Alderney’s draft budget for 2024 goes before the full States on October 11th with the good news that it is possible to wipe out this year’s deficit and turn it into a modest surplus instead.
A deficit in the revenue budget of £533,000 was forecast for 2023 but by careful management this is now expected to drop to £485,000 by the end of the year after a determined effort to reduce costs while improving services.
The deficit was necessary in order to pay for the provision of Primary Health Care and a safe and resilient Ambulance Service, both of which have been added to Alderney’s budget since 2022.
A 4% increase in Property Tax, well below the current rate of inflation, is proposed with the additional income of wise investment of reserves which could add more than £200,000 to the bottom line. It is proposed to combine these measures with further cost savings and increases to vehicle import duty and the first rise in water rates for several years.
Nigel Vooght (pictured), Chair of the Policy & Finance Committee, said: “Every department of the Civil Service and the States Members have worked hard to manage the deficit responsibly and thanks to this teamwork, we are on track to turn it from deficit to surplus next year. No one said it would be easy and while we fully expected this would take us down the route of increasing taxes while making efficiency savings across the board, we have been able to keep such tax increases well below the rate of inflation. Tax increases are never welcome, but many will breathe a sigh of relief that they are not as high as we might have expected in the current economic climate.
“We have grappled with the huge cost of taking primary care and the ambulance service under our wing and with this proposed budget, we have found a way. This has been achieved by a combination of belt-tightening and finding new revenue streams, together with the necessity of raising taxes, albeit by a lesser amount than might have been expected.”
Other measures to be debated and voted on by the States include:
- A proposed 5% increase in Water Rates which will be used to begin building reserves sufficient to pay for major works, such as the ongoing Mouriaux to Platte Saline sewer system and other improvements.
- A 50% increase in vehicle import duty intended to restrict the number of vehicles coming onto the Island. If agreed, this would be the first increase for seven years. Policy on larger vehicles will be discussed next year, especially in the light of public concern about oversized vehicles on the Island’s narrow streets.
- A slight increase in freehold document duty along with increased duty for long leases and share transfers. Although the high level of property sales experienced in 2021 and 2022 have not continued, the States expects sales figures to grow as the Island’s transport connectivity improves in the near future.
Alderney has also committed to a contribution of up to £3.5m to the costs of the airport regeneration project providing the runway extension goes ahead. This could be paid for from capital balances or borrowing, or a combination of both.
In the capital account, surpluses from the Alderney Gambling and Control Commission are expected to be in the region of £2 million this year, yielding £1.5 million after distribution to Alderney e-Gambling Limited, while next year this surplus is expected to be £2.4 million, yielding £1.78 million.