The Cayman Islands civil service expects its personnel costs will increase by $20 million in the 2015/16 budget, which takes effect on July 1.
The spending plan forecasts the personnel costs, which include salaries, pension and healthcare payments for central government workers, to total $252.4 million, compared to $232.3 million budgeted for the current fiscal year which ends June 30.
Nearly half of the 9 percent one-year increase is a planned across-the-board pay increase for civil servants that will take effect on July 1. It is expected to add $7.5 million to the government’s upcoming budget.
The 4 percent cost of living pay raise will effectively be the first pay increase the civil service has received since 2008. A 3.2 percent cost of living adjustment was made in 2008, but was then rescinded, given back again in 2010 and rescinded again.
In addition to the pay increase for all civil servants, some will have their annual pay “regarded” – meaning increased either through promotion or job category change. That’s expected to cost another $500,000.
The 2015/16 budget plan also seeks to increase government employment in specific areas “to increase service quality.” A number of these jobs will be added late in the current budget year.
The additional staff will be going to government’s Needs Assessment Unit, which focuses on the provision of social assistance to lower income families, the Cayman Islands Judicial Administration and the Department of Education.
In all, salary hikes account for $14 million of the personnel cost increase projected during the next budget year. Healthcare costs for employees are budgeted to rise by about $5 million in the coming year, and payments to the civil service pension fund will increase by more than $1 million.
Government has struggled to contain personnel costs over the past five years, according to budget records. Those costs have increased from $213.3 million in the 2011/12 budget year to $238.9 million in the 2012/13 financial year.
The unaudited actual figures for the government’s 2013/14 budget year put personnel costs at $238.1 million and anticipated costs for the current budget at around $232 million.
Cayman’s government employment mushroomed in 2001 when it began hiving off certain civil service job functions into what are now known as statutory authorities and government-owned companies. At that point, 4,034 people worked in the Cayman Islands civil service.
According to the government’s 2013/14 human resources report, 3,571 people worked in the central government and 2,275 were employed in the separate public sector entities.
A Public Authorities Bill, aimed at downsizing the outside entities and bringing many of them back under the direct control of the central government, is one of the proposals legislators are expected to consider within the next year.