The Department of Infrastructure is facing another challenging year after being tasked with achieving a budget reduction of £3.9 million in 2015-16.
Further cuts in staff costs, changes to service delivery, increased use of technology, new operating efficiencies and inflationary increases for certain fees will be implemented to build on the progress made in recent years.
Infrastructure remains at the very forefront of efforts to help the Isle of Man Government achieve its national priority of rebalancing public finances. The Department is on target to secure a budget reduction of almost £6m in the current financial year, comprising £4m in cost savings and £2m in additional income.
While revenue spending is being contained, the Department is committed to maintaining approximately £1 billion of key assets and delivering a high quality infrastructure that allows the Isle of Man to attract new investment. Long-term strategic planning remains a priority, with a focus on continuing to provide the foundations on which others can build economic and social success.
Infrastructure Minister Phil Gawne MHK said: 'Achieving another challenging budget target in 2015-16 on the back of such significant recent reductions will not be easy. We must continue to be bold and innovative in order to adapt to the fiscal pressures facing Government. On a positive note, the Department has already taken a lot of tough decisions that will stand us in good stead for next year and beyond.'
He added:
'We are conscious that local people have been required to share the financial pain. Implementing new and revised charges has been a necessary but extremely unpleasant task. We will work hard to ensure that any increases in fees in the year ahead are kept more in line with inflation wherever possible. There may be scope to revise charges for certain commercial aspects of our business, but that will only be in very isolated circumstances.
'Overall, we will aim to strike the right balance to ensure the Department continues to meet its budget responsibilities while providing services that contribute towards the general wellbeing and economic strength of the Isle of Man.'
The Department of Infrastructure's package of budgetary measures for 2015-16, includes:
Reducing staff costs
The Department will continue its carefully managed approach to reducing staff costs and updating terms and conditions, in conjunction with the workforce and unions.
The number of employees has been reduced by 168 since 1 April 2010, including 81 voluntary departures in 2014-15. This has resulted in savings of more than £4 million.
A major proportion of these positions have been higher grade civil servants. For example, the Ports Division has 10% fewer members of staff now than on 1 April 2013. This figure comprises more civil servants than manual workers, including five posts at senior manager or director level.
Introducing new ways of working
Changes to working practices in Highway Services, Public Transport and at the Isle of Man Airport have significantly lowered operating costs by virtually eliminating premium payments for overtime and increasing flexibility around shift patterns.
The proposed new starter agreement for public sector employees should begin to contribute towards staff savings in 2015-16.
The Department will also explore the potential to outsource certain non-statutory functions, such as school crossing patrols and the provision of cycle training, and aim to secure better value from existing commercial contracts.
Meanwhile, it is intended that the devolution of a range of services to local authorities in April 2015 will be cost neutral, as well as representing a defining moment in the development of a stronger system of local government.
Driving forward new efficiencies
The Department is targeting additional savings through its management of shared services in Government's fleet and estates functions. There is a strong focus on driving consistency of standards and increasing efficiency, especially around procurement of materials and services.
For example, maintenance contracts have been put in place for Government vehicles that are contributing to savings of approximately £400,000 a year.
Energy saving measures and the better use of building management controls are lowering utility bills across the Department's estate. In conjunction with the Department of Education and Children and National Sports Centre, it is estimated that electricity consumption at the NSC has been reduced by 350KWh per day, generating a saving of about £20,000 a year.
Capital investment to lower revenue expenditure
Opportunities will be taken to further reduce the Department's operating costs through capital investment. The modernisation of the bus fleet is lowering fuel and maintenance costs, jet patch technology means that some roads can be repaired 10 times faster, while new equipment installed at Poortown quarry is reducing electricity consumption by an estimated 10%.
In addition, the Department is continuing to maximise the life expectancy of plant and equipment across its divisions.
Investment in technology
The Department has increased its use of technology in line with aspirations for a smaller, smarter Government.
More staff are using mobile devices to process work in the field, rather than returning to the office to complete paperwork before heading out to their next job.
The introduction of a digital planning portal and online payments for vehicle tax has helped to reduce administration costs, while mobile apps such as 'Report a Problem' and 'Read the Signs' are contributing towards a more customer-focused approach to service delivery.
Work will continue to cut bureaucracy in areas such as planning in order to generate savings and free up limited staff resources for other core duties.
Additional income
The Department has introduced a package of new and revised charges to help meet its budget target for 2014-15, including a 10% average rise in vehicle excise duty.
In the year ahead, the intention is that any increases will be held more in line with the rate of inflation.
One possible exception is in harbour dues for leisure vessels, with the Department looking at an option to raise fees for marina pontoons and harbour berths to a more commercially viable level.
Minister Gawne said:
'Against a backdrop of budget and staff reductions for the past five years, the Department is continuing to provide a wide range of essential public services. The ability to make substantial savings and absorb staff cuts while maintaining strategic assets such as the Island's highways, harbours and airport has only been possible through the hard work, dedication and co-operation of our workforce.'
He added:
'Even after taking into account the financial impact of the difficult decisions that have already been made, the Department will still have to find an additional £3.9 million in 2015-16. We are determined to achieve this by lowering our operating costs wherever possible, rather than passing on above-inflation increases in fees. Everyone is focused on providing leaner and more sustainable services.'
