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Community Meeting Presentation Port Erin, 23 rd October 2012

Community Meeting Presentation Port Erin, 23 rd October 2012. OUR FINANCES. Local Economy. Latest Growth 3%-5% in real terms. Unemployment relatively low 2.3%. Inflation falling. (RPI) 2.8%. Slight fall in level of Banking Deposits (down 3% in year to Jun 2012).

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Community Meeting Presentation Port Erin, 23 rd October 2012

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  1. Community Meeting PresentationPort Erin, 23rd October 2012

  2. OUR FINANCES

  3. Local Economy • Latest Growth 3%-5% in real terms. • Unemployment relatively low 2.3%. • Inflation falling. (RPI) 2.8%. • Slight fall in level of Banking Deposits (down 3% in year to Jun 2012). • Low Interest rates leading to lower investment income. Banking profits are recovering.

  4. Medium Term Strategy The second VAT renegotiation created a new shortfall of £75 million. In response we will • Rebalance budgets by 2015-16. • Use £92 million of Reserves, with a • £55m deficit in 2012-13. • Government spending rose by just 1% this year. • Staffing costs have reduced, and 170 posts lost in last year. 266 staff lost since April 2010. • Have had to make a number of difficult decisions.

  5. Revised Medium Term Plan

  6. Benefit Changes • £12m budgeted increase on benefits • Retirement Pension increased by 5.2%. • Income Support, Employed Persons Allowance and Job Seekers allowance 2.5% • Child benefit reduced to UK levels for second and subsequent children (approx £7 per week per child), with offsets for low income families. Will be means tested from 2014. • Nursing Care contribution increased by £40 per week to £100.

  7. Taxation and Charges • 10% and 20% rates unchanged. • Personal Allowances unchanged. • Allowances and reliefs capped at 10% rate. • Alimony relief withdrawn. • Personal Allowance Credit reduced to £500 per person, from £700 due to potential disincentive. • Rise in Tax cap to £120,000 per person. • New NI Rebate Scheme for additional employees, has resulted in 250 new full time jobs.

  8. Half Year update • Income tax is stronger, anticipating £3m more this year, and £5m more next year, mainly corporate tax receipts, but indirect tax lower. • Three year financial plans in course of agreement with all Departments. • Council working on detailed implications of plans, to understand social and economic impact. • Will deliver £31m deficit in 2013-14, in line with original plan.

  9. Summary • Large deficit but plan to remove it. • Have held spending down. • Need to tackle big issues Benefits, Housing. • Have protected spending in Health services, Social Security and Capital Programme. • Have avoided further tax rate rises. • Are currently planning in detail for rest of this administration.

  10. Any Questions?

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