A 2011 agreement Cayman signed with the United Kingdom continues to prevent lawmakers from bringing needed construction projects to local districts, Bodden Town MLA Alva Suckoo said Thursday.
The agreement, known as the Framework for Fiscal Responsibility, was absorbed into the territory’s Public Management and Finance Law in November 2012 and will likely remain there – even if Cayman succeeds in gaining “budget independence” from the U.K. this year.
The U.K. Foreign and Commonwealth Office has, between the 2009/10 budget and the upcoming budget, the 2015/16 spending plan, had to pre-approve all Cayman Islands budgets before they were submitted to the Legislative Assembly. In the 2016/17 year, it’s hoped that step will no longer be required.
However, U.K. officials have said on numerous occasions that the framework, referred to as the FFR, will stay in local law.
“The negative impact of the FFR is most significantly demonstrated when one compares the capital needs of the districts with what we are actually able to spend,” Mr. Suckoo said.
Among the needs of various districts around Grand Cayman, Mr. Suckoo cited the need for hurricane shelters and school facility improvements in the eastern districts. A long-term mental health facility was also required and other healthcare and emergency services around the islands were in need of additional cash, he said.
“We could have accelerated the country’s climb out of the recession had we not been so severely limited,” Mr. Suckoo said. “We are left in a position where we have to move forward … devoid of the ability to stimulate the economy directly ourselves [referring to government].”
Finance Minister Marco Archer said government had proposed a $50.3 million capital projects budget for the 2015/16 fiscal year, which begins on July 1 that included $5.3 million for George Town revitalization projects, $4.2 million for the cruise berthing project in George Town, $5 million for the “phased construction” of the new John Gray High School, $2.2 million for the George Town landfill project and $3.5 million for various construction projects on Cayman Brac.
Another $19 million was set aside for various statutory authorities and government-owned companies, mostly to pay off debt.
Mr. Archer, who inherited the task of ensuring that government meets the U.K. financial requirements, said the framework should not affect local approval of budgets or the Cayman Islands’ ability generally to borrow long-term.
The Framework for Fiscal Responsibility should not impede any future budget approvals, Mr. Archer said.
“They’re good guidelines to operate under,” he said. “The only complaint that I would say is that because of the requirements for the various reports and outline business cases [for public projects] … it does add a significant length of time to when you can bring a project online. And it does add significant costs to the implementation of the project, but it is meant to avoid some of the fiascoes that the country [has] experienced.
“You can’t put a price on good governance.”