Proposed Budget 2025-2028 Review (S.R.8/2024): Joint response of the Chief Minister and the Minister for Treasury and Resources

Findings

Comments

1

In  the  absence  of  supporting  key information,  the  earlier  lodging  and debate timeline for the Budget 2025- 2028 has not met its intended aims for providing  Scrutiny  and  the  States Assembly with the extended timeframe for reviewing the Budget.

The  Budget  2025-2028  was  lodged  on  2nd August, which provided an extended period of 16-weeks for scrutiny, giving Panels more time to request information and hold hearings. This enabled Panels to ask extensive and detailed questions, which were answered by Ministers to support Panels in their work.

Detailed  supporting  information  was  also provided to Panels, including but not limited to:

• Budget Annex

• Income Forecasting Group Report

Business Cases relating to each of the  6 CSP revenue expenditure growth items, and new and revised  capital  projects,  including  the  New Healthcare Facilities Project Phase 1.

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Ministers will consider the lodging date for the Budget  2026-2029  further,  in consultation with Panels.

2

Key  supporting  information including delivery progress updates for  2024,  Ministerial  priorities  for delivery in 2025 and Departmental Business Plans for 2025, were

not  presented  alongside  the  Budget 2025-2028 or provided to Scrutiny.

Individual Ministers responded in detail to written correspondence  from  the  respective  Scrutiny Panels, including updates on 2024 delivery and the 2025 Ministerial Legislative Programme. The Departmental Business Plans will be published as usual in January 2025.

3

The  absence  of  in-year  and  annual progress reporting, or any alternative reporting  mechanism  for  monitoring the delivery of the Budget workstream, presents a risk to the governance and the internal audit function.

The  Council  of  Ministers  and  individual Ministers  receive  ongoing  in-year  updates including financial, performance and delivery information,  appropriately  managing governance risk.

In addition, the Finance Law Delegation Report for the first half of the year was published on 16th August,  including  details  of  in-year  decisions taken by the Minister under certain articles of the Public Finances (Jersey) Law 2019.

4

The dissolution of the Delivery Unit, in the absence of ensuring that its functions to support the monitoring, delivery and reporting of Ministerial priorities  are  carried  out  in  an alternative  manner,  has  negatively impacted

the transparency and accountability of the Budget workstream.

Chief Officers are accountable to their individual Ministers  for  their  departmental  delivery  and performance, and act accordingly. The change to the structure and the closure of the Delivery Unit was  part  of  reducing  overheads  and  focusing funding on the delivery of policy.

5

The Council of Ministers changed the title of the Government Plan to Budget to improve its accessibility and public engagement. The online versions of the Budget were also developed with a view for meeting the  needs  of  those  with disabilities.

The decision to change the name to the Budget was  supported  by  feedback  from  children, young people as well as the public.

For  example,  the  School  Council  Network suggested that the Government Plan  should be called  the  "Government's  money  plan"  or "budget".  In  November  2024,  the  Network, consisting of around 150 students,  were  given feedback  on  how  their  suggestions  on  the Government Budget have been listened to and have helped to make a difference.

6

A video and youth-friendly version of the Budget was produced alongside the Budget, and youth engagement aligned

with  the  Participation  Standards  for

The youth friendly Government Plan, created in co-production  with  the  School  Council Network, was updated to Budget to reflect the comments made by young people.

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children and young people, delivered by the  department  for  Children,  Young People, Education and Skills.

At the School Council Network meeting, students shared their ideas on what the

Government  should  spend  money  on.  This feedback is publicly available in the Participation and Engagement Feedback Report on yoursay.je.

In September 2024, all Department Chief Officers were tasked with responding to the feedback from children and young people, which was shared at the School Council Meeting on 19th November 2024.

7

There  was  no  active  Government communications  plan  for  raising awareness of the Budget 2025-2028 with members of the public, outside of  the  Budget  versions  being published  earlier  and  online.  This was the result of  a concerted effort by Government to be financially

prudent  regarding  communications spend.

There was a clear plan for communicating the budget, including a full media briefing with the Chief Minister and Treasury Minister, and media interviews. The budget documents were published online and on Government social media channels and an announcement from the Chief Minister was issued once the budget had been approved by the States Assembly.

8

When  formulating  the  Budget,  the Island  Outcomes  Indicators,  the Jersey Performance Framework and Community  and  Corporate  Risk Registers  were  all  considered  by Government.  However,  despite previous work to refine and improve the  indicators  and  core  outcome measures, neither new nor enhanced performance  measures  have  been introduced. It is not clear that work to support  departments  to  improve service  performance  measures,  for delivering  more

focus  and  precision  when  designing future Budgets, has led to any tangible improvements.

The Council of Ministers considered all of these inputs before deciding on its Common Strategic Policy  and  finalising  its  proposed  Budget. Performance  measures  were  considered  by Ministers as part of the Common Strategic Policy and deemed sufficient.

9

The  Future  Jersey  Vision  was considered  when  developing  the Common  Strategic  Policy  and  the Budget  2025-2028  to  appropriately align the priorities to reflect the long- term  ambitions.  The  Council  of Ministers  has  endeavoured  to demonstrate this through the 13

Noted.

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Common Strategic Policy priorities.

10

Departmental  Business  Plans  will include  Ministerial  Priorities.  The Business  Plan  must  align  with  the delivery  of  the  Common  Strategic Policy priorities. In developing the Business  Plan  departments  must demonstrate  this  alignment  for  the workstream to be

identified as a priority in the Business Plan.

Noted.

11

While a clear policy direction is established by  prioritising  the Common Strategic Policy priorities, there are  significant challenges and  risks inherent  in  balancing these priorities with Ministerial goals and  ongoing  business  as  usual workstreams.  The  degree  of  risk analysis  and  risk  mitigation undertaken for competing priorities, whilst reprioritising workstreams to deliver  the  13  Common  Strategic Policy priorities, is unclear.

It is the responsibility of Chief Officers on behalf of  their  Ministers  to  deliver  the  Common Strategic Policy priorities, whilst continuing to prioritise  mitigations  against  the  most significant  risks  and  delivery  of  business-as- usual activity.

12

Effective  cross  departmental collaboration  will  be  essential  for delivering  the  Common  Strategic Policy  priorities  within  the  budget allocations  and  timeframes.  Whilst progress  for  delivering  against  the Common  Strategic  Policy  will  be monitored quarterly at the Council of Ministers and Executive Leadership Teams, the process is unclear for how this will be actively facilitated and monitored across departments.

The  Council  of  Ministers  discusses  cross- cutting matters, including the delivery of the Common  Strategic  Policy,  and  individual Ministers are in ongoing dialogue  to  ensure delivery.

The delivery of the Common Strategic Policy and meeting  budget  allocations  are  also  clear objectives  set  for  each  Chief  Officer,  which subsequently appear in objective setting for their teams. This runs throughout the organisation and terms are regularly held to account in management discussions,  with  officials  accounting  to  the responsible Minister.

13

The reprioritisation process aims to concentrate resources on delivering the  Common  Strategic  Policy priorities, even if it requires delaying other  initiatives.  Although  the process  for  reprioritisation incorporated workshops, the use of risk registers to identify tier one risks,

Ministers and their officials continually balance the need to invest in new initiatives to address the issues faced by Islanders with actions to mitigate known issues and risks.

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and budget feasibility, there appears to  be  limited  formal  risk  analysis conducted on each decision. Instead, Ministers and senior officials relied on political discretion and practical constraints,  such  as  staffing  and resource capacity, when accessing the viability and  impact  of  prioritising certain projects. The reprioritisation process  underscores  a  focus  on immediate,  essential  services  and practical outcomes,

but  with  an  apparent  trade-off  in comprehensive risk documentation.

14

The reprioritisation within the Capital Programme aligns with the previous recommendation of the Fiscal Policy Panel  to  reduce  the  Capital Programme  to  a more

realistic level.

Noted.

15

Although  frontline  services  are prioritised  and  exempt  from  the recruitment freeze, the wider impact of  the  restructure  on  back-office functions and policy teams, suggest the recruitment  freeze  could  affect the smooth functioning of essential services. The redundancy programme risks  the  loss  of  institutional knowledge,  Government's  capacity to  deliver  key  services,  and  could negatively impact upon staff morale.

Ministers are mindful of the balance that needs to  be  achieved  as  this  is  carried  out.  It  is important to ensure that Ministers have capacity in their departmental management teams and policy  functions  to  deliver  their  work programme.

There has been a focus on redeployment rather than redundancies, enabling the Government to retain  institutional  knowledge,  skills,  and experience.  Where  staff  changes  take  place there  are  often  opportunities  for  services  to redesign, to improve delivery for the public. Becoming more agile and flexible in how we deliver services can be positive for staff morale.

The  recruitment  freeze  has  enabled  the recruitment and talent attraction teams to refocus on recruiting into essential frontline services.

16

A  significant  contradiction  was identified between the Government's stated priorities for monitoring and planning, and the decision to reduce funding for Statistics Jersey in 2025. Reducing vital data outputs will limit informed  decision-making  both within  Government  and  the community and will negatively affect

The issues identified here were examined in the Budget  debate  and  subsequent  vote  on Amendment 3.

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the ongoing monitoring of the Jersey Performance Framework and delivery against the

Outcome Indicators and the Future Jersey Vision.

17

It is unclear whether a standardised mechanism  for  tracking  Key Performance  Indicators  is consistently  adopted  across departments. Any lack in consistency in  monitoring  and  addressing discrepancies in performance, risks effective and coordinated accountability.

Key  Performance  Indicators  are  regularly reviewed by managers, Chief Officers, Executive Leadership Team and the Council of Ministers. Ministers would like to ensure these mechanisms are understood by Panels and would be content to offer appropriate briefings.

18

It  is  difficult  to  identify  what  has changed  in  practice  to  embed Sustainable  Wellbeing  from  the outset when developing the Budget since  the  enactment  of  the  Public Finances  (Jersey)  Law  2019.  The Law  requires  that  Sustainable Wellbeing  including  economic, social, environmental  and  cultural be  accounted  for  in  the

proposals  of  the  Government  Plan (Budget). However, how the success or otherwise of any actions taken for Sustainable  Wellbeing  are  tracked and measured is not clear.

The  Comptroller  and  Auditor  General's  report Jersey  Performance  Framework'  published  in October 2024 (R.163/2024) sets out the approach to  Sustainable  Wellbeing  since  2019. Developments  include  the  clear  linking  of sustainable  wellbeing  with  the  Future  Jersey vision and establishing the Jersey Performance Framework  (Island  Outcome  Indicators  and Service Performance Measures).

19

While  Jersey  has  not  yet  adopted Gender  Responsive  Budgeting  the Government  has  made  efforts  to consider gender and other protected characteristics  through  the Discrimination  (Jersey)  Law  2013, and  inclusive  policy  development when developing Budget proposals. The  Chief  Minister  expressed openness  to  exploring  Gender Responsive  Budgeting, acknowledging that the concept could be debated in the States Assembly in the  current  term.  However, challenges such as insufficient data were highlighted, and  it  was  noted that further data collection would be necessary  to  support  its implementation.

Noted.

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20

The economic outlook for Jersey in the  near  term  presents  a  mixed picture, with growth primarily driven by the financial sector  and weaker performance in other sectors. While global  inflation  has  decreased, domestic  inflationary  pressures, particularly in housing and the cost of living,  remain  a  concern.  Real earnings  have  been  negatively impacted by high inflation and low productivity.  To  sustain  long-term growth  and  support  an  aging population,  improving  productivity and  diversifying  the  economy beyond the financial sector

will be crucial.

Noted.  The  Future  Economy  Programme  was established  in  2023  to  address  the  challenges Jersey  faces  (demographic  challenges  and productivity) and to deliver sustainable economic growth.

21

Significant  concerns  regarding Jersey's public finances, particularly the  increasing  public  expenditure focused on operational costs rather than  capital  investments,  has  been highlighted  by  the  Fiscal  Policy Panel. This trend is expected to lead to  operating  deficits  in  2025  and 2026,  with  only  a  small  surplus projected  for  2027.  The  rising expenditure  in  a  low-growth economy  poses  risks  of  higher inflation  and  increased  imports, which could undermine real income growth.  Additionally,  the unsustainable  growth  in  healthcare expenditure, representing 76% of the growth in spending over 2025- 2028, raises  concerns  about  the  potential for  difficult  trade-offs  between funding  healthcare  and  other Government  priorities  and  Jersey's declining  net  asset  value  as  a percentage  of  Gross  Domestic Product  (GDP)  further  signals  a reduction  in  the  Island's  financial resilience.

The  Minister  for  Treasury  and  Resources  has responded  to  the  FPP  report,  in  particular  the recommendations.

22

The  Government  endeavoured  to engage widely with key stakeholders for the Budget proposals. The process however faced criticism from some

In relation to revenue measures, Revenue Jersey invites input from a wide range of stakeholders every  year  (in  early  Spring),  long  before  any decisions  have  been made as  to what will be

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stakeholders  who  felt  that  the consultation  was  more  directed  to informing them of decisions  rather than  genuinely  gathering  feedback, and there were concerns that some views  were  not  sufficiently incorporated. Despite the shortened timeline  for  preparing  the  Budget 2025-2028,  which  aimed  for  an earlier  launch,  the  Treasury  and Exchequer  maintained  that consultation  was  conducted  in sufficient time.

included in the final Budget proposals. Not all views can be incorporated but changes to early proposals were made following stakeholder input. For some technical measures, a second round of engagement takes place on the effectiveness of the draft legislation where that is appropriate.

23

Some monitoring of the impacts of excise duty freezes and the resulting effect on inflation, particularly using the  Economics  Unit  to  model  the inflationary impact of duty changes, has been undertaken by the Treasury and Exchequer. There is recognition that  the  long-term  effects  of  these fiscal  measures,  particularly  on businesses and Islanders, may take time  to  fully  manifest.  While  the immediate  mathematical  impact  of excise duty freezes on the retail price index (RPI) is assessed, there appears to  be  a  lack  of  comprehensive ongoing monitoring of broader economic impacts

across all revenue-raising measures on businesses, consumers and overall economic growth.

The  Government  will  continue  to  monitor  the proportion  of  GVA  represented  by taxation  in total. The proportion remains low relative to most OECD countries which fosters economic growth. Generally  speaking,  where  uprating  of  excise duties  is  not  above  RPI  inflation,  then  the Government is simply maintaining the real value of the duties  and  the wider economic  impacts should not vary. Where above-inflation increases are made to affect consumption (particularly in respect of tobacco and fuel), there is sufficient evidence impact.

24

The  proposed  3.6%  uprating  of Jersey's  main  tax  allowances  for 2025 is part of a broader package of measures aimed at alleviating cost- of-living  pressures,  including  the freeze on alcohol and fuel duties and the  introduction  of  a  living  wage. Jersey's  tax  allowances  are comparatively  high,  particularly when  compared  to  neighbouring jurisdictions  such  as Guernsey  and the  United  Kingdom.  A  broader understanding of how to reduce cost of living pressures is required.

Jersey's high tax allowances keep money in islanders' pockets and are a significant lever in improving affordability of goods and services for  households.  Increases  to  benefits  and pensions  are  made  annually  in  line  with statutory commitments to ensure the value of these payments is not eroded.

The cost of living in Jersey is influenced by global  inflationary  pressures  beyond  the Island's control. There is good evidence that these pressures are gradually

subsiding.  Inflation  continues  to  fall  and  is forecast  to  remain  below  2%  until  2027.  In

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addition, the Bank of England has twice reduced the base rate in recent months.

Continuing to maintain a balanced budget ensures that  the  public  service  does  not  contribute  to inflationary pressures.

25

The decision to freeze alcohol duties for 2025 is aimed at alleviating cost of living pressures and supporting the struggling  hospitality  sector,  and reflects  a  complex  balancing  act between economic, social and fiscal priorities. While the freeze is seen as beneficial  for  consumers  and  the hospitality industry, it also represents lost revenue for the Government and does not address the broader public health  concerns  associated  with alcohol  consumption.  More comprehensive solutions are needed to address the rising costs and the cultural shift required around alcohol consumption to resolve the ongoing economic  challenges  facing  the sector. It is noted that the duty freeze may  be  temporary,  with  potential increases to

align with inflation once cost of living pressures ease.

Public Health policy officers continue to study additional programmes to address  social  and health  concerns  related  to  Jersey's  high  per capita consumption of alcohol.

The  duty  freeze  is  temporary.  Indexation  is scheduled to be re-introduced for 2026 rates and over the remainder of the outlook, reflected in projected revenues.

Further discussion with CSSP would be welcome about the taxation of alcohol and achieving the right balance between economic, social and fiscal priorities.

26

The  proposed  increase  in  tobacco duties  in  2025  is  aligned  with  the Government's  public  health objectives  to reduce smoking rates and  alleviate  the  burden  on  the healthcare  system.  However,  while tobacco  consumption,  particularly among young adults, has decreased significantly  in  response  to  these increases, concerns remain regarding the shift to more affordable channels and  the  rise  of  vaping  as  an alternative. With the assumption that consumption is increasingly sourced from  lower  cost  imports,  revenues would  not  increase  with  duty increases. These factors suggest that the  impact  of  tobacco  duties  on

As a matter of policy, tobacco duties are increased by June RPI plus 5%. This is a continuation of the escalator agreed as part of the 2017-2022 Tobacco Strategy. Tobacco duties will continue to rise in line with this escalator due to known impact that tax rises have on smoking reduction.

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consumption  patterns  and  public health outcomes require ongoing evaluation  to  ensure  the  policy achieves its intended goals.

27

While  the  freeze on fuel  duties  in 2023 and 2024, and its continuation into  2025,  has  been  seen  as  a necessary measure to alleviate cost of living  pressures  for  Islanders, especially for small businesses and individuals reliant on vehicles, it also presents challenges for Jersey's long- term climate goals. There is a need for  a  balanced  approach  that

addresses both the immediate cost of living concerns and the future funding of climate initiatives which remains  a  critical  issue  for  future fiscal planning.

Ministers  agree  that  a  balanced  approach  is necessary  taking  into  account  both  short  and longer  term  considerations.  Policy  discussions and consultations on the appropriate balance will be  undertaken  during  the  drafting  of  the  next Budget for 2026.

28

The  preceding  Government  Plan 2024-2027 proposed a reduction of 9 pence  per  litre  on  Hydrotreated Vegetable  Oil  (HVO)  biofuels  to support  the  transition  to  greener transportation.  This  reduction,  to encourage  the  use  of  renewable diesel,  was  forecast  to  cost  the Exchequer  approximately  £85,000. The  gross  decrease  in  income  for 2024  was  expected  to  be  £60,000 rather than the £85,000 forecasted, the  difference  correlating  to  the increase  in  consumption.  The increase  in  consumption  would increase the amount hypothecated to the Climate Emergency Fund (CEF) by  approximately  £2,100  with  the total  cost  to  the  Exchequer  to  be estimated to be £57,900 for 2024. The forecast  consumption  for  2025 remained unchanged at

£85,000.

Current data on sales of HVO in 2024 exceeds the  initial  forecast  estimates  used  in  the Government Plan 2024. This will increase the income foregone, through the reduced rate of duty.

Whilst HVO consumption has increased above expectations,  this  is  expected  to  be  offset  by reduced sales of road diesel. The overall impact to the Exchequer in 2024 will be reviewed once the full years' worth of data is final.

29

Data suggests a long-term trend that vehicle  registrations  are  declining year-on-year for the middle to higher Vehicle  Emissions  Duties  (VED) bands and increasing in the lowest VED  bands.  This  suggests  a

The Electric Vehicle Purchase Incentive (EVPI) was launched in August 2023 as part of policy TR1 of the Carbon Neutral Roadmap (CNR). The initial TR1 budget of £5,734,000 proposed in  the  CNR  for  2022-2025  was  reduced  to £4,334,000  following  adoption  of   Deputy

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consumer preference towards lower emission vehicles. Data also shows that the introduction of the Electric Vehicle Purchase Incentive may have influenced the significant increase in purchases  of  electric  vehicles. Stakeholders  have  raised  concern about  the  absence  of  continued Government  support  for  electric vehicle subsidies  in  the  Budget 2025-2028  to  continue  to incentivise and accelerate the shift to electric vehicles.

In addition, that vehicle size and mass, which contribute to embodied carbon emissions,  are  not  adequately addressed in the current VED policy. Further  concern  is  raised  that  the VED  increases  may  lead  to unintended economic consequences, such as incentivising the retention of less efficient vehicles by consumers and small business owners who get priced out' of being able to purchase a new vehicle, or negatively affecting young  people  entering  motorsports who  purchase  high-  emission vehicles  for  infrequent  recreational use.

Ward 's amendment in favour of Active Travel. Funding allocated for the EVPI was initially expected to run to the end of 2025 but was fully utilised  by  13  December  2024  due  to  high demand. The EVPI supported the purchase of 1,210 electric vehicles, of which approximately 80% were second hand.  There are no plans to reallocate funding from other areas of the CNR to further incentivise electric vehicles in this term of Government. Supporting Islanders to reduce vehicle journeys by adopting active and sustainable modes of travel is also a funded CNR priority. Development of CNR

policy  options for  the period  2026 to  2030 is currently underway.

The Budget 2025-2028 proposals to increase VED bands from January 2025 were developed in consultation with industry stakeholders to focus on the highest emitting vehicle groups. The  VED  escalator  principle  is  intended  to encourage  consumers  to  consider  choosing lower-emissions vehicles

Vehicle  size  and  mass  are  factors  noted  for consideration in  developing a future  fuel  duty replacement policy.

30

The 60-day threshold for short-term visitors  has  been  well  received, however,  establishing  the  take-up and benefit is proving challenging and options to monitor the relief are being explored  by  Revenue  Jersey.  The Reg-  Tech  Super  Deduction  and unilateral  relief  will  be  monitored through  company  and  personal income  tax  returns,  respectively. Additional  measures  to  remove frictions  in  the  tax  system  and administrative processes

to support mobile workers and their employers is a priority workstream for 2025.

Consultations for additional measures to reduce frictions  in  the  tax  system  and  administrative processes for globally mobile workers have begun and will continue in 2025. Because short-term visitors on Island for fewer than 60 days are not required  to  notify  Revenue  Jersey,  monitoring take-up of this option will be difficult; however, Revenue  Jersey  is  hearing  case  studies  of favourable reception and outcomes and will be seeking more evidence of results.

31

Stakeholders  are  supportive  of  the Excise Duty Relief for Craft Spirits Producers highlighting the economic

The  Government  continues  to  review  duty reliefs for small producers and will consult with wine industry stakeholders,  as well as those

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benefits, potential consumer interest and  the  growth  opportunities  for small Jersey businesses. Suggestions have  been  made  to  consider extending  the  relief  to  other  local industries  with  consideration  for wine producers  and  for  industrial, medicinal and scientific

purposes. (This finding reflects the original budget proposal).

using alcohol for manufacturing and scientific purposes, as part of the Budget 2026 process.

Excise  Duty  (Relief  and  Drawback)  (Jersey) Order 2000 already provides duty relief for spirits used for non-beverage purposes.

32

Meaningful consultation on the Fuel Replacement Policy is being sought by key stakeholders at every stage of the  policy  development  process  to ensure ample opportunities for those impacted by the change to provide input. Replacing fuel duties with an alternative  revenue-raising  measure is generally accepted  as  a  sensible evolution  to  balance  fiscal

needs  and  road  maintenance requirements.

The latest analysis of fuel duty receipts does not show a notable decline in revenue. Ministers will continue  to  monitor  the  position  in  2025  and beyond.  The  Government  is  committed  to consulting  on  the  development  of  fuel-duty replacement options when the time comes.

33

It is Government's clear ambition to introduce a tax on vaping products to address  the  related  public  health concerns,  particularly  for  young people. The role of vaping in helping smokers  to  transition  away  from tobacco was raised by stakeholders, and the need to appropriately balance the  tax  threshold  to  avoid discouraging  smokers  from switching to vaping, which is seen as a  reduced-  risk  alternative.  In addition,  stakeholders  agreed  that consideration should be given to how the tax revenue could be used to fund education, prevention and cessation programmes related to both smoking and vaping.

The Government will continue to develop vaping tax policy during 2025.

The  level  of  revenue  from  vaping  remains unknown  (especially  in  light  of  the  recently agreed ban on disposable vapes) and therefore cannot be set aside as a funding source for other projects.

34

Work  is  continuing  to  develop Government's understanding of how the  Tap  Relief'  mechanism  might operate in Jersey and to appropriately scope the relief to meet the needs of Jersey  and  local  hospitality businesses.  Implementation  of  any relief will not take place before 2026.

Legislation for tap relief' has been  drafted. Additional  work  on  compliance  and enforcement to prepare for its introduction in 2026  will  be  paused,  pending  further discussions with stakeholders, who no longer wish it to proceed. Ministers remain of the view that tap relief is a simple solution that could be introduced  immediately  to  create  an  on/off-

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licence price differential. A complete overhaul of  the  excise  duty  regime  to  provide  for different duty rates between on- and off- licence sales regardless of whether it is served in bottles or from taps will be studied  in  2025 but is a considerable undertaking that may ultimately prove

unworkable.

35

The  Fiscal  Policy  Panel  within  its Annual  Report  for  2024  sought  a formal commitment that any monies in excess of the forecasted base case amounts  for  Pillar  Two   receipts would   be allocated   to   rebuild the

Stabilisation  Fund  and  Strategic Reserve  balances.  A  formal commitment has not been made.

The Budget sets out clear proposals on how Pillar Two receipts will be used.

36

All  the  future  tax  measures  in  the Budget 2025-2028 are policy under development and are unlikely to be

implemented before 2026.

All proposals to be implemented in 2025 were contained in the 2025 Finance Law. Any new tax measures for implementation in 2026 will be presented in the

next Budget and accompanying Finance Law in autumn 2025.

37

A further Classification of Functions of Government

report was not published at the time of publishing this report.

Statistics Jersey published the Classifications of Functions of Government report

for 2023 on 27th September 2024, the report is available on the Statistics Jersey website: Public Spending Statistics.pdf

38

Under  Article  10  of  the  Public Finances (Jersey) Law, the Council of  Ministers  must  include  budget submissions from non-ministerial bodies in the

Government Plan.  These were submitted and discussed at Council of Ministers workshops during the development  of  the  Budget, alongside business cases received for additional budget requests.

Noted.

39

As part of the reprioritisation process to target funding to deliver against the  Common  Strategic  Policy priorities,  an  open  bidding  process for  Revenue  Expenditure  Growth funding was only considered where

In developing the Budget 2025-2028 there was no open  bidding  process  for  revenue  expenditure growth funding. Costings were considered as part of the development of the CSP to ensure objectives were affordable. Where additional funding was

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necessary  to  meet  the  Common Strategic Policy

objectives.

identified, policy leads developed business cases for inclusion in the Budget.

40

There is no additional provision for the  Capital  Risk  and  Inflation Reserve in 2025 as opposed to the Government Plan 2024-2027.  There is currently £9 million in the Capital Risk and Inflation Reserve in 2024, and it is intended that amounts not required  in  2024  will  be  carried forward  to  2025.  Capital  pressures arising in

the  year  will  be  met  through reprioritisation  within  the  wider programme where possible.

Noted.

41

The Value for Money Programme is no  longer  being  utilised  in  its previous  form.  The  Council  of Ministers has instigated a change in the  emphasis  in  the  delivery  of savings  towards  practical  and deliverable initiatives that will curb public  expenditure,  with  a  strong focus  remaining  on  delivering  the savings  previously  approved  for 2024. The Thematic Reviews have informed the actions  taken in year (2024) and in those set out in the Budget 2025-2028. The overarching theme  is  to  address  right-sizing Government,  which  has  been informed by the reduction in growth budgets,  new  initiatives,  Capital Programme  deliverability,  use  of consultants and contractors, vacancy management,  focus  on  removing extraneous activity and Health and Community Services workstreams.

Noted.

42

The savings proposals for 2025 were primarily  identified  through  an analysis of departmental structures, focusing  on  reducing  reliance  on consultants  and  streamlining  back- office functions, rather than cutting frontline  services.  Prioritising savings  in  areas  with  a  higher concentration of senior roles aims to

Noted.

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reduce  civil  service  costs  without affecting core public service.

43

Reducing  back-office  capacity significantly  risks  technical expertise,  which  is  crucial  for supporting evidence-based decision- making  and  effective  policy implementation.  The  potential consequences of this were not fully addressed, so a risk remains over the balance  between  prioritising spending for frontline  services  and ensuring  sufficient  resources  in support functions are maintained so as to not undermine

essential service delivery.

The Budget proposes to deliver £15 million in role savings,  to  be  met  largely  through  delayering management  and  removing  vacant  posts.  This represents approximately 2% of the overall staff costs budget. Role savings are weighted towards departments with a proportionately higher number of civil servants at grades 11+. Chief Officers are tasked with delivery to manage risks and ensure minimal service impact, through the MoSCoW prioritisation  method,  workforce  planning  and management oversight of their departments.

44

£4 million of future savings is in the Budget  without clarification  of  how this will be achieved. The Fiscal Policy  Panel  reiterates  previous advice  and  cautions against relying on future unspecified savings.

The  Government  Plan  2024-2027  included unallocated  savings  of  £20  million,  with  £10 million in 2025 and £10 million in 2026. The Budget for 2025-2028, reduces unallocated future savings to £4 million.

45

The Budget 2025-2028 refers to the department  currently  known  as Modernisation and Digital (M&D) as Technology  and  Digital  Services (TDS). Reprioritisation of spending within  Technology  and  Digital Services  for  technology  projects  is aimed  at  focusing  resources  on delivering  foundational  projects before  commencing  new  projects, which  is  how  savings  have  been identified in this department. It is not clear to what extent different departments'  digital  priorities  have been considered.

Modernisation  and  Digital  (M&D)  has  been renamed as Digital Services.

Other  than  Cyber  2.0  programme,  IT Infrastructure upgrade and maintenance projects, digital Services is mainly a provider of technology resources and skills to Departments. This means most of the digital projects across the Government are  planned,  prioritised  and  scoped  by Departments themselves.

46

The level of cross cutting oversight of Technology and Digital Services in relation  to  projects  across Government  departments  is uncertain,  as  an  architectural blueprint  or  digital  strategy  for Government was not yet available.

Through various roles in Digital Services there is significant oversight and involvement across the  large  number  of  cross  cutting  projects. These  roles  provide  direction,  support  and representation  across  Departmental  change projects that require IT skills and where directly impacting Digital Services. Most projects also include an architectural blueprint, or high-level systems design. The overall Digital Strategy is under development and is intended to be ready

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for publishing by June 2025.

47

While  several  departments  have aspirational  goals  to  improve customer service and digital service delivery  for  Islanders,  the prioritisation  and  reprofiling  of technology projects have delayed the intended  timelines  for  these enhancements.

There  was  an  excessively  high  number  of digital and technological projects in train or requested. Not all of these could realistically be delivered, therefore the list had to be prioritised reducing the number from 333 to an achievable 102, which includes the top ranked projects of each department. The decision making

was led by Departments which were cognisant of their frontline priorities and needs. Digital Service supported this work, but did not lead it.

48

In light of balancing day to day spend with financial sustainability for the short (up to 4 years), medium (5 to 12 years)  and  long  term  (beyond  12 years), the Treasury and Exchequer are undertaking two projects. These include a capital plan project, which focuses  on  spend for assets in the medium to long term window (5- 25 years), and a project for longer term financial planning, which considers both capital and revenue expenditure and longer-term impact of borrowing and  reserves.  This  work  provides tools to assist in developing future budget processes with a longer-term focus.

Noted. These projects will continue to be part of Treasury's departmental business plan in 2025.

49

The Budget sets out the revised policy for the Strategic Reserve. This aligns with a previous recommendation of the Fiscal Policy Panel to ensure that the objectives

of all the States Funds are clear and that policies are adjusted in line with the objectives.

Noted.

50

The  Government  has  not  observed the  recommendations  made  by  the Fiscal Policy Panel (FPP) in previous years  to  commit  to  rebuild  the reserves'  balances  through prioritising  transfers  to  the Stabilisation  Fund  and  Strategic Reserve.  The  FPP  has  emphasised that a stronger commitment is needed to  replenish  both  the  Stabilisation Fund and Strategic Reserve. The FPP

The Budget 2025-2028 includes the transfer of prior-year basis taxation debt (circa £280 million) into the Strategic Reserve. This will provide cash receipts into the Strategic Reserve over the next 40+ years.

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recommends  that  the  value  of  the Strategic Reserve should be equal to between  30-60%  of  Gross  Value Added (GVA), however, will only be equal  to  17%  of  GVA  in  2028. Although  the  Budget  includes measures to increase the value of the

reserves, it falls short of the advised targets.

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

1

The Council of Ministers must ensure for all future Budgets that supporting key information is published and provided to Scrutiny as a single document at the time of the lodging of the Budget. Information must include delivery progress updates for the preceding year as  

well   as   Ministerial  priorities   and Departmental Business Plans to coincide with the Budget year under review.

Reject

Appropriate  information was  provided as  part  of  the Budget,  and  Ministers provided  considerable  additional information  as  part  of  the  Panel's review.  Minister  will  give  further consideration  to  this  point  before  the preparation of the next Budget.

Complete

2

The Council of Ministers must ensure that a mechanism is established to provide periodic reporting on delivery progress for the Budget. Reports must be published both in-year and annually for all future Budgets to provide the required

Partly Accept

Existing  reporting  mechanisms  are considered  adequate but Ministers are nevertheless  content  to  give  further consideration to this matter.

Complete

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

transparency, governance and accountability for project delivery within the approved timelines and allocations of funds.

3

The Council of Ministers should develop a communications plan to actively engage members of the public and raise awareness of the Budget process.

Accept

There is a plan for communicating the Budget, and this will be revisited as part of the 2026- 2029 Budget.

Complete

4

The Council of Ministers should encourage Ministers to complete Children's Rights Impact Assessments (CRIAs) when developing the Budget as appropriate. The Council of Ministers should produce a detailed list to identify the CRIAs that were completed in relation to the Budget, which should be accessible alongside all future Budgets.

Accept

Where the provisions of the draft Budget engage the rights of children, the CRIAs will  be  produced  and  published accordingly, as they were for the Budget 2025-2028. All CRIAs will be published on  the  States  Assembly  website alongside the main proposition.

Complete

5

By the end of Q1 2025, the Council of Ministers must establish a structured risk assessment and mitigation framework specifically for monitoring competing priorities within the Common Strategic Policy. This should include consideration for the criteria for identifying and categorising risks associated with each

Reject

The Common Strategic Policy set out 13 actions, which Ministers and their Chief Officers are focused on delivering within established  accountability  and  risk management mechanisms.

In  noting  that,  Ministers  will  remain mindful  and  concur  with  the  Panel's sentiments,  notably  that  risk management is crucial, that clear lines of accountability are necessary and that thinking needs to be long term in nature.

Complete

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

Common Strategic Policy priority, with a mechanism to periodically measure progress and risk levels to ensure adjustments can be  made  promptly where  risks  are identified  or threaten long term goals. Responsibility for monitoring and reporting must be assigned to designated leads within the departments to ensure accountability  across the  departments. Quarterly reports must be produced to highlight specific risk mitigation strategies and be provided to Scrutiny.

6

Cross-departmental collaboration must be targeted with consideration for shared planning tools and regular interdepartmental meetings focused on managing and mitigating risks identified within the Common Strategic Policy priorities. This should be implemented by the end of Q2 2025.

Reject

As  outlined  above,  existing accountability  and  risk  management mechanisms  are  considered  adequate, and  this  includes  considerable collaboration  between  Ministers  and their  officials  across  portfolios  and departments.

Complete

7

To ensure that the reprioritisation process for delivering the Common Strategic Policy is transparent, efficient and minimises risk to essential

Reject

As  outlined  above,  existing accountability  and  risk  management mechanisms are considered adequate.

Again, Ministers take note of the Panel's concerns and accept that when making decisions to prioritise, the consequences

Complete

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

services, the Council of Ministers should establish a risk assessment within the reprioritisation process. This should include a risk review protocol to develop clear assessment and documentation of the risks associated with delaying and deprioritising projects to establish the impact on essential services, the community and  the   Government's  strategic objectives. This should be established by Q3 2025.

for  other  work  streams,  requests  or services  need  to  be  taken  into consideration.

8

A report detailing which projects have been deferred, cancelled or reprioritised, along with the rationale, cost-benefit analysis and risk mitigation strategies employed, should be published to enhance transparency and understanding of the trade-offs made to deliver the Common Strategic Policy priorities. The first report should be published by Q3 2025 with a future report to coincide with the lodging of all future budgets.

Partly Accept

Departments  will  continue  to  track progress  in  delivering  their  Business Plans.  The  format  of  reporting  will balance  the  costs  and  bureaucracy  to ensure good value is delivered without distracting resource from the delivery of Government priorities.

In addition, for 2026  it is planned to include additional detail on changes to project budgets as an appendix to the Budget.

9

Prior to any further structural changes or staffing reductions, the Council of Ministers must ensure that a

Partly Accept

Organisational  development frameworks  are  used  when  reviewing service delivery and any organisational change and the impact of change.

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

comprehensive Impact Assessment is conducted

to consider the effects on service delivery, capacity, morale and the long-term resilience of departments. The assessment should include specific measures for  mitigating risks  associated  with the  loss  of institutional knowledge, particularly at senior levels.

This includes the mitigation of risk as well as staff morale.

10

The Council of Ministers must ensure that measures are in place to protect critical back- office and policy functions which recognise their critical role in enabling effective service delivery on the front line. A flexible approach should be taken to ensure that expertise and capacity in these areas are preserved, particularly where expertise is vital to the delivery of Government priorities, such as health policy development.

Partly Accept

The Council of Ministers recognises the importance  of  critical  back-office  and policy functions. The delivery of good quality  policy  is  crucial  in  enabling Ministers to respond to the challenges the Island faces, especially long- term challenges such as demographic change and  the  consequences  for  our  health services.  At  the  same  time,  Ministers will continue to manage costs, especially in back-office processes, and prioritise the most necessary work.

Complete

11

As the restructuring process progresses, the Council of Ministers should continually monitor its impact, particularly on service delivery and staff retention. Where gaps in capacity are identified, a clear process must be in place to address this,

Accept

Staff attrition has reduced from 8.3% to 6.9%.  The  BeHeard  survey  has  seen positive  increases,  including  in wellbeing.'  The  redeployment  policy and  procedures  have  been  updated  to ensure that anyone on redeployment is able  to  have  the  first  opportunity  for these roles if they meet the criteria. This ensures knowledge is retained.

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

including through the reallocation of resources, redeployment or recruitment where required, to ensure that the Government is able to deliver on its priorities effectively.

Essential front-line services remain the priority,  and  resources  have  been focussed on recruiting into these roles.

12

Succession planning processes should be strengthened, particularly at senior levels, to ensure that departments retain the necessary skills and institutional knowledge. Consideration should be given to mentorship programmes, internal training opportunities and clear career progression pathways to ensure that key functions are maintained without compromising service quality.

Accept

A Succession Planning guide and toolkit

has  been  created.  Colleagues  from People Services will continue to work directly  with  Chief  Officers  to  help identify and grow talent to fill leadership and  business  critical  positions  for  the future.

The  Executive  Leadership  Programme introduced in 2024 and continuing into 2025  will  support  this  work  by identifying colleagues with the potential to step into these posts as both short-term and long-term successors. We will  ensure  proactive  development through job moves and or secondments around  the  different  departments  to provide  greater  development opportunities across Government.

We  will  also  provide  coaching opportunities  to  further  develop  these colleagues.

13

The Council of Ministers must invest in enhancing data collection mechanisms to ensure data continuity for performance monitoring, and should prioritise the maintenance of high quality, timely data collection that feeds directly into key decision- making processes and supports evidence-based policy. As strategic investment in

Partly Accept

There  has  already  been  significant investment  and  improvement  in  the collection  and  presentation  of  data, including  four  additional  Statistics Jersey  posts  to  develop  and  publish statistics  such  as  population  and migration, and all economy gender pay gap based on administrative data already held by the Government.

Statistics Jersey has grown in headcount from 16 FTE in 2021 to 19 FTE in 2025. Decisions on the content and frequency of  statistical  output  are  carefully considered as the data is used by a

Complete

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

data collection and analysis improves efficiency and reduces the need for reactive decision-making based on incomplete or outdated information, the Council of Ministers must effectively balance any decision to reduce statistical outputs against long term benefits of informed policy development.

number  of  different  departments  and islanders.

14

The Council of Ministers should take appropriate steps to clarify and strengthen the mechanisms and metrics in place for the assessing, monitoring and reporting of Key Performance Indicators to ensure consistency across departments. Clear processes should be in place for managing any identified discrepancies in departmental Key Performance Indicators, with specific measures and actions for supporting departments in improving performance.

Partly Accept

Departmental Annual Reports set out the Key Performance Indicators to be used for the year in question. The monitoring and  reporting  of  these  are  the responsibility  of  the  relevant  Chief Officer or Accountable Officer to comply with and improve. The Chief Executive Officer  holds  the  Chief  Officers  to account  through  line  management responsibilities,  and  there  is  political oversight throughout from individual

Ministers and the Council of Ministers as a whole.

Complete

15

The Council of Ministers should consider how transparency in monitoring departmental spending can be enhanced so that public service performance and spending are

Partly Accept

Departmental spending is reported on in the Annual Report and Accounts (ARA). Following  a  C&AG  recommendation from 2024, the Treasury has set out a minimum  standard  of  financial information to be included   in departmental annual reports that support the ARA.

Recommendations

To

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Comments

Target date of action/ completion

transparently evaluated, governed and communicated to the public.

16

The Council of Ministers must be mindful that the Public Finances (Jersey) Law 2019 should demonstrate changes in practice and must ensure ongoing Ministerial engagement and take proactive measures to ensure Sustainable Wellbeing is meaningfully integrated, rather than retroactively in all future Budgets. Consideration should be given for establishing a process to embed Sustainable Wellbeing in core decision-making at all stages of the budgetary decisions. The Council of Ministers should also strengthen monitoring and reporting of Sustainable Wellbeing embedded in the Budget to assess the impact. This should include establishing a clear and measurable mechanism to identify how Sustainable Wellbeing is tied to the Budget's proposals with indicators that are specific, measurable and linked to the long-term outcomes. This should be actioned for all future Budgets.

Reject

The Budget and the Common Strategic Policy both demonstrate a clear link to sustainable  wellbeing.  The  Common Strategic Policy sets out how each of the Council  of  Ministers'  priorities contribute to the long-term outcomes for our Island. The Budget provides funding for these priorities.

In addition to this and in response to the recent report from the Comptroller and Auditor General, ministerial submission templates are being revised to include more explicit consideration of the three sustainable  wellbeing  themes (community, economy and environment) as  part  of  the  policy  development process.

Any  additional  processes  are unnecessary and would divert resources away  from  delivering  on  Ministers' priorities.

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

17

The Council of Ministers should consider taking meaningful steps towards exploring, developing and implementing Gender Responsive Budgeting in Jersey to ensure that public resources are distributed equitably and that the needs of all Islanders, including vulnerable groups, are met. The Council of Ministers should report back to Scrutiny and the States Assembly on the trajectory for progressing this workstream by Q2 2025.

Reject

It is important to consider the effect of policies on all protected characteristics, as  defined  under  the  Discrimination (Jersey) Law 2013. Sex is one of those protected characteristics and therefore it is  actively  considered  during  the  safe space  of  policy  development.  From 2023, this has been a requirement within the  Ministerial  Submission  Template, which  has  included  an  added supplementary advice paper to help guide policy makers to convey the issues and risks appropriately. Therefore, the effect on  the  different  sexes  is  already considered  when  developing  policies which ultimately constitute the proposed Budget,  as  well  as  the  totality  of  the effect of the proposed Budget.

Complete

18

The Council of Ministers should consider how it can improve the consultation process for revenue raising and relief measures to ensure that it is truly participatory to demonstrate that feedback is genuinely taken into account, giving stakeholders ample opportunity to influence policy decisions.

Reject

A specific consultation framework for tax policy does exist and is available on the Government website.  In addition to specific consultation on individual tax policy development proposals, a general invitation  to  stakeholders  to  make Budget Representations is issued annually in the Spring to inform the Treasury's development of the annual Budget.

19

The Council of Ministers should establish a more robust framework for monitoring the longer- term effects of revenue raising measures, including excise duties, on businesses, consumers, and the economy. Ways of

Reject

The Government is not convinced that further analysis over and above what is already done would materially improve decision-making,  especially  where uprating  of  duties  is  limited  to  RPI- inflation simply retaining the real value of  the  duties.  We  will  continue  to undertake  benchmarking  against  other jurisdictions to ensure our approaches to taxation remain appropriate.

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

monitoring how specific revenue measures affect different sectors, particularly vulnerable groups, in a more granular and systematic manner should be considered.

20

The Council of Ministers should invest in improving data collection and economic forecasting tools to better understand the broader and longer-term implications of fiscal measures, including improving the granularity of data in key areas like inflationary pressures, employment trends and sectoral impacts. The Council of Minister should consider expanding the scope of economic modelling to include more detailed assessments of how revenue measures may interact with  broader economic  and  social factors, such as household income levels, business growth and sector-specific productivity.

Partly accept

Work is under way to further improve the quality of data and the understanding of the impacts of fiscal decisions, where necessary.

21

The Council of Ministers should review the long-term social, economic and fiscal impacts of freezing alcohol duties, including the potential health and public sector

Accept

Public  Health  officers  are  developing strategies to reduce Jersey's high alcohol consumption. A 10-year Substance Use Strategy and an action plan are under way,  identifying  13  evidence-  based policy  options  and  a  decision-making tool.  Many  options  fall  under  the Licensing  Assembly's  remit,  limiting

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

costs associated with alcohol consumption. This review should consider alternative measures to support both the hospitality sector and public health, such as targeted subsidies or incentives for responsible drinking practices, alongside fiscal policies that help alleviate cost-of-

living pressures. Additionally, the Government should continue to actively engage with the hospitality sector, public health experts and economic analysts, to assess the effectiveness of the duty freeze and explore sustainable solutions for both industry support and reducing the social costs of alcohol for future Budgets.

government  action.  Public  Health  has raised  these  issues  with  the  Economy Department as part of consultation on proposed amendments to the Licensing (Jersey)  Law  1974.  The  Government plans to increase modelling efforts and continue to consult stakeholders during the development of Budget 2026.

22

The Council of Ministers must closely monitor the effectiveness of the tobacco duty increases in achieving both public health and fiscal objectives. Specifically, the long-term impacts of the increased tobacco duties on smoking prevalence, including the potential unintended consequences such as increased reliance on duty-free channels and rising consumption of

Reject

Strategy sets out one of its strategic aims to  reduce  harms  and  inequalities  in health caused by tobacco and nicotine products. The Tobacco Strategy 2017- 2022  agreed  an  appropriate  minimum above inflation price/tax escalator for the period of the strategy. Since that time, a sustained year-on-year tax escalator of 5% above RPI on cigarettes has been consistently  applied,  with  the underpinning  policy  intent  of  helping reduce affordability and uptake.

The evidence for this fiscal approach is strong.  Higher  tobacco  taxes  reduce smoking  and  smoking-related  disease

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

vaping products must be evaluated. Alternative revenue-raising measures as smoking rates decline should be explored, ensuring a balanced approach that continues to support public health while maintaining fiscal sustainability. Key stakeholders and public health experts should be engaged with when developing policy to ensure it meets both public health and revenue goals in a sustainable manner.

and early death as people cut down, stop smoking, or never start because of the high  cost.  As  effective  tobacco  taxes lead  to  lower  smoking  rates  this contributes  to  the  reduction  of governments' expenditures for the health care costs  associated with preventable illness caused by tobacco consumption. (WHO, 2021).

The  Tobacco  Strategy  2017-2022,  set out to review related issues to lower cost tobacco through duty free.

The Government of Jersey is a signatory to  the  Framework  Convention  of Tobacco  Control  (FCTC),  after  being assessed as having the necessary policies and  mechanisms  to  ensure  that  its population is protected from the harms of tobacco. Any engagement with key stakeholders  regarding  new  revenue measures  will  be  conducted  in accordance  with  the  Government's obligations under this framework.

23

The Council of Ministers must actively progress consideration for introducing a comprehensive long- term strategy to replace fuel duty revenues to support its climate neutral agenda. This strategy should focus on incentivizing the transition to low- emission alternatives, such as electric vehicles (EVs), while ensuring continued financial support for the carbon- neutral roadmap. When exploring options, careful consideration of their impact on different

Partial accept

Work  took  place  throughout  2024  to review  the  options  for  replacing  fuel duty. As recent analysis shows fuel duty receipts are not notably declining as of Q4  2024,  the  Government  does  not regard  this as  a priority for  the 2026 Budget.

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

demographics, particularly those who are dependent on vehicles for daily activities must be considered. Any continued short-term initiatives that provide financial relief to households, should be balanced as to not undermine the Island's long term sustainability goals. Key stakeholders must be engaged with to ensure that the fiscal measures are aligned with the broader objectives of the Island's climate agenda. Proposals for a fuel duty replacement policy much be included within the next Budget for 2026.

24

The Council of Ministers must keep the Vehicle Emissions Duties policy under review and consider how to accommodate for vehicle size and mass (embodied carbon emissions), alongside tailpipe emissions, to reflect the full environmental cost of vehicles more accurately. In parallel, enhancing incentives for encouraging the shift to electric vehicles should be considered. The policy must be closely monitored to assess the potential for

Partially accept

The structure and rates of VED will be kept under review as part of the annual Budget process.

Priorities  for  the  annual  tax  policy programme  will  continue  to  be considered  annually,  subject  to completing existing tax priorities.

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

any unintended consequences to lower income consumers and small businesses. Key stakeholders must be engaged with to ensure that the fiscal measures are aligned with the broader objectives of the Island's environmental goals and economic realities of consumers and businesses.

25

The Council of Ministers must regularly assess the economic impact of the revised Excise Duty Relief for Craft Spirits Producers measures on small producers, local businesses and the hospitality sector. This would provide valuable data to inform any future policy adjustments and further support for Jersey's economic and cultural objectives. In doing so consideration should also be given to the potential for extending the duty relief to other relevant local businesses to expand the support to artisanal producers and potentially for industrial, medicinal and  scientific purposes. (This recommendation reflects the original budget proposal).

Accept (already in place)

In  2025,  officials  will  work  across departments  to  increase  modelling efforts to assess the economic impact of excise  duty  relief  on  producers,  local businesses and the hospitality sector as part of the annual Budget process. We will  engage  with  stakeholders  in  the wine industry and those that use alcohol during  manufacturing  and  scientific purposes  during  the  consultations  for Budget 2026. Please note that relief from duty  is  provided  for  spirits  used  for purposes other than as a beverage under the Excise Duty (Relief and Drawback) (Jersey) Order 2000.

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

26

The Council of Ministers must establish a structured and transparent consultation process for all stakeholders affected by the Fuel Replacement Policy. This should be carried out at all stages of policy development. This should include regular updates, feedback channels and ample opportunity for the industry to provide input throughout the policy development stages. Careful consideration should be given to the impact of any chosen policy on all stakeholders and transparent and timely engagement on any changes must be ensured.

Partly Accept

Government tax policies will continue to be  developed  in  line  with  published Government  policies  on  consultation. Consultation will take place at key stages of policy development.

27

When establishing the public health-oriented tax policy for vaping products, any initial excise duty on vaping products should avoid a sharp rise in costs for consumers transitioning from smoking to the reduced-risk alternative of vaping. An appropriate balance should be achieved whereby the tax can support public health by continuing to encourage the shift away from combustible tobacco. Consideration should be given to how a portion

Partly accept

In line  with the  Fiscal Policy  Panel's advice, hypothecation of taxes is avoided wherever possible.

Work will continue in 2025 to assess a vaping tax. The level of duty will ensure that vapes will remain cheaper than cigarettes   to   support  Islanders' transition from smoking to vaping.

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

of the tax revenues can be earmarked to fund education, prevention and support programmes, which would align with the health objectives and community concerns regarding vaping among young people.

28

Engagement with stakeholders must be strengthened, particularly with the hospitality sector, while developing the Tap Relief' policy to ensure that the chosen model appropriately aligns with both the Government and business need.

Reject

The Government will continue to work within  its  published  frameworks  for consultation.  The  development  of  the Budget 2025-2028 included engagement with the hospitality sector during 2024 at each  stage  of  policy  development. Despite initially requesting development of  Tap  Relief,'  hospitality representatives  no  longer  support  the policy  and  implementation  work  has been paused.

29

The Council of Ministers must provide to Scrutiny a list of the Revenue Growth bids that were presented, but not successful for either business case commissioning and/or inclusion within the Budget. This information should be provided to Scrutiny each year at the time of lodging of the Budget.

Reject

No business cases were commissioned that were not funding CSP objectives, these  were  all  provided  to  scrutiny. There  were  no  unsuccessful  business cases, as there was no open-door bidding process for funding outside of the CSP.

Complete

30

In alignment with the advice of the Fiscal Policy Panel the Council of Ministers must refrain from including any unspecified savings in future Budgets.

Accept

Successive  Government  Plans  have included unallocated savings in future years. The Government Plan 2024-2026 included  £20  million  of  unallocated savings targets across 2025 and 2026. The Budget for 2025-2028,  has  made progress  in  this  regard,  reducing unallocated savings to £4 million.  This is considered achievable given the scale of departmental budgets.