All Government of Montserrat ministries and departments have been instructed to cut their budget by 10% in the hopes of stretching funds to be able to pay salaries and provide services.
Minister of Finance and Premier, Joseph Farrell said last Friday that they are doing some pruning to be able to continue to run the public service.
Montserrat’s budgetary support is allocated in pounds and was set at the start of the budget year at 3.65 XCD to the pound. However, the pound has been dropping rapidly since then, now hovering at about 3.0.
“We are struggling to make sure we deliver the quality of services to the people of Montserrat,” the premier said on Let’s Talk on ZJB Radio Montserrat.
Farrell said most people were unaware that the aid from the British Government is not given in one go, but they must draw down in tranches at least four times a year. This means that Montserrat is exposed to all fluctuations in the rate of the pound.
He said at the current exchange pound to EC rate, they must spend more pounds to meet the quarterly budgetary expenses.
The finance minister admitted that there was “very little money left”, with Montserrat having lost up to 15 million XCD on the falling pound.
The total budget allocation for the fiscal year 2022/23 is EC $194.03 million, consisting of:
- EC $140.17 million of estimated recurrent expenditure;
- EC $53.86 million of estimated capital expenditure.
Budget support from the UK’s Foreign Commonwealth and Development Office is £24.12 million or EC $88.03 million, equating to 63% of the recurrent budget.
Deputy Premier Dr. Samuel Joseph said in last week’s topical debate in Parliament, that the UK Government is unwilling to make up for this shortfall.