Budget formula to change

The Outer Islands is one of those vulnerable areas in the budgeting process for the next financial year but the formula that has been applied over past years to work out what each island is allocated, will probably be scrapped next time around. For some years, the formula has been used to calculate the allocations despite criticism over its flaws.
For a start, the application of a formula for the Outer Islands makes it distinct from the rest of the government departments, who are left to fight over whatever money is left – once the commitments are taken care of: like welfare payments, Civil List entitlements, and other legislated and contracted obligations. Secondly, the formula is said to be based mainly around population – a constantly shifting trend – and also does not take into account the special geographical nature of each island, which may demand a variation in the resources.
With next financial year shaping up to be a belt-tightening squeeze, the Outer Islands is not likely to get much in the way of extras. However, once the formula is reviewed for the following financial year (2011/2012), the Government is expected to re-align the allocation of resources to match its sector approach to regionalizing the priorities.

Headlines : Times 290 02 March 2009
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