THE latest Business Plan is the most depressing document to come out of the States for a very long time.

That’s not just because – for the first time – departments are going to have to make real cuts in the services they provide the public.

It’s also because there is a total absence of any vision for the future. It’s a case of putting everything on hold until we can get out of this recession.

A lot has already been said about the proposed cuts, which have predictably run into deep trouble with the public, but the lack of new investment for the future is equally important. It’s all very well concentrating on getting over the immediate economic problems, and making sure that the States come close to balancing the books next year, but what happens the year after that?

Of course it’s not easy to plan for the future at a time like this. Many of us are just hunkering down, hoping to survive for the next year or two.

But the States has no option; it’s got to plan for the future, even if most members look no further than next year or at the very best, the next election.

So there’s more than one nettle to be grasped at the moment, but the Council of Ministers isn’t doing it. Ministers are naturally concerned about the effects of the downturn, and have adopted a very cautious approach because of the considerable uncertainties we face. But it’s possible to be too cautious. It’s also difficult to restore public services once you have cut them.

So let’s step back and look at the bigger picture.

The bigger picture is that we have a thriving economy, with one of the highest per capita incomes in the world and substantial reserves. We are able to put £44m into stimulating the economy so that as many jobs as possible are protected during the recession.

Unlike other jurisdictions, we’ve been able to do this without resorting to borrowing. Indeed we don’t have any borrowing worth talking about. Then we’ve been able to pay for a brand new £110m Energy from Waste plant out of petty cash.

Yet the Health and Social Services Department now has to cut back on office cleaning to save money.

There’s something wrong somewhere.

Perhaps the problem is that we’ve got our priorities wrong. Of course one man’s priority is another man’s waste of money, but many people are opposed to the way in which the cuts proposed by departments to meet the Business Plan targets have been prioritised.

Even the Council of Ministers appears to be back-tracking by asking departments to look again at the services they have identified for the chop. Obviously they expect some magic formula to appear so that they can cut back on other services without causing such a public outcry. Fat chance.

It should now be painfully obvious to everyone that there is not a vast amount of waste in the States which can be pruned without upsetting people. If there were, surely the departments would have chosen that option.

No, they were forced by the Council of Ministers to find additional savings to meet previously agreed cash limits, and there was no option but to choose the least unpalatable cuts. Ministers can prattle on as much as they like about there being better ways of doing things, and perhaps over time there often are.

But it’s crazy to expect departments in a matter of weeks to come up with immediate, uncontroversial savings in budgets that have already been pruned to the bone to pay for growth elsewhere. That’s in addition to the normal severe pressure on budgets, of course.

It might also have been a good idea to consult their staff about cuts. I know that some managers like to think that they know it all, but those on the coalface might have been able to suggest other ways of saving money. They probably wouldn’t want to put their own jobs on the line, but at least if they did face redundancy, they would know that everything else had been looked at.

It might also have prevented the predictable reaction from the unions and the conflict that’s going to make life very difficult for States departments.

However, the Council of Ministers said they agonised over the cuts but that they were necessary in these very difficult times. Well that’s the Big Question. Are they necessary?
Quite prudently ministers insisted that if departments had to spend money on £17.3m worth of new items such as replacing revenue from the reciprocal health agreement and the Williamson proposals on children’s services, then departments would have to match this with savings elsewhere or increased revenue.

It was a hard slog but they managed to find nearly all of the money, although there was a shortfall of £4m. So rather than carry this forward as a deficit, the council decided the spending limits agreed last year were sacrosanct, and therefore they insisted departments shave their budgets even further on a pro rata basis. And that’s when they hit the services that have produced all of the headlines in recent days.

The Chief Minister quite rightly says that these additional cuts represent only 1% of total spending and that departments should have been able to manage this without causing a fuss. Well they haven’t been able to so far, so either the departments aren’t really trying or the Chief Minister is wrong.

Also the argument about it being only 1% of total spending works both ways. Perhaps it could be absorbed and perhaps we can afford to spend it. It would have an inevitable impact on public finances but we still have considerable reserves, and in any case we can’t expect to escape scot free at a time like this.

The Council of Ministers’ ultra-cautious approach means that there’s no money to invest in the future and any hope that the tourism industry, for example, will be revived have been dashed by further cuts in marketing, events and air route development. It will be no surprise to see the tourism numbers continue to plummet and of course we can always blame the recession.

Yes, some ‘timely, temporary and targeted’ money is being put in to try to soften the impact of the recession, but this will be used on make-work schemes and will not position the Island’s industries to become more competitive for the future. In fact the reverse could be true.

It would be harsh to argue that the benefits the Island has derived from being successful in the past are now being squandered. But our economy is still in good shape, and that should be giving us an edge against our competitors, many of whom will be much more affected by the recession.

It would be a shame if we were panicked into losing this lead and destroying parts of our public service in the process.

• Peter Body is editor of Business Brief magazine.

• See Tuesday’s JEP for more business news.