A bulletin has been issued by the Isle of Man Government that casts doubt on the future of projects on the railway, such as the recent proposal to resurrect the railcar project, following the announcement of the V.A.T. agreement between the U.K. and Manx Governments.  The statement reads as follows and was issued by Mary Williams of the government:-

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Dear Colleague,

You may be aware that in Tynwald yesterday the Chief Minister has made a statement outlining the very serious situation facing the finances of the Isle of Man Government as a result of the change to the arrangement of sharing revenue from V.A.T. and other indirect tax to between the island and the United Kingdom.

In addition to the revenue reductions already projected due to the state of the U.K. economy and the lower V.A.T. rate the change means we face an estimated loss of ninety million pounds in the next 2010/2011 financial year and a 140 million in subsequent years.

Such sums are clearly significant given that the government’s overall net revenue spending is estimated at 572.1 million in the current financial year.  Government will be examining all budgets in the coming months to see how spending can be reduced and this will involve all departments, boards and offices.  No decisions have yet been taken but no option can be ruled out as we seek to secure priority services for the public and safeguard the island’s future.  The Isle of Man is not immune to the financial problems that are affecting the rest of the world.  Our community has a good track record of dealing with change and the current challenge can be managed albeit that some very difficult decisions will have to be taken.  The full text of the Chief Minister’s statement can be seen on the Isle of Man Government website at www.gov.im/cso