Deputy governor’s office agrees; premier says ‘no layoffs’
A wholesale restructuring of the Cayman Islands government’s financial reporting mechanism will probably require a reorganisation of public sector entities themselves, Auditor General Alastair Swarbrick said last week.
Departing a bit from his usual role of reviewing government accounts and ensuring the Cayman Islands gets value for money in public projects, Mr. Swarbrick made a series of recommendations on how government should reform itself to put out more accurate, more relevant and less complex financial statements.
“I’m not going to say I have all the answers in terms of some of this stuff, but I think they need to have a fundamental look at how they structure government and some of entities that they have,” Mr. Swarbrick said.
The government’s existing reporting under the Public Management and Finance Law has left much to be desired, ending in nine straight years of failure in producing financial statements for the entire public sector.
“The fact that that hasn’t been reported in nine years raises some fundamental questions about why? Why hasn’t that been driven forward in nine years?” Mr. Swarbrick said. “Ultimately, it’s up to them to look at the framework that they have.”
For instance, smaller agencies like the Cayman National Cultural Foundation, the National Gallery of the Cayman Islands and the Cayman Islands National Museum all must produce their own financial statements now. Audit Manager Martin Ruben said it might behoove those agencies to look at combining at least some of their tasks.
“We talk about some of the very small agencies just not having that capacity today and suffering, if you wish, with the fact that they can’t produce the financial statements that are required,” Mr. Ruben said. “There’s a real opportunity here.”
Consolidation of any agency can lead to downsizing or repurposing of employees, but Mr. Swarbrick said that is just part of the restructuring process.
“You have to ask those questions, do we have the right agencies? I think it’s always appropriate that you review the purpose of an agency,” he said.
Top managers in the civil service have already suggested such moves, and on a much grander scale. However, it remains up to the elected government to pull the trigger with the purse strings, according to Peter Gough in the deputy governor’s office.
“Project 1”, a wholesale reorganisation of the government started by Mr. Gough and Deputy Governor Franz Manderson earlier this year, led to entirely different ministry and portfolio assignments following the 22 May general election.
The effort could eventually lead to job losses within central government or even independent authorities, depending on what the governor and elected ministers decide to do. However, Mr. Gough said, the first thing for the government service to do is get organised.
“The first stage is the get them in the right places, and then you start to question ‘well, do we still need this service?’” Mr. Gough said.
Big questions are being asked during the exercise around the central roles of some massive government agencies, as well as the smaller ones.
“Should immigration and customs be under the same ministry? In some countries they’ve merged them,” Mr. Gough said, giving one example. “They have commonality in terms in their enforcement; they are protecting our borders.”
Since being elected and then chosen as premier, People’s Progressive Movement party leader Alden McLaughlin has consistently said there would be no layoffs within the civil service. He reiterated that point during his first address in the Legislative Assembly last week.
The subject was also discussed during a meeting between Mr. McLaughlin and UK Overseas Territories Minister Mark Simmonds in London in mid-June.
Mr. Simmonds said he would like to see an overall reduction in the Cayman Islands public sector debt, which now stands at more than $700 million – including both central government and statutory authorities’ debts.
Mr. McLaughlin also noted that government would consider privatising government-owned companies to a certain extent, as long as that could be accomplished while safeguarding local interests. Mr. Simmonds agreed to provide technical experts who could advise Cayman on public/private funding packages that could provide necessary capital, without long-term revenue consequences.
Mr. McLaughlin told the House that the previous United Democratic Party administration’s budget had set “overly ambitious” targets to reduce government spending, stifling the rebound in the Cayman economy.
“We believe a more gradual, phased approach should be taken,” he said.