Transcript Budget 2011-12 JCC slides

The 2011-12 Budget
Presentation to the JCC
By Hon A. Craine MHK, Treasury Minister
Date 16th February 2011
Introduction
• Progress on Five year rebalancing plan.
• Impact of Increase in VAT to 20%.
• Local Economy update.
• Tax and National Insurance changes.
• International Issues.
Medium Term Strategy - Reminder
Last Year we said the plan was to Rebalance budgets by 2014-15.
Use £114 million of Reserves, with a
£35m deficit in 2011-12.
But –
Rate of VAT has increased.
Savings have been greater than forecast.
Revised Medium Term Plan
Medium Term Rebalancing
£ million
2010-11 2011-12 2012-13 2013-14
Capital transfers
24
44
39
39
Spending reductions
26
51
54
57
Taxation/charges
20
21
21
21
Reserves/surplus
-2
-2
0
-3
Total
68
114
114
114
Last year
85
142
142
142
Improvement
17
28
28
28
Customs and Excise Forecasts
Customs and Excise - Changes in receipts
£ million
2010 Budget
Rise in rate of VAT to 20%
Arrears/Other
2011 Budget
Change
2010/11 2011/12 2012/13 2013/14
338
312
340
370
2
10
350
28
2
342
30
0
370
30
0
400
12
30
30
30
Update on Local Economy
 Growth of 4-5% in real terms this year.
 Unemployment has fallen not risen as projected
last year, 1.9%.
 Inflation remains high on global pressures now
(RPI) 5.5%.
 Stable level of Banking Deposits (down 2% in
year).
 Strong growth in personal and Corporate Tax
receipts for 2009-10, paid this year.
Current Year Forecasts
2010/11
£m
Income
Expenditure
Transfer from
Reserves
Surplus
Budget
520
535
15
Forecast
537
535
0
Variance
+17
0
-15
0
2
+2
Future Year Forecasts
£m
Income
Expenditure
Reserves
Surplus
Budget
2011-12
535
533
0
2
Budget
2012-13
574
574
0
0
Budget
2013-14
616
613
0
3
Departmental Estimates (£m)
Department
DCCL
DED
DEC
DEFA
DOH
DHA
DOI
DSC
Treasury
Other
Total
Budget
17.4
15.0
95.7
15.3
121.4
31.6
34.7
136.2
19.0
46.9
533.2
Adjusted
Budget
17.7
15.2
96.3
15.3
123.0
31.8
35.4
136.2
16.5
45.6
533.2
Increase/
Decrease
(0.5)
(0.2)
(2.9)
(1.0)
7.5
(2.2)
(2.2)
(0.5)
(1.2)
1.5
(1.8)
%
(2.5)
(1.4)
(2.9)
(6.3)
6.5
(6.6)
(5.9)
(0.4)
(7.0)
3.3
(0.3)
Benefit increases
 £10m budgeted spend on benefits
Retirement Pension 4.6%.
Income Support, Family Income Supplement
and Job Seekers allowance 4.5%
Child benefit remains the same.
Capital Expenditure
83% delivery in current year (£80m).
£101m programme next year.
£9m for Natural Gas extension, £10m for
Bemahague.
£67m of construction, including £32m on
Housing including continued financing of Local
Authority Programme.
Existing Reserves
Reserve
March Book Bal c/f
11/12 est
Dec Market Value
NI Fund
£583m
£2m
£655m
Reserve Fund
£356m
£0m
£426m
Public Sector Pensions
£209m
(£3m)
£243m
Notes Fund
£32m
Capital Fund
£78m
(£59m)
Housing Reserve
£ 13m
(£9m)
HEDF
£ 44m
(£2m)
£48m
Economic Development
£12m
£3m
£12m
Other Internal Funds
£95m
(£21m)
Total
£1,467m
-
(£89m)
£32m
KSF Update
Current Position - £214m advanced in respect of
Early payment schemes and Depositors
Compensation Scheme
£163m repaid or held by DCS Manager. All
claims now in and vast majority paid.
£51m current exposure. Future liquidation
proceeds to reduce this to net £5m by 2017.
£5m written off against Reserve Fund as
eventual cost, could be lower.
Taxation and Charges
10%/20% rates unchanged.
Personal Allowances unchanged.
Further limit on mortgage and loan interest relief
to £7,500 per person per annum (equates to
£150,000 of mortgage/loan per person).
Personal Allowance Credit up 8% (£50) to £700
per person, Qualifying limit up to £9,300.
Removal of tax relief on educational deeds of
covenant and Class 4 National Insurance
payments.
Summary
Have benefited from VAT rate rise to 20%, but
Have also brought spending down faster.
As a result we have a balanced budget.
Have protected spending in Health services,
Social Security and Capital Programme.
Have avoided further tax rises (ie National
Insurance).
Need to maintain confidence against future
“shocks”.
International Issues
Zero ten applies equally to all companies, and is
code compliant.
EU working group have considered ARI
(Attribution regime) within personal tax, and
have concluded that it does in conjunction with
zero-ten give rise to harmful effects.
This could widen scope of code group, or create
conflict with EU.
We are proposing abolition of ARI from April
2012.
Budget 2011-12
Any questions ?