MercoPress. South Atlantic News Agency

Falklands, Government finally presents delayed 25/26 Budget approved by outgoing Legislative Assembly

MLA Roger Spink, said: “This budget has been the subject of thorough and, at times, robust debate among Members.”

The Falkland Islands Government’s (FIG) Budget for 2025/26 has today, 26th July, been approved by the Legislative Assembly, setting a considered and strategic direction to safeguard the long-term financial health of the Islands.

The 2025/26 budget and accompanying updated five-year financial plan support the aims of the current Islands Plan. They demonstrate FIG’s commitment to making transformational capital investments in essential infrastructure that is crucial to the future development of the Islands and our continued economic success.

FIG’s capital program will ramp up in the next year with the capital priorities contained within the five-year financial plan. These will focus on the port replacement project, a new power station, a new waste management facility and three new wind turbines at Sand Bay.

The FIG operating budget for 2025/26 is £105 million (excluding depreciation and internal recharges) with an anticipated surplus of £14.1m before deduction of interest costs of £9m. The total capital expenditure program for 2025/26 is £105.6m.

The continuing expenditure and additional investments supported by the budget will help deliver several Islands Plan commitments for the community. These initiatives include:

• Significant investment for Health and Social Services for improved services, maintenance of the King Edward Memorial Hospital building and the operational costs of running Tussac House.
• The Falkland Islands Community School optimization project that will deliver a better learning and working environment. The project will address current needs and create space to accommodate space requirements over the next fifteen years.
• The Falkland Islands National Sports Council and FIG have collaborated to deliver the new sports complex, which is due to be operational during 2025/26.
Key aspects of the 2025/26 Budget include:
• The minimum wage hourly amount will increase from £9.19 per hour to £9.66 per hour from 1 January 2026, a 5% increase.
• Retirement pension payments from 1 July 2025 to be increased by 25/26 forecast inflation of 2.4%. Retirement pension contributions from 1 January 2026 are to be increased by 25/26 forecast inflation of 2.4%.
• There will be a flat cost-of-living increase of £500 for all full-time FIG employees, along with a grade step increase for all those eligible.
• Travel Credit Scheme levels remain unchanged.

Regarding fee and charges increases for 2025/26, these largely have followed

• The service charge to increase by 10%
• FIG rents to increase by 7%
• Planning fees increasing by 100%
• Leisure Centre fees increasing by 10%
• Road Traffic License increasing by 10%
• Permanent Residence Permit increasing by 53.8%
• Embarkation tax increasing by 25%, Passenger levy increasing by 35% for Stanley and 56% for Stanley + Camp.
• Duty on tobacco, cigarettes and cigars are to be increase by 20%, 10% and 18.5% respectively from 17th July 2025.
• Duty is to be introduced on vapes and vaping substances from 1 January 2026: Single-use vapes £20 per vape, vaping substances liquids or solids £3 per 10ml/mg or part thereof.
• Increases below 5% across the different alcohol products from 17th July 2025.
Personal tax rates are to remain at current levels: personal allowance at £16,860 and the 21% threshold at £18,000.

FIG Financial Secretary Pat Clunie said: “This budget has been prepared in a markedly different financial environment compared to the previous year. The reduction in government revenue set against the need to invest significantly into our capital program, alongside the need to finance the £150million debt, has meant that the process has been challenging but necessary to ensure that the long-term financial position of the Falkland Islands is maintained. The sound stewardship of government funds has been at the forefront of our minds throughout the process, with operating cost savings of £1m being found which will flow through into the years ahead. Rather than making sweeping changes, the budget takes a targeted approach – implementing modest adjustments now to mitigate the need for potentially more drastic measures later. This budget is not just about the year ahead, it is setting a path for the future”.

MLA Roger Spink, portfolio holder for Government services, said: “This budget has been the subject of thorough and, at times, robust debate among Members. The focus has been, and must remain, on protecting the core financial strength of the Islands and we are determined to preserve our fiscal resilience while investing in the infrastructure that will support future generations and create the right economic environment for growth moving forward. Throughout the process, we have worked to ensure that the budget balances the pressing need to fund our ambitious capital progra that contains many long-overdue essential and much needed projects, with maintaining our government services and minimizing any necessary rises in fees. There are a number of positive steps in the budget such as the rise in the minimum wage, along with an increase in pensions and a range of other benefits in line with inflation. This is the final budget for this Assembly, against a difficult economic background, and it again demonstrates a commitment to ensuring the long-term prosperity, stability and economic development of our Islands”.

There will be a Public Meeting at the Chamber of Commerce on Monday 21 July 2025 at 5pm where the Financial Secretary will present the 2025/26 government budget.