A review team has recommended
cutting CI$17 million across four government bodies, according to a newly
released report.
Cabinet has agreed to CI$15.2
million of the cuts recommended by four review teams, Deputy Governor Donovan
Ebanks told lawmakers at a Legislative Assembly meeting Monday.
Mr. Ebanks said the civil service
review – done at the request of the UK’s Foreign and Commonwealth Office as one
of the conditions for agreeing to let Cayman borrow $312 million – identified
$17 million in potential savings over 12 to 36 months.
“To realise $15.2 million in
savings from only four of the government’s 62 public-sector entities is a
significant achievement,” Mr. Ebanks said.
Civil servants and members of the
private sector carried out the review, which began in December 2009 and ended
in March. Mr. Ebanks said no civil servant reviewed his or her own department.
The first review phase included the
prison service, the Department of Tourism, Public Works and the Cayman Islands
National Insurance Company, known as CINICO, which together spend about $72
million annually.
The recommended cuts included
shutting Fairbanks prison for women, introducing insurance co-pay for civil
servants, and outsourcing the Cayman Jazz Fest.
Among the recommended cuts are $7.5
million, or 15 per cent of current expenditure, from CINICO; a $2.2 million
cut, equal to 20 per cent of current expenditure, in the Public Works
Department; a $3.9 million, or 28 per cent of expenditure, in the prison
service, and $3.5 million, or 12 per cent of expenditure, from the Department
of Tourism.
Prisons
The team recommended transferring
the 13 female inmates from Fairbanks Prison to Northward Prison and selling the
land on which the women’s prison is situated to save $100,000 a year, plus the
lands sale.
It also recommended that some of
the prisons’ 26 low-risk inmates be electronically monitored and placed under
house arrest to save $600,000. However, the prison service pointed out that
four of these low-risk, or Category D, prisoners were serving life sentences
and that there were legal issues involved in releasing prisoners on electronic
monitoring schemes.
The report noted that $500,000
could be saved annually by giving early release to and deporting nationals or
by transferring them to lower-cost custody in their own countries. There were
33 foreign nationals in prison, and 10 may be suitable for early parole,
according to the report.
Partnering with lower-cost overseas
prisons to take the most serious offenders, repeat offenders and high-risk
inmates could save Cayman’s prison service $250,000 per year, the report
stated.
Giving courts more flexibility to
award community service, financial penalties and, in the case of overseas
nationals, exportation and immigration bans, could save the local prisons
another $250,000 per year.
The report stated that some 2,400
round trips are expected to be made this year escorting inmates from the prison
to George Town for court appearances. It recommended that video-link technology
could be used to cut that number in half – saving $200,000 a year.
It also recommended eliminating
housing allowances for prison officers, which currently costs about $225,000
annually.
The review team calculated that if
all its recommendations were implemented, the prison population could drop by
40 per cent.
Department of Tourism
The report recommended that $1.4
million a year could be saved by outsourcing tourism training to the Ministry
of Education or the private sector.
Cayman Jazz Fest could be
outsourced to the private sector and subsidised at no more than 25 per cent of
the current cost, the report stated.
Transferring the inspection and
licensing of tourist accommodation to the Department of Environmental Health
would save $300,000 a year, while $250,000 could be saved by transferring the
administration of tourism scholarship to the Ministry of Education. Another
$325,000 could be cut by decreasing public relations activities by 25 per cent.
The Department of Tourism spends
$254,000 a year collecting more than $9.5 million in tourist revenue annually.
This cost could be cut if the Treasury collected that revenue, the report
found.
CINICO
By charging civil servants a $20
co-payment on dental and pharmaceutical services and eliminating coverage for
over-the-counter medications, CINICO could save more than $3 million, according
to the government insurance review team.
CINICO could save up to $2 million
by in-sourcing third party administrators for local and overseas claims
administration and claims payment functions.
Another $2.7 million could be saved
by increasing specialised staff at the Health Services Authority for medical
care that CINICO pays out the most for, namely oncology, neonatal and
cardiology, the report stated.
CINICO responded that oncology
specialist care could be provided locally, but not neonatal or cardiology until
certain national policies are addressed.
Public Works
The report pointed out $500,000
could be saved in the Public Works Department if it redeployed or stopped using
social employees – “workers whose skills, abilities and mental/physical
capacity render them less productive; and prevents them from finding equivalent
employment in the private sector”. It stated that 20 per cent to 25 per cent of
Public Works employees fell into this category.
Another $500,000 could be saved by
making redundant or redeploying half the staff – eight to nine employees – in
management, finance administration and human resources.
“The effectiveness and cost
efficiency of Public Works is significantly hampered in a number of areas by
ineffective processes, lack of adequate materials and stores, poor procedures,
poor utilisation of transportation, inefficient scheduling and monitoring of
work. These shortcomings can be addressed through redesign and better
management,” the report stated.
Second phase
The second phase of the review,
which is under way, involves eight public sector bodies – the Cayman Islands
Airports Authority, the Cayman Islands Port Authority, Children and Family
Services, Computer Services, Customs, Education Services, Fire Services, and
the Royal Cayman Islands Police Service.
The deputy governor reported that
Cabinet had appointed a “monitoring mechanism to ensure that recommendations are
not given lip service but instead are carried out as quickly and efficiently as
possible and that it is kept appraised of progress”.
The eight teams involved in the
second phase of the review are due to send their reports to Cabinet by 17
December.
Related Videos
It always makes interesting reading for any review to recommend cost savings to government especially in an economic downturn. It’s simply music to the ears, but after reading the report that recommended the budget cuts, it was apparent that the review team did an extremely poor job.
They appear not to fully comprehend the operational environment, operations or processes of their subjects hence it is difficult to place any reliability or validity to their recommendations.
If government were to implement these recommendations via budget cuts the operations of each of the agencies would become counter-productive both financially and socially.
It must be stresses, the report is of extremely poor quality. Notably, the financial benefits are all pie-in-the sky, whilst the impact of their actions seems always of "suitable" risk and the complexities of implementation are also favorable. This clearly demonstrates the review team’s simplicity of thought processes and total mis-understanding of the agencies reviewed.
This project is too critical to be botched and it is best for the project manager to review their own processes, especially background work on the operations and operating environment of each agency, included laws, conventions and government policy, before developing another damaging report.