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Submitted by (Juanita Brock) 06.06.2013 (Article Archived on 18.07.2013)

This report covers both the Appropriation Bill and the Finance Bill referred to the Select Committee on the Estimates by this Assembly on Tuesday morning.


Mr Speaker, Honourable


report covers both the Appropriation Bill and the Finance Bill referred to the
Select Committee on the Estimates by this Assembly on Tuesday morning.


is an exciting year for the Islands and as mentioned on Tuesday the Budget
Select Committee has taken advantage of the additional revenues in recent years
to continue investing in the economy and to freeze a number of Government fees
and charges.


Due to the comprehensive meetings
that have been held since February on the budget the Budget Select Committee
made only one change when they met on Tuesday afternoon. I am therefore not
proposing any changes to the Appropriation or Finance Bills that were put
before the House earlier this week. The proposed appropriation remains at
£60,930,500. The operating deficit excluding oil is £3.8M and including oil
revenues and expenditure is £6.8M.


The Budget Select Committee
reviewed the increase on FIG housing rents and agreed to reduce the increase
from 5% as I announced on Tuesday to 3%, in line with the other inflationary
increases. The Committee also asked for a review of Housing policies to ensure
that the population in general are not disadvantaged by any impact that the
increased demand for housing from the oil and gas industry may have on house
and rental prices.

5. There is one area on fees and
charges which I did not mention on Tuesday, that of Customs duties. The Budget
Select Committee reviewed these duties and agreed a 5% increase in the duty on
tobacco products. This will add 22p to a packet of cigarettes and 47p to 50g of
tobacco. 2


The Committee also approved a 3%
increase in duty on all alcoholic beverages. This will add 34p onto a litre of
spirits, 2p on a bottle of wine and 8p on a case of beer.


This brings me to some of the
specific areas of spending outlined in the appropriation bill. Starting with
departmental spend of £43.7M the largest share of funding goes to PWD with 21%
of the total amounting to £9M, this is followed by £8M for Health and Social
Services, £6M for Natural resources and £5.7M for Education. The remaining £15M
is split between the other FIG directorates.


Some new approvals in the year

 Provisional funding for a
service level agreement with an NHS hospital to improve Health services. This
scheme requires further definition over the next few months before the funding
is released;


 Increased funding for Higher and
Further Education due to increased numbers of students studying overseas;


 Provisional funding for a
revised structure for Members Remuneration. Public consultation is still
underway on this and a final structure is due to be approved prior to the

 Increased funding for the AG’s
Chambers to pursue a variety of projects including the New Edition of the Laws;


 The creation of 21 new or
extended Government posts across Agriculture, PR, Health, HR and the Police


9. Transfer payments this year
total £7.2M, including £3.5M for economic development, which will be
distributed as follows:


 £1.8M to support the ferry
between East and West Falkland;


 £1.2M to fund the Falkland
Islands Development Corporation and economic development loans;

 £1M in support of shipping

 £870,000 for Falkland Islands
Tourist Board and the Tourism Development Strategy;

 £312,000 for the Rural
Development Strategy;

 £247,000 to support agricultural
development programmes including a new cattle genetics programme;

 £180,000 each for FIMCo and

 £146,000 for the Museum and
National Trust;

 Just under £100,000 for
Falklands Conservation; and

 Funding to mark the 100th anniversary
of the Battle of the Falklands;

 The remaining funding is provided
to finance a number of schemes and projects.


10. Transfer Funds are those
monies transferred from the Consolidated Fund to the Special Funds in order to
finance various priorities and liabilities. As last year these include a £4M
transfer to the capital equalisation fund and £362,000 between the two pension
funds. I will return to these briefly later.

11. As mentioned on Tuesday this
budget also includes a section to encourage the development of the Oil and Gas
sector. Within the operating section the following projects are included for


 Up to 10 additional (or
extended) posts created to deal with oil related work including Oil & Gas
advice, marine work, financial management of capital projects, FIGAS service,
Planning and Offshore management. These posts will only be pursued if related
projects are progressed and in some cases will be expected to be


 Funding for an Environmental Gap


 £700,000 for drafting of
legislation, amendments and legal agreements;


 £195,000 for consultancies
relating to regulation of telecommunications, health & safety and planning;


 Funding for staff training to
ensure FIG can effectively deal with any emergencies arising from Oil and Gas


 Additional transfers to the
Pension Funds as recommended by the recent actuarial reviews.


12. The approved capital budget is
a net five year programme of £39.8M between 2012/13 and 2016/17. The 2013/14
programme includes the following significant schemes:


 £4.7M for Municipal Services
including the MPA Wind Farm, alternative water supply and the provision of
further serviced housing plots;


 £3M for Roads including an
increased allocation for Camp Roads, the surfacing of Moody Brook Road and the
staged re-surfacing of Ross Road;


 £1.7M for Government Land and
Buildings including the Museum relocation and Jetty improvements;


 £1.5M each for Housing and
Departmental Assets including funding for a number of IT related projects and
increased medical equipment budget; and


 £1.4M for Plant & Vehicles.


13. These schemes do not include
any items arising purely due to oil and gas development. However, the following
schemes are included of a capital nature over the next five years to encourage
oil and gas development:


 Improvements to Stanley Airport;


 Increased Government Housing and
Office space due to staff increases;


 Port related infrastructure
including an access road, funding to investigate financing and investment
structures, waste management and water supply,

Environmental and other
assessments, consultancies relating to design, health & safety and surveys;


 Additional serviced plots for


14. Over the next five years a
surplus (including oil revenues and expenditures) is projected of £2M. This is
based on a number of high level assumptions regarding Illex, investment returns
and the timing of oil exploration and drilling. Should the oil and gas industry
progress at a different pace from that currently anticipated the projections
could change dramatically. Close monitoring of these will be undertaken as
usual through Standing Finance Committee.


15. The Bills put forward today
provide for significant investment into the local economy in a number of areas
whilst not placing reliance on revenues that are highly uncertain.


16. Again, I thank all those that
have been heavily involved in the budget process and also those who have kept
the Treasury running over this time.


17. Mr Speaker, this concludes my
report of the proceedings of the Select Committee on the 2013/14 estimates.


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