Project Future

In April 2014, during the first PPM-led coalition government, Deputy Governor Franz Manderson commissioned EY to review the functioning of the public service, offer recommendations on how to make it more efficient and cut red tape to help the private sector function. It included reviewing the Cayman Islands Government’s assets and “recommending those that could be sold to the private sector where a fair market exists”.

The core team for the report were Keiran Hutchinson (project leader) and Steve Nowell from the Cayman Islands office, and Larni de Courtenay from the Australia office. They were supported by a global advisory board.

General oversight of the report was provided by Dan Scott (relationship assessment and service quality), who was EY Managing Partner – Financial Services at the time, and Rohan Small (coordinating partner), both from the Cayman Islands office.

The introduction to the report notes a number of caveats, including that it was a review of the state of the CIG “at a defined point in time”.

The report noted that the public sector debt by the end of June 2014 was $874.5 million. The authors wrote. “If unfunded pension liabilities are included, total public sector liabilities amount to $1.115 billion at FY14 and are projected to amount to $1.047 billion in FY15. These liabilities amount to 43.4% of the public sector’s gross assets in FY14 and a projected proportion still at close to 40% in FY15.”

It also stated that there was a lack of capital to invest in infrastructure and that the CIG was unable at the time to borrow funds. It recommended downsizing and streamlining the government and concentrating on core government functions.

Among its Priority 1 recommendations was the outsourcing of medical operations, potentially all facilities, to a large brand-name third-party operator. This could include the HSA hospital in George Town, the district clinics, Faith Hospital on Cayman Brac, and the Dental Clinic. It also recommended passing old debts onto a private debt collection agency on a no-win, no-fee basis.

It recommended that the government health insurance company, CINICO, enter into a joint venture with the private sector so that it could provide additional, more profitable insurance lines, such as auto insurance, with the long-term goal of becoming a private sector entity.

When it came to education, the report suggested transitioning the government schools to charter schools in phases, which would reduce the “civil service by an average of 22 teachers per school concessioned”. The authors said that starting with three or four schools “would be prudent to ensure that the commercial, financial, operational and governance models were working as intended”.

It also recommended the amalgamation of the three primary schools in Cayman Brac to create two schools on two sites: Creek Infant School and West End Junior School. 

Other recommendations included selling off undeveloped land and unused property owned by the CIG, selling the Turtle Farm, Radio Cayman and the Water Authority, and outsourcing government functions to the private sector, notably waste collection, but also prison transfers, hospital and prison catering, and security at the courts, at the Governor’s House and for police cells.

The authors suggested that the CIG consider the sale or long-term lease of the ports and the airports or entering into public-private partnerships to operate them. They did not suggest selling Cayman Airways because it was not viable as a business but recommended more “transparency of operations, strategic functions and benefits”.

However, they did suggest preparing UCCI, the postal service and the Cayman Islands Stock Exchange for future sale.

The deputy governor’s response to the report was to appoint Mary Rodriguez, chief advisor to the Strategic Reforms Implementation Unit, to head up a new programme, also called Project Future, in October 2015. The new project would develop a five-year strategic plan to reform the civil service as part of a broader reform of the public sector based on some recommendations made by EY.

It’s unclear how much the SRIU has achieved.