The government made a higher than expected surplus last year of £68.9m, thanks to bumper tax receipts.

The original budget had been set to make surplus of £2m but this was revised to a £5.9m deficit after Tynwald voted through £8m of extra funds for the Department of Health and Social Care.

But the government’s latest accounts show that it was able to post a surplus of £68.9m for 2019-20.

Income was significantly higher than expected - a total of £1,158m which was £80m better than budget and £91m better than last year.

This was largely due to finalising agreement with the UK on the calculation for our VAT share, resulting in an extra £64m of income (shared revenue of £433m up from £369m), allowing the release of provisions prudently held back over the last three years.

Taxation income was £77.3m higher than expected. Some £241m was collected in income tax which was £10.6m better than budget and £3.4m up on last year.

Figures are outlined in the light blue book of unaudited accounts to be laid before next week’s Tynwald sitting.

In his foreword, Treasury Minister Alfred Cannan said: ’The financial position reported in these accounts means we can and should be confident, but we must not be complacent.

’It is important to bear in mind that in achieving our surplus position we have utilised our reserves and will need to do so during the coronavirus pandemic.

’Therefore we must remain both prudent and alert when it comes to funding and prioritising public services expenditure.’

Mr Cannan said the £68.9m surplus alongside existing reserves has enabled the transfer of £40m into the Contingency Fund which is assisting in supporting the economic impact of coronavirus, whose impact is not seen in the 2019-20 financial year.

Lower than anticipated social security expenditure last year also boosted the government’s financial position last year.

Spending on National Insurance-funded benefits in 2019-20 was lower than budget by £6.5m primarily due to retirement pensions which were £8.2m lower.

Pensions expenditure was lower than budget by £370k at £100.8m and the amount drawn from the reserve was £4.6m less than budgeted.

Mr Cannan said: ’I recognise that we continue to draw on reserves to meet operational commitments, most clearly defined by the use of the public service employee pensions reserve to meet pension costs.

This drawdown of £33.2m was lower than the budgeted £37m for 2019-20.

Employee costs including agency staff were worse than the revised budget by £0.5m, which included an £8m supplementary vote.

Total employee costs were £20m higher than last year which is mainly due to a 3.7% increase from the payment of pay awards including arrears.

The value of externally invested funds fell by £60m, the result of the Covid’s impact on the stock market.