Politics
Surprise fuel cut in budget
(CNS): The premier has announced a reduction of 25 cents per gallon on diesel duty imported by CUC from 1 January next year, which will cut the cost of bills for both residential and business customers. In his presentation ahead of the finance minister's budget Monday in the Legisaltive Assembly, he revealed the fuel duty cut as well as reduction in general duty of 2% on all goods for licensed retail traders, which he also said would help merchants cut their prices and encourage people to buy local. As he began delivering the full budget, Marco Archer also announced that government was expecting to end this financial year with a $108 million surplus, $7 milllion more than expected.
Check back for more reports from budget throughout the day.
McTaggart’s U-turn revealed
(CNS): A report from a parliamentary committee to be laid in the Legislative Assembly during this week’s meeting reveals that government back-bencher Roy McTaggart proposed a committee motion which he ultimately voted against when legislators last met. The U-turn by the George Town C4C member, who serves as a councillor in the ministries of finance and financial services, is shown in the minutes of meetings of the Oversight Committee for the Office of the Complaints Commissioner (OCC), chaired by Ezzard Miller. The document shows McTaggart had proposed and agreed that the committee chair table a report by the OCC on whistleblowing and move a motion in the LA that it be accepted as government policy.
According to the minutes from 1 April, seen by CNS, which are contained in the committee’s annual report, the members had discussed a report by Complaints Commissioner Nicola Williams on whistleblowing. During the meeting McTaggart moved a committee motion, which was seconded by opposition member Bernie Bush. The motion directed the chair to table William’s report and draft a motion for debate in the LA, as the committee members all agreed the report should be debated ahead of government adopting the recommendations in the report as policy.
However, some nine days later when Miller tabled the report and moved that agreed motion, not only did the government benches shy from debating the motion but McTaggart also voted ‘no’ to the adoption of the report’s recommendation, despite his position just a week earlier.
The motion and McTaggart’s U-turn caused a political stir, as the government appeared to be taken by surprise by the motion tabled by Miller. But the chair stated at the time that the motion proposed by McTaggart had been accepted by the committee members at the 1 April meeting, with the exception of PPM back-bench committee member Al Suckoo, who was not present.
The minutes for the following committee meeting on 15 April reveal that the committee was concerned that despite their agreement McTaggart had voted ‘no’ and that only the deputy governor and the premier had said anything on Miller’s motion. The commissioner was also very disappointed that the government had chosen not to debate the motion about her recommendations, given the significant public interest. She said such a debate and show of support would have “given comfort to whistleblowers".
Williams also revealed that despite her work she had not been consulted about the proposed legislation or discussion document which the Law Reform Commission recently published for public input. However, but her office had offered to assist and that offered remained.
Budget finally gets UK OK
(CNS): The UK has finally given the nod to the Cayman Islands government for its 2014/15 spending plan, which the finance minister said does not include any new revenue raising measures. With approval for the budget coming from the FCO on Wednesday Marco Archer, the finance and economics minister, can now deliver the budget Monday at the State Opening of the LA as planned. Describing the spending plan as a business-friendly budget, he said it would positively impact the business community and households as well as various sectors of the economy, with no inflationary triggers, yet controlling costs through prudent spending. “This budget is a good package,” Archer said Thursday.
The minister said the preparation for what will be his second budget began in February and his boss, Premier Alden McLaughlin, recently revealed that the government had not had an easy time as the personnel cost for the civil service had blown the operating expense side of the ledger.
Nevertheless, Archer has now balanced the books to the liking of the UK, and although he is promising no new taxes, there are no indications that there will be any cuts to the fees implemented by the previous administration, such as the duty on fuel, and civil servants will see another year go by where their cost of living allowance continues to be withheld.
The first sitting of the LA’s 2014-2015 meeting will open with the governor’s Throne Speech, when Helen Kilpatrick will outline broad government goals for the coming fiscal year, after which there will be a presentation given by McLaughlin detailing policy plans, followed by Archer’s Budget Address. The opposition leader’s response and the debate by MLAs on the three presentations is expected to start on Thursday, 29 May.
Following that the members will examine the budget in detail in Finance Committee, and once passed by the parliament, the budget has to be gazetted before 30 June 2014 in order for government to carry on functioning on 1 July.
CIG settles with ousted bosses
(CNS): After more than five years on paid leave, the former chief officer in the health ministry, Diane Montoya, and the deputy financial secretary in Financial Services, Deborah Drummond, have been offered a deal by the Cayman Islands Government. The amount of the settlements, despite coming out of the public purse, remains under wraps but both women received a lump sum which equates to the annual salaries they would have earned until their retirement at 60 had they stayed in the service as well as some legal costs. Neither women were ever accused of any wrongdoing but were maneuvered out of their top public sector jobs when the UDP administration, led by McKeeva Bush, reorganized the ministries following the 2009 election victory.
In a statement from the deputy governor’s office on Wednesday, officials said that the agreements came following “protracted negotiations” but the government had amicably settled the women’s clams. Under the terms of a confidential agreement, they will officially retire from the civil service, on 1 July.
“The financial terms of the settlement reflect government’s legal obligation to compensate the officers for the loss of salary between their early retirement date and their normal retirement date upon their attaining age 60. A sum will also be paid as a contribution toward their joint legal fees. The officers will receive their normal pension entitlements appropriate to their 2014 retirement date,” Deputy Governor Franz Manderson said in the statement.
He also described the officers' departure as a loss for the service.
"At no time has any allegation of wrongdoing been made against the officers, despite their having been put on required leavedating back to 2009. In the face of this difficult situation, the officers have conducted themselves with the utmost professionalism and have, throughout the arduous process, demonstrated respect for the offices they held and the people and government they have collectively served for more than 60 years,” Manderson added.
Given that both women were commanding top six figure salaries as Grade C public servants, the cost to the public purse is likely to be more than $3 million because when the women were placed on required leave in 2009, they were only in their forties and many years away from the civil service retirement age.
Graham Hampson, who represented the two officers, emphasised that his clients were, in light of the all the facts and especially their many years of unblemished service with distinction to the Cayman Islands, entitled to personal privacy in relation to the details of the resolution of the matter, hence the confidential nature of the agreement. He thanked the government for recognizing and respecting this fundamental right.
No reasons were ever formally given for sending the two senior civil servants home. The deputy governor at the time, Donovan Ebanks, said they had done nothing wrong and were awaiting a decision to place them in new roles, but no new jobs were ever forthcoming.
After the women had been on leave for some five years, Manderson said at the UCCI conference that such a situation would not be allowed to happen ever again.
He noted that there was a difference between a reshuffle of the ministries, which he said most new governments do, and just sending senior civil servants home. In this instance, when the Bush administration realigned the ministries things went much further than a reshuffle, with Drummond, Montoya and the former education ministry’s chief officer, Angela Martins, all being sent on required leave. Martins, however, retired in 2011.
Cuts not just privatization
(CNS): Premier Alden McLaughlin and Deputy Governor Franz Manderson were both keen to press home the message Friday that the review of the civil service currently being conducted by local management consultants Ernst and Young (EY) is not just about selling off or privatizing government assets. McLaughlin said that this 'Rationalization' process would examine how government can merge or amalgamate departments and services to help bring down the cost of government. He said the exercise was to determine how best services can be provided and the premier expected that EY will make recommendations about areas that can be restructured and not just sold.
“I want to make it clear that rationalization is not privatization,” the premier said. “A rather simplistic view has been taken by some that we can just sell of this agency or that company.”
McLaughlin said the process was about how best to deliver government services generally and EY is expected to make recommendations about restructuring, amalgamation, consolidation, streamlining, outsourcing and possibly privatization via this strategic overview.
Government has not identified any specific services or departments that would be the most obvious to sell off, as the premier said there were no preconceived ideas about what EY might find.
Manderson explained that the civil service had already done what it could so far without engaging the expertise now contracted to help make the next changes. He said this phase of rationalization would transform government.
Dan Scott, the regional partner of EY, said he was taking a particular interest in the project and it was critically important to get this right. He said the public sector has grown hand in hand with the private sector but it was time to pause and see if it can be more effective. Scott said that would also help the civilservice attract the right talent and warned that it was time to embrace change.
“I have taken a personal interest in it and will be very involved in the process because ultimately, while we can deliver solutions, it needs to be about delivering solutions that have an understanding of the local market place and not just solutions that come out of a text book,” he said, adding that EY had assembled a talented team.
Leading that team is Larni de Courtenay, an EY expert from Australia who has spent several years working with the government there on the same sort of rationalization of the public sector. She said she would be bringing that experience to the table here in Cayman. She said that in Australia they had adopted a number of different rationalisation strategies that were not just privatization and they were hoping to capture ideas from those inside the civil service.
Rivers claims a productive year at ministry
(CNS): The education and employment minister claimed a successful and productive year when she held a meeting last week in her West Bay constituency. Despite continuing problems in the schools and unemployment levels among Caymanians, in particular the under 25's, Tara Rivers was patting herself on the back for a job well-done. The minister stated that she and her councillor, Winston Connolly, both of whom joined the Progressives' government after winning their seats on the Coalition for Cayman ticket in the general election, “have been extremely busy driving a policy agenda” to accomplish key objectives in the ministry. Rivers has released her own progress report, outlining what she said were those key accomplishments.
“This year has been a very productive one. We have made great strides in many key areas in a relatively short period of time. We still have a long way to go, but we have made tremendous progress already in this first year since taking office, and it is important for us to share this progress and the accomplishments with the country, so that the public knows exactly what we have been doing,” Rivers said as she thanked staff in the ministry, the various departments and the schools.
“I look forward to continuing to drive the policy agenda to improve our education system, to improve our labour and employment mechanisms and to promote gender equality in all aspects of life in our country,” she said.
According to the latest figures from the Economics and Statistics Office, the unemployment rate among locals fell marginally during 2013 from the high of 10.5 percent in 2012 to 9.4 percent. However, there are still major concerns about the levels of unemployment among local people and the barriers that many say they are facing.
With a reduction in the size of the civil service, a major policy objective of the government over the next financial year, Rivers may find herself dealing with another increase in local jobless numbers in her second year in office.
See progress report below.
CS bill ‘blew’ budget figures
(CNS): The hefty personnel costs for the civil service have again been blamed for the delay in government’s plans to deliver an annual budget. The premier said Friday that the LA date was pushed back because of the battle it had to bring the numbers down to fit the limits set by the UK on the CS tab. Speaking at a press conference about the latest phase of the public sector cost cutting exercise, Alden McLaughlin said although the budget submitted to the FCO now meets the parameters, the challenge had been getting it to that point because the limit for government personnel is fixed at $241 million. Faced with a need to fill 174 vacant posts and 17 new jobs, “It just blew the budget by $8.6 milion,” he said.
“We had to get that back in line, not just to get the numbers right … but we have to have some degree of flexibility over the course of the year to fill positions and hire new people, so it means we had to push the numbers down even more. That’s been the great challenge of this budget,” the premier explained.
“On all other fronts … all the numbers came in really, really good. Revenue is up above what we had proposed and expenditure is what we planned and paid down debt …,” he added as he indicated that government’s net debt ratio, cash reserves and other requirements were on track.
The premier said the troubling aspects remained the cost of the civil service and as a result, just over a week away from the anticipated Budget meeting, he said government was still waiting for the OK from London.
Having contracted Ernst and Young to work with the civil service to focus on the possible merger, amalgamation and privatization of public services to enable government to become more efficient, more effective and streamlined without creating major job losses was a major challenge. But, he said, his government was committed to seeing it through.
McLaughlin said there had been an “explosion over the course of the past decade” that had “created immense pressures on expenditure”, which all government had, and would continue to, grapple with.
He said the growth in public sector personnel costs was largely down to the Public Management And Finance Law and the Public Service Management Law, which had required a proliferation in numbers of personnel as each government entity was obligated to take on its own human resource and financial accounting functions from what was once a more centralized system.
That was, he said, “when the numbers exploded through roof” when the laws took effect, during the time the previous PPM government was at the helm, he had conceded.
McLaughlin warned that the attempts to manage costs to date were now unsustainable. The austerity measures, working with huge numbers of vacant posts and other challenges were impacting the delivery of services, such as police, immigration, prison, fire and many more. He explained that the personnel requirements meant government couldn’t give public sector workers the 3.2% cost of living allowance back.
“We think they should get more…but it is because the personnel costs are just too high and we have reached the ceiling,” he said. “It’s not just salaries but the health care …and long term pension commitment,” he added.
McLaughlin pointed out that if the numbers were allowed to continue to grow, the ability of government to pay decent salaries, give raises and provide the generous benefits would be compromised for all government employees. Regardless of who was elected to government, the premier said, the challenge will remain until it is properly addressed.
“What’s going to happen is that benefits will be eroded and decent salaries compromised,” he added, for everyone on the government payroll.
McLaughlin said he was determined to put it right and find the right way to contain costs, preserve benefits and reasonable pay and to stabilize the situation for civil servants who have been faced with uncertainty over the last five years or more over pay, benefits and jobs. He said government was going to create a sustainable civil service that was the right size and able to provide the right services.
Franz Manderson, the deputy governor, explained why phase five of the rationalization process, in which government had enlisted the professional help of EY, was different to many that have gone before.
He said this would examine not just how government could perform the services better but who as well how services can be delivered through mergers and amalgamation, partnering with private sector or privatization. It would also, Manderson said, conclude with “recommendations and a road map for implementation.”
The other factor that the deputy governor noted of specific importance was the political support from the elected arm of government.
“It is Important to know that this exercise is different,” he said adding that he believed it would be a “tremendous success”, not just because of the joined-up approach, with both his office and that of the premier’s committed to the process, but that the elected arm of government would be directing the policy decisions.
“If government wants to privatize or amalgamate it will be my job to make it happened. Once the elected government makes the decisions we will carry them out and make sure staff are treated fairly and equitably,” Manderson added.
Although government has not yet stated what areas are the most likely to be targeted, civil servants and the broader public won’t have to long to wait as the EY’s $155,000 plus expenses review is expected to be completed before the end of June and from that government will begin the process of implementation.
McLaughlin made it clear that there are no preconceived ideas and anything, with the exception of the judiciary, was possible in any public sector entity.
PAC delays public meetings on governance reports
(CNS): The Public Accounts Committee recently cancelled a proposed public hearing on a collection of damning reports from the Office of the Auditor General (OAG) dealing with the management of resources, accountability and good governance. The five reports were published by the auditor general in January but now will no be publicly scrutinized until later in the year because, the PAC chair said, witnesses were too busy to come to the meeting due to budget preparations. The reports revealed that values and ethics are being applied only selectively in government and while Cayman has a sound governance framework, officials are simply not following or implementing the rules as designed.
The auditor general found systemic and structural problems in government which leaves the public purse open to abuse. Fundamental controls that should ensure lawful expenditure are not robust and are not good enough to even say if budget appropriations are accurate. No one can be sure that the money legislators vote on government is the money that is really required or spent.
Despite the damning revelations, the PAC chair waited until the week before the budget would be delivered for 2014/15 to call a meeting in order to question civil servants on the OAG’s findings. However, Roy McTaggart told CNS that he had cancelled the meeting.
“Following the issue of notices to witnesses and members by the LA staff last week, I was made aware that because of ongoing budget preparations, ministry personnel would find it particularly challenging to attend the meeting as required by Standing Order 77(8),” he told CNS in an email on Wednesday in response to questions.
“In the circumstances, I thought it best to allow the budget preparations to continue without disruption, thus I chose to postpone the meeting until afterthe budget session,” he said.
So far, since it was established in June of last year following the May 2013 general elections, the PAC has held only one public session. That meeting was held in September and the committee examined reports dealing with inappropriate board and political interference at several statutory authorities. During that meeting McKeeva Bush, the former premier and now PAC deputy chair, attacked the auditor general and refused to accept his findings.
The committee has not yet submitted its report on that hearing, any minutes of its closed door meetings or an annual report of the committee's work over the last 12 months.
The former PAC chair, Ezzard Miller, said he was disappointed to see that the new PAC had fallen back into old habits and had not maintained the pace he set when he was chair of not only scrutinizing reports in a timely fashion but keeping the Legislative Assembly informed of the PAC’s work.
Miller has criticised Premier Alden McLaughlin on numerous occasions for nominating and voting for Bush to take a seat on the committee, which will be tasked with examining reports that take aim at his time as premier, which Miller believes will hamper the work of the committee.
The independent member’s fears may also have been born out as sources close to the matter tell CNS that at least one recently completed audit report that should have been sent to the PAC has been withheld by the legal department. This, CNS was told, is because the content infringes on the criminal case against the former premier, who is due to go on trial this September facing charges that relate to the misuse of a government credit card.
“This is an example of the absurdity of this situation when the relevant authority cannot send a report to PAC to undertake the work it is duty bound to perform because it may concern one of its members,” he added.
Bush has vigorously denied the allegations against him and since he was first charged, some eleven counts relating to theft have been dropped. The former premier is now facing allegations of misconduct and abuse of office.
LA Budget date changed
(CNS): Legislative Assembly officials have announced that the budget meeting will now take place on 26 May providing that the UK gives the finance minister the nod for his 2014/15 spending plan. The official notification of the State Opening & Budget Meeting of the Cayman Islands Legislative Assembly was sent via email to members on Wednesday evening indicating that the House will now meet to deal with the government's second budget a week on Monday and not next Wednesday as had been expected. Ezzard Miller the MLA for North Side said that members were given just twenty-four hours to submit motions and questions for the meeting which he said was unacceptable.
The formal letter sent by the LA to members of the country's parliament on Wednesday said Parliamentary Questions and Motions had to be submitted before 5pm today, Thursday 15 May as a result of the standing order requirement that these have to be handed to the Clerk no later than ten days notice prior to the commencement of the Meeting.
Miller said this was even worst than the last government and despite the election promises of the PPM government to restore the integrity of parliament they were also "treating it like a fish shop". He said that the email was sent out from the LA at 5-40pm on Wednesday evening giving members less than twenty four hours which was unacceptable.
The independent representative said it made it impossible for him to do his job properly as he pointed out he had arranged to meet constituents this evening to discuss some issues that would have led to a possible motion or questions but now he said he will not be able to help them in this meeting as the deadline has come and gone before members.com have had anytime to consider what they need to submit.
'This is worse than its ever been," he said, adding that as bad as things were under the UDP the Speaker would allow questions and motions to be submitted after the deadline though he conceded that was wrong.
"We have to get to the point where the speaker sets the four meetings of the parliament for the year and ministers then should work towards those dates," as he berated the arbitrary approach that the current government was taking to meetings when they had criticized the previous administration for behaving the same way.
Although the premier had made an attempt to set a parliamentary timetable it was only three dates and in the end they were changed.
Miller also pointed out that had the former premier, Mckeeva Bush not changed the law to give his UDP government until the eleventh hour to deliver their budgets, the PPM, who had objected to that change at the time when they were in opposition, would also have been a month late with their 2014/15 spending plan. Miller railed against what he said was the continued disrespect for the Legislative Assembly and by implication the country's democratic system.
Whistleblowing input wanted
(CNS): The public is being asked to comment on a new discussion paper drawn up by the Law Reform Commission, which will be used to draft legislation to facilitate and protect people who blow the whistle on skullduggery in public office. Government has been discussing the legislation for several years, but despite the general agreement that Cayman needs to create a safe environment for disclosure of wrongdoing, there is still no law to protect or assist those who have witnessed misconduct. The LRC said the new paper looks at the need for encouraging people to speak out about wrongdoing without fear of losing their jobs or being persecuted in some other way.
The issue came to the fore in the Legislative Assembly recently during what turned out to be a controversial debate when North Side MLA Ezzard Miller called on government to implement the recommendations made by the complaints commissioner in her report before the end of the year. Government voted against Miller's motion without entering into the debate after the deputy governor said it was working on a law to address her recommendations. It was later revealed that government's primary objection was that one of the recommendations conflicted with the constitution.
However, the appearance of the LRC's discussion paper just last week in the public domain suggests that government is even further away from potential legislation to protect whistleblowers that was implied in the LA last month.
The report by commissioner Nicola Williams, which was published in March, made it very clear that most public servants were extremely reluctant to come forward as experience had taught them that those who tell usually end up out of a job or persecuted in some way. Her findings were supported by the outpouring of comments on the story on CNS, in which the vast majority of bloggers indicated that they did not believe it was safe for anyone in government to disclose any concerns about potential wrongdoing.
Williams' research led her to conclude that the environment in the public sector was such that not only was there no protection for those who expose wrongdoing, but the culture positively discouraged any kind of disclosure.
Her findings were at direct odds with the widely proclaimed and collective desire of both the public and private sector for a transparent and corruption free government, underpinned by modem legislation and institutions that support openness and honesty. As a result, the pressing need for legislation is not in doubt but Cayman remains at a very early stage in the legislative process.
Nevertheless the LRC has at least drawn up a detailed discussion paper as a starting point for a whistleblowers law or, to give it its formal title, a Protected Disclosures Bill.
"The Discussion paper gives an overview of the current legislation in the Cayman Islands and how persons are protected under legislation in some other jurisdictions. It also submits for public input the issue of whether financial incentives should be paid for disclosures of improper conduct," the commission stated in a release with the publication of the paper.
The main objective is to draw up a law that will facilitate and encourage the responsible disclosure of genuine improper conduct and properly protect those that blow the whistle. The bill also proposes a definition of improper conduct, similar to that found in the UK and Jamaica, which covers all eventualities, from outright criminal offences or a failure to carry out a legal obligation to human rights abuses to mismanagement or health and safety violations.
The bill provides for disclosure to ministers, employers and designated officers of employers, lawyers, prescribed persons and to a designated authority. Schedule 1 of the bill specifies that prescribed persons would include the attorney general, the commissioner of police and the director of public prosecutions as well as the auditor general, the complaints commissioner and members of the Anti-Corruption Commission, the Standards in Public Life Commission and the Cayman Islands Monetary Authority.
The LRC paper also outlines the potential procedures to be followed when making disclosures; the procedures to be followed for the investigation of disclosures; protection against reprisals and remedies in the forms of court action, criminal complaint and resolution by labour tribunals; penalties for reprisals against whistleblowers; confidentiality relating to disclosures; and the periodic review of the legislation by a committee of the Legislative Assembly.
The bill requires written disclosure procedures to be implemented by the people to whom disclosures can be made and there is attached to the Discussion paper an Appendix B which contains samples of internal policies, which the commission said it believes would be helpful to guide employers.
Read the discussion paper here
Members of the public are invited to submit their comments on the consultation paper before 30 June to the Director, Law Reform Commission, PO Box 1999 KY1-1104, delivered by hand to the offices of the Commission at 1st floor dms House, Genesis Close or sent by e-mail to Cheryl.Neblett@gov.ky.
Related CNS article:
80% of whistleblowers sacked (13 March 2014)