Grappling with national debt: Conflict looms

A leaked report looks set to ratchet up tensions between government and the unions. 

It’s only in draft form but it outlines how the cash-strapped government might overhaul significant parts of the public sector.

Services must become more efficient, says Finance Minister Bob Richards, citing options such as outsourcing and privatization.

The leaked draft of a legislative proposal gives the first glimpse of how reform could be carried out.

But the unions call it draconian and warn that it would give government ministers too much power. 

Draft a nonstarter, says BTUC

Finance minister says new legislation fears exaggerated but labour association ‘extremely unhappy’

Organized labour is opposing the initial draft of a piece of legislation that could overhaul and streamline the delivery of government services because they say it grants government ministers more power to merge or abolish entire public bodies or offices.

The Finance Minister E.T. “Bob” Richards, who is the man behind the draft proposal, meanwhile, says such fears are exaggerated.

The leaked proposal, titled the Public Bodies Reform Act 2014 Consultation Draft, comes months after the SAGE (Spending and Government Efficiency Commission) report, released in late October, outlined the need to overhaul Bermuda’s public sector. 

This past February, Finance Minister E.T. “Bob” Richards outlined several proposed reforms that he said would streamline government services, including the privatization and mutualization of public boards, agencies and departments — reforms that could be met with resistance from the island’s unions. 

Now, Mr Richards says the draft is “intended as a starting point for discussion as we seek to reform and enhance the delivery of public services”.

Non-starter

However, Allan Wilkinson, the president of Bermuda Trade Union Congress (BTUC), an association of unions that includes about 5,000 government workers, says the initiative, which was first reported earlier this week by Gary Moreno of ZBM, in its current form is a nonstarter. 

He acknowledged that government currently has the power to eliminate or merge whole public agencies, but said the proposal, which he expects to be tabled in the legislature by the end of this month, appears to make it easier for ministers to make such changes. 

Mr Wilkinson said this prospective legislation was modelled on parts of a British law, with the chief difference being that the Bermudian draft omitted provisions that would protect workers’ rights. He described the draft as “a bit draconian”. “We have concerns about the power it would give to the ministers,” he said. “We would like to be more of a stakeholder. This appears to be quite aggressive with regards to labour.”

‘Extremely unhappy’

The BTUC has already provided government with a “comprehensive list of our questions and concerns” relating to the proposal, said Michael Charles, the group’s general secretary. He said the congress is waiting for government to reply to that list.“We are extremely unhappy with it, especially in its current form,” said Mr Charles.

This week, Mr Richards repeated what has become his mantra in recent months: “The status quo is not an option”. He said concerns of giving excess power to ministers, his office in particular, is overblown. 

All decisions, he said, relating to the merging of government departments or outsourcing of government jobs “will ultimately be made by the Cabinet of Bermuda”.

“We must move forward with reforms that will make meaningful changes to end the government deficit and improve service to the public,” he said.

The draft also establishes an Efficiency and Reform Authority, a board that will review and analyse public entities and figure out ways to make them more efficient. The board will consist of seven members, two of whom will represent the island’s unions. All seven would be appointed by the finance minister.  The head of civil service, the financial secretary and whomever the board appoints as CEO would also serve as ex officio members. 

During his budget presentation earlier this year, Mr Richards said a slew of public or quasi public entities should be considered for restructuring. 

Reform options included outsourcing, privatization or mutualization , which is the process through which companies, or in this case government entities, are turned into cooperatives where the employees have a majority ownership stake. The draft proposal appears to be an attempt to craft the legislative framework necessary to implement some of those reforms.

In February’s budget presentation, some of the government operations that should be considered for reform included airport operations, emissions and vehicle testing, aircraft and ship registries, waste management, vehicle and equipment operations and maintenance, parks maintenance and water and sewage operations, among others. Earlier this year, the Opposition PLP indicated privatization will not solve the government’s problems, but did give signs the party could be receptive to mutualization, so long as it met with the acceptance of unions.