The scale and cost of government has grown beyond what the taxpayer can sustain.

Treasury now treats public sector overspending as normal and routine rather than as the last resort - and the over-reliance on reserves means we may not be able to deal with future economic shocks.

These are the damning findings of a Tynwald scrutiny committee report.

They are conclusions that most residents already know or suspect - but it’s startling to see them outlined so starkly in an official report, albeit one authored by a committee made up of three backbenchers as we head towards a general election.

The economic policy review committee report on the role of the Treasury, the structural deficit and the use of reserves will be laid as a motion for debate at the March sitting of Tynwald.

Castigating a system that ‘normalises overspending’, the report outlines how the structural deficit was steadily brought under control between 2016 and 2019, with a surplus of £13.7m achieved at the end of 2019-20.

Then came the pandemic, which resulted in a structural deficit of £217.4m due to excess costs and lost income.

Since then, the structural deficit has remained high – varying between £91.4m and £103.1m.

The committee says that getting back to a structural surplus ‘does not currently appear to be a priority for the Treasury’, and the deficit has persisted at around £100m despite rising government income.

‘This indicates the problem is structural - the scale and cost of government and its activities has grown beyond what the economy and the island’s taxpayers can sustain,’ it states.

The committee says it’s equally concerned about the continued drawdowns on reserves.

A drawdown of £110.6m from reserves was planned in the last Budget – a substantial increase on the £98.4m drawdown in 2024-25.

‘Despite repeated assurances fromTreasury that reliance on reserves will diminish, the direction of travel has been the reverse,’ the report notes.

It concludes: ‘The public is increasingly concerned by the government’s systemic reliance on reserves.

‘Public sector overspending is no longer treated as the last resort – Treasury now treats it as normal and routine.

‘If this continues, the repercussions will be significant: the reserves and the National Insurance Fund will be depleted, and future generations will pay the price.

‘Our overreliance on the use of reserves to fund ordinary government activity now means we may not be in a robust position to adequately deal with future economic shocks.’

The committee is chaired by Jason Moorhouse (Arbory, Castletown and Malew) sitting with Kate Lord-Brennan (Glenfaba and Peel) and Douglas North MHK John Wannenburgh.

They say efforts taken by Treasury to control public spending have been ‘limited and hands-off’.

And they criticise recent steep rises in the minimum wage, describing it as ‘effectively a tax on businesses’ which harms the economy.

‘It is neither fair nor sensible to compensate for the bloat of government by extracting more and more income from our island’s businesses and working residents’, the report points out.

It outlines a series of recommendations including a drastic reduction in the use of reserves.