Rebalancing the island’s budget by 2015-16 is only the start, Chief Minister Allan Bell told politicians in a Tynwald address outlining government progress and priorities for the coming year.
He specified the major challenges that lie ahead balancing the conflicting needs to economise while supporting an ageing population.
He also signalled a radical restructuring of the Council of Ministers system.
Mr Bell told members that he would propose the changes, affecting his own office as well as the Council of Ministers, before the end of the year.
‘We must have more robust means for developing policies and driving through change if we are to deal effectively with the critical issues our island faces,’ he said.
‘Government can no longer work in departmental silos. We will be reviewing the budget-setting process, which I believe needs improvement for the future. We must put the needs of our citizens above the outdated structures of Government to deliver the right outcomes.’
He added: ‘Treasury is continuing to forecast that we will rebalance our budget in 2015-16 in line with its original plan.
‘But this does not mean the job is done and we will be able to resume our old spending hapits.’
He said original predictions of withdrawing reserve funds of £92m were an over estimate and the likely figure was £84m to £89m.
‘We have set a target of making £10m in annual efficiency savings through the transforming goernment programme,’ he said.
Savings had been made by centralising services and keeping a check on the government’s wage bill – the latter by £50m ‘in real terms’ since 2010 by reducing staff numbers and giving below-inflation wage increases.
Other savings had been made by reducing staff sickness and cutting the cost of government accommodation by reducing the amount of rented space and the number of buildings it owns, he said.
Accommodation costs were reduced by more than £700,000 in the past two years and £5.1m of surplus property had been disposed of, also in the past two years.
The merging of harbours and airports divisions of the Department of Infrastructure was a valuable part of the process of streamlining government. The merging of the Manx Electricity Authority and Water and Sewerage Authority would also help the process, though he warned against above-inflation tariff increases. Consideration is also to be given to bringing the government’s departments of Health and Social Care back together.
The growing interest in the TT saw 40,000 visitors this year, which was up by 27 per cent on 2010. This brought in £18.9m of economic benefit to the island and £3.5m into government coffers.
Further afield he said the government was working hard to forge links and gain foreign business with 12 delegations of more than 40 people visiting from China in the past year. Business from the Middle East had also brought over £3m in bank deposits £2 billion in life insurance funds and 40 corporate jets for the island’s aircraft register.
One target is to strengthen political and econimic links with the north west of England and a key priority for government, he said, would be next year’s International Festival for Business in Liverpool.
‘It will be the biggest such event since the Festival of Britain in 1951, attracting some quarter of a million businesses and government leaders,’ he said.
Answering quetions at the end of his address, Mr Bell said the government’s open skies policy allowing airlines to operate routes to the island was likely to receive further consideration. He said the FATCA negotiations with the US were now complete but added: ‘At the moment America is closed so we have no one to sign it with.’
Rushen MHK Laurence Skelly suggested a Manx National Savings Bond might ‘help maintain viability of the island’s sub post offices’.
Returning to the issue of the impending healthcare burden Mr Bell said: ‘No one should be under any illusions that when we have balanced the budget that is an end to it. Over 80s health care needs a whole island debate.’
The 65-plus age group is expected to grow by 75 per cent in the next 20 years, compared to an overall population increase of 16 per cent. Health care costs for the over 80s will double from £25m to £50m.