Government agencies could be undermining efforts to cut the overall cost of the public sector, two senior civil servants suggested on Wednesday.
Staff numbers have gone up for statutory authorities and government companies over the past year despite a government-wide effort to cut numbers, according to Gloria McField-Nixon, chief officer for the Portfolio of the Civil Service.
She said perks like pay raises and bonuses, which have been cut in core government, were also continuing in these agencies.
Speaking at a hearing of the Public Accounts Committee to discuss the findings of a report by Auditor General Alastair Swarbrick, both Ms. McField-Nixon and Jennifer Ahearn, chief officer in the Ministry of Health, highlighted issues with the governance and accountability of government-owned companies and statutory authorities.
These are companies like Cayman Airways and the Cayman Turtle Farm and agencies like the Health Services Authority and the Cayman Islands Airports Authority, which are under government control but operate with a degree of autonomy under the direction of appointed boards of directors. Some receive public subsidies, others earn their own revenues.
Both women highlighted the need for a Public Authorities Bill, which is currently being drafted, to create a clear chain of accountability and ensure these agencies are on the same page as government when it comes to policy objectives.
Ms. McField-Nixon said that when government found itself in “dire financial straits,” it only had the power to introduce austerity measures within core government.
She said the authorities had been effectively exempt from the pay freezes and cost-cutting measures enforced across the civil service, including efforts to cut staff numbers. She said an upcoming head-count audit of the entire public service for the last financial year would show a small increase in staff in those agencies.
“While there has been an overall decline [across the entire public service], it is eroded by a disconnect in urgency and direction between core government and the statutory authorities. That is an illustration of the issues and the consequences of not having the equal ability to manage all the assets that government is responsible for with the same approach,” she said.
Ms. Ahearn suggested the disconnect extends to policy and budgeting decisions.
She said there is a need for an over-arching piece of legislation to make sure the various boards and companies have the same relationship with government and the same general priority.
She added that the legislation should also establish clear lines of responsibility and accountability to help ensure “delivery of services in accordance with government plans, monitor their delivery and have some control over their spending.”
She added, “We have seen inconsistency in things like salaries, duty allowances and bonuses, particularly with the statutory authorities and government companies that receive funds from central government, rather than those that give back.”
She suggested legislation, rather than policy changes, are required.
“Having a Public Authorities Bill would ensure there is one set of guidelines for the governance structure,” Ms. Ahearn said. “Having it enshrined in legislation would make it clear for everyone involved and give it the teeth it needs.”
She said the current set of laws for the various bodies are inconsistent, suggesting some are silent on the issue of whether government ministers could even give directives on policy.
“We need to tidy that up … We need to have this review of the legislation so we can have a rational and consistent outcome,” Ms. McField-Nixon said.
Related Videos
I assume that all of this was covered in the EY report.
It is the executive structures of many of these statutory authorities and government companies that have created the significant increase in personnel expenditure that we have seen in recent years. The country is too small to have the large executive structures that exist in many of the statutory authorities and government companies and one can only assume that this will be a significant focus of the ongoing restructuring by the government.
In the public sector, people don’t get raises and bonus when a company is losing money like the turtle farm. They freeze expenditures until they show a profit. No wonder these guy want to stay under CIG control where they do not have to produce result for their pay. The can continually lose money and still get raises and bonus’s.