Governor Ric Todd Reports on Elections Milestones

On Monday, Governor Ric Todd released a comprehensivereport on the progress to April 2012 towards the required milestones imposed by Britain before elections will be resumed in the TCI.

Governor Ric Todd

Since 2009, Todd said, the interim administration has been working to stabilise the economic position of the Turks and Caicos Islands, update laws and legal safeguards to ensure impartial decision making in government, tackle the necessary changes in land and immigration matters, put in place robust public financial control and create a more efficient and effective public service. Progressively, as the changes identified are implemented, UK ministers will be in a more informed position to decide when the time is right to restore a locally elected administration.

Milestone 1 – Implementation of a new TCI Constitution Order

The preparation of a new Constitution was completed in July 2011 and the new Constitution is ready to be put into effect when progress has been made on the other milestones. It will be brought into force thirty days before elections, when a date is decided by ministers in London. Preparations required to be ready for an election were described by the Governor’s Office in October last year, since then they have been progressing steadily and require a few more months to be completed:

• A national census to provide a more accurate measure of the population of TCI began in late January. Enumeration finished in April and a summary of the enumeration exercise is expected to be published soon.

• An updated Elections Ordinance to tighten up the voting procedures, including the arrangements for conducting the ballot for the new ‘All Island’ candidates has been consulted upon widely and the text is completed. It is scheduled to become law in May.

• Drafting instructions for a new law on the conduct of political parties, as recommended by the Commission of Inquiry report, are with a legislative drafter. These define the intention to establish acceptable sources of political funding, campaign methods and accounting practices. Completion is intended for June 2012

• Electoral registration of voters by the Elections Office commenced in April, supported by a project led by the Ministry of Border Control and Labour to verify TCIslander status and issue secure documentary proof of status. This process will continue until 30 June 2012.

A provisional Register of Electors is expected to be published in July. Dependent upon the number of challenges to be resolved during July, a final Register of Electors will be published in August or September. An Electoral Boundaries Commission, scheduled for July, will define the ten new electoral districts and a new Boundaries Ordinance will be prepared in August. Election information and poll worker training is in preparation and will be ready for implementation in the summer.

Milestone 2 – Introduction of new ordinances

Several improvements to the laws of the TCI were identified by the Commission of Inquiry and, subsequently, others were found to be necessary. The programme of drafting new ordinances started eighteen months ago and, in conjunction with a team of legislative drafters funded by the European Union, several further ordinances are in preparation. This ‘ordinances’ milestone mentions requirements for new laws on specific topics:

• The Integrity Commission (Amendment) Ordinance came into force in March. It widens the number of public office holders in TCIG, the statutory bodies, uniformed services and future elected leadership who are required to give personal and financial data about their interests to the Integrity Commission. Information from individuals is assessed against its standards and those in compliance are granted a Certificate of Compliance. This certificate is a necessary requirement to hold public office. The ordinance also reinforces the independence of the Commission from government influence.

• A second, and complementary, ordinance is being prepared by the EU-funded drafters to confer increased powers upon the Integrity Commission for its investigations into suspected fraud and corruption.

• Considerable progress has been made in completing new public financial responsibility ordinances. The Public Financial Management (PFM) and National Audit Office (NAO) Ordinances were put into force on 1 April. The PFM Ordinance defines the new financial management and control procedures to be followed by all public servants in ministries, statutory bodies and any service receiving public funds and creates new criminal and civil penalties for failures in administration. The NAO Ordinance creates a strengthened, independent audit and investigation function over public finances, with direct reporting to the Governor

• A further financial management ordinance is in preparation to define the role of the Chief Financial Officer within the restructured TCIG civil service. This position is a requirement of the UK government loan guarantee and is specified in the 2011 Constitution Order. Completion of this ordinance following consultation is expected in June.

Milestone 3 – Establishment of robust and transparent public financial management processes

Emphasis under this milestone has focused on continued implementation of existing financial controls and the additional requirements in recent legislation:

The new PFM Ordinance came into force on 1 April 2012 and introduced a wide ranging set of verifiable accounting and compliance requirements. In particular, it sets out a clear mechanism for budget control and specifies the delegation of financial responsibilities within ministries. It also addresses financial management within statutory bodies. Public resources are only allocated to statutory bodies through a formal Letter of Sponsorship from a sponsoring ministry and these bodies must now conform to the same financial regulations as government ministries and departments. There has been wide consultation on the new law and further training and in depth briefings should be completed by the end of June

The Audit Department in TCIG is also being reformed into two distinct bodies: the National Audit Office, a statutory body that will operate outside ministerial control, and the Chief Internal Audit Department, which will focus on internal government controls, risk management and governance processes across TCIG. The National Audit Office (NAO) is mandated by the NAO Ordinance approved and scheduled to come into force on 1 September 2012. The operations of the new Chief Internal Audit Office are described in the PFM Ordinance

The TCIG Budget for 2012/13 will be approved on 23 May. Additional time was allowed for new Permanent Secretaries, who took up their posts on 1 April, to carry out a review of their new ministries and submit pragmatic budget bids for their revised areas of responsibility

The PFM Ordinance conferred an Accounting Officer role on all Permanent Secretaries from 1 April 2012. Permanent Secretaries are now legally responsible for the proper use and accounting of public funds by all departments within their ministry, as well as statutory bodies that fall under their remit. In the case of statutory bodies, financial powers are delegated to Directors/CEOs who are held at the same standards as a Permanent Secretary/Accounting Officer

Work is in progress to improve the speed and quality procurement and contracting processes used by TCIG by reform of the present central procurement model, development of a central contracting unit and introduction, where appropriate, of other forms of contract management such as category management, pricing and market testing, framework contracts and proactive management of existing contracts to ensure the public get good value for money.

Milestone 4 – Implementation of budget measures to put the TCI government on track to achieve a fiscal surplus in the financial year ending March 2013

This is a milestone that will continue to demand vigilance. Public expenditure overall for the last financial year (up to 31 March 2012) was lower than the previous one, although unplanned events pushed the final total off-track. This was due in part to the need to tackle the NHIB funding shortfall for the hospital contract and to cover more unpaid bills from the past that surfaced during the year, such as disputed medical treatment expenses with overseas providers and accumulated electricity charges and debts.

An intense and challenging budgeting round has been held since January alongside the slimming down of the number of ministries to five. The new budget is expected to confirm it is possible to achieve and sustain a financial surplus in TCIG’s current (checking) account.

Creating a surplus in TCIG’s annual accounts, where more money is received than expended, can be used to invest wisely in replacing key elements of the national infrastructure, as well as paying off part of the national debt. It is absolutely essential to rebuild the country’s creditworthiness in the eyes of the international community. Over time, restoring an acceptable credit rating for TCI will permit the country to refinance the remainder of its debt at an affordable interest rate when the UK loan guarantee expires in 2016.

Whilst government revenues have improved and public expenditure has fallen, the ability to produce a financial surplus in TCIG’s annual accounts requires vigilance to recognise and mitigate possible external economic shocks, for example major unplanned expenditures or changes in the costs of imported fuel and goods. During the last quarter:

• Considerable effort has been made within TCIG to contain the public sector budget into the future. A voluntary severance scheme was largely completed at the end of March when over 400 people left the civil service. This exercise has reduced the size of the civil service to its 2004 level

• Revenue income has been improved by more rigorous enforcement of existing charges. Further work in this area should tackle the apparent 40% drop-out rate in business licence renewals and gather in payments to TCIG required under Development Agreements

• There are still too many statutory bodies and several have salary levels and terms and conditions that are more generous than their sponsor ministries. Around $10m was spent in the last financial year on running these bodies and for most little or no assessment of their value for money has been undertaken. In January there were 37 bodies in existence. Whilst some are essential or required by the Constitution, they still need to prove their worth alongside the others. By the end of April three bodies were wound up: TC Invest, the Business Licensing Committee and the Business Licensing Appeal Tribunal. Their functions where still necessary have been reabsorbed into TCIG or ways have been found to provide them in a more efficient manner. As a precursor, the Ministry of Finance has placed the same requirement on statutory bodies as for ministries to reduce operational costs in 2012/13 by a further ~25% compared to the last financial year. It is expected this should be achieved by improving operational efficiencies and cutting out unnecessary expenditure. For example, the NIB and NHIB have been asked to combine their separate and duplicative contributions collection operations. Both schemes require payments to be made from salaries and other incomes so a practical plan for joint working should be possible

• Permanent Secretaries now have to sponsor each statutory body and they have been asked to identify if further bodies should be considered for closure, merger or transfer to the not-for-profit sector. Where changes have been identified they will be taken forward by ministries in the coming months and for those that will continue, very close scrutiny of individual business cases will be given to those that require their boards to be renewed on 31 May

• During this quarter, following intensive work by the Ministry of Finance, the compilation of the national accounts for the years of 2008/09 and 2009/10 were completed, alongside the better evidenced accounts for 2010/11 and 2011/12. TCIG is eager to publish these to demonstrate the trend in financial improvement and will do so once they have completed external audit. This audit step is under way for some time but the number of weeks it will take to complete is outside the of the control of TCIG

• A VAT Green Paper was published in March that lays out steps to be taken up to April 2013 to reform the tax system by introducing this change. It also informs the commercial sector of the preparations they will be required to undertake

• The TCIG’s economic planning team have been brought into the core of government and delivered two important tasks since January. First, they organised and led a meticulous and comprehensive national census and are now busy compiling and analysing the data. Second, work has begun on a medium term economic plan. Whilst this work requires further data to be collected from within TCIG and key business sectors, it is expected a report will be available for wider review and consultation from June. An economic development plan is an important step for TCI to show to the international community it has a sound view on what it seeks to achieve in maintaining and growing the economy over the next five years.

Milestone 5 – Implementation of a transparent and fair process for acquisition of Turks and Caicos Islander status

The nationwide consultation exercise led by the Consultative Forum ended in February. Over 140 email submissions were received, many of which represented a number of people. One submission, from The Men of Grand Turk, was signed by 387 Islanders. Hundreds of people attended a series of public meetings held on all of the islands. The high level of public engagement with this exercise was very welcome. In mid-March, the Consultative Forum met to confirm the messages received in response to the consultation. These messages are now being built into the preparation of a new ordinance to meet the milestone.

A transparent and fair process requires more than new law: it needs to be supported by clear policies and procedures and administered consistently by capable staff. The Ministry of Border Control and Labour is continuing to implement its comprehensive change programme, launched last year, to institute clear policies and consistent, lawful practice at every stage in the system. The aim is stronger borders, targeted and prioritised enforcement, effective employment services, and accurate and secure services for citizenship, civil registration and permanent status.

Achievements in the first quarter of 2012 include:

• Clearance of the long-standing backlogs of PRC and nationality cases

• Apprehension and removal of some high-harm individuals from TCI

• Significant progress towards putting the coastal radar system into operation. The mast and base facilities are being renovated and a recruitment exercise for radar operators is under way. A contract was let for the installation of radar equipment and work is planned for May and June.

Milestone 6 – Significant progress with the civil and criminal process recommended by the Commission of Inquiry, and implementation of measures to enable these to continue unimpeded

Thirteen people have been charged with criminal offences by the Special Investigation and Prosecution Team since late 2011. It is understood a number of lines of inquiry are still under investigation.

• In April sufficiency hearings before a judge were held for eleven of the defendants. Four defendants conceded there was sufficient evidence against them to stand trial and for the remainder the judge found there were sufficient grounds for all counts to be taken forward for trial. A further sufficiency hearing is scheduled for May for the other defendants and a plea and directions hearing, at which trial dates are expected to be set, is fixed for July

• The FCO announced a grant of £3.8 million at the end of April to reimburse costs by the SIPT investigations in 2011/12. A further grant of £745 000 was also made by the UK to cover construction costs to rehabilitate the court facilities on Providenciales

• The pursuit of civil recovery cases has continued actively throughout the last quarter. This work is detailed and the prospect of further recoveries remain strong

• Work has continued since late 2011 to prepare three new ordinances: Crimes Ordinance, Criminal Procedures Ordinance and a Legal Professions Ordinance. Initial drafting has been completed and it is expected these will be published by the AG’s Chambers in draft form for consultation in May or June 2012.

Milestone 7 – Implementation of a new Crown land policy

This milestone was completed when the Crown Land Ordinance came into force in March. To ensure the new arrangements for Crown land are implemented successfully various reforms are in place:

• The management of Crown Land, land valuation and land surveying has been moved to the management and control of the Attorney General

• A new Commissioner of Lands has been appointed and is answerable to the Attorney General

• The final approval for the sale of Crown Land in the future will be signed off by the Governor’s Office.

An outstanding matter is the recruitment of a permanent Land Registrar. The UK has agreed to fund further temporary assistance until the summer to provide a further opportunity for a suitable person to be found.

Milestone 8 – Substantial progress in the reform of the Public Service

This reform is not simply a matter of re-sizing departments or moving people from one team to another. It involves changing attitudes in the workplace, innovating new methods of working and reorientation of activities to provide the general public with a more welcoming and friendly service. This milestone involves creating the conditions for impartial policy-making, establishing sensible boundaries to ministerial influence in the internal affairs of a ministry, adjusting the number and structure of ministries and units, and improvements in the volume and quality of services delivered:

• Nine ministries and 13 permanent secretaries were reduced to five each on 1 April

• Following the voluntary release scheme the civil service has returned in size to its 2004 level. No further major rationalisation is expected but the recruitment freeze will continue, except in justifiable cases, and remuneration arrangements will be unaltered

• Further performance management, service quality and policy-making training for the new PSs, managers and key officials in TCIG will be undertaken during 2012

• A new Directorate for Human Resources has been created to replace OPSM

• A new Public Service Ordinance is being prepared by the EU-funded legislation team, together with a rewritten set of General Orders. One intention of this work is to return the determination of staff discipline and performance management to line managers within ministries and give a new, strategic role to the Public Service Commission. These changes are expected to be completed in the next quarter

• A separate project began in April to identify efficiencies and opportunities to pool effort, amongst four, small statutory bodies whose roles are defined in the Constitution, whilst maintaining their individual identities: Public Services Commission, Human Rights Commission, Integrity Commission and Complaints Commission

• New terms and conditions, more similar to the civil service, have been drawn up and will be applied to new board level appointees on statutory bodies. Many of the remaining statutory bodies will have to conform to the new terms and conditions when the boards are renewed at the end of May.

Whilst not specifically part of this milestone, it is pleasing to report:

• Police reform is progressing smoothly and the subject of separate progress reporting to the Governor and Advisory Council

• Prison reform has led to many changes in the regime at HM Prison Grand Turk and the creation of work training and activity programmes for prisoners. For example, the expansion of the prison farm into poultry and eggs has been reported recently in the media. Sentence management for prisoners has been implemented and interventions targeted to assist offenders for life after prison, such as Anger Management and ‘Just Think’ cognitive therapy. Work continues on court video links and plans for a remand centre on Providenciales. These should reduce the need to transport prisoners to court by plane from Grand Turk, with savings in cost and improvements in convenience for all concerned.

DFID has stepped up its assistance to TCIG in April with the establishment of a staffed Programme Office working with Chief Executive Officer. Its role is to identify improvements and maintain momentum in the reform and restructuring under way across every ministry and with the statutory bodies. This will be an active and intensive area of work during the next quarter. Ultimately, the desire is to build up within the civil service a culture of continuous improvement. Incentives and rewards for improvement in service, as well as for outstanding work, are one part of this culture change and these will be reviewed as part of the reform of General Orders.

In conclusion

Sustained and impressive progress has been made in the first quarter of 2012. It is to the credit of all involved in modernising the public service, governance processes and financial management of TCI that step by step the necessary improvements established by the milestones are being fulfilled.