In February of last year I presented what I termed a budget of focus to grow the economy, deliver essential capital projects, support hard-working families and improve the lives of vulnerable members of our community.
The budget was one of quiet optimism based on a five year fiscal plan that was consistently delivering beyond our stated objectives and indeed the budget was further reinforced last year by the delivery of a fair and realistic agreement of the VAT share due to the Island from our calculated economic activity.
That budget moved us closer towards delivering better outcomes for our society based on our programme for Government and our desire to redress the balance of a harsh decade of wage deflation. It raised personal allowances for the fourth consecutive year, it raised child benefit for the fourth consecutive year, it built on the additional funding given to preschool education, it built on the additional support given to low income families with children at University, it added further funding to essential Police and public services, it gave more funding to health and social care and it further cemented funding in place for critical national infrastructure.
These and many other measures including our triple lock pension commitments have been the bedrock of this Governments fiscal policies to date. These policies have eased the cost of living for thousands of families, have helped address wage deflation and we have consistently invested money directly into the economy, creating job opportunities and growth that have supported the lowest unemployment figures on this Island for over twenty years.
And finally Mr President we set out last year to achieve a £12 million surplus as part of our fiscal rebalancing strategy. A budget of focus for an Island of focus.
Well I can tell you a year later we have been well and truly focused – but not perhaps in the way that was intended. We have been focused on stabilising our economy. We have been focused on protecting jobs and businesses. We have been focused on protecting public health and the NHS. And we have been focused on structuring our finances to provide both reactive and proactive support to our nation and our people in their hour of need.
That focus, that protection, that support means that the £12 million surplus forecast last year is today a forecasted £74 million deficit and is part of a total additional COVID pandemic cost to the Government finances of over £200 million pounds.
That focus, that protection, that support has meant we have reduced our cash balances by £146 million, seen our forecasted income reduce by over £80 million and spend over £100 million in direct financial support to our economy and our people. These figures may cause some to draw breath but Mr President at what price the health of the nation? What price the protection of jobs and business? What price the protection of critical national infrastructure? And what price our economic stability for the future?
The actions we have taken and the costs we have incurred has saved lives, has protected this nation, has protected jobs and the economy and indeed has protected public finances. The actions taken and costs we have incurred have been responsible and appropriate and left room for manoeuvre. They have left us optimistic that not only can we get through this crisis with our existing financial parameters, we can also invest to sustain our economy and build for the future.
So rather than a budget of gloom, I bring forward to you today, I would suggest a budget of resilience, a budget that yes reflects the fiscal toll of the past twelve months, but also a budget that reflects the fundamental structure and strength of our Island Nation and its people on all its economic, fiscal and social fronts.
This budget is one that will continue to stabilise our economy, protect our people, support our public services and exercise responsible financial management whilst ensuring that we continue to invest in our future.
Mr President, you need little reminding that in March last year large parts of our domestic economy were closed down with little warning and businesses had to adapt, with speed, to new challenges including issues with supply chains, remote working adaptations and the knock-on effects of the transmission of the virus in other countries.
Initial economic modelling predicted that the downturn from COVID-19 was expected to be harder in the Isle of Man than the 2008 global recession.
Our immediate response centred on the preservation of life due to the threat to health that the virus posed, but it was clear that the threat to our Islands economic future, and society, would have lasting implications if we did not provide clear, proactive and considered support to businesses and individuals who were affected through no fault of their own.
Just as we could not ignore the significant health risk posed, we could not ignore the risk that restrictions and lockdown periods posed to our economy and to the financial health of our people.
In response, we brought forward a comprehensive package of measures designed to protect jobs, stabilise the economy and lay the groundwork for a solid economic recovery.
Stabilising the economy
To date we estimate that 3,200 businesses and self-employed individuals will have received support totalling approximately £14 million through the Coronavirus Business Support Scheme.
Around 350 qualifying businesses in the Travel and Tourism sector are estimated to receive up to £11.5 million in support through the Strategic Capacity Scheme and other sector specific schemes.
We have protected the Island’s fishing industry with packages of support which could reach up to £1 million by April this year.
Government backed loan schemes have made available £50 million of loans through the disruption loan guarantee and working capital loan schemes and over £30 million of Government taxation payments were deferred, to provide respite for businesses and individuals at a time when they needed it most.
The Salary Support Scheme has supported almost 12,500 employees and we estimate will pay out over £61 million.
The Manx Earnings Replacement Allowance, or MERA, will have paid out approximately £9.5 million in addition to increased revenue welfare spending of £5.5 million.
Indeed at the peak of the first lockdown, 14,688 working residents were directly supported by our schemes and Support was delivered rapidly, conclusively and equitably.
I want to pay tribute to those officers across treasury and the department for enterprise who worked with urgency and total commitment to design, deliver and administer these schemes, that have proven so vital to so many.
Mr President, I have always maintained that our support would not be able to save every job, or account for every loss. But our dashboard of indicators, including current unemployment figures and income tax receipts demonstrates that these measures have positively impacted those sectors and those individuals who were in need.
I also want to pay tribute to so many across the private sector who adapted and managed their businesses so successfully, supported their employees and came together to find ways to drive their sectors forward. Your input, commitment and determination is to be applauded. Thank you.
Investing in our future
Mr President, these economic packages are stabilising influences but we also needed to consider economic stimulus. That is why in the Summer of 2020 I announced a £100 million economic recovery fund to protect jobs, stabilise our economy but also to invest in our future. The newly established Economic Recovery Group to lead a coordinated response to stimulate and regenerate the economy. We are prepared to provide support measures as necessary and are progressing opportunities for reskilling and education for our people, accelerating initiatives that benefit our Island, and creating opportunities to stimulate spending in our domestic economy.
Now is also the time to assess our future and The Economic Recovery Group has commissioned a new Strategic Economic Framework to provide the platform to drive forward the Island’s economy over the next 5 to 10 years.
This core piece of economic analysis and assessment will let us truly understand how each part of the Island’s economy functions and interacts with Government and other sectors.
The point of this strategy will be to be bold, to look across a wide range of opportunities and identify the opportunities where the Isle of Man can take advantage, or even lead the way on. It will draw on experts across a range of sectors, bringing views and analysis to help the Island find its place for the next 5 to 10 years and beyond
This Framework is being developed so that future administrations can understand the economic levers available to them and make informed decisions on the choice of policy options available, ensuring the Island has good, well-paying jobs that are the bedrock of our economy and finances. There will be proper engagement with a wide range of businesses and individuals and I expect this process to commence within weeks.
The Economic Recovery Group has so far approved funding for a wide variety of projects:
- £3 million to provide increased opportunities for Manx students to study at university;
- we have invested £1 million to date developing new training opportunities at UCM leading to 409 students being supported on courses;
- £500,000 to establish a new medicinal cannabis industry;
- An additional £1 million for the town and village regeneration scheme which will improve our environment to create opportunities for local businesses and contractors;
- £500,000 of grant funding to stage local domestic events driving footfall and economic activity in regions; and
- £1.4 million to accelerate the National Fibre Broadband rollout providing critical digital capability for the island moving forward.
In addition, the Economic Recovery Fund has financed the Manx Restart Scheme with the aim of creating 120 new employment opportunities within the private sector for people who have been unemployed for 3 months or more, including those who have been in receipt of MERA, or not in receipt of benefits at all.
This Scheme provides a real opportunity for people who have been out of work for some time to get their foot in the door and demonstrate their potential in a real job – with the aim of securing long-term permanent employment at the end of the placement, either with the employing organisation or elsewhere.
This budget before you today indicates that we expect to spend up to £10 million this year from the Economic Recovery Fund and estimates another £30 million expenditure next year supporting jobs and our economy. Additional monies remain available but I am sure Honourable Members would agree with me that any money must be spent wisely. I will keep both Tynwald and the public updated and informed.
Turning now to more specifics of the budget before this Honourable Court.
Responsible financial management
The forecast in this budget is that revenues for the current year are projected to be some £87 million lower than was budgeted for in February 2020.
Taking this forecast into account together with the costs of the various support schemes and payments from contingency, for such things as personal protective equipment, we estimate the cost to the public purse of the pandemic response to be over £200 million.
So, the impact has been substantial, however both government finances and the island have demonstrated substantial resilience. Indeed our fiscal and economic position is more favourable than we had feared at the commencement of this crisis last year.
Our reserves, despite the pressure, have stood up particularly well and with market values increasing by 13% since the market crash in March 2020. The market value of our reserves stands at £1.6 billion which is broadly at the same level pre the pandemic.
Our income tax receipts are forecast to be around £223 million this year, some £23 million below the Pink Book figure. Honourable Members will I’m sure appreciate there remains some uncertainty in all of our forecasts this year.
National insurance receipts are stable this year, with the forecast in the Pink Book at only £2.4 million below budget and there remains a chance we may achieve the budget target. This is a testament to the levels of economic activity and employment opportunities that have been sustained outside of the lockdown periods.
IN terms of VAT, we still need to work with HM Treasury to calculate the final position for this year to determine the shared VAT revenue. Whilst I am confident that in the circumstances our economic performance will be above our initial expectations, a prudent measure we have provided for a reduction in this income.
In terms of expenditure for this year, the approach to unexpected costs taken was to manage them through contingency without adjusting underlying Departmental targets. This is the responsible course of action and has allowed the Treasury to maintain oversight of unexpected cost claims as they arose.
Moving now to the year ahead, clearly there are many unknowns facing us over the next 12 months and beyond and honourable members will recognise that our future projections beyond April 2022 may be subject to significant variation.
Nevertheless we have presented a considered scenario in the pink book on the potential position for future years. The key assumption in this scenario projection is that by 2023/24 public sector revenues will broadly recover to the planned level set out in the last budget.
The core assumption is that income tax revenues will fall in 2021/22 as impact of the pandemic continues to be felt, but will then return to previous expected levels by 2023/24. The basic assumption being there is no permanent scarring to our economy.
I do acknowledge there is risk to this forecast, however the Island’s economy has proven very resilient and the emergence of vaccines indicate that an assumption of a recovery to previous economic activity levels is a reasonable one. Further, this is consistent with the speed of economic recovery experienced last year following the release of lockdown restrictions.
The other core element of taxation income is shared indirect taxes collected in accordance with the Customs and Excise Agreement with the UK. Members will recall that the calculation for the current five year period was agreed in February 2020.
Whilst remaining bullish about the opportunity for economic recovery nevertheless we will take a small provision of 3% against this income as a prudent measure for 2021/22.
Mr President, given the continued level of risk and uncertainty, the budget proposes that we continue the approach taken in the summer budget update to carry an increased level of contingency.
This budget therefore includes a higher than normal level in the contingency fund of £12 million, to be topped up by another £10 million. In addition there is £11 million in Treasury’s revenue contingency account to provide a means to manage the increased levels of uncertainty and risk.
Talking about uncertainty, there are still major challenges facing public finances around the World, with talk about tax increases being necessary to recoup the huge levels of expenditure required to manage the pandemic.
Indeed I am sure there has been much speculation in many quarters that today I will increase taxes in some way to cover the ongoing costs of the pandemic, Either by reducing personal allowances, increasing rates of income tax or by raising revenue through a change to the rules in National Insurance.
However, now is not the time for tax rises. Instead our focus must be on continuing to support our economy and our recovery. No news on tax rises is good news for jobs, investment and economic stability and is a testament to the strength and good management of public finances. I should also point Honourable Members again to the increases to personal allowances up until last year which, I would suggest, have helped many cope with short term income reductions. Under this Administration the £3,750 increase in personal allowances from £10,500 to £14,250 has meant that a single person pays up to £550 less tax per year and a couple up to £1,100 less tax per year. We have put money back in people’s pockets and helped improve living standards.
Honourable Members will recall that last year I stated that I would initiate a review of the National Insurance System. I can confirm that a review has been undertaken and that I intend to bring the Report back to this Court for a policy debate in the coming months.
A change to a national insurance regime that has been in place since the 1940’s is not something I intend to do without Members input, or without a public consultation. Therefore following the Tynwald debate, I will issue a public consultation on the various options for change. It is vital that our system of taxation remains fair and is appropriately designed to meet our commitments.
Honourable Members, with regards to our taxation policies and practices, I can confirm that the Isle of Man continues to meet an ever increasing number of international standards and that they continue to evolve, develop and change.
I have said before that keeping up with these International standards is vital to our reputation and our economy and this continues to be the case.
The international standard for economic substance which was introduced in January 2019, continues to widen in scope and I will be bringing an Order to the Court in June to extend the scope to include partnerships.
Also Honourable Members will be aware that recently Members of the European Parliament adopted a resolution to change how the European Union’s list of non-cooperative tax jurisdictions is established.
Although the vote to adopt the resolution has no legal impact it will add further political pressure on the European Union Commission and European Union Member States.
The Assessor is also closely monitoring the ongoing work of the OECD, developing new international standards, such as the work designed to address the challenges arising from the digitalisation of the economy. This concerns new rules to determine taxing rights between jurisdictions for digitally-intensive multinational businesses and introduces the concept of a global minimum effective tax rate.
Mr President these changes to international tax standards are complex and time-consuming, however I remain confident that the Island will continue to adapt to meet these international challenges. This will also form a core plank of our economic framework assessment.
Supporting our people
Moving on to allowances and benefits.
I have decided to continue to follow the United Kingdom’s “triple lock” uprating of state pensions, for the time being. Therefore, the rates of the Manx state pension up to the 'full amount' and basic rates of State Retirement Pension will increase by 2.5% from the week commencing 12 April. This results in the full rate of the Manx state pension increasing from £191.35 per week to £196.14 per week and the rate of a full basic state retirement pension increasing by £3.35 a week, to £137.60 per week.
Rates of the 'Pension Top-up' are also increasing by 2.5%.
'Protected amounts' of the Manx state pension and the additional state retirement pension - commonly referred to as 'SERPS' - are being increased by 0.5% from the week commencing 12th April, the same as they will be in the United Kingdom.
Overall, the cost of these increases in the Island is estimated to be £3.6 million per annum, which will be paid for out of the Manx National Insurance Fund. Once again Mr President this is good news for our pensioners.
Annual review of benefit rates
Aside from state pensions and the Manx Pension Supplement, most National Insurance-funded benefits in the Island will increase by 0.5% from the week commencing 12th April – the same as they will be in the United Kingdom.
One notable exception to this is the Nursing Care Contribution, the rate of which is being increased by £25 per week, in order that it keeps pace with its equivalent in England.
As regards those benefits which are funded out of general revenue, these are usually increased relative to the rate of domestic inflation at the customary reference point. As regards this year’s review, that reference point is September 2020. At September 2020 the Isle of Man Consumer Prices Index was negative, and it has continued to hover around zero since then.
I have therefore decided that, generally speaking, the rates of child benefit, attendance allowance, disability living allowance and the prescribed amounts for each of the income-related benefits are to continue at their current rates and amounts from April. However, exceptions include:
- a £25.06 per week increase in the maximum allowable towards nursing home fees for income support and income-based jobseeker’s allowance purposes; and
- a 4.25% increase in the rates of the pensioner premium for income support and income-based jobseeker’s allowance;
- a £15,000 increase in the 10% threshold for the income support property tariff; and
- a 0.5% increase in the higher rate of the Disability Living Allowance mobility component.
The amounts of the Christmas Bonus, Winter Bonus, Funeral Payment and Maternity Payment will continue at their current levels.
Mr President, over the past four budgets, this administration has sought to recognise the value of our hard working families and we have increased child benefit by 15% since the start of this administration. A family with two children qualifying for child benefit receives up to £231.40 per annum more than they did four years ago. It is not to be the case that this will rise this year Mr President, but my hope is that in future years there will be a strong focus on providing support for families particularly with young children in a modern world. The family unit must be at the heart of our thinking just as it is at the heart of our communities. I support strong policies to encourage families to responsibly grow and develop and I hope our previous budget investments in personal allowances, child benefit and pre- schools has helped in that respect. I would encourage these and other policies to remain central to Governments thinking in the future.
Mr President, on the subject of welfare reform, Treasury has decided that changes to the income support rules for lone parents whose youngest child is aged 6 or over and changes to the minimum work requirements for employed person’s allowance which were due to come into effect in April this year are each to be postponed for 12 months. This is to allow time for the local economy to recover and consequently for more job opportunities to be created. Regulations will be laid before this Honourable Court at next month’s sitting to give effect to this. Mr President, our ethos has been to provide encouragement and support for lone parents to transition back into work, but this is not the time to increases pressure unnecessarily.
Supporting public services
As I have said, the Budget proposed this year is one of resilience and one which carefully balances the need to protect our economy with the need to be prudent with public finances. There is now, more than ever, a real need to live within our means and a rigorous assessment of departmental bids has taken place. I am pleased to say that despite the pressures on our finances that a total of £23.2 million of bids to the revenue account are included in the budget before this Court, split into £18.8 million of new revenue funding and £4.4 million of bids to reduce revenue targets given the anticipated ongoing impact of the pandemic.
Honourable Members will of course be well aware that health and care provision has formed a key element of my previous budgets.
In my speech last year I commented on the report and recommendations produced by Sir Jonathan Michael on Health and Care services on the Island that were presented to, and accepted by, this Honourable Court, to deliver a high quality, sustainable and integrated health and care service.
I said last year that we had started to implement his recommendations and that we were committed to achieving them all – this budget demonstrates action to fulfil that commitment, it contains the first budget for Manx Care as a standalone entity, separate from the Department of Health and Social Care.
So for the first time on this Island, a publicly funded but arm’s length delivery organisation, responsible to a new Board and with experienced health and care leaders, will be responsible for the delivery of all health and care services.
Manx Care will be required to deliver the wide range of services required by our people to a standard specified. But also, importantly, they, as we all, need to ensure the best use of the taxpayer’s money provided for the delivery of health and care services. We also need to make sure those services are monitored and independently assured, so that we can have confidence and increasing pride in what is being provided to our people.
To fully achieve the vision that Sir Jonathan set out for us with his package of recommendations will take many years. His report forecast a need to spend considerably more by 2036 to maintain the availability of and range of services, and to improve performance and delivery of those health and care services, which our people use today and, indeed, all of us on this Island will need at some point in the future.
There remains a gap between the expected level of budget required into the future and the financial provision included in our projections. This funding gap will require further strategies and policy decisions to address it in the future.
Honourable Members, we have embarked upon a significant journey in accepting Sir Jonathan’s recommendations and the establishment of Manx Care and the part that this budget has to play in that is a crucial step towards the high quality, sustainable health and care system that we all want to see.
Specifically, this budget includes £11.3 million of funding to fill the DHSC legacy cost gap and to provide appropriate staffing resource to properly establish governance and Clinical structures within Manx Care and DHSC.
The budget also includes £1.6 million new funding for complex care packages and £2.3 million for GP contract services, indemnity costs, phlebotomy services and new roles in the primary care environment. There is also just under £200,000 for enhanced dermatology services next year.
Importantly, as part of the funding strategy for Health and Care services, a 1% efficiency target is required to be achieved by Manx Care during 2021/22, with further efficiency targets set each year for the next 7 years. The achievement of these targets is crucial in order to 'bend the future cost curve' of health and care services highlighted in Sir Jonathan’s report. It is intended that it will encourage innovation, efficiency and drive economies but, critically, to ensure focus on the most important aspect of health and care, the individual – be that patient or service user.
Mr President, this is a budget which builds on the £22 million in new revenue bids and £33 million in supplementary votes we’ve already given over the last four years and protects and invests in Health and Care services and takes forward the arrangements agreed by this Court. This government has put health top of the priority list and these investments will pay dividends in the years ahead.
The proposed budget expands our commitment to tackling climate change, with £5 million more for climate change mitigation initiatives and a total of £6.25 million for the climate change adaption budget in the Department of Infrastructure, including £2.25 million of additional money for Flood defence works and scheme designs at various locations around the Island.
In the twelve months since the Council of Ministers’ Climate Plan was unanimously supported in Tynwald (in January 2020). Climate change has become a central tenet of the work of the Isle of Man Government and the public have become increasingly engaged in the issues and opportunities that climate change presents. Much planning work is now required to fully understand the roadmap towards achieving objectives and I expect that future funding requirements will become clearer and more specific.
The budget includes almost £900,000 to establish the Climate Change Transformation team within the Cabinet Office. And there is £500,000 in new money to bolster the Flood and Coastal protection team, recently transferred to the Department of Infrastructure from the MUA.
In addition, Mr President, a further £5 million is proposed for the Environmental Protection Fund.
There is therefore over £17 million in total committed in this budget towards delivering our climate change agenda.
The Department of Infrastructure’s income streams have been seriously affected by the pandemic, especially in the Ports and Airports Division. The budget acknowledges this and consequently includes a bid to reduce revenue targets for the Department for next year by £4.4 million, this is some 50% of the maximum amount requested by the Department but reflects a balance between maintaining budgetary challenge and a realistic expectation over income reductions. The Treasury will continue to monitor the Departments performance against this budget over the year, with this risk forming part of the rationale for an increased level of contingency held.
We have included £200,000 of new money for technology solutions and change within the Constabulary and money towards an ongoing fire safety project for the Fire and Rescue service And almost £500,000 to build the business change capability within the Government.
This budget also includes financial provision for the new Auditor General’s office at a total of £852,000, £392,000 transferring from Treasury’s budget thus providing a net increase of £460,000. I look forward to reading the first reports from the Auditor General and reviewing the various opportunities for delivering public services more efficiently.
Turning to public sector pay, we must recognise the pressure that public funds have come under. Therefore the increase in public sector pay budgets this year is set at 1% rather than the previously forecast 2%. This protects jobs and is in the long-term interests of public services. If pay exceeds the 1% target then monies will have to found from within departmental budgets and I ask pay bodies to recognise the pressure that public finances are under this year.
Mr President, the most vital element of the public services are the people that deliver them and I want to thank all public sector staff for their hard work and dedication shown over the past year through what has been challenging times. I have witnessed first-hand the extraordinary hours, the sleepless nights and the commitment delivered by countless public servants. Thank you for your contribution.
Turning now to Capital spending, the budget proposes a full budget of £182 million of expenditure for the year, including some £15 million of cost for new Schemes. I will go into more of the detail of this later but Members will of course be aware of the challenges we have faced to fund and deliver our Capital programme for some time and, in particular, Government’s ability to successfully manage and deliver large complex capital projects.
In common with recent budgets our financial planning assumes that we cannot and will not deliver the forecasted pink book spend at a level of £182 million.
It is untenable to continue to budget on this basis and it is now time to address the fundamental issues of capital planning, delivery and financing.
The consistent under delivery of planned expenditure combined with new scheme approvals has led to a growing wave of unspent approvals being carried forward from one year to the next. This problem is even more acute this year as the pandemic has further delayed the delivery of the capital programme and has resulted in this unachievable £182m of capital works.
This is not a satisfactory position and we cannot allow this situation to continue.
The Treasury will now lead a Strategic Infrastructure Needs Analysis to form the basis of our medium and long-term capital planning with a target delivery date of the autumn of this year.
The objective of this is to enable us to reset our capital programme to fully understand and prioritise our capital investment and maintenance programme over the medium to long term. From this position we can then determine an appropriate strategic financing plan. At present we deliver as much of the capital programme as we can and on average this is a substantial £70 million of investment each year, however we must improve our understanding of whether this is sufficient or indeed that we are applying this appropriately.
This budget proposes therefore that, as a first but crucial step, we introduce a new means to finance capital for central Government with the introduction of the Capital Financing Reserve to replace the existing capital loan charges mechanism.
The existing mechanism will remain for financing capital schemes outside of the central government, where monies must be tracked into and out of General Revenue, but for those schemes where the internal Government loans are just a means of accounting for purely internal transactions, the new reserve represents a much needed and overdue simplification of the process.
The budget proposes a transfer of £25 million in the year from revenue to assist to build the balance on the Reserve, the amount of this transfer also helps to reduce the pressure on the revenue account next year.
As I have said, this is a first step. If approved it will enable the treasury to develop simplified, and modernised, capital approvals and reporting processes so that we can all better understand and scrutinise this significant area of public expenditure.
Mr President we are ripping up the credit card and introducing a more transparent and accountable process for future strategic investment spending.
The pink book outlines the capital spending that is proposed for this year and in particular I would bring to the court’s attention the ongoing schemes which are being developed, including the Liverpool landing stage, Douglas promenade works and the new older persons residential unit at Summerhill.
As a prudent measure and given the level of uncertainty that exists next year, the budget includes an increased level of funding within the capital contingency budget of £6 million for next year. This allows for timing changes, minor increased costs and importantly unexpected emergency works that may arise in the year.
Mr President, determining our strategic capital needs is a vital element of our capital changes, but we must also ensure that we have the necessary expertise available to deliver complex capital investment and maintenance.
The Council of Ministers has determined that that a new Major Capital Projects Board and Unit will be created within the Cabinet Office. This function will take responsibility for the oversight and delivery of all major capital projects with expenditure of £3 million or more and will be in place early in the new financial year.
In addition, responsibility for the remaining capital investment projects and property maintenance will be centralised within the Department of Infrastructure. The Department has a wide range of responsibilities and we will review the capability and capacity of this department for this delivery requirement.
Looking more widely at the use of Government owned land and property, I am sure honourable Members will agree that we have to ensure we obtain value for these assets, ensuring that, where appropriate, development is encouraged and facilitated to benefit our Island, addressing amongst other matters the issue of undeveloped sites in our Town Centres.
It is time to move forward with more direction and to that end the economic recovery group has been working on proposals for an Isle of Man Development Corporation and i intend to bring a motion to this Court in March, setting out the detail of how such a Development Corporation would operate.
Honourable members, I said in the summer that the Treasury was undertaking an in-depth review of the means by which we fund and account for capital expenditure, I also said that there as a possibility of a sovereign debt issuance as part of a longer term financing strategy. The work to examine alternative means to fund capital and other long-term investment requirements is still underway and will continue to be developed with the forthcoming analysis of our strategic needs.
Whilst this year has been one of unusual challenge, we have not allowed it to divert us from continuing to move our agenda forwards. During the year, the implementation of the Dormant Assets Act 2019 has continued and I would like to thank the cooperation of the local banks.
It is intended to lay the first annual report before this Court next month but I can share that we have received payments into the reserve of over £4 million this year, meaning in accordance with the agreed policy I expect over £600,000 to be available to release to the Manx Lottery Trust early in the new financial year for onwards distribution for charitable purposes. Another good news story from a good news treasury.
Mr President, this year’s budget will, I expect, be like no other in modern times, reflecting as it does considerable forecasted losses and expenditure whilst bringing forward short-term forecasting based available assumptions.
We know this pandemic will bring, and indeed has brought, global economic challenges that will need addressing and we cannot, and must not, be complacent in the management of public finances or indeed in the management of our economy. But in the face of adversity this nation can still advance with a go forward budget:
- £15 million more for health
- Over £17 million for climate change and its impact
- Capital projects reformed
- An Economic Recovery Group delivering increased training and reskilling opportunities, investing in high speed fibre and the local economy
- A new Manx Development Agency to develop brownfield sites
- Contingency funding and plans to deal with uncertainty
- A new economic framework on its way
- £600k for charitable causes through the Dormant Assets Act
- And Mr President despite the pressures no tax increases bringing stability to household incomes and businesses in equal measure
We are stabilising the economy, we are protecting jobs and we are investing in our future.
Mr President this budget encapsulates the resilience of our public finances and planning in the midst of a global health and economic crisis. But also Mr President this budget is primarily built upon the ethics of hard work, determination and integrity demonstrated by the people of this nation in tackling the pandemic. Their actions in fighting the virus, their determination and focus on supporting the domestic economy and local businesses has given our economy a fighting chance and indeed delivered a platform for stability in this budget today. It is, Mr President, a budget of resilience built on the hard work of our society – indeed a budget of resilience for a resilient nation and I heartily commend it to this Honourable Court.