The Falkland Islands government has announced highlights of its Budget for 2017/18, approved by the Legislative Assembly and which becomes effective on first July 2017 and will end on the 30th June 2018.
Highlights maintain the nine existing budget principles, basically to spend within FIG's means; no public sector borrowing for operational purposes; appropriate level of funding to maintain efficient and effective public services; to seek to improve the quality of life in the Falklands; to encourage development and strengthen infrastructure.
The operation budget 2017/18 has an annual turnover of almost £ 60 million, while there is funding over five years of £61.5 million in Health and £37.2 million in Education, and £40.9 million included over 5 years for investment in Infrastructure and £13.7 million over the next 5 years in transfers to the FIG pension funds.
Maintain Nine Existing Budget Principles:
• Principle 1 – “To spend within FIG’s means”
FIG will only spend to a level that it can afford and is sustainable over the Medium Term Financial Plan (MTFP)
• Principle 2 – “No public sector borrowing for operational purposes”
The budget does not require any public sector borrowing.
• Principle 3 – “A reasonable level of funds are held in uncommitted reserves”
FIG will maintain 2.5 times departmental spend in uncommitted reserves for the term of the MTFP (£131.6M)
• Principle 4 – “An appropriate level of funding is provided to maintain efficient and effective public services”
Funding over five years of £61.5M in Health and £37.2M in Education
• Principle 5 – “To ensure appropriate funding of FIG Special Funds”
Appropriate funding is in place for the Currency and Insurance funds to mitigate risks to FIG.
• Principle 6 – “To ensure sustainable pension arrangements are in place”
o £13.7M over the next 5 years in transfers to the two FIG pension funds to seek to reduce the deficits.
o Increase in member contribution rates over the 5 year MTFP
o Increase in retirement age by 1 year every 10 years staring 2020
• Principle 7 – “To seek to improve the quality of life in the Falkland Islands”
o 13% increase in minimum wage to £6.58/hour for all workers (90% of living wage) from 1st January 2018
o 2% civil service cost of living increase and continuation of incremental salary progression
o All FIG employees (including apprentices) to earn at least the Living Wage.
o 2% increase in pension rate (standard retirement pension now £153/week)
o 2% increase in employment programme rates.
o No increase in domestic service charge, vehicle license fees & FIGAS fares for Falkland residents
o Increase in students grants in line with UK inflation
• Principle 8 – “To encourage economic development in the Falkland Islands”
A greater emphasis has been placed in the budget to invest a larger proportion of funds in economic development in the next 5 years.
• Principle 9: “To strengthen infrastructure within the Falkland Islands”
o £40.9M included over 5 years for investment in Infrastructure and Maintenance projects including £2M/year for the camp roads network and the continuation of the surfacing of the MPA road
o Progression of existing schemes such as the construction of the Vulnerable Peoples Unit, housing & infrastructure development and £1M/year for the maintenance of FIPASS
o Additional funding for High priority schemes: Upgrading of facilities at KEMH to include the installation of a CAT Scan and upgrades to the Operating Theatres, a new Sports Facilities, support tor Nursery Facilities, a new Power Station,the next phase of Diamond Jubilee Road, improvements to the Air Terminal and the construction of a new Training Centre
See Fig 1
Capital Investment Strategy:
See Fig 2
Fees, Charges, Taxes and Duties
All changes effective 1st July 2017 unless otherwise stated
• Income tax and rates and bands
• Corporation tax and rates and bands
• Vehicle, firearm and police vetting fees
• Medical and dental charges
• Shipping Registration fees
• Cemetery plot reservation
• Funeral charges
• Service charges for domestic properties remain at £426/year
• Metered water charges and waste collection charges
• Electricity connection charge for new properties
• FIGAS flight and freight rates for Falkland Residents
• Town hall hire charges
• Meals on Wheels charges
• Aviation landing fees
• Retirement pension contribution rate (resident) from £14.50 per week to £15.75 per week (matched by employer). Self employed and voluntary contributions to £31.50 per week (effective 1 January 2018)
• Voluntary overseas retirement pension contribution rate to £58.25/week
• Employment programme payment increased from £121/ week to £123 / week
• Customs import duties of 5% on cigarettes and tobacco products (effective immediately)
• Customs import duties of 3% on alcohol (effective immediately)
• Septic tank cleaning charges to £165.80
• Embarkation fee to increase from £22 to £25
• Student grants increased to £7,212 for non-London students, and £8,467 for London students
• Boarding charges at Stanley House by 10%
• 1% increase in rents for FIG accommodation
• Electricity price to increase from 18p per unit to 19p per unit (effective from Saturday 3rd June)
• FIGAS flight rates for tourists
• Civil aviation fees for various items
• Legal Aid scheme hourly rate increased from £150 / hr to £157.41/hr
• UK Nationality Related Fees in line with changes implemented by UK government
• 2% increase in Custom Service Fees
• Banking licence to £9,000 per annum from 1st January 2018
• Medical Services Tax (MST) rate reduced to 0% effective 1st January 2018
In addition to the FIG contribution to the Retirement Pension Scheme, it is intended that member contributions will also increase in order to reduce the pension deficits. The increased contributions (effective 1 January in each year) will be as follows (split 50:50 between employer and employee as shown):
See Fig 3
13% increase in minimum wage to £6.58/hour for all workers (90% of living wage) from 1st January 2018
2% civil service cost of living increase and continuation of incremental salary progression
All FIG employees (including apprentices) to earn at least the Living Wage.
2% increase in pension rate (standard retirement pension now £153/week)
No increase in domestic service charge, vehicle license fees & FIGAS fares for Falkland residents
Increase in students grants in line with UK inflation