The United Kingdom government has asked the government of the Cayman Islands to sign a mutually agreed framework for fiscal responsibility (FFR).
Economists in Britain’s Foreign and Commonwealth Office (FCO) have developed the FFR and it has been presented to the Cayman government for review, discussion and eventual signature.
The FFR was developed on the basis of four fundamental tenets, or principles:
• Government should undertake effective medium-term planning to ensure that the full impact of fiscal decisions is understood;
• Government should put value for money considerations at the heart of the decision-making process;
• Government should demonstrate effective management of risk; and
• Government should drive the delivery of improved accountability in all public sector operations.
According to Cayman Islands Premier McKeeva Bush, such an agreement has the potential to impact not only the government’s financial policy-making, but the territory’s broader economic status, and the government’s overall performance in terms of good governance.
“This policy document, which we are negotiating with the UK, therefore has the ability to affect the quality of life and the standard of living in these Islands,” he said.
Bush said that he is in favour of signing such an agreement and that it is understandable that Britain has seen the need to restrict its exposure in such circumstances as there is no guarantee as to what kind of spendthrift government will be elected in the future.
However, Bush expressed reservations about some of the important methods put forward in the FFR as the means by which these principles are to be achieved.
