Updated 3pm: Government officials confirmed receipt of an email from UK Foreign and Commonwealth Office Director for Overseas Territories Colin Roberts that approved the Cayman Islands budget Friday afternoon.
The Cayman Islands government assented on Friday to a number of conditions requested by the United Kingdom prior to the Mother Country’s approval of the territory’s 2012/13 budget.
The final approval of the $567 million spending plan proposed by the ruling United Democratic Party government was expected to be formalised in an official letter to the country next week.
The approval will allow Cayman Islands lawmakers to follow through with debate on the spending plan in the Legislative Assembly’s finance committee into next week and eventually approve the full budget prior to the 31 August expiry of the country’s two-month temporary spending plan.
“This approval has validated what my government has been saying all week,” Premier McKeeva Bush said Friday. “That is, that we have presented a credible and sustainable budget to the Legislative Assembly, knowing full well that we had met the requirements set out by the Foreign and Commonwealth Office.
“If we had followed the thinking of the opposition and independent members of the House and other critics to wait for formal notification, where would we be today? We would have had to scramble next week to meet the deadline for passage of the Appropriations Bill. The course that we have taken in making significant progress in the legislative phase of this budget process was the correct decision.”
According to several sources within the government, conditional approval of the budget from the United Kingdom was dependent upon several things:
*Passage of the UK-Cayman agreement known as the Framework for Fiscal Responsibility into local law. Right now, the agreement sets certain general spending, procurement and management guidelines on the country, but has taken the form of a signed agreement only – not law.
*There can be no supplementary budget during the 2012/13 budget year, unless it is to fund recovery from natural disasters. It was not immediately clear whether this requirement had been extended to other budget years.
*The Cayman Islands government agrees to assist the UK’s appointed economic advisor in periodic budgetary reviews during the fiscal year, of which there can be as many as four.
*A ‘budget board’ will be established, to be led by Deputy Governor Franz Manderson and to consist of an unknown number of members. Those members can include certain representatives of the private sector. The board will assist government in setting longer term fiscal plans and policies between now and 30 June, 2016.