Services surpass spending limit

Money budgeted for certain Cayman Islands government services fell substantially short of the actual cost of providing them during both this fiscal year and last year.

The most recent example of such a cash shortage occurred in the country’s legal aid budget, of which the $919,000 provided by government at the beginning of the current budget ran out in December; only six months into the fiscal year.

An emergency infusion of $250,000 was approved by Cabinet in March. Additional funding requests were expected to allow legal aid services for the court system to continue through the end of June.

Legal aid money is what government pays to provide attorneys for defendants in criminal and certain civil cases who can’t afford lawyers on their own.

Some $22.78 million dollars was expected to be generated from various revenue streams for the Health Services Authority at the start of the current budget year, which is 1 July. However, an increase in fees expected to help create those revenues wasn’t put in place until March. Other billing code changes for the HSA still haven’t been approved.

In February, Health Minister Anthony Eden was unable to state how much money had been lost because of the delay in implementing the fee hike.

During the last budget year, government paid ten times the amount it initially planned to for ‘refugee services’ which are essentially housing, food and care for Cuban migrants who illegally land on Cayman’s shores. The money is needed to support the migrants while they await repatriation to Cuba.

Government initially set aside $61,629 for the expense in the 2006/07 budget. A supplemental appropriation had to be approved in November for more than $600,000 to pay the rest of the costs.

In the current year, $63,478 was budgeted for ‘refugee services.’ It’s unknown how much government has spent on those so far.

Legal aid, refugee services, and to a certain extent public health care services are linked in that they are provided for the poor or indigent who would not otherwise receive them if the government did not pay.

Even opposition party members agree that it is difficult to predict the cost of some of these services.

‘We all know the overall system of government has to cut its cloth to match its revenue base,’ West Bay MLA Rolston Anglin said. ‘Does that cause us to have unrealistic numbers? I don’t think in the big sense it does.’

However, Mr. Anglin said he believes government should take a second look at its current performance-based budgeting system where departments bill ministries for services rendered.

‘Instead of looking at everyone individually, you have the ‘salami effect’ where you just have budget cuts across the board,’ he said. ‘The good performers get punished for the non-performers.’

Legal aid

Legislative Assembly members were told during a finance committee meeting in 2007 that the amount they had set aside for legal aid was not going to be enough to get through the current fiscal year.

Nearly $1.8 million was spent on legal aid in 2006/07; about twice the amount that was budgeted for this year.

Defence attorneys went without pay from January into March, when the additional funding by Cabinet was approved.

It’s not the first time that’s happened.

Clerk of the Courts Valdis Foldats told the LA in May that a previous reduction of more than $600,000 in the 2006/07 fiscal year had forced attorneys to go without pay. Another emergency cash infusion was needed at that time to continue providing impoverished defendants with lawyers.

Some Cayman lawmakers have argued that the government is spending far too much on legal aid when the amount is compared to other British Overseas Territories, and that not enough of that money is going to Caymanian lawyers.

Chief Justice Anthony Smellie recently sent a draft report with recommendations on the legal aid issue to the Law Reform Commission. The commission is now reviewing that report.

HSA fees

Within the past year, government had to approve an $11.3 million cash bail out for the Health Services Authority to cover operating losses within the system. It’s expected there will be some operating loss in the health system for the coming year, but the exact amount won’t be known until the financial year is complete.

Mr. Eden has previously said that Cayman’s current health care system is ‘unsustainable’ unless fees are increased and the hospital system begins charging for certain services that have previously been provided at government expense.

The hospital system announced plans last year that it said would make government bail outs a thing of the past by the 2009/2010 fiscal year. However, there were delays in implementing some of those revenue measures


The amount paid to house, feed and repatriate Cuban migrants varies from year to year depending on how many actually show up on Cayman Islands shores.

Chief Secretary George McCarthy has said it’s very difficult to predict that number.

‘We need to take a cold, hard look at what is the norm,’ Mr. Anglin said. ‘If the trend is up, they ought to be using higher (budget) figures.’