy identified and delivered through the Sustainable Finance Action Plan which will embed sustainability into financial practices and business practices and support the decarbonisation of the finance industry[18]. The package would be brought forward in the next Budget for approval from 2026 (the first year of receipts).

It is proposed that the considerable potential upside revenues from Pillar Two should be used for strengthening reserves, further investment in competitiveness, and investment in infrastructure, in particular meeting part of the capital costs of the first phase of the New Hospital Facilities.

It should not be spent on recurring items, as the future income remains highly uncertain. Such management of the Pillar Two upside revenues will be fiscally prudent and sustainable while also harnessing Jersey's continued growth as an International Finance Centre. Further detail will be proposed in next year's Budget 2026

Summary of General Revenue Income Forecast, incorporating Budget Measures

Table 9: Income Forecast, including additional income measures

Public Sector Spending 2025-2028

This Budget proposes £1.2 billion of spending in 2025 on delivering services to Islanders.

Revenue Heads of Expenditure

The Budget is required, by the Public Finances Law, to set out the proposed amount to be spent from the Consolidated Fund by each head of expenditure, after allowing for any estimates of departmental income. Heads of expenditure within this Budget relate to each Government of Jersey department, Non-Ministerial and other States bodies, and a separate head of expenditure for the Central Reserve. Expenditure has been allocated to departments for 2025, and estimates produced for 2026 to 2028.

Departmental heads of expenditure are aligned according to lines of accountability under the Public Finances Law. Expenditure is approved in this manner to ensure that there is clear accountability, both at political and officer levels. The departmental expenditure limits for 2025 incorporate both existing resource requirements and new funding, but exclude pay- inflation, which is held centrally in reserves. Whilst this is generally aligned to Ministerial portfolios, there are some differences, and a Ministerial mapping is provided as part of the Annex to the Budget.

Children, Families, Education and Lifelong

Learning , £226m

Health and

General public services and  Community Services  Social Benefits (incl States other , £434m , £322m grant) , £214m

Figure 19: Departmental Net Revenue Expenditure (excluding Reserves)

The above chart illustrates the proportion of Government net revenue spending in 2025, on Health and Community Services (27%), Children, Families, Education, and Lifelong Learning (19%), tax funded social benefits (18%), and other public services (36%). General public services and other, includes all other departmental and Non-Ministerial functions listed in Table 10.

- Living Wage Transitional Support 10,000  10,000  -  -

13,790  Past Service Pension Liability Refinancing  13,783  13,791  13,799  13,808 1,057,395  Departmental Net Revenue Expenditure  1,147,970  1,140,837  1,148,292  1,161,348 Non-Ministerial and Other States Bodies

3,208   Bailiff 's Chambers  3,800  3,602  3,604  3,607 1,152  Comptroller and Auditor General  1,196  1,187  1,215  1,247 8,859  Judicial Greffe  9,968  9,928  9,932  9,936 12,881  Law Officers' Department  14,015  14,220  14,220  14,220 905  Office of the Lieutenant Governor  913  913  913  913

735  Official Analyst  784  787  837  837 2,951  Probation  3,324  3,348  3,351  3,345 9,904  States Assembly  10,932  11,215  11,096  11,181 2,413  Viscount's Department  2,616  2,611  2,611  2,611 43,008  Non-Ministerial Net Revenue Expenditure  47,548  47,811  47,779  47,897 1,100,403  Departmental and Non-Mins Total  1,195,518  1,188,648  1,196,071  1,209,245

Reserves

62,188  Central Reserve  34,197  54,286  71,145  91,158 62,188  Reserves Expenditure  34,197  54,286  71,145  91,158

- Future Savings - (4,285) (6,304)  (6,304)

1,162,591  Net Revenue Expenditure  1,229,715  1,238,649  1,260,912  1,294,099 56,131  Depreciation and amortisation  58,934  58,919  58,919  58,919 1,218,722  Net Revenue Expenditure after Depreciation  1,288,649  1,297,568  1,319,831  1,353,018

Table 10: Revenue Heads of Expenditure

Future year estimates include departmental allocations of savings, but not provisions for inflation (which will be confirmed in future Budgets) and are held in Central Reserves estimates. Budget estimates including inflation provisions held in the Central Reserve allocated to departments will be included in the Annex to the Budget, for indicative purposes.

The establishment of a Public Services Ombudsperson, as approved in principle by the States Assembly in March 2018 [P.32/2018] and progressed by the preceding Government, remains under review by the Council of Ministers. The Complaints Panel is itself conducting a review of its own procedures and processes. In July 2024, the Jersey Law Commission published a report entitled "Keeping the Complaints Panel or creating the Ombudsperson", which worked through the different choices about the basic design of Jersey's independent complaints handling body with the aim of taking an informed decision as to whether to keep a reformed Complaints Panel or go forward with the Ombudsperson. Subsequent to that report, a consultation paper was published. The Council of Ministers will fully consider the consultation results published by the Jersey Law Commission and Complaints Panel respectively when considering the appropriate way forward. Detailed proposals will be brought forward in 2025 for States Assembly approval and also detailed in the successive Government Plan[25].

Within the Revenue Head of Expenditure for the Cabinet Office, funding for Statistics Jersey will be increased by £78,000 through the reallocation of other departmental expenditure within the Cabinet Office[26].

Changes to Revenue Expenditure

The Budget proposes £1.2 billion of spending on delivering public services to Islanders in 2025, an increase from 2024 driven largely by inflationary pressures, funding for investment in the CSP as well as Health and Community Services.

Table 11: Changes to Net Revenue Expenditure

1,600 1,400 1,200 1,000 800 600 400 200 0

2020 2021 2022 2023 2024 2025 2026 2027 Expenditure Expenditure Forecast Income

Figure 20: Income and expenditure trends before depreciation

In line with the CSP, where possible existing allocations have been reprioritised to deliver objectives. Revenue expenditure growth has been limited to delivering specific CSP priorities and providing funding to address ongoing and worsening deficits in Health and Community Services.

Common Strategic Policy Priorities

The CSP sets out 13 priorities over the next two years, aligned with the long-term vision set out in the Future Jersey report and ten Island Outcomes arising from it. Where delivery of these priorities can't be met through reprioritisation of existing resources and budgets, additional funding has been provided. This includes funding to deliver the Violence Against Women and Girls (VAWG) Taskforce recommendations, extending nursery and childcare provision, providing nutritious school meals for Government maintained primary schools, investment in lifelong learning and future skills provision, as well as funding for the deferral of waste charges until 2027.

Implementation of VAWG Taskforce Recommendations

The additional funding will ensure the continued implementation of the VAWG Taskforce Recommendations. Primarily the investment covers the cost of a law drafter for the period, training costs, as well as the cost of an external researcher to carry out independent reviews.

Extend Nursery and childcare provision

Funding will deliver a phased introduction of nursery and childcare provision to children aged 2-3  years  with  additional  needs.  It  will  make  comprehensive  training  and  development available for staff in the early years sector, with the aim of improving the quality of early years education and the recruitment and retention of staff. It would also fund a pilot scheme to increase access to unused spaces in our primary school nurseries, as well as conducting an assessment of nursery capacity in St Helier.

Provide a nutritious school meal for every child in all States primary schools

This additional investment will fund the expansion and continued implementation of the existing school meal programme funded through previous Government Plans.

Investing in Lifelong Learning & Future Skills Provision

This investment will meet the cost of enhancing grants to students both in distance learning and in person learning.

We will also review the scheme available for apprenticeships and increase the funding and support available[27].

This priority will focus on re-shaping the lifelong learning and future skills provision and the Minister will bring forward proposals in this Budget period.

Minimum Income Standards – Living wage

Additional funding will be used to ensure the commissioning of a research study to establish and maintain a set of household minimum income standards in Jersey. This is expected to support the improved understanding of basic living costs in Jersey and will help to inform future policies in respect of minimum wage and benefit rates.

Deferral of Waste Income Charges

In line with the CSP commitment to Government fees, duties and charges as low as possible to help Islanders with the cost of living in 2025, the introduction of commercial solid waste charges will be deferred until 2027. In the interim, funding will be provided to the Infrastructure department to alleviate financial pressures, including the loss of inert waste income as the La Collette site reaches capacity. The deferral of charges will also help to support businesses, who will also be transitioning to a Living Wage over the next two years.

Business support during the transition to a Living Wage

As part of the 2024 Common Strategic Policy, Ministers have committed to implementing the States Assembly decision to bring the minimum wage to two-thirds of the median wage by the end of this term of office.

In recognition of the impacts on employers and employees, funding of up to £10 million will be provided in 2025 and 2026 to support businesses and charities whilst the living wage is implemented, with the cost met through a temporary reduction in the States Grant made to the Social Security Fund in both of these years. The primary objectives of the support will be to improve productivity and maintain competitiveness. A separate head of expenditure has been established, and suitable governance will be developed to ensure that schemes will meet those objectives. Further detail on the governance and support schemes under consideration will be provided in September. Where possible, existing schemes, adapted to fit new circumstances, will be used to minimise both bureaucracy and risk. The dual focus on competitiveness, particularly for exporters and productivity will aim to both drive economic growth and help reduce the cost of living in the medium term.

Achieving this priority will support employees in critical industries like retail, hospitality and agriculture with higher wages. It will also help support a thriving and more productive local economy and help us to attract workers to alleviate labour shortages.

Other Revenue Expenditure Growth Funding

Table 13 provides a summary of the revenue growth funding allocated in additional to that for the CSP.

In the aftermath of the Covid-19 pandemic, the previous Government Plan 2024 – 2027 recognised the ongoing challenges in Health and Community Services and provided for additional funding driven by both factors in the direct control of the department, and structural factors outside of their direct control.

A team to deliver a Financial Recovery Programme (FRP) has been put in place in 2023, to deliver efficiency savings of £25 million. In 2023 the FRP delivered savings of £3.2 million, with the profile of savings now reprofiled to deliver further recurring savings of £5 million in 2024, £8 million in 2025 and £9 million in 2026. This reprofile means that additional funding of £9 million has been allocated to the department in 2025 only.

FRP efficiency savings will reduce the deficit, through improved planning and control to enable more effective use of staff and resources, improved procurement and contract management, and optimising income generation.

In addition, since the previous Government Plan, healthcare activity and externally influenced costs such as the purchase of healthcare (mental health, social care, tertiary care), drugs, medical supplies and utilities have continued to rise sharply. A further £13 million of additional funding has been allocated on a recurring basis (in excess of the additional £14.5 million provided in Government Plan 2024-2027) to address these pressures.

In addition, £620k has been allocated to Health and Community Services for funding of In Vitro Fertilisation, recently approved by the Assembly[28].

Funding for the Termination of Pregnancy (Jersey) Law 1997 Amendments workstream will be reviewed to ensure that both policy and law drafting resource for this workstream is prioritised by the Council of Ministers in the 2025 Legislative Programme and in order for amendments to the current outdated law to be lodged prior to the end of 2025.[29]

In accordance with Article 10 of the Public Finances (Jersey) Law, the Budget also provides for £2.3 million of revenue expenditure growth requests received from Non-Ministerial departments.

Further information on the proposed additional expenditure can be found in Appendix 3, and the Annex to the Budget.

Inflation

It is both prudent and good financial management to plan for the impact of economic influences on Government finances. As such, we have set aside amounts to cover inflationary pressures on pay (held centrally), social benefits and non-pay expenditure.

Inflation peaked at 12.7% in 2023 with expectations that inflation continues to fall in 2024, before stabilising around 1.7% in 2025. In this context, the Budget sets aside an additional £30 million in 2025 for the inflationary impact on government spending.

1.7% of non-pay expenditure inflation has been allocated directly to departments in 2025. The allocation of non-pay inflation is based on the Fiscal Policy Panel assumption for RPI published in May 2024.

The States Employment Board entered into a multi-year pay deal with all pay groups in early 2024, resolving the pay dispute with teaching unions and giving certainty to employees until 2026. The inflationary provisions for pay, include an additional 1% above the FPP assumption for RPI in both 2025 and 2026, agreed in the 3-year pay offer by the States Employment Board.

Provisions are held in the Central Reserve for pay inflation and non-pay inflation for future years. Once, the 2025 pay award is finalised, pay provisions will be allocated from Central Reserve to departmental budgets.

Inflation is expected to plateau around 2% in later years of the plan, with additional amounts provided to maintain departmental budgets in real terms. Inflation is, by nature cumulative, and so this amount grows throughout the plan. There remains a reduced, but still significant amount of uncertainty around levels of inflation. If inflation is higher the provision in the plan may not be sufficient to meet the cost of the agreed pay award, and the additional costs would need to be met from within the overall budgeted approvals in the plan. Higher inflation would typically also lead to increased levels of income and non-staff expenditure.

The transition to the living wage could potentially impact on States income, means-tested benefit payments and inflation. As there is a high level of uncertainty no provision has been made. Future economic assumptions from the FPP will incorporate any impact which will then be reflected in future Budgets.

Formula Driven Growth

The Budget also allocates a further £23.4 million to a number of areas of expenditure that are determined by pre-agreed formulae. These include:

• an annual 2% increase in Health budgets to maintain service standards and meet the costs of health care inflation,

• staged increases in the Jersey Overseas Aid (JOA) budget to 0.3% of GVA by 2025

• formula driven increases for the States Grant to the Social Security Fund and Long- Term Care Fund (as set out in the sections "Social Security Fund" and "Long-Term Care Fund").

• Overdraft charges based on projected cash balances in the Consolidated Fund.

Following approval of Funding for Culture, Arts and Heritage (P.69/2024), the Government continues the commitment to maintain funding to this sector based on 1% of overall States revenue expenditure[30].

Delivering Savings to Allow Reprioritisation

The Common Strategic Policy outlines the Council of Ministers' approach and commitment to reprioritise budgets where appropriate to deliver objectives, curbing growth in the public sector, relying less on consultants and preventing unnecessary expenditure.

To fund our priorities, the Budget includes proposals to reduce some spending, which will deliver savings over the plan period. A further breakdown of saving proposals is included in Appendix 3.

Saving Proposals  

Table 14: Saving Proposals

Review of Arm's Length and Regulatory Organisations

The Economy department has committed to reviewing how its Arm's Length Organisations operate, and how savings could be delivered in those agencies through better sharing of resource and cross-organisational working. Those savings would be realised through lower grants paid.

In future years similar reviews of both grant-funded Arm's Length Organisations and States funded regulatory bodies are anticipated to deliver further saving opportunities. The £1 million target in both 2026 and 2027 will be unallocated, pending the outcome of these reviews.

Reduce Office Footprint

The move to the new government offices enables the consolidation of the overall office estate delivering ongoing revenue savings, through lower Government running costs. Due to existing lease terms and conditions savings will be realised over a number of years, commencing in 2025 with £4.4 million fully realised by 2028.

Reprioritisation of previous growth funding

Revenue expenditure growth funding totalling £3.1 million allocated in Government Plan 2024–2027, has been reprioritised to support funding of CSP objectives.

Reduction in roles through removing management layers, removing extraneous activity and reduction in consultancy

The Council of Ministers has committed in its CSP to curb the growth in the public sector and rely less on external consultants, instead developing local talent within the civil service and redirecting monies saved to those areas where it is needed most.

It is expected that by establishing a more deliverable capital programme and growth allocations the need for consultants, contractors and professional advisors will diminish proportionately.

Role savings have been allocated in accordance with the principle of protecting frontline services.

In addition to reducing consultancy spend, staff savings will be delivered through

• Removing long standing budgeted vacancies

• Removing management layers

• Focus on removing extraneous activity

Departments are developing plans to deliver against this £15 million target, allocations have been provided to departments in 2025, based upon plans, with estimates included for 2026.

Non-Ministerial departments were requested to contribute to savings targets, with a commitment to deliver £0.5 million received from most Non-Ministerial bodies.

Future Savings

The majority of savings have been allocated to departments, based on plans received to date. The remaining £4 million will be allocated in future budgets. The Council of Ministers considers that these additional savings will be achieved given the scale of departmental budgets (£1.2 billion in 2025).

HCS Financial Recovery Plan

In addition to the savings detailed above, the ongoing HCS Financial Recovery Programme (FRP) plans to deliver cost reductions to bring Health deficits under control. The timing of FRP savings has been reprofiled to a less aggressive timeline, based upon the advice of senior health colleagues, delivering £5 million in 2024, £8 million in 2025 and £9 million in 2026. These are on top of the FRP savings delivered in 2023, meaning that by 2026, the savings will amount to £25 million per annum, a year later than the original targets.

Comparison of FRP Profile  

Table 15: HCS Financial Recovery Plan

FRP efficiency savings will reduce the deficit, through improved planning and control to enable more effective use of staff and resources, improved procurement and contract management, and optimising income generation.

Depreciation

Depreciation represents the cost of using Government assets in the provision of services. It is included when calculating whether the Government is running a surplus or a deficit, which follows FPP advice, and helps to ensure that the need to continue to invest in assets is adequately recognised in planning.

The increase in depreciation during 2025-2028 reflects an estimated uplift in asset values, because of assets being either created or replaced.

Reserve Head of Expenditure

This budget includes a single Central Reserve head of expenditure. As well as a provision of £7 million for unforeseen expenditure in year (including £2 million ring-fenced for social benefits), this incorporates centrally held items such as provisions for inflation that have not been allocated to departments.

Within the Central Reserve, funds earmarked in the General Reserve are held outside of operational expenditure limits, and can be used to meet modest unforeseen pressures, or to provide advance funding for urgent expenditure in the public interest. In each year, amounts are held to manage fluctuations in benefit expenditure due to economic changes, and to allow one-off funding for emerging issues.

The General Reserve in previous years has been supplemented by significant sums carried forward, this is not likely to be the case for 2025.

Table 16: Central Reserve Expenditure

Also included within Central Reserves, are inflation provisions for non-pay inflation over the years 2026 – 2028, with non-pay inflation allocated to departments in 2025. Pay inflation for the 2025 pay awards and future years are held centrally, and not included within departmental budget allocations until pay awards have been agreed.

Additional funding of £2 million is set aside in the Central Reserve for the First Step assisted home ownership scheme, this will provide further support to first time buyers to help make home ownership achievable for those struggling to get on the property ladder. The additional money will be funded by transfers from legacy housing funds.

Capital and Other Projects 2025- 2028

Introduction

The Capital Programme sets out expenditure on the development and replacement of the Island's assets, including Estates, Infrastructure, Equipment, and IT. It is essential that we continue to invest in the replacement and maintenance of our Island's assets so that we can deliver the services that Islanders need. The focus of the Capital Programme is the projects that will be delivered by the Government of Jersey. It does not include the capital plans of the States of Jersey Development Company, Andium Homes and other State-Owned Entities, who will also be investing significantly across the four-year horizon of this budget.

Funding allocated to projects through the Capital Programme is on a cashflow basis. For Major Projects, both the first year of expenditure and the total cost of the project are presented for approval. For other projects, approvals are annual even though a four-year view of cashflow is presented.

The Public Finances Law 2019 defines major projects' under Article 1 as follows:

1. a capital project the duration of which, from start to finish, is planned to be of more than one year and the total cost of which is planned to be of more than £5 million; or
2. a project that has been designated as a major project under an approved government plan

Major Projects are separately identified within each section of the programme.

The Capital Programme also includes Grouped Heads of Expenditure. They help to increase flexibility, allowing Accountable Officers to manage individual projects within a wider programme so that any delays or changes to project expenditure can be managed within the approved financial envelope.

Major Projects are not included in a grouped head of expenditure once the total expenditure for the project has been agreed in a Budget. However, some projects planned for future years of a grouped head of expenditure may ultimately become Major Projects (if the estimated costs exceed £5 million). For example, a replacement school would almost certainly become a major project but would remain in the New School and Educational Developments grouped head of expenditure until the timing and costs are finalised.

Under the Public Finances Law, the Minister for Treasury and Resources can approve changes to funding allocations for projects through the application of property receipts or other income. It is anticipated that the property disposals in 2026 will provide £3 million to support the creation of new property assets. The specific properties to be disposed of will be proposed in the Budget 2026-29 following the completion of a strategic review of the estate.

The Capital Programme sets out the range of projects that will be delivered in 2025. Some projects already in delivery from previous plans may incur some costs in 2025 due to unforeseen delays. Heads of expenditure established in previous plans will continue to allow for this.

Strategic Focus – Deliverability and Renewal

This budget seeks to re-focus the Capital Programme to ensure that projects are deliverable and there is an improved balance between the need to develop new assets to deliver improvements and the requirement to sustain the existing asset base through replacement and refurbishment.

Deliverability

While affordability is always a key constraint on Government's project ambitions, in recent years departmental spending on projects has significantly lagged behind available budgets due to internal and external capacity constraints.

There is a limit to the capacity in the local economic sectors to deliver project work commissioned by Government – this has been a particular challenge in the local the construction market. Government's internal resources are also finite, and this places limits on the number of projects that can be successfully developed and managed simultaneously.

After taking up Office in February 2024, the Council of Ministers recognised these limitations and through the Budget has sought to prioritise and re-profile projects to ensure that project plans are better matched to available capacity. This work will also help to reduce the need to draw on external consultants to provide additional resources to deliver projects.

Further work to refine the programme will continue over the next 12 months alongside longer-term capital planning with a view to establishing a more consistent annual tempo for capital spending. However, this Budget makes substantial strides towards a fully deliverable programme by ensuring that budgets for each of the 4 years are lower than £100 million – the previous peak level of capital spending on the core capital programme.

Renewal

The Common Strategic Policy recognises the need to revitalise St Helier and this priority is given life through new initiatives in this Budget including a bold new Youth Facility project the preferred site for which would support the wider redevelopment underway at Ann Street and give a new lease of life to the derelict Ann Street Brewery. The wider strategic theme of asset renewal also frames the new investment in this Budget. Successive capital programmes in recent years have tended to prioritise new, improvement-focused initiatives while there have been comparably lower levels of investment aimed at replacing and renewing core existing assets. In this Budget, the Council of Ministers has sought to bring an improved balance between projects intended to grow the asset base and those aimed at ensuring that the Government's estate, digital systems, and wider public infrastructure are an appropriate condition to deliver their crucial purpose.

Decarbonisation of Government

Jersey's 2050 net zero target, and interim 68% reduction in CO2 emissions by 2030, requires the Government to decarbonise heat within its Estate. We have begun this process, and from 2024 existing heating systems that break down or are at the end of their life will be replaced by low carbon systems wherever possible, and only low carbon heating systems will be specified for all new Government of Jersey-owned or leased property.

This will be factored into all future projects in the Capital Programme.

The Capital Programme

Investment in capital and other projects is important for ensuring the sustainability and improvement of the Island's public services. Projects support the creation, improvement and extension of assets that enable service delivery.

The Capital Programme in this Budget proposes a total of £415 million for projects across 2025-2028 to invest in the Island's critical infrastructure, the public sector estate, and Government's information technology systems. It also enables the replacement of essential equipment and other assets.

Table 17 provides a breakdown of the key thematic areas of spend within the Capital Programme, each of which is set out in further detail in the sections that follow.

Approved  £'000  Estimate  Estimate  Estimate  Estimate 1,706  Feasibility  1,442  1,155  544  - 41,029  Estates  27,904  18,490  25,828  33,329 30,044  Infrastructure  29,788  29,955  19,580  24,000 20,162  Information Technology  20,618  16,280  9,580  1,000 10,680  Replacement Assets and Minor Capital  13,130  10,580  10,580  10,580 103,621  Projects Expenditure  92,882  76,460  66,112  68,909 4,699  COCF Funded Projects  3,490  -  -  - 108,320  Projects Expenditure incl. COCF Funded Projects  96,372  76,460  66,112  68,909

Table 17: Capital and Other Projects Programme

In addition to the programme summarised above, the States Assembly is asked to approve the proposed capital plans of the Trading Funds and States Funds.

Total  £'000  Estimate  Estimate  Estimate  Estimate

- Vehicle and Plant Replacement 3,000  3,000  3,000  3,000

- Car Park Enhancement and Refurbishment 2,751  600  3,140  100

- Trading Funds Total 5,751  3,600  6,140  3,100

Table 18: Scheme Funded from Trading Funds

Proposed Schemes Funded from the Social Security Fund

Project  2025  2026  2027  2028 Total  £'000  Estimate  Estimate  Estimate  Estimate 30,838  Benefits and Payments (Transform)  9,899  7,476  7,644  1,635 30,838  Social Security Fund Total  9,899  7,476  7,644  1,635

Table 19: Scheme Funded from Social Security Fund

In addition, the following projects are funded through transfers from the Criminal Offences Confiscation Fund.

Proposed Schemes Funded by transfer from Criminal Offences Confiscation Fund

Project  2025  2026  2027  2028 Total  £'000  Estimate  Estimate  Estimate  Estimate 2,529  Firearms Range  906  -  -  - 4,291  Dewberry House – Sexual Assault Referral Centre  2,125  -  -  -

- Prison Improvement Works  459  -  -  -

6,820  Project Expenditure – COCF Funded  3,490  -  -  - Table 20: Scheme Funded from Criminal Offences Confiscation Fund

Feasibility

The Government of Jersey adopts a gateway approach to project investment decision making. Individual projects and their associated costs are committed to after detailed, feasibility work has been completed. This helps to ensure that funding allocated to projects through the Budget reflects the Government's best estimate of likely resource requirements based on detailed policy and feasibility planning.

An allocation for feasibility is included in the Budget to provide funding to allow departments to undertake an assessment of new proposals and develop robust Outline Business Cases, which will become the basis for subsequently agreeing the individual budget allocations for new projects.

The allocation for feasibility funding is a grouped head of expenditure. As such, it provides funding for indicative projects but, reflecting the potential for policy and planning to evolve, allows for flexibility within the approved amount. This permits funding to be reallocated where projects progress faster or slower than forecast. To improve flexibility and prevent delay, emerging projects can also receive feasibility funding in year, subject to appropriate approvals. Arrangements for the management of feasibility funding are set out in the Public Finances Manual.

Table 22 sets out current feasibility plans for the Budget 2025-2028.

Feasibility - Breakdown of Grouped Head of Expenditure

2025  2026  2027  2028 £'000  Estimate  Estimate  Estimate  Estimate Feasibility, of which;

- Crematorium 300  -  -  -

- Education Estate 500  500  -  -

- Cycling and Walking Infrastructure Delivery Programme - 255 -  -

- Shoreline Management Plan - Havre Des Pas 542  400 544  -

- Vehicle Testing Service 100  -  -  -

- Emerging Projects -  -  -  - Total Feasibility  1,442  1,155  544  -

Table 22: Feasibility - Breakdown of Grouped Head of Expenditure

This Budget provides initial exploratory funding for the first in a series of projects required to deliver the Shoreline Management Plan, which is intended to enable the Island to manage the risk of coastal erosion and flooding linked to rising sea levels. Funding in this Budget is for the first project at Havre des Pas, feasibility work for which will commence in 2025.

Additional funding is provided for the department for Children, Young People, Education and Skills to undertake a feasibility project associated with the New Schools and Educational Developments including work on a new town-based school on the Gas Place site and the development of Mont à L'Abbé Secondary school.

Estates

Estates  

Table 23: Estates | (M) indicates a Major Project

Customer and Local Services Estate

In line with asset replacement plans, the Crematorium is due for refit and refurbishment to ensure this essential part of the Island's infrastructure can continue to reliably deliver services to Islanders.

Children, Young People, Education & Skills (CYPES) Estate

Funding for CYPES Major Projects is continued in this Budget:

• A new secondary school at Mont à L'Abbé – will expand the Island's provision of care and learning for children with moderate to severe learning difficulties, creating an environment tailored to their needs. In combination with the primary school, this single campus will create a specialised hub to accommodate learning from ages 0-25 as well as respite care.

• A new youth centre at Le Squez - will create a new community hub and space for young people in the community to use and enjoy. Providing a link to other youth centres across the Island and a safe place for children and young people to meet and socialise. The development of the Le Squez youth centre has been reprofiled to

allow a new youth facility in St Helier to be brought forward in the earlier years of the Budget.

Funding for other CYPES estate priorities is consolidated within two grouped heads of expenditure:

- New Schools and Educational Developments provides funding for a town-based school at Gas Place in later years and also features new funding for a youth facility proposed for the Ann Street Brewery site.

- Upgrades to CYPES Estate supports a broader range of needs including efforts to improve the condition of the existing CYPES estate, improve facilities at La Passerelle, expand youth service facilities, and improve sports fields and play spaces. Table 24 shows an indicative allocation, with the grouped head of expenditure giving the flexibility to reprioritise as needed based on the urgency and readiness of projects in- year.

Upgrades to CYPES Estates - Breakdown of Grouped Head of Expenditure

Spon  Supp  2025  2026  2027  2028 £'000  Dept  Dept  Estimate  Estimate  Estimate  Estimate

Table 24: Upgrades to CYPES Estates - Breakdown of Grouped Head of Expenditure

Health and Community Services Estate

Funding for essential works within the HCS estate includes the development of specialist accommodation for Islanders with learnings difficulties and an extension of the rolling programme of renovations within the General Hospital. Due to the current hospital's age, on- going refurbishment works are required to ensure the delivery of safe and modern services pending the construction of New Healthcare Facilities to meet the Island's long-term health and care needs.

Infrastructure and Environment Estate

Investment in sport

This Budget provides funding to complete the decant of Fort Regent whilst enabling the development of a new sports centre at Oakfield as replacement venue for clubs and associations.

This investment is a significant early development that is connected to a wider programme of future investment that will be considered in future Budgets to deliver a comprehensive sport strategy for the Island.

Major refurbishments and upgrades

During 2023, the Department for Infrastructure and Environment undertook an extensive condition survey of Government-owned properties. The Major Refurbishments and Upgrades head of expenditure was established in the Government Plan 2024-27 to provide a first tranche of funding to deliver urgent works identified by the survey.

In this Budget, Major Refurbishments and Upgrades are established as a grouped head of expenditure that will support programmes of works related to fire safety within the CYPES estate and upgrades at Highlands College, as well as wider needs across the estate identified by the recent condition survey. Table 25 provides an indication of the breakdown of funding across the grouped head of expenditure.

Major Refurbishments and Upgrades - Breakdown of Grouped Head of Expenditure