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THE government’s “plundering” of the Social Security Fund could be blocked if politicians back an amendment to the 2026 Budget proposals. Deputy Sir Philip Bailhache said he wanted to “lay down a marker” that would persuade ministers to scrap plans to reduce the annual States grant to the fund over the next four years. The Budget, due to be debated in December, sets out the intention to cut the annual grant by around £50 million across the next four years. “I think that the fundamental problem is that the plundering of the Social Security fund comes about because we are spending more than we earn,” Deputy Bailhache told the JEP. “We are spending roughly £50m a year more than our income, so the grant is being reduced to accommodate that overspending. “The plan is to continue this overspending for four years to 2029, but worse than that, there’s no plan to stop the overspending – this is a continuing liability. “What happens after 2029? Do we continue to plunder the Social Security fund?” The government should find a different way of plugging the gap, Deputy Bailhache argued. “The issue for a backbencher like me is, what can one do to stop it? The budget debate is the only opportunity to try to lay down a marker for the government, to try to persuade it to mend its ways.” Chief Minister Lyndon Farnham has previously sought to reassure States Members that the reserve fund is in a “strong state”, having grown to around £2.5 billion. Although he is still finalising details of his amendment, Deputy Bailhache said reducing the size of the public sector workforce would be a step in the right direction. “Between 2018 and 2023 the workforce grew by 21.5%, which is a staggering increase,” the St Clement representative said. “The numbers went up roughly from 8,000 to 10,000 – even if we reduced the number by 10% down to 9,000 over a period of years, that would make a significant difference, so one of the things that I shall be saying during the Budget debate is that the civil service ought to be mandated to cut the workforce.” Deputy Bailhache also questioned the government’s reliance on advice provided by the UK government actuary’s department in 2021, which ministers in Jersey have used to demonstrate the good health of the Social Security Fund. “The government first of all quoted advice that not paying this money into the Social Security fund was not going to affect the ability of the fund to provide pensions in the future, but what we now learn is that the actuaries’ calculations have been based upon assumptions which they have been told to make by the minister. “One of those assumptions is that the investment return throughout the projected period will increase by 1% per annum.” A letter from the UK actuaries sent last month and released by Jersey’s government this week said that further advice could be provided on whether the 1% assumption was reasonable. The Health and Social Security Scrutiny Panel, of which Deputy Bailhache is a member, held a public meeting with Social Security Minister Lyndsay Feltham last week in which they called for the government to take up the “further advice” offer from London as a matter of urgency.
