DHSS could face cuts in services

All government departments are expected to be hit

Health and social services staff on the Isle of Man are being asked for their suggestions on how to cut costs.

The Manx government is to lose up to £140m a year in revenue from 2011 because of the UK's revision of VAT sharing arrangements.

The Department of Health and Social Security (DHSS) said it could face cuts in some services as a result.

It added that a review of all services was being undertaken but it is not yet clear where the axe will fall.

Unions consulted

In a statement, the DHSS said whilst health and social care would remain government priorities, "cuts in services may have to be made".

"It is important that all proposals to cut expenditure are carefully considered and that the implications are fully assessed," said a spokesperson.

"We would not wish to act without being fully aware of the implications and having consulted with our staff bodies.

"The department is currently briefing its staff and seeking their suggestions for cost savings and has had helpful discussions with trade union representatives."

Last month, Chief Minister Tony Brown warned that public services, jobs and voluntary groups could all be affected by the sudden financial pressures.

About £300m is brought in every year through shared revenue from VAT and other indirect taxes.

But the new UK-enforced arrangement, coupled with the drop in VAT rate to 15%, means a loss of revenue of £90m in 2010 and £140m thereafter.