Given on 28 June 2016 in the debate on the States’ Accounts for 2015 (Billet d’Etat XVIII).
The way we organise our Accounts demonstrates what we value, and goes some way towards explaining why the States behaves as it does. What we see here is what we will get come Budget time unless we spend some time thinking about it now – as many of those who have already spoken have so clearly shown.
I read through the Accounts carefully. Not only that – I read back through the headlines of the Budget reports and annual Accounts of the States for the last fifteen years, tracing how the States’ financial position has changed; observing its relentless upward march; looking back with envy on the years of £50-million operating surpluses, which must now seem like a lifetime ago.
For me, as a relative newcomer, it is important to familiarise myself with the historical context, which my more experienced colleagues clearly already know well. These accounts are, of course, little more than a snapshot in time. To give them real meaning and, more importantly, to understand where we can and should go next, it is vital to ground the numbers we see today in the story of what has happened until now. That will hold even more true when we come to debate the Budget in November.
But for the purpose of this speech, perhaps I need not have bothered with all that depth. I went full circle through fifteen years of history, and landed back on the first page of this year’s accounts. And that, by and large, is where I am going to stay.
Sir, I said that the way we organise our Accounts demonstrates what we value.
On page one, we are reminded that the States has failed to meet one of its own essential objectives – the requirement to maintain budget sustainability.
The non-achievement of this target is a recurrent theme throughout the Accounts. Paragraphs 1.3 and 3.16 of the States Treasurer’s report advise us that the States has not met the target of a real-terms freeze in revenue expenditure, as set out in our Fiscal and Economic Plan.
With so much attention given to this target in the Accounts, it is clear that we value it and want to meet it. Indeed, the President of Policy and Resources, in his foreword, tells us that the present situation requires policy responses. He is right, of course; and financial balance must continue to be a priority for us. But is that the only thing that we value? Is it the only objective that we hold?
Sir, the previous States is condemned, by many of its surviving members, as one which made too many strategies and achieved too little change. Speaking as someone who wrote some of those unfortunate strategies, I wholeheartedly share Members’ frustration, and hope to be part of a States that will be known for rolling up its sleeves and making the changes that matter in islanders’ day-to-day lives. But I call my colleagues’ attention to those strategies now because they, too, contained objectives – objectives which go to the heart of what it means to govern responsibly. Objectives which reflect our responsibilities to each other – to those who are marginalised and disadvantaged – to the generations who have given us our future, and now deserve dignity and respect in retirement – to the generations yet to come, our children’s children, and to the world that they will have to live in.
Members will agree with me, I am sure, that these objectives are integral to our duty, as a States, to the community. They might even agree – and I hope at least one person will recognise the quote – that while it may be “vital that we work within the fiscal framework, and its concept of long-run permanent balance”, nonetheless “it’s not enough for any government to be focused exclusively on, or to be defined by, the economy and the health of its public finances.”
Yet it is only – only – the fiscal framework and the solitary objective of long-run budget balance that gets a mention in these Accounts. And while I agree that such balance is important, it is only this that shapes our proposed “policy responses” – and I share the view, already put clearly by Deputy Green and Deputy Fallaize – that this is not enough, and we must think again about how we organise our resources to achieve what we, as a States, are obliged to achieve.
I know some States Members – though a minority, as I think the Island Games vote bears witness – believe that economic flourishing is all that matters. Get the money right and the rest will follow.
I recognise some of that thinking. I agree that our prosperity is the bedrock of our comfort, wellbeing and security as a community. I consider the Committee for Economic Development to hold an important role within the States, and will be holding them accountable for delivery – especially considering that much of this year’s deficit is due to shortfalls on the income side, which their work alone can stimulate. I came into the States thinking that part of our role would be, at least to safeguard our economic success, and to nurture further development. The UK’s momentous decision, last week, to leave the European Union, may make that a far higher bar to clear; but we owe it to our community to do so.
But, Sir, I must differ from the belief that the money is all that matters – that this one objective is enough. The money is only – ever – a means to an end. The end is how we live well as a society. If our “policy responses” are not geared towards achieving that, through the way we manage our public finances, they cannot be considered fit for purpose for a government.
In fairness, there is some recognition of this in the Accounts. For each Department, we are given a narrative, giving us a broad outline of what that Department has done with its money over the past year.
Those narratives could bear with some improvement – and I hope we can work together on this, as a States, over the course of the next four years. Perhaps I shouldn’t tease, but we have no explanation, on page 50, of how it happens that the Treasury and Resources Department increased its establishment by just 0.4 of a whole-time equivalent staff member, while increasing its staff wage bill by £0.4 million. On the face of it, that’s the jammiest part-time job I’ve ever seen!
More seriously, though, none of the Departmental narratives link their yearly spending to the impact that their work is having on the community. We’ve had this conversation within the Committee for Health and Social Care, and we are committed to revising our narrative – and our choice of activity data, in particular – so that, in future, it reflects more meaningful and externally comparable information about what is happening within the island’s health and social care system, and what that means for people’s real lives.
We are a government. We can do better than simply saying what things we bought and how many people we paid with the money we were given. We owe it to our community to demonstrate how the money we’ve spent – the money which they have pooled, and put towards the protection and improvement of their society – has helped us to deliver that which we are obliged and mandated to deliver. Not the things we’ve bought, but the changes they’ve made.
So, back to page one.
The “policy responses” we are offered, to help achieve our objective of budget balance, include disciplined financial management; service transformation; promotion of economic growth; improving our tax take; and ensuring a financial return from States’ assets. All are necessary, as Deputy Fallaize put it, but not sufficient. All are perfectly adequate responses to that particular challenge in isolation.
But what happens when we start to integrate our social and economic objectives when shaping our policy response? What happens if we work in the idea of being a happy, healthy or inclusive community into our financial planning? How would these policy objectives evolve if we caveated the need to return to budget sustainability with the requirement that this should be done in a way that actively minimises inequalities in health or improves educational outcomes across our population, for example? What if the President’s foreword had recognised the need to achieve budget balance, but – in the words of one of my colleagues on the Committee for Employment and Social Security – acknowledged that no decent government should balance its books on the backs of the poor?
The objectives that we bear in mind when we set our Budget, and the objectives that we monitor when we consider our Accounts, influence what we as a States consider to be important, and shape how we behave and what we prioritise, both collectively and within our Committees. Financial balance is part – an important part – of the picture. I agree we must continue to treat it as a priority. But it is of little value of itself, unless we also understand what it is we’re supposed to be doing, for the people of Guernsey and Alderney, with the money that we do have. That’s an area which needs more work. And it’s not simply the question of developing a vision, which I’m sure the President will reference in his summing up – it’s a question of integrating those values into the day-to-day work that we do, and how we monitor what we’ve achieved.
Sir, this was not the Accounts speech I had intended to write. I had expected to be giving an impassioned defence of my much-loved and much-despaired-of Health and Social Care Committee. After all, its financial position is obligingly dramatic, and demonstrates the significance and complexity of the work which we must do.
But, since I’ve found myself a member of the Committee, I do not wish to protest too much or too often. We have challenges which are well-known, and which we will continue to work through, as those before us have done. I happen to share Deputy Roffey’s view, expressed last time, that all those who have tried their hand at running HSSD have done so with extraordinary commitment and integrity, and that none of them deserved the way the Assembly treated successive Health boards during the last term. I believe my President and fellow Committee members will continue to do the same, and I trust that this Assembly will be wiser to the complexity of the challenges that are faced by HSC, and the fundamental importance of a sustained period of stability in achieving the kinds of long-term change we need to see in health and social care. I hope our President’s commitment to openness, which will no doubt be evident in her own speeches, will help to demonstrate how we are dealing with the many financial, social and ethical challenges the Committee must face – not just in the once-a-year update provided by the Accounts, but on a regular and ongoing basis.
In closing, Sir, I have rather laboured the point, this morning, that unless our social and economic objectives are integrated with each other, and unless we are conscious of them both when we are planning our finances, the achievement of one will inevitably lose out to the other. I’ve laboured it because I believe we can do it. I agree as much as the next person that a long-term financial imbalance is not desirable, and that closing the deficit must be a priority for this States. We may, of course, disagree on how that should be achieved – but we must surely agree that, in doing so, the social consequences of our actions must carry equal weight with the financial ones; and that we must seek to attain our fiscal objectives in a manner which is consistent with our broader duties to the community. I believe that we are a States who will prove that we are capable of using public money both prudently and purposefully. We must make it a priority to do so.