SO who are we to believe? The Treasury Minister, who tells us that working differently should be able to save the States £50m a year, or at least most of it? Or the union leader who tells us that 400 jobs will have to go in one department alone?

The answer is neither of them, although one is more right than the other – and I’m afraid it’s not the Treasury Minister.

It is painfully obvious that States jobs will have to go if we are to come anywhere near a saving of £50m a year.

Even the Treasury Minister has changed his emphasis and acknowledges in a statement he made last Tuesday that ‘this level of spending cannot be saved without radical changes to service provision and some reduction in staffing levels’.

Radical changes in service levels means cutting services to you and me. But where are the cuts going to be made? We’ve already had some States Members wringing their hands over the deficiencies in the kidney dialysis service. Where have they been for the past couple of years? Don’t they know that the Health department and every other department of the States has been under severe pressure to cut costs?

But this will be as nothing compared to what we are going to see under the Comprehensive Spending Review. Job losses will not be solely in Health and Social Services, of course. Indeed, most of the department’s services are likely to be protected, as they are literally a matter of life and death, or at least have a serious impact on our quality of life. One States Member even said that the Island needed the best medical services that money can buy.

So more of the pain is likely to be experienced in other departments, and if I were in Transport and Technical Services, for example, I would be bracing myself.
Those who have complained about a bloated public service might believe that we can cut a few jobs without having much of an impact, but the level of savings required means that even Health will have to suffer job losses.

It’s important to appreciate the scale of the problem. The savings required represent about 10% of the total States budget, so on a pro rata basis the number of jobs that need to be cut is more than 600.

Perhaps 100 will have to go at the biggest department – Health – which in itself will cause huge problems in the provision of services. Jobs for accountants will presumably be protected and probably increased in the zeal to save money and ensure that it is spent efficiently.

So we need to lose 500 or so jobs from other departments, perhaps 100 from Home Affairs (that means fewer policemen, because they haven’t got that many other staff), and Education (fewer teachers), and Social Security (long queues for benefits), Transport and Technical Services (broken sewers and roads left unattended), Economic Development (less effort to grow the economy, which might have helped us out of our current predicament) etc, etc.

Even the Public Accounts Committee, who have looked diligently for savings, have come up with a list of ideas that would hardly scratch the surface. For example, they have suggested looking at court costs and repatriating prisoners. Well I’m sorry to have to point out that the £50m savings required is more than the entire budget of Home Affairs, let alone just the courts.

We could close the entire prison tomorrow and it wouldn’t come near to the total savings needed. We could certainly send the prisoners back to the UK or wherever they came from, but what would we do with those from Jersey?

Perhaps we could ignore their human rights and send them to Guernsey. Guernsey can look after our prisoners and we can look after their waste. Now that’s the kind of blue sky thinking that the Treasury department is trying to encourage. Unfortunately, our financial problems are too severe to be solved by tinkering. They appear to need wholesale change, if not butchery.

So how did we get into this sorry state? I have been told that we are one of the wealthiest jurisdictions in the world when measured by national income per capita. I have also been told that we are among the lowest-taxed in the world, that we have better public services than most and that we have considerable reserves to help us get over the recession.

Yet here we are in a third world financial crisis that requires immediate action. Not action over several years, which would provide time to restructure the administration and try to achieve those savings. No, it’s got to be done now, or at least pretty darn quick.

The Treasury Minister gave a hint of the root of the problem in his statement, and this is obviously going to be his line from now on. He pointed out that public spending had increased by more than 30% in the past five years and it rose 6.6% in 2009 alone.

But hang on, who was responsible for approving this increased spending? The increase was largely due to new public services being agreed over the past few years. This was even done against the advice of the independent Fiscal Policy Panel.

Now I am a strong supporter of the public sector, which constantly needs more money just to carry on providing existing services.

However, I am not so sure that adding more services was a wise move when it was obvious that we were heading for harder times. Seats have been rearranged at the Council of Ministers since then, but a number of ministers were in the council when it approved the new services which are now contributing to the crisis. So they must admit some of the responsibility.

Unfortunately, this error is now being compounded by panic, and it’s hardly surprising that the Comprehensive Spending Review is being seen as a threat by staff. It is a threat.

Ideally the review should have been viewed as an opportunity to look at how the States are run and see what innovative ways could be found to do things better and hopefully more cheaply.

In the meantime, we could use rainy day money. But there’s not much of that left, so we don’t have the luxury of time. It’s now a mad scramble to save money before ministers bow to the inevitable and raise taxes.

Peter Body is editor of Business Brief magazine.