DESPITE the best of intentions, the public hearings by the Public Accounts Committee last week were largely a waste of time and achieved little.

The hearings were called to ‘bring to account’ leading States officials for their failure to push forward with nearly £8m worth of savings identified by the Comptroller and Auditor General in his Emerging Issues report.

However, all the hearings process did was to confirm, at least to my mind, the exact opposite of what the PAC is trying to achieve. The hearings merely showed how difficult, if not impossible, it’s going to be to cut States spending by any significant amount.

Indeed, after three hours of hearing chief executives talk about the problems facing their departments, I am bracing myself for the inevitable tax increases.
Take Education, Sport and Culture, for example.

One of the potential savings identified by the Comptroller and Auditor General was shutting a primary school because the demographics show that we could do without at least one.

So that should be an easy win. But you wait and see what happens when they identify the actual school they propose closing down. There will be an enormous public outcry, just as there was in Guernsey when similar proposals were made.

But the Education department hasn’t even got to the stage of identifying a school for the chop. They have so few administrative staff that they have had to outsource the various reviews which are looking at issues like primary school provision and many other potential savings besides.

There is an even more critical problem facing the Education department which is totally out of its control: the department is expecting very large increases in higher-education fees in the UK which, unless there is further support from the States, means that many more Jersey students will simply not be able to afford to go to university.

That’s not something you want to hear at a time when the Island desperately needs a well-educated workforce to compete in the global economy.

Of course, Education could cut back on spending money on items that simply aren’t essential – such as heritage, for example. The Jersey Heritage Trust is living beyond its means and doesn’t have any money to maintain its buildings, let alone invest in them. So what is the Education department supposed to do – turn its back on what many Islanders believe is in fact an essential aspect of Island life and extremely important to the tourism industry?

But if we are talking about real life and death issues, then we should look at Health and Social Services, where the Auditor General identified a number of potential savings. One of them was using fewer locum and agency staff.
Wow – I bet Health and Social Services never thought of that one.

Does anybody seriously believe that Health actually want to employ temporary staff? Of course not. They would rather have their own full-time staff.
But unfortunately, there is a strong tendency to teach your grandmother to suck eggs when you’re scrambling around looking for savings. You sometimes end up with scrambled eggs.

The truth of the matter is that without locums and agency staff, the department simply could not cope. Vacancies for nurses, for example, are higher in Jersey than they are in London, so unless the States want to increase pay levels substantially and provide more good-quality
accommodation, they will be lucky to fill the posts they need to operate the hospital at its current 100 per cent capacity, let alone at a less risky 85 per cent.

Incidentally, the accommodation problem is partly as a result of a previous cost-cutting exercise, when some bright spark thought it a good wheeze to sell off a lot of the hospital accommodation. Presumably that came under the heading of something the States didn’t need to do.

Now we have other money-making ideas, such as charging for some Accident and Emergency services. But even that could prove more problematic than it seems at first. As the acting chief executive of the department told the PAC, these difficulties would become obvious when the first child died of meningitis because the mother was reluctant to take the child to A & E because of the cost. Nevertheless, the whole subject is still being investigated by the department, which already has more than enough on its plate.

So there are no easy solutions, as I’m sure the Auditor General would be the first to realise. Indeed, some of the solutions that have already been tried and have helped the States to make £20 million savings have subsequently been shown to create inefficiencies rather than the other way round.

For example, centralising certain services, such as human resources, procurement and IT, was thought to be a no-brainer in making the machine much more efficient and save money at the same time. However, as far as centralised HR is concerned, it has been a total waste of time, the acting chief executive of HSS told the PAC. He wasn’t completely sure about centralised IT, either, although he did acknowledge that there were some benefits.

All this debate is going on as we rapidly head towards a States deficit of £50 million, and if you thought it was difficult wringing £20 million in savings out of the States, you try to save £50 million when all the low-bearing fruit has long been consumed.

Much of the savings proposed by the Auditor General have now been overtaken by the Comprehensive Spending Review, the all-singing, all-dancing investigation of States spending which will leave no stone unturned. That’s unlike previous reviews which have kept several stones in place, or to mix metaphors, have tended to avoid upsetting some of the sacred cows.

Just about everyone acknowledges that such a review needs to be carried out, although some of us are a little sceptical that those sacred cows will indeed be disturbed. Similarly, everyone also accepts that there are further savings that can be made by improving the efficiency of the States.

Where the main difference of opinion lies is in the extent of those savings. Certainly no one appearing before the PAC believed that efficiency savings alone would be enough to get us out of our financial difficulties. Most departments are already being forced to make significant savings just so that they can afford to carry on doing what they are doing now.

Any new problem such, as higher education funding, the Jersey Heritage Trust crisis, escalating health costs and an ageing population will just make matters worse.

So services will undoubtedly have to be cut, which is what some critics have apparently wanted for years, perhaps without fully appreciating the impact of such cuts or the reaction of the general public.

Will people be happy, for example, to see bigger class sizes, fewer students going to university, museums being closed down and hospital waiting lists soaring? That’s not shroud-waving – that’s facing facts.

That is why, in the absence of a Fairy Godmother, I am bracing myself for those tax increases.
Peter Body is editor of Business Brief magazine