Some civil servants will be given a much larger pay cut than 3.2 per cent of their salary under budget reduction proposals contained within the Cayman Islands government’s 2012/13 spending plan.
Government staff is to be reduced by a “headcount” of some 360 civil servants during a period of five years, on top of the 140 vacant or new positions that have already not been filled.
There will also be a “pay freeze” for all members of the civil service.
Heretofore unrevealed details of budget cut proposals for the Cayman Islands civil service were made public this week in a statement by Premier McKeeva Bush.
The statement was made Monday during the Legislative Assembly’s Finance Committee as a response to some recent media stories Mr. Bush took exception to; calling them “tragedies in reporting”.
Of more importance to government workers, however, were previously unknown details contained in the speech of plans to cut the civil service. Mr. Bush had earlier stressed during a news conference that these were budget cutting plans drawn up and agreed to by the Cayman Islands civil service. Deputy Governor Franz Manderson confirmed that some details of the budget reduction plans had not been shared with government workers prior to the premier’s remarks before the LA’s Finance Committee.
Civil servants will receive an across-the-board pay cut of 3.2 per cent in the current budget year, an amount which was just recently restored to them by Mr. Bush’s government.
The move is expected to generate some $5 to $6 million in savings during the course of the 2012/13 budget year, which government has earmarked to assist in paying down past service pension liabilities for current public sector retirees.
The government has not made full payments into that fund for at least the past three years.
Some civil servants will be losing additional pay.
Those Caymanian government workers over the retirement age of 60 who continue working for the public sector on contract are able to receive their pension, as well as a salary for the term of their contract.
However, under new civil service rules, those public servants will receive what amounts to a pay cut upon taking up their new contracts.
“All fixed term contracts for civil servants over the age of 60 [will] be assessed at point 1 on the salary scale,” Mr. Bush said Monday.
What that means is, if a pay grade “J” civil servant was working at pay point 5 on the civil service scale, when they reached age 60 and signed a new contract, they would go back to point 1 of the scale.
The reduction could result in thousands or even tens of thousands of lost wages per year, depending on the person’s position on the pay scale. The civil servant would also be in a position to receive their pension while receiving the reduced salary.
In addition to the previously announced hiring freeze, which according to Premier Bush means “80 per cent of the posts that were budgeted in the 2012/13 fiscal year” will not be filled, a “pay freeze” for all civil service salaries will be implemented.
Deputy Governor Manderson had alluded to some – but not all – of this in a 20 August memo.
“Through 30 June, chief officers have agreed to eliminate approximately 140 of the vacancies and new positions that had been funded in the original draft of the 2012/13 budget,” the deputy governor’s memo stated. “Over the next five years the moratorium on recruitment will aim to make further reductions to our numbers by closely scrutinising new vacancies … to assess whether such posts remain critical to our operations,”
The goal, according to Mr. Manderson, is to save as many jobs as possible of existing civil servants while not requiring them to take massive pay cuts so the government can keep operating.
Mr. Bush said Monday that there would be a “reduction in headcount” of the civil service by 360 during the next five years and a pay freeze on “all civil service salaries as well”.
Mr. Manderson said that his office was still working out details of a voluntary separation scheme for civil servants and implementation of healthcare plans for new government workers.
New police officers joining the RCIPS will be given a reduced housing allowance as well, Mr. Bush said.