PRESS RELEASE
Report on Executive Council for 27 th January 2026
A meeting of Executive Council was held on 22 nd December 2025 which considered papers on Budget Planning and Cost Recovery Principles. Decisions on these papers was deferred to allow time for Members to be briefed in detail, to gain a greater understanding of the current financial commitments, and to create new budget principles rather than continue using the budget principles of the previous Assembly.
A meeting of Executive Council (ExCo) was held on 27 th January 2026. MLAs Roberts, Clifton and Ford were in attendance. ExCo considered the following papers:
Budget Planning – 2026/27 Onwards
This paper formed the beginning of the 2026/27 budget process, against the backdrop of a forecast operating deficit of £3.4m for the 2025/26 financial year, and a forecast reduction in reserves from a current 3.1 times adjusted departmental expenditure to 1.2 times in 2027/28, due to significant capital expenditure. This paper sought direction on the budget principles, timeline, and options for the budget process.
Given the current financial situation, the clear call for change from the electorate, and following discussion/consultation with all Members, ExCo have approved a new suite of budget principles:
- Live within our means.
- No public sector borrowing for operating purposes.
- Must maintain a minimum of 1.5 times operating expenditure in uncommitted reserves for every year of the life of this Assembly.
- Ensure sustainable pension arrangements.
- Provide an appropriate level of funding to maintain cost efficient and effective
public services.
- Prioritise investment in critical national infrastructure.
- Encourage sustainable and affordable economic development.
- Within our financial means, strive for improved social equity and fairness.
ExCo approved a proposed new budget process which aims to provide a more streamlined and strategic approach. The budget timeline has been amended to reflect the decision on the budget principles and process.
Cost Recovery Policy Principles
This paper presented a Cost Recovery Policy Principles document. It follows requests from previous Budget Select Committees to put in place a policy framework to address a gap faced by previous Assemblies who have not had all the information required to fully appreciate the relationship between cost and price when approving fees, and to ensure corporate consistency going forward. The three proposed policy principles that all fees and charges should follow are:
- Service-linked – Users must receive a specific good or service, and the
charge for which must be clearly linked to the cost of delivering that good or
service.
- Transparent and fair – Cost calculations must be based on a clear and
documented methodology and rationale.
- Equitable – All recipients should be charged equally unless there is a
reasonable policy justification for an alternative treatment.
Approval of a cost recovery policy does not mean that all fees and charges must increase, it creates a framework to provide a consistent way of handling fees and charges. Implementation will take several years and final decisions on the level of cost recovery will reside with Members. ExCo approved the Policy Principles.
FIG Annual Financial Statements and Audit Completion Report
ExCo approved the Annual Financial Accounts and Audit Completion Report for year ended 30 th June 2025 (Retirement Pension Equalisation Fund Accounts for year ended 31 st December 2024), and requested the Chief Executive to lay these on the table at the next sitting of the Legislative Assembly, whilst noting that two of the current Executive Council Members were not on the previous Assembly and would not be in a position to respond to any questions in relation to the accounts.
FIG Lending to Private Sector – Closed Paper
Currently, within the Falkland Islands, private sector businesses have no access to large value commercial finance to support capital investment or business development. The Falkland Islands Development Corporation have a limited budget available, supported by an annual FIG subvention. FIG have been exploring mechanisms to facilitate access to funds for the private sector for some time.
Due to positive recent investment performance, FIG have received a windfall of £19 million on our investments.
After careful consideration of the options available to facilitate lending to the private sector, the potential impacts on the medium-term financial forecast, and balancing this against other key priorities, particularly the need to address the current housing situation, ExCo have agreed to utilise the £19 million investment windfall in the following way:
– FIG will make available up to £9 million for the purpose of providing loans to private sector businesses, prioritising lending to support key priorities.
– ExCo is minded to make up to £10 million available for housing development, and requests that options be brought for consideration at the earliest opportunity.
– FIG will continue to explore alternative options to facilitate lending to the private sector.
Rolling Aircraft Replacement Project – Update – Closed Paper
This paper provided an update on the Rolling Aircraft Replacement Project and sought approval to proceed with a comprehensive review of the Falkland Islands Government Air Service (FIGAS) before further commitments are made.
FIGAS currently operates a fleet of five Britten Norman BN-2 Islander aircraft, with one new aircraft in production. Delivery of the new aircraft has been repeatedly delayed, and the service also faces significant operational and financial challenges. Given these challenges, it was recommended to carry out a full review of FIGAS before progressing any further with the aircraft replacement project.
ExCo approved the terms of reference of the planned review, which will include
engagement with service users.
Supply of Printer and Photocopier Services – Closed Paper
The purpose of this report was to enable ExCo to consider the contractual provision
of printer and photocopier services for the Falkland Islands Government.
Response to letter from PAC: Review of the payments to Sure South Atlantic
Ltd (2018-2027)
ExCo approved the response to the Public Accounts Committee in relation to the recommendations from the review of payments to Sure South Atlantic Ltd. The response will be submitted to the meeting of the Legislative Assembly on 26 th February 2026.
Development of a Land Recovery Programme: summary of consolation phase one and design recommendations This paper provided feedback from the consultation phase and the proposed principles for the development of a Land Recovery Programme.
The Department of Agriculture (DoA) have been working on developing a Land Recovery Programme to support the economic sustainability and ecological resilience of farming, communities and ecosystems within the Falkland Islands. The DoA launched a participatory co-design process, this first phase involved a public survey, in-depth interviews, and workshops.
ExCo noted the feedback and approved the Land Recovery Programme progressing to phase two of the consultation process, involving development, launch and evaluation of a draft programme structure following an agreed set of principles.
Offshore Petroleum Professional Services Framework
ExCo approved the concept of a new DMR Offshore Petroleum Professional Services Framework and direct officers to develop a framework that would be brought back to ExCo for approval before the commencement of procurement activity for a framework agreement. This framework would enable faster procurement, reduce administrative burden, and deliver consistent quality, supported by robust commercial management controls once established.
Offshore Minerals (Amendment) Bill 2026
This paper included a Bill to amend the Offshore Minerals Ordinance 1994 to enhance the Government’s powers and reduce risk to Government, including financial risk, arising from the decommissioning of offshore installations and pipelines.
ExCo agreed for the Bill to be published in the Gazette for the First Reading. It was noted that current holders of productions licences will be notified and given the opportunity to make representations.
High-Cost Medication Policy
ExCo approved a High-Cost Medication Policy which aims to provide a clear protocol and framework for decisions relating to high-cost medications considered for prescribing at the KEMH. This policy development has become necessary due to rapid rising cost pressures in respect of high-cost medications in recent years.
The policy makes clear the criteria that must be met for high-cost medications to be considered for prescribing in the Falklands, and the decision-making process depending on whether the cost can be absorbed within existing budget allocations or
not.
Annual Review of Market Supplements
ExCo noted the annual report regarding the implementation of market supplements for the period January to December 2025. Market supplements can be approved for a post where there is demonstrated difficulty with recruitment or retention.
During the reporting period, six requests for market supplements were approved, but only three were recruited to. For the remaining three posts recruitment remains ongoing. The total cost of market supplements actively being applied during the period was £61,218 and related to five posts (six Full Time Equivalents).
Proposed Memorandum of Understanding (MoU) concerning Maritime Security Standards
ExCo approved the signing of MoU with the UK Department for Transport (DfT) concerning the implementation of maritime security standards, as part of obligations under the International Ship and Port Facility Security Code. The MoU is part of increasing collaboration between the UK DfT and the Overseas Territories and will help set out respective roles in support of ensuring port security. FIG is already compliant with all the actions and endeavours assigned to it under the MoU.
Prison Monitoring Board Annual Report 2025
ExCo noted the annual report of the Prison Monitoring Board on the administration and condition of the Prison. The Board considers the Prison fit for current purpose and in good repair.
Annual Report of the Falkland Islands Maritime Authority (FIMA)
ExCo noted the annual report on the exercise and performance of FIMA. The report
covered training, legislation, progress against audit findings, vessel inspections, links
to other agencies, and Coastal State responsibilities.
The report will before the Legislative Assembly and the next meeting of the Maritime
Committee.
MLA Jack Ford
29/01/2026
