Guernsey Community Foundation Voluntary Sector and Social Policy Newsletter October 2016
Welcome to the latest edition of the Guernsey Community Foundation’s Voluntary Sector and Social Policy newsletter. My name is Niki Cleal and I have taken over from Emilie Yerby as the Guernsey Community Foundation’s Policy Director and I lead the Foundation’s work on social policy and research. I also support an umbrella organisation of charities and organisations working for, or with, older people, called Ageing Well in the Bailiwick.
As many of you will know Emilie was elected as a People’s Deputy in this year’s General Election. You can read more about Emilie’s current work as a Deputy in the States of Deliberation in her blog http://emilieyerby.com/blog/
About Niki Cleal Immediately before joining the Foundation I was commissioned by the States of Guernsey to assist in the development of the Social Security Department’s proposals for a Secondary Pensions System which were agreed by the States Assembly and will lead to the introduction of automatic enrolment in private pension saving. This project gave me a really helpful insight into the States’ policy making process.
From 2006-2013, I was the Director of the Pensions Policy Institute, an educational research charity based in London, with overall responsibility for leading and managing the charity where I oversaw a large number of research projects on pension reforms in the UK and was involved in a number of UK Government reviews.
Prior to this I spent ten years working as a Civil Servant in the UK Government, at HM Treasury and at the NHS Executive in Leeds, including three years working on health policy. I was born and educated in Guernsey and have a BA (Hons) Economics from Cambridge University and an MBA from INSEAD. I now lead the Foundation’s work in the broad area of Social Policy and lead on the Foundation’s projects and research.
If you read anything of interest or concern in this newsletter and you would like more information, or if you or your colleagues would like to sign up for regular updates, please don’t hesitate to get in touch. This newsletter is produced with the aim of supporting effective working between the voluntary and community sectors and the States, and we welcome feedback or suggestions for improvement at any time.
Niki Cleal, Policy Director, Guernsey Community Foundation E-mail: [email protected] Tel: (01481) 748056 1 of 8
States Re-organisation
As part of the re-organisation of the States from 1 May 2016 there is now a Policy and Resources Committee headed up by the Committee’s President, Deputy Gavin St Pier, and six Principal Committees replace the ten previous Departments of the States of Guernsey. There are also a number of Authorities, Boards and Commissions.
From the 1st May 2016 the States of Guernsey meets approximately every three weeks, except in school holidays, to discuss and debate reports, draft legislation and other matters.
Who’s Who in the new look States?
Policy and Resources Committee – President, Policy and Resources, Deputy Gavin St Pier.
Policy and Resources Committee Members: Deputy Al Brouard, Deputy Jonathan Le Tocq, Deputy Jane Stephens, and Deputy Lyndon Trott.
The Six Principal Committees and their Presidents are:
Committee for Home Affairs – President, Deputy Mary Lowe
Committee for Health & Social Care – President, Deputy Heidi Soulsby
Committee for the Environment & Infrastructure – President, Deputy Barry Brehaut
Committee for Employment & Social Security – President, Deputy Michelle Le Clerc
Committee for Education, Sport & Culture – President, Deputy Paul Le Pelley
Committee for Economic Development – President, Deputy Peter Ferbrache
For the full remits and membership of States Committees and the Authorities, Boards and Commissions of the States see the following link: https://www.gov.gg/constitution.
Other States appointments of note of relevance to the voluntary sector include:
Deputy Jane Stephens is the social policy lead on the Policy and Resources Committee
Deputy Sarah Hansmann- Rouxel – the new Disability Champion for the States
Deputy Lindsay de Sausmarez – political representative for Ageing Well in the Bailiwick – an umbrella organisation of 30 charities and organisations working with, and for, older people in the Bailiwick of Guernsey
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What’s coming up in the new States - Overview
There are a number of States meetings coming up in November and December 2016. Some of these are Special Meetings to consider particular items of States business.
1st November 2016 – Special meeting for the States to debate the 2017 Budget proposals
2nd November – continuation of the debate on Island Development Plan and other States business including the Committee for Employment and Social Security’s uprating report to increase benefit and contribution rates and proposals to increase the minimum wage
15th November 2016 – Special meeting to consider Phase 1 of the Policy and Resources Plan
30th November 2016 – regular States meeting
14th December 2016 – regular States meeting
What’s in the States this month (November)?
This briefing covers items that will be debated by the States in their November States Meetings on 1st, 2nd and 15th November 2016.
Items that may be of interest from a voluntary sector or social policy perspective include: Budget 2017 The States’ review of charity financial support The Island Development Plan Proposals to increase the minimum wage and benefit and contribution rates Phase 1 of the Policy and Resources Plan
Budget 2017
On 3rd October 2016 the Policy and Resources (P&R) Committee published a draft Budget for 2017 which aims to achieve a balanced budget in 2017. In order to achieve a balanced budget in 2017, the burden has been shared between a reduction in public expenditure and revenue raising measures at a ratio of 2:1. The budget for public expenditure has been reduced by some £10 million, by comparison, tax and duty increases are around half this level at £5.4 million.
Some of the key Budget 2017 measures announced include: Personal income tax allowances increased to £10,000 The gradual withdrawal of personal income tax allowances for high earners, at a rate of £1 for every £3 that a person's income exceeds £138,684 a year reform of the document duty regime, which will reduce the tax paid when buying a property for less than £800,000 Removal of the age-related additional personal allowances for anyone turning 65 from 2019 and removal of the dependent relative allowance for new claims from 2018 3 of 8 In addition, P&R are proposing a number of tax and duty increases for 2017 including:
Domestic Tax on Real Property and land rates to increase by 10.5% Commercial Tax on Real Property to increase by 5% A 5.6% increase in the duty on cigarettes A 2% real-terms' increase in the duty on alcohol A 5p increase in the duty on a litre of fuel
Public expenditure is planned to be reduced in real-terms by 3% in 2017, 5% in 2018 and 5% in 2019. It is not entirely clear where those public expenditure cuts will fall, the relevant Committees will need to identify potential public expenditure savings, but one specific area which has been identified is that the Committee for Employment and Social Security’s Social Welfare Investigation Benefits Review reforms to supplementary benefit and rent rebate are likely to be delayed.
P&R have produced a one page summary of the Budget 2017 measures: https://www.gov.gg/CHttpHandler.ashx?id=104352&p=0
Further details of the Budget 2017 including the full budget report can be found at the following link: https://www.gov.gg/article/156293/2017-Budget-report-released
The Budget report will be debated by the States on 1 November 2016. See the link to the Billet d’Etat and any amendments which are to be debated here:- https://www.gov.gg/article/156292/States-Meeting-on-1st-November-XXVI
GCF Comment: While we support the increases to the personal tax allowances and the reform to document duty which are likely to benefit low income households and purchasers of lower value properties, we are concerned about the potential combined impact of public expenditure cuts and increases in taxes on households on low incomes. In particular, the Foundation is concerned about the delay to the introduction and the lack of consultation on the Social Welfare Benefit Investigation Committee’s (SWIBC) reforms to supplementary benefit and rent rebate, which will mean that the 1,200 households and families who stood to gain from the SWIBC reforms will not do so. GCF will be meeting with the Policy and Resources Committee and the Committee for Employment and Social Security to discuss our concerns.
States’ Charity Financial Support Review The Association of Guernsey Charities has lobbied the States for the introduction of tax relief on charitable giving. In its Budget report Policy and Resources Committee has effectively ruled out applying tax relief to charitable giving for 2017.
The Policy & Resources Committee met in September 2016 and unanimously agreed that while there were strong arguments in favour of some form of tax relief on charitable donations in the future, the financial constraints and reduction in tax revenue in the overall budget meant that it would not be possible to introduce tax relief on charitable donations in 2017.
However, Policy and Resources Committee has said that it will conduct a more wide-ranging and detailed review of potential measures to support the voluntary and charitable sector – including different levels of
4 of 8 tax relief on charitable donations and payroll giving – in partnership with the Association of Guernsey charities in time for it to be considered for 2018.
Deputy Jane Stephens has written to members of the Association of Guernsey Charities explaining the reasons for this decision and what happens next. The letter can be found on the Guernsey Disability Alliance’s website at the link here:- http://disabilityalliance.org.gg/blog/2016/10/tax-relief-charitable-giving/
GCF Comment: The Foundation supports the principle of the introduction of tax incentives to encourage charitable giving but recognises that the public finances are currently very constrained and that introducing such tax incentives would lead to a loss of States' tax revenue. We welcome the proposed review by Policy and Resources Committee to consider potential measures to support the voluntary and charitable sectors in this regard. The Foundation would be keen to provide input into this review.
The Island Development Plan The Island Development Plan (IDP) sets out the land planning policies for the whole of Guernsey in a single document, and has been prepared to replace both the Urban Area Plan and the Rural Area Plan both of which will cease to have effect on 2nd December 2016. The IDP has been prepared by the Development & Planning Authority to be consistent with and taking into account strategic guidance and direction set out within the Strategic Land Use Plan, which was approved by the States in November 2011.
The Island Development Plan runs to over a thousand pages, spread over two reports and eleven appendices, plus extensive supporting guidance and technical background. Further details can be found at the following link:-https://gov.gg/planningpolicy
The agenda for the States meeting on 2nd November and the Billet d’Etat can be found here:- https://www.gov.gg/article/156237/States-Meeting-on-2nd-November-XXVII
The States will continue debating the Island Development Plan at their meeting on 2nd November 2016.
Minimum Wage Proposals The Committee for Employment and Social Security has published a Policy Letter for consideration by the States of Deliberation on 2nd November 2016 that proposes an increase in the minimum wage in the Bailiwick of Guernsey payable from 1 January 2017 to
Adult minimum wage rate: £7.20 per hour (for workers aged 18 and over), (up from current rate of £6.85 per hour, a proposed increase of 5.1%) Young person’s minimum wage rate: £6.50 per hour for workers aged 16 and 17) (up from current rate of £6.10 per hour, a proposed increase of 6.6%).
The minimum wage proposals will be debated in the States on 2nd November 2016 and the Policy letter with further details can be downloaded here:- https://www.gov.gg/CHttpHandler.ashx?id=103977&p=0
Any charities which employ staff at the minimum wage rates will need to review their hourly rates of pay in line with the new minimum wage agreed by the States in time for 1 January 2017.
5 of 8 GCF Comment: The Foundation’s view is that the proposed increase in the minimum rate from 1 January 2017 is a step in the right direction, although we are disappointed that it doesn’t go as far as we would have liked as we set out in our submission to the Commerce and Employment Department. In our submission, we suggested that an increase in the minimum wage to £7.85 per house (for workers aged 18 and over) would be more in line with the proposed levels of minimum income used to inform the work of the Social Welfare Benefit Investigation Committee.
Proposals to Increase Benefit and Contribution rates The Committee for Employment & Social Security has produced its annual report for the 2017 benefit and contribution rates. The proposals will be debated by the States in early November 2016, following the 2017 States Budget.
Old age pensions will increase by £1.64 per week from January 2017, to £206.09 for people with a full contribution record. This is an increase of 0.8% and is in line with the pensions uprating policy that the States approved last year. 0.8% being approximately one third of the difference between the June 2016 RPIX figure of 0.6% and the December 2015 median earnings index of 1.3%. The 0.8% uprating applies to all contributory benefits, except for long-term care benefits, which will increase by 0.6% for 2017.
Contribution rates will increase from January 2017, resulting from previous decisions made by the States. In line with a decision of the States made in November 2015, the contribution rate for employers and employed persons will increase by 0.1% each in order to fund the new package of parental benefits, which are being implemented on 1st January 2017.
Following the February 2016 States debate on the Supported Living and Ageing Well Strategy, the previous States agreed that the long-term care insurance scheme contribution rate should be increased by at least 0.5% from 2017 in order to improve the sustainability of the Long-term Care Insurance Fund. Until more is known about the future scope of the Long-term Care Insurance Scheme, the Committee is proposing the minimum increase of 0.5% for 2017. This increase will apply to all classes of contributors, including pensioners. The extra 0.5% will not apply to employers, as they do not contribute to the Long-term Care Insurance Fund.
In addition, the Committee's main recommendations are to:
Increase long-term care benefits and non-contributory benefits by 0.6%, being equal to the June 2016 RPIX figure, excluding family allowance and the supplementary winter fuel allowance. The rate of the winter fuel allowance follows the cost of fuel, light, and power, reported in the States of Guernsey's Inflation Bulletin for June 2016, which reported an annual decrease of 5.9%. The fuel allowance will be £26.03 from the end of October 2016 to end of April 2017. Reduce family allowance by £2.40 per week per child from 1st January 2017. The benefit had been frozen at £15.90 since 2013, in line with the views of the previous Social Security Department, and the views of the States during the March 2015 debate on the Personal Tax, Pensions and Benefits Review. The States requested that the Committee make this reduction to £13.50 during the States debate in November 2015, on the then Education Department's Policy Letter on the transformation of early years education. This was in order that the cash limit for the Committee for Education, Sport & Culture could be increased to part fund the new universal entitlement to pre-school education. A part of the saving generated from the reduction in family allowance will be transferred to the supplementary benefit budget for 2017, in order to ensure that families in receipt of supplementary benefit will not be affected by the reduction in the family allowance payment. 6 of 8 Increase the prescription charge by ten pence to £3.80 per item for all those who are not exempt from paying the charge.
The full uprating report is available here:- https://www.gov.gg/article/156228/Benefit-and- Contribution-Rates-for-2017
GCF Comment: The Foundation notes that the Committee for Employment and Social Security has reduced its uprating policy for the Old Age Pension from the mid-point between RPIX and average earnings, to one- third of the difference between RPIX and average earnings. This indexation policy means that over time the value of the Old Age Pension will decline relative to average earnings. The long-term intention of the Committee is to index the Old Age Pension to prices from 2025, pending the introduction of the Secondary Pension proposals. The impact of uprating the Old Age Pension by prices rather than earnings on levels of poverty among pensioner households will need to be closely monitored.
In addition, contribution rates for social security for employers and employed persons will increase by 0.1% each in order to fund the new package of parental benefits, family allowance is being reduced and the contribution rate to the long-term care insurance scheme will increase by 0.5% in 2017. The States will need to monitor the overall impact of these contribution rises and benefit reductions on low income households.
Phase 1 of the Policy and Resources Plan – Future Guernsey On 10 October 2016, the Policy & Resources Committee published the first phase of the Policy & Resource Plan which will be debated by the States on 15 November 2016. This phase is known as 'Future Guernsey'. It sets out Policy and Resource Committee’s vision for where the island should be in 20 years' time. It is a 'programme for government' expressing what the States will be doing. Future Guernsey will provide the basis for the second phase of the Policy and Resource Plan which will be developed in the coming months. Phase two of the plan will set out a programme for Government for the period 2017 to 2021 and will be debated by the States in June 2017. It is a plan for the community, not just a plan for the States of Guernsey.
Further information of Phase 1 of the Policy and Resources Plan is available at the following link:- https://www.gov.gg/policyandresourceplan
GCF Comment: We welcome Policy & Resources Committee’s ambitious aim to identify a vision for the future of Guernsey that focuses on the outcomes that the States of Guernsey would like to achieve over the next 20 years. The Foundation has welcomed the engagement that it has had in this process to date.
If the States approves the high level vision, then the hard work will really begin in the next phase as the Principal Committees develop their own individual plans and the Policy and Resources Committee begins the difficult prioritisation process in order to develop an overall programme of Government for the States of Guernsey. Inevitably, this prioritisation process is likely to lead to some difficult choices and trade-offs about which States’ projects to prioritise and which to delay or not progress.
We welcome the recognition that the plan cannot be delivered by the States of Guernsey alone and that the States will need to work in partnership with business and community groups to achieve the plan’s objectives.
7 of 8 What consultations are now open? There are no formal departmental consultations that are currently open that we are aware of. However the voluntary sector should look to engage with the States Charity Financial Support review and should look out for further information from Policy and Resources as this review is initiated. It is likely that the States will ask for initial contributions to this review by 31 December 2016, and the review will need to come up with proposals by July 2018 if they are to be considered in time for the 2018 Budget.
If you are aware of an open consultation that you think the voluntary sector should be made aware of please e-mail Niki Cleal at [email protected].
What new reports have recently been published?
You might want to dip into the latest edition of the States’ own newsletter, The Changing Times, the latest edition was published in October 2016. You can read the newsletter online here, and sign up for future updates by emailing [email protected].
In Closing If you have found this newsletter helpful and would like to sign up for future updates, or if you would like more information on anything mentioned here, please contact Niki Cleal on [email protected] or phone (01481) 748056.
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