Says privatization won’t normally save money
Speaking in the Legislative Assembly last week, North Side legislator Ezzard Miller said privatizing government services will not offer any financial savings and that the government should make policy decisions prior to engaging consultants to write reports recommending things the government would never agree to do.
Mr. Miller, who made his remarks as part of his contribution to the budget debate, was referring specifically to the EY report commissioned by the government in 2014. That report, titled “Project Future: Creating a sustainable future of the Cayman Islands” recommended, among other things, that government privatize a number of government services. Very few of the recommendations in the report have been adopted since its release last September.
Mr. Miller said his position remains what it was from the beginning. “The deputy governor … invited me to a meeting and I told him, in front of E and Y [sic], ‘This is an exercise in futility; this is a waste of money.’”
Instead of asking EY to make recommendations on ways of reducing government costs without telling them what the government was willing to do, Mr. Miller argued the government should first decide what services it was willing to privatize.
“Once the government has made that policy decision, then you hire someone like E and Y to tell you how to privatize it and get the maximum return from it. Because we can tell E & Y we [weren’t] going to sell Radio Cayman. They recommended to sell Radio Cayman. We didn’t tell them we wasn’t going to sell the Water Authority, but they recommended we sell it.”
Although Mr. Miller believes there are some government services that could be privatized, he does not think it will lead to big savings for the government.
“Don’t fool yourself,” he said. “It is not possible, or it’s going to be very rare and few instances that you are going to be able to privatize a service that government currently provides and provide that service cheaper by the private sector – very few, if any.”
Recalling when he was the executive council member with responsibility for waste management in 1989, Mr. Miller said he tried to privatize garbage collection.
“At that time, we were charging $25 a year or something like that,” he said. “If I remember, the lowest bid I got back was $50 a month. So, while the Chamber of Commerce and the media likes to badmouth the civil service about how they’re inefficient and they’re ineffective … well, that ain’t true, you know; ignore that.”
The North Side MLA then defended the capabilities of the civil service.
“There are many services in the civil service that are being delivered efficiently and effectively and I’m telling you here today, without fear of successful contradiction, that the private sector cannot do it cheaper or more effectively or more efficiently.”
To illustrate his distrust for the private sector, Mr. Miller then took aim at the Chamber of Commerce, which he blames for changes made to the Pensions Law.
“It was the Chamber of Commerce that hijacked that, you know, and made it the rubbish we have today,” he said. “The only people who have made money out of it are the fund managers and themselves.”
Because of what he feels are deficiencies in the existing Pension Law, Mr. Miller said some people are going to suffer in their twilight years unless the government finds alternative ways of looking after them.
“And that’s the disgrace in the whole thing,” he said. “That was solely done by the private sector. It was a deliberate act on their part to make money.”