Friday 21 March 2025
General Update
Sir,
This is the last President's Update that I'll have the privilege to give, at least as ESS President, so I'd like to mention some of the Committee's main achievements during this political term.
Top of the pile, in my view, is the implementation of the Secondary Pensions Law, 2023, which came into force on 1st October 2023. This places a statutory obligation on all employers in Guernsey and Alderney to automatically enrol their employees in a workplace pension scheme. Unless they opt-out, employees will build up a private pension through their contributions and those of their employer.
The auto-enrolment duty is being phased in by employer size (based on the number of employees) between July 2024 and October 2025. The minimum amounts employers and employees are required to contribute are also being phased in, reaching their full amount, 10% of earnings, in 2032.
I may be biased, but I think this is one of the most significant achievements of the Assembly this term - importantly noting that the groundwork was laid by my predecessors, former Deputies Allister Langlois and Michelle Le Clerc, and their Committees.
The equivalent policy in the UK, introduced from 2012 onwards, has led to a tenfold increase in total membership of defined contribution occupational schemes.
I have no doubt that the provision of a second-pillar pension in Guernsey and Alderney will both lead to more comfortable and secure retirements and reduce future reliance on taxpayer-funded income support.
The approval of Guernsey's Prevention of Discrimination Ordinance in 2022 was also a big achievement for this Assembly, which had been promised for many years. It prohibits discrimination, harassment and victimisation on the grounds ofrace, disability, carer status, sexual orientation and religion or belief in the workplaceand in wider society.
The Committee recently carried out an interim review of the Ordinance and the outcome, plus proposals to prohibit age discrimination, will be published next Monday for consideration in April.
When the law came into force the Employment Relations Service morphed into the Employment and Equal Opportunities Service, or the 'EEOS'. This is Guernsey's independent authority for providing advice, guidance, and dispute resolution services in the fields of employment and discrimination law.
Its vision is to promote an inclusive society where everyone has an opportunity to secure employment, is treated fairly at work, and can enjoy equal access to goods, services, and education.
The first annual report of the Director of the EEOS will also be published next Monday and makes for interesting reading. It demonstrates that this legislation is required, but that concerns it would 'open the floodgates' to many opportunistic employees and members of the public filing complaints which might be frivolous or malicious, were misplaced.
Almost 50% of complaints have been resolved through conciliation, demonstrating the important role of alternative dispute resolution. 16 formal complaints were lodged with the Tribunal under the Prevention of Discrimination Ordinance during the fifteen-month period covered by the report.
Moving onto the Affordable Housing Development Programme. The States of Guernsey, working in partnership with the GHA, have been successful during this term in securing a pipeline of land for the development of Affordable Housing in future, but the number of properties constructed has been disappointing, although progress is now accelerating.
Since the start of this political term 72 units of Affordable Housing have been completed across seven different sites. A further 29 units are currently under construction.
Of course, we would've liked to have built many more Affordable Housing units during this term, but the pace of the Programme has been affected by a number of factors outside our control.
We continue working closely with the GHA to deliver additional Affordable Housing units, and work is also underway by E&I to develop alternative delivery approaches to supplement the GHA's capacity.
Housing development by its nature takes time due to the need to identify the right sites, purchase them and then plan the sites, with a lot of this type of work having been undertaken during this term. This should allow for a major acceleration over the next few years.
One of the keys to making that a reality is the St Sampson's Strategic Delivery Framework, which the Committee commissioned from Savills Urban Design Studio. This will be signed off this term and provides a holistic approach for delivering the allocated housing sites in the area which puts sustainable living at its core.
The sites covered by the framework have the potential for around 1,000 new homes (expected to be a mix of private and Affordable Housing tenures), and the framework's approach sets out to create safe and well connected communities; and diverse neighbourhoods where people want to live, work, and spend time.
During this term of government, and against a backdrop of unusually high inflation, the Committee has focused on policies to improve the financial position of low-income households.
The arbitrary limit on the weekly income for people living in the community in receipt of income support has been scrapped. This provision had a major impact on larger families, which is some cases led to significant childhood poverty, or parents going without essentials themselves. Frankly it was a real stain on Guernsey's social policy and I am so pleased that the States voted overwhelmingly to rescind it.
Also, on the theme of helping those on the lowest incomes, emergency and interim increases to income support rates were implemented in October 2022 and August 2023 to support low-income households facing financial pressure during what was an extended period of high inflation. I thank the States for their support.
Although delayed because of the economic impact of the Covid-19 pandemic, States approved targets for the rates of the Adult and Young Persons' Minimum Wage were achieved with effect from 1 st October 2024. Over a period of six years, the Adult Minimum Wage Rate has increased from £7.75 per hour in 2018, which was equivalent to 50.7% of median earnings based on a 40-hour working week, to £12.00 per hour, which is equivalent to 60% of median earnings.
The Committee has also taken measures to better target non-contributory benefits at those who most need them.
Family allowance was a universal benefit until the end of 2021. With effect from 1 st January 2022, an annual household income limit of £120,000 was introduced (now £125,000). Savings arising from the introduction of the cap are used to fund the provision of children's services, including subsidised primary care appointments, an annual free dental check-up, and cultural enrichment activities in schools.
Targeted additional financial support for low-income informal carers has been implemented through income support, and the scope of the scheme that provides support to people who are just outside the reach of income support with assistance with their medical and paramedical expenses, has been increased.
A compensation scheme for people with diffuse mesothelioma, which is caused by exposure to asbestos, was introduced, on a non-statutory basis, in January 2021.
It's absolutely essential, against a backdrop of an ageing population and increasing dependency ratio, to maximise participation in work.
The Committee has made some policy changes intended to nudge parents back to work in a way that is sensitive to the important role of parents of young children.
From September 2024, single parents in receipt of income support, or the member of a couple in receipt of income support who is primarily responsible for childcare, are expected to work part-time when their youngest child turns three (this age was previously five).
From January 2025, the upper age limit of a child in respect of whom an individual is eligible to receive family allowance credits was reduced from under 16 years to under 12 years, except in certain limited, specified circumstances.
The Committee has also increased investment in targeted support services, delivered by third sector organisations, for people who have various barriers to work.
The Committee entered into a ten-year index-linked funding arrangement with GROW. This provided a strong foundation on which the charity was able to raise the significant amount of money necessary to develop their fantastic new training facility at Verte Rue.
The Committee has also substantially increased its grant funding to the Guernsey Employment Trust, which does fantastic work to support disabled and disadvantaged people to prepare for, find and maintain work in Guernsey.
Successful partnerships have also been developed with Guernsey Caring for Ex-Offenders, GO, GSPCA, Unlimited and Les Cotils. Grants enable these organisations to provide tailored support, training and supervision to individuals referred to them by the Job Centre, to help them secure suitable and sustainable employment.
The outcomes have been positive for many individuals and for the public purse - with the value of the grants paid being offset in full by the benefit savings arising from individuals entering employment. Not to mention the other, more difficult to quantify, benefits for the individuals concerned and society as a whole, such as improved mental and physical health, reduced re-offending, etc.
The Supporting Occupational Health & Wellbeing Programme, or SOHWELL, has also made great progress during this term.
The SOHWELL Programme was instigated by the former Committee in response to a rising trend in long-term incapacity benefit claims. The Programme recognised that to stem this rising trend, there was a need to transform the way short-term sickness claims were managed to reduce the number that became long-term.
The Programme is founded on the principle that, in many cases, it is better for a person's long-term health and wellbeing to be in work. This ensures that, where appropriate, people who have an illness, injury or disability are supported early to help them stay in work or get back to work more quickly. The Programme has therefore had a strong focus on occupational health, prevention, and early intervention.
Phase one delivered a redesigned medical certificate and work capability assessment, and resulted in case managers and doctors working in a different way and with a greater emphasis on occupational health and vocational rehabilitation.
Phase two focused on employer engagement and raising awareness of the important relationship between work and health.
And phase three, which has progressed during this political term, aims to create a roadmap to enhance and maximise the effectiveness of services that increase workforce participation. A key aspect of this is to focus on prevention and early intervention initiatives while raising community awareness and understanding of the aims of occupational health. The product of this work, a Work and Wellbeing Strategy, is expected to be published by the Committee before the end of quarter 2 - so watch this space.
At an operational level, a number of large change programmes have been successfully implemented.
Through the (now closed) MyGov Programme, the Customer Hub was formed within Edward T Wheadon House during 2022 delivering a range of services, including some on behalf of ESS.
Following a period of live running, a restructure of the Customer Hub and Committee services has taken place and been implemented from January 2025. For those services for which ESS is responsible, this restructure is expected to strengthen customer service through more efficient decision making and an even greater focus on return-to-work initiatives and support.
In 2024, the Revenue Service Transformation Programme migrated all Contribution Records, Life Events, Status and Financial Records off the Legacy Contributions mainframe system. This involved over 130 million records being extracted, prepared, signed off by the Service and loaded into new systems.
This move removed a significant number of risks to contribution data while they were held in legacy servers, and the increased automation and speed of contributions processes will provide new opportunities for policy enhancements.
The Committee has taken proactive measures to improve the financial position of the Guernsey Insurance Fund and the Long-term Care Insurance Fund. In late 2021, the Committee secured in-principle States approval to gradually increase social security contribution rates. Four annual increases have been implemented since this time.
On 1 st January 2021, the balance of the Guernsey Insurance Fund was £705.3m, which was equivalent to about 4.4 times annual expenditure. By the end of 2024, the balance had increased to £763.9m, although expenditure cover had reduced to 3.8 times annual expenditure, reflecting the significant financial pressure being experienced by this Fund principally due to the ageing population.
On 1 st January 2021, the balance of the Long-term Care Insurance Fund was £101.0 million, which was equivalent to 4.9 times annual expenditure. By the end of 2024, the balance had increased to £178.0m, which was equivalent to 6.9 times annual expenditure.
This trend of increasing expenditure cover is not expected to continue in the long-term as benefit rates are set to increase in July 2025 to stabilise and incentives growth in the private care home market, and demand for bed-based long-term care is projected to increase significantly in the decades to come.
Further work will need to be done during the next term of government to reform and reshape the current model of community long-term care to improve user choice and deliver efficiencies and cost savings.
And finally, I'd like to conclude by thanking the Committee's staff who take pride in their work and strive to provide excellent service to our customers and to the Committee. In my long political service, I have worked with many fantastic teams of public servants but few, if any, better than the amazing staff at ESS - from housing to pensions and from Income Support to Legal Aid. I do wish we all spent a little more time acknowledging the very many fantastic public servants Guernsey is so lucky to have.