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Isle of Man Government Annual Report 2005

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Isle of Man Government Annual Report 2005 ISLE OF MAN GOVERNMENT ANNUAL REPORT 2005 Laid before Tynwald on 18th October 2005 by Hon D J Gelling MLC Chief Minister October 2005 Price: £5.00 ISLE OF MAN GOVERNMENT ANNUAL REPORT 2005 To: The Hon. Noel Q. Cringle, President of Tynwald, and the Honourable Council and Keys in Tynwald assembled. Recommendation That the progress of Government in achieving its aims and objectives as explained in this report be noted, and that the items identified in Part III be endorsed as the Council of Ministers future priorities for the development of services. CONTENTS Foreword by Chief Minister 1 PART I: GENERAL OVERVIEW 2 Part I: 1.1 The Economy 2 1.2 Population 4 1.3 Government Services: 5 1.3.1 Capital Spending 5 1.3.2 Revenue Spending 8 1.3.3 Personnel 12 Part II: The Isle of Man Government Plan 2004/07 Introduction 14 2.1 Economic Progress 14 2.2 Social Well Being 18 2.3 Quality Environment 24 2.4 Sound Infrastructure 26 2.5 Good Government 28 2.6 Positive National Identity 30 Part III: Future Priorities Introduction 32 3.1 Economic Progress 32 3.2 Social Well-being 34 3.3 Quality Environment 36 3.4 Sound Infrastructure 37 3.5 Good Government 38 3.6 Positive National Identity 39 Part IV: Departmental Progress Reports 4.1 Agriculture, Fisheries & Forestry 40 4.2 Education 43 4.3 Health & Social Security 46 4.4 Home Affairs 49 4.5 Local Government & the Environment 52 4.6 Tourism & Leisure 57 4.7 Trade & Industry 60 4.8 Transport 62 4.9 Treasury 68 4.10 Chief Secretary’s Office 73 4.11 Drug & Alcohol Strategy 76 4.12 Communications Commission 80 4.13 Financial Supervision Commission 82 4.14 General Registry 84 4.15 Insurance & Pensions Authority 87 4.16 IOM Post Office 88 4.17 IOM Water Authority 90 4.18 Manx Electricity Authority 93 4.19 Manx National Heritage 95 4.20 Office of Fair Trading 97 4.21 Personnel Office 100 APPENDICES 1. National Income 2. National Income Compared to the UK 3. Income Generated in Basic Sectors 4. Isle of Man Government Plan 2004 103 Actions Report 5. Tynwald Policy Decisions Report 135 6. Legislation Enacted 172 FOREWORD BY CHIEF MINISTER During the year 2004/2005 Government has continued to make real progress on issues of importance to the community, notwithstanding the political challenges which have also been a feature of the year. The purpose of this publication is to report back to Tynwald and the public, on what Government has been doing, highlighting what it has achieved and where it could improve performance. This Annual Report sets out the work being progressed and undertaken by various arms of Government to make a difference in such areas as crime reduction, hospital waiting times, road safety, examination results, air and water quality, and accessibility to public transport for the less agile. As ever, there is no cause for complacency. There is clear room for improvement, for example, in the delivery of our capital and legislative programmes. In the field of governance, the financial position at the MEA was a salutary reminder that no country or organisation is immune from unexpected difficulties. The test of maturity lies in how such problems are addressed, and I am pleased that Government and Tynwald have responded to the particular challenges of the period with openness and a strong sense of public responsibility. There is also a willingness to learn the lessons of experience, and a renewed emphasis on the principles of good corporate governance. Government’s priorities will continue to centre on diversified growth of the economy, which is absolutely vital for the future employment opportunities and living standards of the people of the Island. This means a focus on such areas as education, training, marketing and branding. Other priorities indicated in this report include the maintenance of primary care health services, support for low income groups, health promotion and community safety. The Island has a strong platform for further progress. Our economy and public finances remain sound, as indicated by the national income figures and by the renewal of our ‘triple A’ international credit rating. Our taxation and economic strategies provide a clear way forward, and the Isle of Man is gaining increasing recognition as a small country that is both enterprising and internationally responsible. Our Island community can look forward to the future with confidence. Hon D J Gelling MLC Chief Minister 1 PART I: GENERAL OVERVIEW 1.1 THE ECONOMY Overview Despite ongoing challenges, increasing competition and only sluggish global growth, the Isle of Man economy continues to develop, expand and diversify. National income accounts for 2003/04 revealed real growth that year of 6.3%, a figure which was three times the EU average. Since then there has been further growth evidenced in all the key indicators, including those relating to employment (numbers in employment have increased by around 600 in the year to June) and job vacancies (notifications to the Job Centre are running at a four year high). The unemployment rate has moved above that of the previous five years but nevertheless still stands at only 1.3%. Per capita GDP on the Island rose by 6% in real terms. Comparisons put IOM per capita GDP at 106% of that in the UK. In reality the IOM relative position improved by almost 4% but the improvement was masked by revisions by the UK to their official GDP calculations. The Island’s per capita GDP is now some 15% higher than the EU15 average. Domestic price inflation in 2004/05 has been significantly impacted upon by rising world energy prices. Annual inflation, as measured by the retail price index, hit a peak of 6.4% in December 2004, but has now subsided, to stand at 4% in June. Far and away the main element of the increase in the cost of living has been the category of Fuel and Light, in which average prices rose by 24% in the year to June. Whilst the trend is downwards, the volatility of fuel prices will likely see the inflation rate jump around the trend from month to month. House prices continue to move upwards but at their slowest rate for almost a decade. In June the average price of a house sold on the Island was £223,511, compared to £211,733 in June 2004, an increase of just 5.6% compared to 13% over the previous year. Despite renewed inward migration since 2003 and the downward pressure on interest rates, the housing market is likely to remain relatively subdued in the year ahead. The United Kingdom economy is now firmly on a downward path, with growth expectations for the year now only around 1½%-2%, compared to the Chancellor’s own forecast of between 3% and 3½%. The UK economy has for a long time now been driven by debt financed consumer spending. Rising job uncertainty and stalled house prices are serving to curtail borrowing and spending, with implications for future growth. Both the IMF and the OECD have revised their forecasts of global growth downwards in recent months. Whilst growth has been stagnant in the EU, continued expansion of the US economy is helping to sustain global growth. But it is India and China whose growth rates are powering ahead. In so doing, increased demand pressures are being put on commodities prices, including oil. But at the same time their development will serve to perpetuate the expansion of world trade and investment, to the ultimate benefit of all competitive trading nations. 2 Income from Employment In June 2004 the average gross earnings of full-time employees was £485 per week (up 2.4% over the year) with the middle 50% falling in the band £324 to £577 per week. Full- time employees worked an average of 38.7 hours per week, including 1.6 hours of overtime. Average earnings in the Isle of Man were 96% of those in Great Britain. The comparatively slow rate of increase in earnings reflects the low rate of inflation being experienced at the time when many wage negotiations would have been concluded in 2003. Around that time annual inflation was typically around 3%. The gradual increase in inflation since then is likely to have fed through into wage settlements in 2004/05 such that average earnings are probably now also rising faster. Isle of Man National Income The national income accounts provide a measure of overall growth and development of the Manx economy and indicate the changing importance of its component sectors. The main national accounting measures, Gross Domestic Product (GDP) and Gross National Product (GNP), provide a monetary valuation of the Manx economy as a whole. GDP represents the monetary value of all goods and services produced within the Island’s economy over a one year period, and provides a measure of both personal and corporate income derived from economic activity on the Island. GNP also takes account of net income received from abroad in the form of interest, rents, profits and dividends. The latest national income accounts relate to the fiscal year 2003/04 and reveal that in that year the economy, as measured by GDP, expanded by 9.1% in cash terms, 6.3% in real terms (when the effects of rising prices are stripped out). This rate of growth was an improvement on the 5.9% in 2002/03 and shows that, though some way off its peak recorded in the late 1990’s, the economy continues to perform creditably.
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