Civil servants debate EY report

More than 100 Cayman Islands civil servants gathered Wednesday night to debate the benefits and drawbacks of recommendations in a recent consultant’s report that proposed government cutbacks and outsourcing in dozens of public sector agencies.

If all recommendations in the Ernst & Young consultancy evaluation were implemented, hundreds of government jobs, and entire government departments in some cases, would be taken over by the private sector. In addition, other government entities would be sold off or closed down.

Civil Service Association President James Watler said not all proposals in the EY evaluation were opposed by civil servants; some were supported during Wednesday’s meeting at Mary Miller Hall. However, he noted there were a number of areas of concern expressed during the closed-door meeting.

“One of the things that EY seems to have forgotten is the social responsibility of a government,” Mr. Watler said. “I think the premier and his colleagues are cognizant of that.

“We are not being alarmists, but there seems to be contradictions in there, disclaimers,” he said. “Why would you farm out something that would potentially fail [in the private sector]? It’s going to fall back in [government’s] lap.”

For instance, a top priority recommendation made by EY reviewers was to consider outsourcing the medical operations of the Cayman Islands Hospital in George Town and Faith Hospital in Cayman Brac, along with associated government health clinics.

Such a move would bring high-quality employees and healthcare professionals with specialist knowledge, and also help to recover the Health Services Authority’s current $55 million in bad debts, the EY report opined. However, EY reviewers noted there would be difficulty in attracting such a third party group because of the “small scale of the George Town hospital operation.” Also, if the third party contractor failed, the government would be required to resume control of the public hospital system. This option was placed in the “medium term” for implementation.

A potentially quicker option would be to establish a “joint venture operation” between the Cayman Islands National Insurance Company and a private sector company. EY recommends this could be done in the short term and would enable CINICO to compete on a “more equal footing” with private sector medical insurers. It would also mean far fewer government employees involved in the provision of healthcare services.

The EY report notes there was likely to be push back from private sector companies that did not want the competition that taking such a step might bring. There would also be “potential for discontent amongst [the] civil service for the introduction of deductibles and/or co-pay charges” on health insurance policies. The government service currently receives 100 percent coverage on its healthcare benefits.

Mr. Watler said he has been around long enough to remember the days of Caribbean Home Insurance, which ensured the civil servants’ healthcare plans during one period of the 1980s and early 1990s.

“And one night, it disappeared,” he said. “My family was on one of those plans.”

The good news from the perspective of civil servants attending Wednesday’s meeting was assurances from government ministers that no final decisions had been made on the EY recommendations, giving the association time to provide government with members’ views. An online and printed survey was making the rounds in the civil service, and Mr. Watler said a report from Wednesday’s meeting would also be given to government. “We have a healthy debate going,” he said.

Deputy Governor Franz Manderson has said that only the recommendations from the EY report that receive Cabinet approval would be taken forward to the implementation stage. The person in charge of implementing those recommendations for the government is former Education Ministry Chief Officer Mary Rodrigues.

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  1. I agree with the Civil Service Association President, Mr. James Watler, that one of the things that EY seems to have forgotten is the social responsibility of government. Many individuals in the private sector are quick to suggest that the Public Service should operate under the same model as the private sector, but it is obvious that they are totally unaware of Government’s enormous social responsibilities.

    While I agree that the EY Report has been professionally presented by that firm, I am also cognizant of the limitations which they have placed in their report, regarding constraints of sufficient time to have carried out an in depth analysis of the information available to them. In their letter to Hon. Franz Manderson dated 1 September, 2014, EY stated that Given the short time frame in which the work has been undertaken relative to the scope of the exercise, it has not been possible to analyse all of the information in depth. In addition, due to the time limitations and the information available to us, further work may be required to develop more detailed business cases for approved recommendations (page 3 of the Report). Based on this admission by EY, my question is: Why did not the Government allow EY sufficient time to have produced a properly analysed report of their review of the Cayman Islands Public Service?

    Based on the absence of the required in depth analysis, the EY Report may reasonably be regarded as no more than a Preliminary Report, requiring further analysis for it to be finalized. In the circumstances, therefore, I am unable to rationalize the basis for EY’s recommendations to Government. The EY Report further states: We recommend the development of a 2025 Vision for the Cayman Islands as a country. This will allow improvements to strategic planning, budgeting, objective setting and performance appraisal of CIG employees. This should be pursued as a near term opportunity to streamline Government and improve service delivery (page 23 of the Report). This statement further underscores the preliminary status of the EY Report.

    In view of the foregoing and, in particular, EY’s stated limitations relating to time constraints, I am of the view that more in depth analysis is required on the EY Report in order for it to form a reliable basis for their recommendations to Government.