2019-20 Budget

[Pages:130]2019-20 Budget

A Budget of Confidence

Isle of Man Budget 2019-20

Table of Contents

Table of Contents

1. INTRODUCTION FROM THE MINISTER - BUDGET REPORT 2019-20 ........................................ 3

2. OVERALL FINANCIAL SUMMARY FOR REVENUE & CAPITAL ..................................................... 5 2.1. Government Revenue Forecast 2019-20 TO 2022-23........................................................ 5 2.2 Government Capital Forecast 2019-20 TO 2022-23 .......................................................... 5

3. 2019-20 BUDGET HEADLINES............................................................................................... 6

4. THE FIVE YEAR FINANCIAL PLAN.......................................................................................... 7

5. REVENUE ? INCOME ...........................................................................................................13 5.1. 2018-19 Performance ? Treasury Income.......................................................................13 5.2. 2019-20 Budget Overview.............................................................................................13 5.3. Customs & Excise.........................................................................................................14 5.4. Income Tax .................................................................................................................15 5.5. Departmental Fees & Charges .......................................................................................18 5.6. Investment Income ......................................................................................................18

6. REVENUE ? EXPENDITURE ..................................................................................................19 6.1. 2018-19 Performance - Expenditure...............................................................................19 6.2. 2019-2020 Budget........................................................................................................20 6.3. Pay Costs ....................................................................................................................21 6.4. Public Sector Pensions ..................................................................................................23 6.5. National Insurance and Welfare Benefits ........................................................................24 6.6. Non-pay costs..............................................................................................................24 6.7. Contingency Funds.......................................................................................................25 6.8. Loan Charges and Capital Financing...............................................................................25 6.9. Grants Payable.............................................................................................................26

7. THE CAPITAL PROGRAMME .................................................................................................27 7.1. Overview.....................................................................................................................27 7.2. 2018-19 Performance ...................................................................................................27 7.3. 2019-20 Budget ...........................................................................................................28 7.4. The 5 year Capital Programme ......................................................................................35

8. THE RESERVES...................................................................................................................38 8.1. External Reserves.........................................................................................................38 8.2. Internal Reserves .........................................................................................................39 8.3. Reserves 2018-19 Performance .....................................................................................40 8.4. Reserves 2019-20 Projected Income & Expenditure.........................................................41 8.5. Reserves Projected Future Expenditure ..........................................................................42

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Table of Contents (Continued)

Isle of Man Budget 2019-20

Table of Contents

APPENDIX 1 - ANALYSIS OF TREASURY INCOME .........................................................................43

APPENDIX 2 - NATIONAL INSURANCE ACCOUNT .........................................................................44

APPENDIX 3 - WELFARE BENEFIT PAYMENTS..............................................................................45

APPENDIX 4 - REVENUE EXPENDITURE IN DETAIL BY DEPARTMENT, OFFICE OR BOARD...............46 4.1. Department for Enterprise (DFE) ......................................................................................46 4.2. Department of Education, Sport and Culture (DESC) ..........................................................50 4.3. Department of Environment, Food & Agriculture (DEFA).....................................................53 4.4. Department of Health & Social Care (DHSC) ......................................................................57 4.5. Department of Home Affairs (DHA)...................................................................................60 4.6. Department of Infrastructure (DOI) ..................................................................................64 4.7. The Treasury ..................................................................................................................69 4.8. Cabinet Office .................................................................................................................72 4.9. Executive Government.....................................................................................................76 4.10. Manx Museum and National Trust..................................................................................81 4.11. Legislature (Parliament)................................................................................................85 4.12. Statutory Boards and Bodies (Revenue Funded)..............................................................88 4.13 Inter-Departmental Transfers ........................................................................................94 4.14. Statutory Boards (Non-Revenue Funded)........................................................................95 - Manx Utilities Authority ...........................................................................................95 - Isle of Man Post Office............................................................................................97

APPENDIX 5 - FULL CAPITAL PROGRAMME INCLUDING 2019-20...................................................99

APPENDIX 6 - CAPITAL PROGRAMME FUTURE SCHEMES ............................................................ 113

APPENDIX 7 ? EXPLANATION OF COLUMN 2 CAPITAL SCHEMES.................................................115

APPENDIX 8 ? EXPLANATION OF RESERVES..............................................................................122

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Isle of Man Budget 2019-20

Budget Summary Position

1. INTRODUCTION FROM THE MINISTER - BUDGET REPORT 2019-20 A Budget of Confidence

This is the third budget of my tenure, and it continues to support the main objectives set out in the Programme for Government; facilitating the development of an inclusive and caring society, enabling an Island of enterprise and opportunity and ensuring we remain financially responsible. It delivers continued growth in taxation receipts, sustainable investment in public services and further significant investment in our Island's infrastructure.

The budget also recognises the financial pressures that many people and families continue to experience. In previous budgets we have sought to bring as much relief as we can to the "family heartbeat" of our society and for the third budget in a row we will be increasing the Personal Tax Allowance and proposing an (above inflation) increase to child benefit.

Last year we brought forward ?1.5 million of additional funding for pre-school credits to help those with young children. This year we have ring fenced an additional ?1.5 million to help parents who are supporting higher education costs.

And it's not just child benefits that receive special attention. Above inflation increases are also applied to Employed Persons Allowance, Maternity Payments and Disability Premiums.

Our focus remains on supporting our working families and building an inclusive society. In doing so we remain adamant that welfare spending is appropriately targeted and fair, both in terms of the criteria for receipt and the recognition of our need to provide support to key groups.

In addition it is vital that our communities are confident that the Island is a healthy and safe place to live and work. We are therefore committing ?2.5 million to our Police Service that will enable them to provide more community resources to tackle criminal behaviour but also resource their ability to understand and engage where mental health problems are behind such issues.

The Department of Health and Social Care (DHSC) remains a critical area of concern. We recognise that the forthcoming report from Sir Jonathan Michael could result in significant changes and we stand by with a Healthcare Transformation Fund of ?5 million to act in accordance with Tynwald's decisions.

Tackling these issues is not feasible without a strong and healthy economy and we continue to support funding for business growth and development. In addition we will be encouraging new resident employees with a National Insurance Holiday Scheme which will provide an added incentive for relocation to the Island and aid employers with their recruitment programmes.

Our capital program will add to our economic performance and deliver solid infrastructure foundations for the future with a planned programme of almost ?479 million over the next five years. The 2019-20 programme will see a focus on our communication links with over ?5 million of work at the airport to maintain safety and security at our gateway with other jurisdictions and further development work on the Liverpool Ferry Terminal with significant investment of over ?6 million this year alone, subject to Tynwald's approval. Funding has also been made available for investigatory and design work for a cruise berth off Victoria Pier.

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Isle of Man Budget 2019-20

Budget Summary Position

BUDGET REPORT 2019-20 (Continued) To support on-Island communications there is a commitment to invest in increased fibre-optic connectivity and on-going investment in our transport infrastructure. This includes further investment of ?1.9 million in the bus fleet to reduce operating costs and improve environmental efficiency as well as a consolidated fund for our heritage rail assets. The budget will also see investment in the built environment with projects ranging from the Douglas Promenade scheme, through improved patient facilities on the DHSC estate, to investment to protect our towns and villages from the elements. To protect our population and maintain our reputation there will be investment in vehicles, equipment and software to tackle crime and promote safety. This budget predicts a surplus of ?28 million in the current year which exceeds expectations but nevertheless only just over halfway towards the estimated ?45m needed to meet the Public Sector pension shortfall from 2022. We cannot be complacent, but we can be confident. Confident that despite the backdrop of continued international, political and economic uncertainty, the Island is demonstrating remarkable resilience. Higher than expected income tax receipts reflect encouraging business performance and, across the Island, there is strong evidence of continued confidence as investors develop hotels, offices and houses alike. In a year that promises international political and economic turbulence, this budget provides a platform for confidence in our Island and the future. The environment around us is changing; but with change also comes opportunity. We must seek to recognise that we have solid foundations on which we can adapt to meet our challenges.

Alfred Cannan MHK Minister for the Treasury

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Isle of Man Budget 2019-20

Budget Summary Position

2. OVERALL FINANCIAL SUMMARY FOR REVENUE & CAPITAL

2.ernment Revenue Forecast 2019-20 TO 2022-23

In accordance with the Treasury Act 1985, the Treasury is pleased to present the revenue forecast for the Isle of Man Government for the financial year 2019-20, together with provisional projections for the following three years to 2022-23.

TABLE 1 - Government Revenue Forecast 2019-20 to 2022-23

Budget 2018-19 (1,001,633) 991,439 (10,194)

GOVERNMENT REVENUE FORECAST 2019-20 TO 2022-23

Probable

Budget

Provisional Budgets

2018-19 ?000 (1,019,771) Income

2019-20 (1,039,868)

2020-21 (1,071,962)

2021-22

2022-23

(1,099,966) (1,129,821)

992,004 Expenditure

1,037,822

1,053,943

1,069,961 1,128,231

(27,767) (Surplus)/Deficit

(2,046)

(18,019)

(30,005)

(1,590)

2.2 Government Capital Forecast 2019-20 TO 2022-23 Table 2 below shows the summary Capital Account including details of expected receipts and payments (based on adjusted expected capital expenditure levels) for the next financial year, 2019-20. Provisional projections have also been provided for the following three years to 2022-23.

TABLE 2 - Government Capital Forecast 2019-20 to 2022-23

Budget 2018-19 (62,530)

62,000 (530)

GOVERNMENT CAPITAL FORECAST 2019-20 TO 2022-23

Probable 2018-19 (63,305) 55,000* (8,305)

?000 Receipts Payments (Surplus)/Deficit

Budget 2019-20 (62,953)

70,511

(7,558)

Provisional Budgets 2020-21 2021-22 2022-23 (64,651) (65,879) (66,827)

85,991 68,934 68,934

(21,340) (3,055) (2,107)

45,946 530

46,476

58,753 8,305

67,058

Capital Account Balance B/F

Surplus/(Deficit) on Capital Account Capital Account Balance C/F

67,058 (7,558) 59,500

59,500 (21,340)

38,160

38,160 (3,055) 35,105

35,105 (2,107) 32,998

*Please note this is a 47% full year projection of total budgeted expenditure approved for 2018-19 - which Treasury has forecast based on expenditure for the year to date, prior year expenditure trends, and estimated expenditure to the end of the financial year.

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