CINICO costs, other expenses cut
Employees in the Cayman
Islands civil service were informed Thursday that their salaries
would be cut by slightly more than three per cent starting 1 July.
The 3.2 per cent cut is basically a “rollback” or removal of the cost of living pay increase given to
government workers in 2008.
The move comes as no surprise
following statements from civil service leaders earlier in the year that some
pay reductions might be needed in the upcoming budget, as Cayman struggles to
balance its spending plan.
Members of the Cayman Islands Civil
Service Association had previously agreed to a minor pay cut, at least as far
as a temporary reduction, to help government meet its budget targets. However, some members indicated Thursday that they had not been told about the latest round of budget cuts.
According to an administrative circular sent to all government chief officers and department directors Friday morning, the pay reduction was one of several budget-cutting items set for the next fiscal year.
Other cuts included a ten per cent reduction in premiums charged by CINICO (Cayman Islands National Insurance Company) to all central government departments. Currently, civil servants pay nothing out of their own pockets for monthly health care premiums.
Funding to fill new or vacant jobs will be limited to positions agreed to during a meeting of Cabinet members and chief officers on 3 May. Government has been operating under a “soft” hiring freeze since late 2008.
Some civil service departments were also asked to cut up to 75 per cent of their recruitment budgets, acting pay allowances, duty allowances, and motorcar allowances.
Overtime budgets were slashed by 50 per cent for the upcoming fiscal year.
Eliminated from the spending plan were all payments for accrued leave and compensatory time not taken during the year. Also cut out entirely were allowances for entertainment and laundry.
“Some of these decisions will require amendments to existing legislation,” read the circular, issued by Acting Deputy Governor Franz Manderson. “Those decisions, when implemented, should accomplish the 2010/11 targets for personnel costs for the core government to which the Cabinet have now agreed.”
Mr. Manderson warned in the circular that government’s budget-cutting exercise is not over.
“Further reductions in operating expenses will be expected over the next three years,” the circular read. “It follows that sustainable means of reducing costs must continuously be pursued.”
The Cayman Islands government has been forced to put off its formal budget proposal for the coming year –
initially scheduled for 30 April – partly due to elections in the United Kingdom
delaying on-going negotiations with the Foreign and Commonwealth Office about
how much money the country can borrow in the coming year.
Friday’s circular said nothing about reductions in other areas of government spending, including capital (construction) expenditure and non-personnel related costs.
Statutory authorities and government-owned companies were also told that Cabinet’s budget cutting measures should be implemented, where they are applicable to those entities.
For the full story, please see Monday’s Caymanian Compass….