AN EXERCISE IN HERMENEUTICS
A draft Order in Council, proposed
to be made by the British Government to apply to Anguilla, has been widely and
publicly circulated in Anguilla in the past days. I have now read it, and can explain that its
essential provisions are contained in 12 sections as follows:
·
By section 1, the Order replaces and supersedes any Act of the
Legislature or Order in Council which is in conflict with it. This expressly includes the present Anguilla
Constitution, 1982. If any provision
of the Constitution were to conflict with this Order, the Order would prevail.
·
Section 2 deals with interpretation and definitions.
·
By section 3, certain General Principles are set out. Principally, the Government will be obliged
to formulate a new Fiscal Framework which will set limits on levels of
public debt. This Fiscal Framework will
be agreed with the Secretary of State before its adoption, and which will
replace the existing Fiscal Responsibility Act, 2013.
·
Any decision of the Government, or any Government policy, or any Act of
the House of Assembly which would, in the opinion of the Governor, exceed the
Fiscal Framework will require prior approval of the Secretary of State.
·
The Minister of Finance will be required to report to the House of
Assembly every 6 months on the performance of Government in implementing the
Fiscal Framework and on the state of public finances and the state of the
economy of Anguilla.
·
When any proposed Appropriation Bill (the Government’s annual
budget) would not be balanced, the Minister shall explain the reasons for the
failure to the House of Assembly.
·
Where, in the opinion of the Secretary of State, Government is likely to
be in breach of the Fiscal Framework then the following consequences
arise. (i) The Governor will have the
power to enact any legislation, by Order published in the Gazette,
thought fit to ensure compliance. (ii)
Government shall agree with the Secretary of State a Medium Term Fiscal Plan
to meet key debt ratios. And, (iii) the
Governor may appoint a Chief Financial Advisor who shall be obliged to
comply with any direction given to him or her by the Governor.
·
By section 4, no variation of any tax, rate or other levy shall be
made by any Minister or the Government except under the authority of an
Act. Where an Act authorizes any person
to vary a tax, rate or levy, that person shall report to the House on such
exercise of power not less than every 6 months.
·
By section 5, the Minister shall ensure that all contingent liabilities
of the Government (including pensions and healthcare) are subjected to
independent actuarial assessment every 2 years and shall report to the House
within 2 months.
·
By section 6, all monies received by the Government shall be paid into
the Consolidated Fund.
·
By section 7, no money shall be withdrawn from the Consolidated Fund
except to meet expenditure charged on the Fund by a law in force in Anguilla.
·
By section 8, the Minister of Finance shall at least 6 weeks before the
beginning of each financial year lay before the House the estimates of
revenue and a document setting out targets for revenue and expenditure, and
the House shall publish them without delay.
·
By section 9, the Minister is required to introduce into the House an Appropriation
Bill and any necessary Supplementary Appropriation Bills, and the Governor
may refuse to assent to any such Bill if it would be inconsistent with the
Fiscal Framework.
·
Section 10 limits Government’s power to borrow except as
authorized by an Act and in accordance with the Fiscal Framework. If the UK’s Department for International
Development (DfID) guarantees any borrowing by the Government of Anguilla,
the guaranteed borrowing shall be repaid as quickly as possible. The Governor may on behalf of Government enter
into counter-indemnity arrangements with HMG in connection with any
borrowing by Government and shall ensure compliance by Government with any
obligations under any such arrangements.
·
By section 11, the Governor may act contrary to any advice by Executive
Council if compliance with such advice would be inconsistent with the Fiscal
Framework. The Governor may give directions
to any Minister or public officer to ensure compliance with the financial
obligations of Government, and the recipient shall be obliged to comply. The Governor may after consultation with the
Chief Financial Adviser make legislative proposals to Executive Council and may
establish an independent review of the performance and functioning of any statutory
body and may dissolve the Board of any statutory Board and reconstitute it.
·
By section 12, the Governor’s functions under the Order do not have to be
in accordance with the advice of the Executive Council.
These provisions of the draft Order
indicate that the following problems exist in connection with the finances of the
Government of Anguilla:
·
The macro-economic and fiscal policies of the Government are not being
formulated and conducted for the sustained long term prosperity of the people
of Anguilla.
·
Anguilla’s public funds are not being managed according to established
principles of value for money, affordability and regularity and in the
interests of long term financial stability.
·
The Government has no framework document setting limits on the levels of
public debt relative to public revenue.
·
The Minister of Finance does not report regularly to the House on the
financial performance of Government or the state of the public finances and the
state of the economy of Anguilla.
·
The Governor does not presently have sufficient power to ensure that
Government does not breach the existing fiscal framework and the Governor needs
power to enact law to ensure compliance with the new Fiscal Framework.
·
The Governor needs a Chief Financial Officer, who will be under the
Governor’s control, to carry out any functions which may be prescribed by the
Governor (which will, presumably, mean enforcing compliance by Ministers and
public servants with the government’s legal and financial obligations).
·
Ministers of Government are imposing, waiving and varying taxes, rates
and levies without the authority of a law, and this needs to be stopped.
·
Where Ministers waive and vary taxes, rates and levies, they do not
report or account to the House of Assembly.
·
There has not been any actuarial assessment of Anguilla’s contingent
liabilities.
·
The public monies of Anguilla are not being paid as required by existing
law into the Consolidated Fund but are being paid into unauthorized accounts.
·
The public funds of Anguilla are not presently being invested or used
according to law, but are being kept or handled in unauthorized ways.
·
Monies are presently being withdrawn from the Consolidate Fund contrary
to law.
·
The Minister of Finance is not placing the Estimates promptly before the
House as he is expected by law to do, nor is he setting targets for government’s
revenue and expenditure, nor are the Estimates being published promptly, as is
presently required by law.
·
Excessive expenditures by government departments, over and above that
authorised by the annual Budget, are not being legalised by an appropriate
Supplementary Appropriation Act as required by law, and government’s spending
of public money needs to be better regulated.
·
The Anguilla Government is not complying with its existing undertakings to
the British Government to regulate borrowings by the Government.
·
DfID may, as a consequence of mishandling of public funds by the
Government of Anguilla, be required to lend money to the Government of Anguilla,
and there is a need to ensure that such borrowing is repaid promptly.
·
Ministers and public servants are acting against the interests of the
public of Anguilla, and they need to be further regulated.
·
The statutory boards of Anguilla (such as the Social Security Board, and
the Anguilla Health Authority), which are appointed by Ministers, are not
reporting accurately on their financial performance, and they need further
regulation, including giving the Governor the power to dissolve and
reconstitute such Boards.
All of these errors and weaknesses described
above are a terrible indictment on the management by successive governments of
Anguilla of the public finances. We have
evidently for decades been mis-managing Anguilla’s public monies. It should hardly be necessary to point out
that all such mis-management has been conducted under the scrutiny of the FCO
and by a cabinet of Ministers headed by the FCO-appointed Governor who chairs
their meetings in Executive Council. I
think we would all agree that it is high time that someone brought the
Executive Council to its senses and insisted that the island’s public finances
be properly managed.
The only proposed provision that I can
see that will result in bad governance is the imposition of a Chief Financial
Officer. The creation of a ‘finance tsar’
with power to consult with the Governor in overturning decisions of not just
ExCo but also the laws of our House of Assembly, is anti-democratic. It is much to be preferred that, instead,
Ministers and senior public servants be held accountable under the law for
their management of our funds. The
existing laws are more than adequate for ensuring good governance. All that is necessary is that they be
enforced.
Besides that caveat, all the other
provisions of the Order are appropriate and belong in our Constitution to
govern our government.
Revised 9 April 2018
to improve formatting
