UK fiscal framework may stay in law

New overseas territories director visits

There is no “sunset” or end date for the UK-drafted Framework for Fiscal Responsibility now contained within the Cayman Islands Public Management and Finance Law, UK officials confirmed Thursday.

During his first visit to the Cayman Islands, British Overseas Territories Department Director Peter Hayes – who replaced former director Colin Roberts in October – fielded questions during a press conference about the fiscal framework document and other issues.

“[The Framework for Fiscal Responsibility] doesn’t sunset,” Mr. Hayes said. ‘But it’s not something that we would see as cast in stone forever.”

Right now, the framework agreement – signed by Premier McKeeva Bush in November 2011 and passed into law by legislators this month – sets guidelines on certain areas like government spending and borrowing, bidding for public projects and rules for financial reporting.

The document prevents the Cayman Islands from entering into any further long-term borrowing to support public projects through June 30, 2016. The only exception to that rule is in the case of natural disasters affecting the Islands.

“One would hope, as the financial management situation develops and as the guidelines come back within the debt limits…then obviously we want to make sure the Framework for Fiscal Responsibility is keeping pace with circumstances,” Mr. Hayes said.

Cayman Islands Governor Duncan Taylor elaborated.

“There’s a timetable to get the government finances back into a position where they meet all the borrowing guidelines,” Mr. Taylor said. “At that stage, assuming we get there, then some of the ability of the minister in the UK to have a say in the setting of the [Cayman Islands] budget falls away.

However, the principles of sound management will stay in the finance law, and that could include new rules for things like public project procurement.

“We may well have a new procurement law,” Mr. Taylor said. “What you may find is those basic principles that are in the Framework for Fiscal Responsibility might be incorporated into some other bit of the Public Management and Finance Law at some stage.”

The governor also sought to downplay fears that the enactment of the fiscal framework would somehow hold up the ForCayman Investment Alliance negotiations between government and the Dart group of companies. However, he noted that the UK’s financial adviser may wish to have a word with both parties involved in the agreement.

The negotiations include a proposal to relocate a section of West Bay Road along Seven Mile Beach and build a waste management facility in Bodden Town.

“It’s not a procurement process as such,” he said. “You’re not in a competitive tendering position because you’re looking at some swaps there between what government have and what Dart has.”

 

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4 COMMENTS

  1. The fact that the FFR ‘may’ stay in Law should come as no surprise.

    As a very astute GTMLA recently explained – this FFR allows the UK to control the finances of the Cayman Islands – and they will never want to give that up – if they did the Law would have had a ‘sunset clause’.

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  2. I see nothing wrong with that – why should the UK tax payer be responsible for debt run up by the Cayman Island government.

    It is about time the government of this country stepped up to the mark and took responsibility for the state of this country’s debt instead on blaming everybody else and that goes for every government for the last 20 years.

    You create the polices that causes this so now you can take the blame. 550M between 50,000 is CI 11,000 of tax per person in this country if everybody paid it. That is more than some people earn per year here!!

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  3. Thats precisely the irony – the UK taxpayer is not responsible for the debt of the Cayman Islands.

    The UK has never once, except for a grant back in the 70’s and a few blankets after Ivan given the Cayman Islands anything.

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  4. The fiscal framework is a good something,this is the price we pay for electing gold diggers over the years. And those withOUT the country at heart. There should be a FFR for IMMIGRATION..

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