Shifting certain central government functions to Cayman’s private sector would take more than 200 jobs off the public payroll immediately – while not necessarily eliminating them altogether – and could save more than $2 million per year, a consultant’s report estimates.
The Ernst & Young report, which was commissioned by the government in efforts to reduce burgeoning costs of the public sector, identifies specific 18 areas where a relatively small number of jobs could be shaved off the public payroll, but in which private sector opportunities to provide a similar service to government exist.
“Consideration should be given to a phased outsourcing program over a two-year period to minimize impact on the local economy,” the EY report recommends.
These recommendations deal with specific jobs in central government identified by the EY consultants. The report separately dealt with longer term, much wider ranging outsourcing possibilities within other departments and statutory authorities that the government would need to implement via changes in its policies and which would affect a much higher number of employees.
Most of the central government areas considered for outsourcing by the EY consultants employ fewer than 15 people, with the exception of two: information technology and public works.
The government employs a total of 54 people in information technology in the Computer Services Department and in the Ministry of Home Affairs.
“There is no reason why government should continue to provide IT services in house,” the EY report states, citing the potential exception of IT procurement and strategy areas.
“Many governments around the world are selling or winding up centralized IT departments and outsourcing. [There is an] active IT market in Grand Cayman or [in] the greater Caribbean market.”
Other areas where a significant number of jobs could be outsourced, according to EY, are in the public works and parks, recreation and cemeteries departments.
Some 50 full-time equivalent positions could be considered for outsourcing in public works areas of project management, construction oversight, quantity surveying and mechanical, electrical and plumbing work, the report states. The report also assumes that 18 of the 22 jobs in the parks unit could be outsourced.
“Many [of these] activities are already outsourced to the private sector,” the EY report notes.
Other central government functions with fewer employees were identified as potential targets for outsourcing in the consultant report.
Prisoner transport – This currently requires about five prison officers per day to perform. Consultants estimated this service could be provided through private security firms.
Prison catering, hospital catering and linen services – The combined services require fewer than 20 government employees. A number of catering companies could be used to fill the gap, EY stated.
Security services and warrants – About 10 RCIPS officers are now used to guard the courthouse, the governor’s office and police prison cells. Another five serve process from the courts. All of these positions could be outsourced to private sector companies that employ cheaper security officers, the report suggested.
Debt collection – This task is currently handled by four employees, mostly chasing after unpaid bills from the Health Services Authority.
Plans, surveys and building inspections – There are four plan examiners and another 10 building inspectors on the public payroll, EY notes. Again, this work could all be done by the private sector, reviewers state. Government employs a total of 10 surveyors and field assistants whose jobs could also be outsourced.
Vehicle inspections, driving tests and maintenance – The Department of Vehicle and Drivers Licensing has two vehicle inspectors, three vehicle examiners and two driving examiners. Some employees, about 15, in the government vehicle and equipment services department could also be outsourced to the private sector, EY states, since all of this work can now be done in local auto shops.
Road maintenance – About 15 people in the National Roads Authority are dedicated to maintenance duties that could be outsourced, according to EY.
EY also identified some risks in the outsourcing plan, including the concern that private-public sector comparisons wouldn’t be done fairly if government’s “added costs,” such as pensions and healthcare for employees were not included in any analysis.
There is also a potential for government to mishandle the management of outsourced contracts, the consultant firm notes. “[This is] not a core government capability at this point in time,” the EY report states.
Also, if the private sector company providing the service goes out of business, it is presumed government would have to continue with it. Outsourcing government IT functions also carries inherent security risks, reviewers note.