The government’s latest management accounts forecast a net expenditure overspend of £7.2m for the 2025/26 financial year, despite stronger-than-expected income tax receipts.
The forecast to the end of September 2025 predicts government income will finish £24.1m ahead of budget, driven by a £31m surplus in income tax.
However, significant cost pressures, particularly on employee pensions and Manx Care, are pushing expenditure over budget.
The accounts state: “The current forecast for the full year is that government net expenditure will end £7.2m above budget, an adverse variance.”
It notes “Manx Care and Superannuation costs continue to face pressure which impacts the overall net government position significantly.”
Superannuation lump sum payments are a primary driver, forecast to be £16.3m over budget. For Manx Care, operational spending is forecast £9m over budget, with additional cost pressures of £4.1m.
The strong income tax performance means the government does not currently intend to draw £8.3m of planned investment income from reserves. “The investment income is not expected to be required to fund General Revenue expenditure this year,” the report notes.
Year-to-date figures show a £1m adverse variance, a shift from a £2.9m favourable position in August, attributed to timing differences in expenditure and internal fund claims.