A SURPLUS of £19.3M was achieved in 2010/11 against an original budget deficit of £1M according an external audit of the Falkland Islands Government.

A paper on the subject notes, "However, the full picture is not as rosy as this headline might suggest.  There are a number of windfall factors that need to be highlighted.  There are two areas which FIG can't influence and a third which was not anticipated at the time of the budget, that have significantly impacted on the results for the year:

Surplus in year  £19.3  £M
Investment returns* (£6.5) £M
Fishing licences* (£7.3) £M
Oil Exploration** (£6.5) £M
"Standard" Deficit (£1.0) £M

The report continues, "This shows that excluding the unanticipated revenues (see above) a £1M deficit is evident in line with the original budget.

"It should also be noted that in the first two months of the 2011/12 financial year investment portfolios have decreased in value by £4.4M due to the drop in global markets.  Therefore a significant portion of the additional investment returns received last year in this area have already been wiped out."

"Net Liquid Assets at the June 30, 2011 totalled £110.2M;  equivalent of 2.9 times departmental expenditure.  This is included in the Balance Sheet attached as an appendix."

*In excess of budget (not total revenue).

**This is an amalgamation of revenue votes showing greater than estimate for which the main reason is considered to be oil exploration related.