Austerity

Government announces civil service salary cuts as part of austerity measures. This circular letter from the Department of Public Administration to all public servants has just been sent to me for comment. I have not checked with anyone to make sure it is authentic. I take it on trust as the source is dependable. I have read it.

Department of Public Administration

The James Ronald Webster Building

The Valley

REF: EST/5/10

GOVERNMENT CIRCULAR NO. 4 OF 8 JUNE 2009

TO: Permanent Secretaries

Hon. Attorney General

Department Heads

All Public Officers

H E, The Governor (for information)

Ministers of Government (for information)

AUSTERITY MEASURES

Anguilla and by extension the Budget of the Government of Anguilla continue to be impacted by the sharp slow down in global economic activity. The Government of Anguilla has been adopting certain austerity measures in response to the global financial crisis. The current difficulty being experienced in meeting monthly expenditure has necessitated further austerity measures by Government.

On Wednesday June 3, 2009 Executive Council agreed to the following for a period of six months in the first instance, effective July 1, 2009, to sharply reduce expenditure:-

(i) the figures for travel allowance categories A to E will be as follows:-

($225.00, $175.00, $125.00, $75.00, $62.50 respectively);

Council further agreed that travel allowance categories should be continuously reviewed to ensure that officers are placed in the correct categories.

(ii) telephone allowance will remain at the current reduced level;

(iii) salary payments be reduced by the amounts set out below:-

a) Hon Deputy Governor, Hon Attorney

General and Public Officers in grades A-F - 10%

Public Officers in grades G-M - 5%

Public Officers in grades A-F who did not receive the 25% salary increase in September 2008 should have the increase actually received reduced using the following formula to determine the percentage reduction (10 ÷ 25 x % increase in salary actually received in September 2008 = % amount current salary to be reduced by). This is proposed exceptionally on moral grounds particularly as persons would have made financial commitments based on their prior salary. This exception must not be construed as giving affected persons any rights or benefits that they would not have otherwise accrued.

b) All elected Members of HoA - 15% (of ministerial and HoA allowances)

Speaker and Nominated Members - 5%

Special Assistants/Advisers/

Specialist Worker - 10%

Wage Workers - 5%

(iv) pensioners will not be affected by any reductions;

(v) officers retiring during the temporary salary suspension period will be afforded their retirement benefits (gratuity and pension) based on their current salary and not at the reduced salary;

(vi) all officers including “contract” officers will be subject to the temporary suspension of benefits;

(vii) the GoA will communicate with financial institutions to request that civil servants who require their loans to be refinanced be granted that service at no cost;

Council noted that the GoA cannot commit to giving back the suspended funds at this time but undertakes that if the situation changes positively and significantly, consideration will be given to either partial or full reimbursement of the suspended funds.

Public Administration acknowledges the historic nature of these measures and the personal sacrifice officers will be required to make. However, it is hoped that public officers will recognize the seriousness of the situation and understand that the measures being instituted come after considerable deliberation.

Public Administration continues to urge officers, especially at this time, to remain vigilant in the collection of government revenues, be professional in the performance of designated duties and practice sound work ethics.

------------------------------------------------

Lana Horsford-Harrigan

Director Human Resource Management

Public Administration

Copy – Honourable Deputy Governor

Here are my comments.

First, let me say that everyone in Anguilla would expect that in time of financial crisis and falling revenue deep cuts must be made, including cuts in salaries and allowances. But, it is elementary that such cuts can only to be made by consent, not by force.

The memorandum makes it clear, if only by inference, that the proposed reduction was determined on by the Executive Council without discussion with either the public service or their representatives. There is no question of seeking to obtain the consent of the civil servants whose salaries will be affected. They are being told of a decision that has been made. The decision is “effective July 1”, by which I understand that salaries will be cut from July 2009. The lack of consultation and the failure even to try to secure prior agreement is unbelievably inconsiderate and unacceptable if true. Tell me which employer in Anguilla could get away with informing his employees, without any prior discussion, that their salaries were about to be cut?

The third paragraph from the bottom, with the words “commit to giving back the suspended funds”, etc, makes it clear that the Executive Council believes that it has the right to take away the proposed salary cuts permanently. This is not guaranteed to be a temporary suspension, it is to be a possibly permanent cut in salary. That is contrary to section 7 of the Constitution of Anguilla. This letter infringes the “property rights” section of the Constitution, and as such is illegal.

One thing that is guaranteed to get me really vexed is when I see government not bothering to take legal advice on a matter of great importance and obvious contention such as this. This proposal is the wholesale cutting of salaries. That is a matter of great importance of obvious contention. There are civil servants who are already living at the limit of their means. There are house mortgages, car loans, university loans, vacation loans, and personal loans for furniture, all expected to be paid on time. Any reduction will call for civil servants to have to begin negotiations with creditors and other persons to whom there are obligations.

That is why I would contend that no competent department of public administration could possibly have circulated this memorandum without first having sought legal advice. And, I would go further and state that no lawyer in a West Indian Attorney-General’s Chambers could possibly have o-kayed it. Both contentions cannot be right. One must be wrong. The conclusion is that either the department took a risk, or the A-G’s Chambers was careless.

I know it is a long time ago, but government must retain files. About the year 1982 Verna Fahie was a young civil servant. She was sent by government on a Canadian scholarship to Barbados. After about a year, government wrote her a letter. They had just realized that she was getting a stipend from the Canadians. That was in addition to her Anguilla public service salary. That was considered too good for her. She was informed that after she came back to Anguilla they would begin deducting her salary until she had paid back the government of Anguilla the amount of the Canadian stipend. She protested that they were the ones that had organized the scholarship, and they should have known about the stipend from the beginning. She did not agree to any deduction from her salary. They went ahead and made the deductions anyway. She took the matter to the High Court. The judge’s decision was that salary is property as much as land is. Just as government is not allowed to confiscate your land without payment of full compensation, so they are not allowed to confiscate any part of your salary. They had to pay her back the salary that had been cut and pay her legal costs as well.

In what way is the proposed new cut any different from what was done to Verna Fahie?

Come on, public admin, get their consent first.