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PROCEEDINGS DAALTYN PUBLIC ACCOUNTS COMMITTEE Budget

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PROCEEDINGS DAALTYN PUBLIC ACCOUNTS COMMITTEE Budget S T A N D I N G C O M M I T T E E O F T Y N W A L D C O U R T O F F I C I A L R E P O R T R E C O R T Y S O I K O I L B I N G V E A Y N T I N V A A L P R O C E E D I N G S D A A L T Y N PUBLIC ACCOUNTS COMMITTEE Budget HANSARD Douglas, Wednesday, 11th April 2018 PP2018/0075 PAC-B, No. 1/2017-18 All published Official Reports can be found on the Tynwald website: www.tynwald.org.im/business/hansard Published by the Office of the Clerk of Tynwald, Legislative Buildings, Finch Road, Douglas, Isle of Man, IM1 3PW. © High Court of Tynwald, 2018 STANDING COMMITTEE, WEDNESDAY, 11th APRIL 2018 Members Present: Chairman: Hon. J P Watterson SHK Mr T M Crookall MLC Mr M R Coleman MLC Mr D C Cretney MLC Mr R E Callister MHK Clerk: Mrs J Corkish Assistant Clerk: Ms N Lowney Contents Procedural ........................................................................................................................................ 3 EVIDENCE OF Hon. A L Cannan MHK, Minister and Mrs S Lowe, Chief Financial Officer, with: Caldric Randall, Financial Controller; Darrin Oldam, Deputy Director of Policy and Legislation; Ross Stephens, Director of Social Security; David Ireland, Director of National Insurance; and 5 Paul Martin, Deputy Assessor of Income Tax – the Treasury .......................................................... 3 The Committee sat in private at 4.50 p.m. .................................................................................... 38 __________________________________________________________________ 2 PAC-B/17-18 STANDING COMMITTEE, WEDNESDAY, 11th APRIL 2018 Standing Committee of Tynwald on Public Accounts Budget The Committee sat in public at 2.30 p.m. in the Legislative Council Chamber, Legislative Buildings, Douglas [MR SPEAKER in the Chair] Procedural The Chairman (Mr Speaker): Good afternoon and welcome to this public meeting of the Public Accounts Committee. I am Juan Watterson, Speaker of the House of Keys and Chairman of the Committee. With me are Mr Tim Crookall MLC, the Vice-Chair, Mr David Cretney MLC, Chair 10 of the Social Affairs Policy Review Committee, Mr Mike Coleman, who has now gone out of office as an MLC but under Tynwald Standing Order 5.5 remains as Chair of the Economic Policy Review Committee until replaced, and Mr Rob Callister MHK, Chair of the Environment and Infrastructure Policy Review Committee. Could I just ask you all to check that your mobile phones are on silent so they do not 15 interrupt proceedings. Also for the purposes of Hansard I will be ensuring that we do not have two people speaking at once. Today’s session is with the Treasury Minister, the Hon. Alf Cannan MHK, and Chief Financial Officer, Mrs Sheila Lowe, and the topic is the 2018-19 Budget. This session follows last year’s session about the Budget and the more recent session in January about the 2016-17 accounts. 20 Also in attendance we have: Darrin Oldam, Deputy Director of Policy and Legislation; Ross Stephens, Director of Social Security; Caldric Randall, Financial Controller; David Ireland, Director of National Insurance; and Paul Martin, Deputy Assessor of Income Tax. Fantastic – we can remember six names! Okay, we will get started. EVIDENCE OF Hon. A L Cannan MHK, Minister and Mrs S Lowe, Chief Financial Officer, with: Caldric Randall, Financial Controller; Darrin Oldam, Deputy Director of Policy and Legislation; Ross Stephens, Director of Social Security; David Ireland, Director of National Insurance; and Paul Martin, Deputy Assessor of Income Tax – the Treasury 25 Q1. The Chairman: If I can ask you, Minister, last year we asked you how much of the Budget was inherited and you said, ‘I think in the next 12 months we will certainly be looking to delve deeper into those departmental spending plans so that we produce a much more cohesive Budget, I hope, the next time,’ so if I could ask you, for starters, what has changed? 30 __________________________________________________________________ 3 PAC-B/17-18 STANDING COMMITTEE, WEDNESDAY, 11th APRIL 2018 The Minister for the Treasury (Mr Cannan): I think what has changed is we have delivered, I think, a fairly impressive track record of delivery in terms of our progress and that instead of a deficit of £79 million, we estimated a structural deficit this year of £40 million. Therefore, the indications are that we have experienced significant economic growth – I think progressive 35 economic growth. Some of the Budget plans that we had last year, some of the reforms that we brought in, have proved to be successful and I think that we are demonstrating clear progress moving forward. Q2. The Chairman: So in terms of the department spending plans which was an area that you 40 were hoping to delve deeper into, how has that manifested itself in this year’s Budget? The Minister: I think you will see that, first and foremost, we have been able to deliver £13.8 million of targeted additional spending for departments in key areas that reflects the Programme for Government, the priorities set out by Tynwald. I can tell you that during the 45 process of determining budget and spending requirements we have spent significant time with the departments talking their plans, interpreting their plans and understanding where their pressures were and what their priorities are. You will see, of course, that we continue to control departmental spending and we continue to control that by limiting increases or giving very small inflationary increases and of course a 50 significant cost control on staff salaries which form a significant part of the overall Budget. Q3. The Chairman: I am sure that we will be touching in a bit more detail on just about all of those points as we go through. We asked you about Budget reform last year and you mentioned you were looking at a more 55 consultative process in relation to apportioning the Budget. We see that you attended a Positive Action Group meeting and held a public meeting in Peel after the Budget; how did they go? The Minister: In terms of delivery I was happy with the way that it went and for those that were there and turned up you would have to speak to them, but from my perspective I think we 60 gave a pretty good overview. But more importantly we were there to answer questions from those present about the Budget and about the future plans. Q4. The Chairman: In terms of pre-Budget consultation, you said in December 2014 that the public need to be engaged in the process. I was just wondering how the public have been 65 involved in the process and what you have done to engage public engagement before the Budget? The Minister: The public needed to be engaged? 70 The Chairman: Yes, in December 2014 in Tynwald – if I can find the reference – you said that the public needs to be involved in the Budget, in the planning process for Rebalancing the Budget – if I can just see if I can find the reference: [They are]… absolutely clear in our communication, and I hope I am getting the message across that I think there has to be more engagement from outside the Council of Ministers because it is too sheltered at the moment. And also later on: I think it is possible to use the web to carry out consultation on budget plans and seek public views. – was your quote from 2014. 75 __________________________________________________________________ 4 PAC-B/17-18 STANDING COMMITTEE, WEDNESDAY, 11th APRIL 2018 The Minister: Yes, and so I am delighted that we carried out the single biggest consultation with the public in terms of determining where we could find savings within Government. The SAVE initiative was designed in such a way so as to seek the broadest possible range of views on where Government could save money – 1,200 responses; I think the public did get engaged in 80 that in a number of ways and of course I will be reporting on that very soon to Tynwald in terms of what outcomes we can expect to see. So yes I think that we did carry out a very successful public consultation in that respect and obviously the next challenge is determining how successful that has been and where the key areas are that the public felt they could get reform from public services and how willing of 85 course Tynwald is to see those reforms through themselves. Q5. The Chairman: So this is something that will be a continuing theme of engagement over the next few years in terms of that public engagement? Because of course a Budget is about more than just savings, isn’t it? So is this something that we can expect to see more of in the 90 coming years – pre-Budget public consultation? The Minister: There is no pre-Budget consultation as such. We have gone out to the public in a very comprehensive way to determine where they think Government should be seeking its efficiencies and we will be delivering – I will be delivering that – in terms of a report to Tynwald 95 in the very near future. Tynwald has an opportunity to debate that report and then we will progress forward as a result of that debate. Q6. The Chairman: You said last year that the Programme for Government has more clearly identified the priorities for Government, so between that public consultation … how have 100 budgeting and spending profiles changed as a result of that process or has it been the usual sort of incremental based approach that we have seen in the past? The Minister: There has not been a fundamental, radical overhaul.
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