DIRE warnings were issued by two ministers forced to come back to Tynwald for money to cover departmental overspends in the last financial year.
Home Affairs Minister Juan Watterson MHK asked for an extra £430,000 while Social Care Minister Chris Robertshaw MHK wanted £397,000.
Both successfully secured the funds but sent out the message that the status quo was unaffordable and things would have to change.
Mr Watterson told Tynwald colleagues the Home Affairs 2011-12 budget had been slashed by £2m on the previous year and was £5.4 million down on the year before that. ‘The DHA is now operating with a budget lower than the 2005-06 financial year,’ he said. ‘At the heart of this overspend is our staffing costs. DHA has the highest proportion of any government department of its spend as staffing, 74.2 per cent. Loan charges accounted for a further 5 per cent, leaving £6.7m on estates, vehicles, contracts – all of which have been rigoriously reviewed.’
Mr Watterson said spending had been drastically cut and income increased by about 50 per cent. But he said the sticking point was pay rises.
He recalled Chief Minister Allan Bell’s February budget speech in which he told the unions it was ‘money or jobs’. ‘As such, the pay rise for civil servants and firefighters has meant that we have had to lose 34 posts, or 6 per cent of our headcount,’ said Mr Watterson, who spoke about front-line service cuts in the form of the controversial closure of two police stations.
Mr Watterson detailed other financial burdens placed on his department, including a premises move for the Financial Crime Unit falling through at the cost of another year’s £140,000 rent.
In addition, the DHA is paying a daily rate for the placement of 11 prisoners in the UK. The rates have increased by 22 per cent this year meaning a loss of £113,000 to the coffers.
Hot on the heels of Mr Watterson was Mr Robertshaw, who delivered some stark figures to his Tynwald colleagues.
The cost of taxpayer-funded benefits has risen by a quarter over the last decade, he said.
For example, the number of people receiving income support has seen a 37 per cent increase over the last five years. For 2011-12 the Department of Social Care increased the budget for income support by 8.9 per cent to £27.9m based on a projected increase in recipients, yet the actual spend was nearly £2.8m over budget.
‘This is simply untenable,’ said Mr Robertshaw, adding only fundamental reform of social security policy could address the challenge.
Mr Robertshaw said the cost of the public sector housing deficit is likely to double over the next five years.
And he concluded by saying, if nothing more is done to tackle the challenges facing his department, he would need approximately £6m plus inflation every year to cover the rising demand for services.
He warned things would have to change and said fundamental policy reform was needed.
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