No word on civil service pay raise

Although Cayman Islands Premier McKeeva Bush has recommended civil servants receive a 3.2 per cent pay increase this year, there’s no indication as to whether that increase will occur.

The premier – who is also the country’s Minister of Finance – said in late August he felt a modest pay raise for government workers is possible since the territory ended the last budget year with a $25 million operating surplus. That means government revenues came in higher than expenses.

At the time, Mr. Bush said he believed the pay increase was possible for the September civil service paycheques. However, neither September nor October’s pay have showed an increase.

The Civil Service Association’s management council said Friday it had heard nothing further about a 3.2 per cent pay raise from the administration.

A spokesman from the Premier’s office said a pay increase is still under consideration.

Back in August, Mr. Bush indicated he would probably need approval on any pay increase from the United Kingdom’s Foreign and Commonwealth Office prior to it being implemented.

“There will still be tight restrictions on expenditure for this year and fiscal prudence must continue to be maintained,” Mr. Bush said.

At the end of the 2008/09 government budget year, public finances ended on 30 June, 2009, at an $81 million operating deficit. In addition, government debt ratios compared to what it was earning in revenues exceeded limits set in the country’s Public Management and Finance Law.

Because of these financial issues, the UK government had to step in and assert more control of Cayman’s financial situation. One of the things the UK ordered for Cayman was the Islands not borrow any more money in the next two fiscal years.

Premier Bush said in August he was sure government would have to make up the additional expense on the pay increase in savings somewhere else, if Cabinet approved the increase.

In July 2010, at the start of last year’s budget, civil servants received a 3.2 per cent pay reduction to help balance the books. Government has always said that pay cut was a temporary measure, and Mr. Bush said it was his intention to return the pay once finances began to recover.

Mr. Bush said the performance in last year’s budget indicated improvements had been made. The $25 million surplus represents a final actual budget number for the fiscal year ending 30 June, 2011. Those numbers had not yet been audited, but Mr. Bush said he expected no major changes once that audit was completed.

Government’s projected revenues went from $510 million to an actual $535 million at the end of the 2010/11 budget, according to the premier. Government operating expenses went from a projected $508 million to an actual $483 million.

Performance of government-owned companies and statutory authorities also improved from forecasts, reporting a surplus of about $3 million for the year.

In addition, government spent about $3 million less in financing costs for the year – that’s the amount of money Cayman must pay to meet its debts.

The premier said this was done by “stretching out the time before it became critical that we had to borrow the $155 million”. Cayman borrowed $155 million to help meet costs in the 2010/11 fiscal year.