Government Efficiency

Government Efficiency

The chief minister has made reducing government’s spending one of his main priorities in recent years.

In the Pink Book, it says: "The Government Efficiency and Change Programme is aiming to deliver at least £50 million in efficiency savings over a five-year period. Treasury is supportive of this work and believes it will help achieve the medium financial plan; however it is not considered prudent to factor in potential savings and any efficiencies will be considered as mitigations assisting Departments to meet any future possible cost pressures within their allocated budgets."

As part of that efficiency programme, monthly scrutiny panels and the forthcoming introduction of priority-based budgeting were highlighted as ways of maintaining stability and driving greater efficiency in government spending into the future. 

Treasury is setting departmental pay and non-pay budgets below inflation expectations, which is expected to deliver results quicker.

The Treasury Minister, Chris Thomas MHK, says: "I estimate that this means £5.6 million of savings will be achieved [in 2026-27] and £29 million over the medium term if there is adherence to the plan."

Health

Healthcare and the funding associated with its provision has been a key aspect of the overall budget setting process during the years since the inception of Manx Care.

The Pink Book says this is underlined by the fact that the budget for providing health and social care services has increased from £289 million in 2022/23 to £404.1 million being budgeted for this upcoming financial year.

If the Budget is approved, the Department of Health and Social Care will receive an additional £45 million, driven by demand for services delivered by Manx Care and increasing the DHSC annual budget to £412 million.

This rise marks the first departure from the funding formula set out following the Independent Review of the Isle of Man Health and Social Care System, leading Minister Thomas to warn: "Healthcare is important but the sustained and substantial increase in costs in recent years remains a significant risk to the achievement of our medium-term financial plan."

Manx Care's total budget for this financial year will be £404.2 million, up from £361.8 million last year.

Chris Thomas says this funding increase means that, for the first time since its inception, Manx Care will be funded in line with the recommendations from the 2019 Sir Jonathan Michael report.

Contingency Funding

There's a revenue contingency budget within Treasury and to access this, departments or boards that encounter unanticipated costs have to submit robust business cases for approval.

The level of this contingency for 2026/27 has been set at £16.3 million.

An amount of £10 million has been allocated within the contingency fund specifically for potential Manx Care cost pressures.

To access this, the Department of Health and Social Care would need to submit specific business cases which would be subject to Treasury and Council of Ministers approval.

You can hear what the Treasury Minister, Chris Thomas MHK, had to say about government efficiency in Tynwald below: