Report: ‘Outside expertise’ needed to cut civil service

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Experts from outside the Cayman Islands government will likely be asked to perform a review of public sector services with an eye toward shrinking the overall size of the public sector, records released last week reveal.  

“The deputy governor [said] that it was important that a comprehensive report be prepared that will allow ministers to determine what services provided by the government should be abolished, amalgamated or privatized,” according to a record of a Sept. 16 civil service chief officers meeting.  

“It was agreed that civil servants should not be asked to perform this work and that expertise from outside of government was necessary. However, it was important for ministers to also hear the views of chief officers.”  

If the outside review is undertaken, it will be the fourth such review within the past few years.  

“Project 1,” which started last year as a restructuring effort in the government service, led to the formation of two new ministry positions and the combining of others. Another review started under former Deputy Governor Donovan Ebanks identified in several stages some cost-cutting possibilities, only some of which were put into effect. 

In early 2010, the government released the Miller-Shaw consultancy report which exhaustively identified privatization opportunities within government entities as well as areas where the public sector could outsource or reduce employees.  

Current Deputy Governor Franz Manderson said civil service personnel costs were reduced by about $12 million during the recently ended 2012/13 budget year. However, the cost cutting was partially negated by spending on health care, legal aid and other budget items.  

A similar $12 million reduction was anticipated in the 2013/14 government spending plan, set to be released in the Legislative Assembly on Monday, Premier Alden McLaughlin said. 

Mr. McLaughlin said Tuesday that the UK’s foreign office had approved the government’s full 2013/14 budget along with its four-year spending plan in line with the established Framework for Fiscal Responsibility. That plan includes no new long-term borrowing for government through the 2016/17 fiscal year and agreements that no supplementary expenditures would be undertaken during the course of the budget year.  

Premier McLaughlin allowed in a public address last week that government was engaging in “cost containment” measures in recent years that were not sustainable in the long term. Those include deferral of hiring key personnel or purchasing certain supplies “which you can only do for so long.” 

The core government service has steadily decreased over the past five years, from more than 3,800 employees at its height in 2008 to just over 3,500 today.  

However, employment in the related statutory authorities and government-owned companies has not kept pace, according to a government human resources report completed for the 2011/12 financial year.  

Between June 30, 2011, and June 30, 2012, entire public sector jobs increased by 91 positions, according to the report. In mid-2011, there were 5,810 people employed in the entire public sector; 3,619 in the civil service/core government and 2,191 in the statutory authorities and government-owned companies.  

“Seventy-eight percent of the [91 employee] increase [came] from the statutory authorities and government-owned companies, and 22 percent [came] from core government,” according to the human resources report for 2012.  

Mr. Manderson has said that overall government service numbers dropped during the 2012/13 budget year, but a full-year human resources report has not yet been made public.  

Mr. McLaughlin has said that privatization initiatives would be considered going forward, as government continues to seek ways to cut costs. 

“We are fast reaching the point that, unless government is prepared to take hard decisions to divest itself of certain services, that we are not going to be able to drive down costs,” he said last week.  

The premier said government would look at “hiving off” some of the services it provides, but has not determined which services. 

“As far as true privatization, the only [government entities] people express an interest in buying are the profitable ones,” Mr. McLaughlin said. 

Some government-owned companies and statutory authorities make money each year, such as the Water Authority-Cayman, the Civil Aviation Authority and the Maritime Authority. Others are perennial money-losers, such as the Cayman Turtle Farm and Cayman Airways.  

The government projected a $1.6 million surplus in the overall operations of statutory authorities and government-owned companies for the 2012/13 budget year. However, certain initial expenditures – such as an $18 million stipend from Cabinet to Cayman Airways – are not counted in the “surplus” total. 

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Franz Manderson

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Mr. McLaughlin
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4 COMMENTS

  1. Franz Manderson and the chief officers are the first group that should be terminated. If this group can’t complete the simple task of performing a review and restructuring of the civil service then we don’t need them.

    This group has abdicated their responsibility and the government would save millions of dollars by consolidating their functions and replacing them with people that are competent and capable of doing the work.

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  2. I don’t agree with Mr. Boland’s posting. Mr. Manderson is a real strait forward guy like most of the other senior civil servants of Her Majesty’s Government. If we follow that advice, we lose all the smart people and getting letters about how terrible our government is instead of finding the right solution. Attacking our senior civil servants is not what we need.

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  3. I sincerely hope that this vital Project 1 report is produced with all due haste, passed on to the committee that reviews reports for review, is duly cataloged, filed and archived to collect dust alongside all of the other reports government has commissioned in the past and we have paid for and then studiously ignored and eventually forgotten.

    Only government can find sense in the statement that it has cut costs by 12 million but that these cuts were offset by increased spending. I wonder how much Project 1, the Government Project to cut its costs, has cost so far. What delicious farce. As Wil Rogers said, I don’t make jokes. I just watch the Government and report the facts.

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  4. As far as true privatization, the only government entities people express an interest in buying are the profitable ones, Mr. McLaughlin said.

    Wow does it take a rocket scientist to figure this out.. ?

    Is any of this new, we’re been hearing it over and over, it’s obvious what needs to be done, but no one is prepared to make the hard choices.

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