Spending cuts begin at last

Thursday 3rd June 2010, 3:00PM BST.

THE States are poised to grasp the nettle of spending cuts, bear the inevitable pain – which, of course, will also be borne by the people they serve – and at long last keep the promise that significant public sector cuts are to be made for the longer term benefit of the economy.

In spite of earlier protestations that departmental budgets had been cut as close to the bone as possible, a programme of economies totalling £12 million is now on the table, though that figure looks less impressive when seen in the context of £6 million having been earmarked to fund voluntary redundancies and £3 million that is likely to be set aside for essential investment.

Some services will clearly suffer, but it is nevertheless true that, for some years, a great many Islanders have had an appetite for streamlining in what is often seen as an overblown, wasteful public sector. However, making sense of public services is now a secondary issue. The principal purpose of the proposed cuts – and, indeed, the driving force behind them – is the imperative of filling the infamous black hole in the Island’s finances linked to forecast budgetary deficits.

Other sources of money, such as taxation and so-far elusive economic growth, are expected to play their part in filling the hole, but it has been all too apparent for many months that cuts will have to bear the brunt of the task. If the States have ever found themselves in a ‘needs must’ situation, this is it.

The planned cuts, which include delicate issues such as scrapping school milk and the Christmas bonus for some categories of pensioner, will be attacked for a range of reasons. Some will be seen as targeting the wrong parts of society, but more general opposition will crystallise around the idea that it is fundamentally wrong to reduce spending when an economy is in the throes of recovering from a major recession.

Alas, we are faced with choosing the lesser of two evils. Running severely and perhaps irrecoverably into the red is a greater risk than the theoretical possibility of hampering general economic recovery.

It is, meanwhile, highly likely that the cuts now in the offing – which appear to amount to rather less than the target set for this period of two per cent of States expenditure – are merely indicative of the shape of things to come. Further services will have to be axed and more user-pays structures will have to be introduced in the next few years if the overall goal of a ten per cent reduction is to be met.