Skelton presses government over rising debt

The government has come under renewed pressure in the House of Assembly over rising debt levels and the use of reserve funds, as Territorial At-Large member Ronnie Skelton questioned the sustainability of the 2026 budget during debate on the Appropriation Bill.

Speaking in the House, Skelton drew attention to the gap between projected revenue and expenditure, noting that government plans to collect $447.7 million while spending $454.5 million, requiring additional financing to balance the budget. He outlined how the shortfall would be covered through transfers from multiple funds and additional borrowing.

“The budget estimates intend to collect $447.7 million and they’re basically going to spend $454.5 million,” Skelton stated.

He said the government intended to close the gap by drawing from the Environmental Fund, the Miscellaneous Purpose Fund, the Transportation Network Improvement Fund and the Contingency Fund, while also servicing existing debt obligations.

“The government needs to pay down the principal on debt, which is about $90 million,” Skelton said.

Skelton acknowledged that some of the debt was incurred under previous administrations, including during his tenure as Minister of Finance, but warned against taking on obligations without clear repayment capacity.

“I am very prudent in debt. I don’t take on debt that I can’t afford to pay,” he stated.

He also questioned the sharp increase in planned withdrawals from the Reserve Fund, pointing to discrepancies between earlier draft estimates and the final figures presented to the House.

“In the first draft of this budget estimate, the monies from the reserve were $9.7 million, and now it’s $20.776 million,” Skelton said.

Skelton further highlighted the scale of proposed capital spending, with $87.249 million earmarked for capital works, development projects and acquisitions, much of it to be financed through existing loans and reserve funds.

“If you add the money coming out of the Reserve Fund, it’s $29 million,” he said.

Beyond the immediate budget figures, Skelton argued that revenue growth had failed to keep pace with expanding expenditure, noting that while total spending had grown substantially over recent years, revenue performance had remained largely flat.

“The budget itself gone from close to $400 million to $550 million, but the revenue is not showing any sign of major improvement,” he stated.

Skelton’s remarks come against the backdrop of ongoing constraints on the territory’s borrowing capacity. The Premier previously acknowledged that the BVI remains subject to borrowing limits imposed by the United Kingdom, which require UK approval for new loans and place ceilings on public debt as part of post-Commission of Inquiry fiscal oversight arrangements. Those restrictions continue to shape the government’s ability to finance large-scale projects through borrowing.