Four government departments predict overspend

Overall government net expenditure set to be over-budget

Several government departments were predicted to be over budget in the first three months of this financial year.

New figures have been released by Treasury following a commitment by the minister to provide 'regular updates outlining the state of government finances'.

You can find the Central Government Summary Management Accounts, which covers up to 30 June 2024, HERE.

It reveals overall government net expenditure is £1.7 million worse than the budget for the year to date before fund claims.

Net expenditure is currently forecast to be £16.4 million worse than budget by year-end, after taking account of reimbursements from funds.

The four departments forecasting an overspend are: education, sport and culture, enterprise, infrastructure, and health and social care.

EDUCATION, SPORT AND CULTURE

The Department for Education, Sport and Culture forecasts an overspend caused by 'income being below expectation and increased teacher pay awards'.

The report states that it is currently £1.2 million below budget, mainly due to education grants and secondary schools' divisions, however the department is not expecting the underspend position to continue for the full year.

Instead it's expecting to be overspent by around £1 million and states it faced 'additional risk' in its forecast due to the 'uncertainty' around the teacher’s pay award.

ENTERPRISE

The Department for Enterprise is forecasting an overspend due to 'a slowdown in the housing market compared with last year, and a subsequent reduction of income, alongside increased costs within its motorsport division which supports the TT and MGP'.

It's expecting to be over budget by £1.4 million.

The department says it has 'taken steps to further reduce non-essential spend and is monitoring the position closely'.

INFRASTRUCTURE

The Department of Infrastructure says it is having to contend with increased costs for the provision of social housing and the bus service.

It's expecting to be over budget by £1.1 million.

The airport, public estates and bus divisions are expected to generate income below the budgeted levels, but the effects are offset to an extent with waste, highways, fleet and housing forecast to exceed their budgeted income. 

The main areas of forecast overspend are housing deficiency and busses which are currently expected to show £1.2million and £1.1million negative variances to budget respectively. 

HEALTH AND SOCIAL CARE

The Department of Health and Social Care was already forecasting an overspend by June 2024 which has been 'primarily driven by increased costs in Manx Care, in areas such as tertiary contract activity and additional drugs costs'. 

Treasury says: "Without corrective action this overspend was due to increase by the end of the financial year. A range of cost improvement savings have already been agreed by the Manx Care board to reduce the projected year-end overspend while continuing to maintain critical services."

The report states Manx Care is currently forecast to be overspent by around £17.8 million (after internal fund reimbursements). 

Employee costs are forecast to be £1 million over budget 'but there is some additional risk relating to pay awards that are yet to be agreed'.

OTHER DEPARTMENTS

Elsewhere - Treasury, DEFA, Home Affairs and the Cabinet Office are all predicted to be on or under budget for this financial year.