ROADTOWN Tortola BVI, January 11th, 2012 - Public Officers were able to learn more about Cabinet’s decision for the 2012 expenditure cuts at an HR Talk yesterday, hosted jointly by the Department of Human Resources and the Ministry of Finance.

In a Ministry of Finance and Human Resources Circular issued to all public officers, it was announced that Cabinet has made the decision to reduce performance increments by 50% in the 2012 fiscal year and reduce the operating expenses of ministries and departments by 7%.

According to the information shared in the Circular, “We are all very much aware of the fiscal constraints with which the Government of the Virgin Islands has been faced with in the past few years and of the Government’s commitment to ensure that we are able to treat this reality in a manner that is responsible and sustainable.

Deputy Governor Mrs. V. Inez Archibald speaking at the HR Talk said, “I am not sure that this comes as a surprise, to any of us. We know we have been talking for some time about the fiscal condition of the Territory and I personally was gratified that the cuts in relation to public officers mean that they retain their jobs.”

Financial Secretary Mr. Neil Smith explained to the public officers that over the past five years we have been faced with the fact that our revenues within central government have not kept pace with our expenditure growth. Revenue growth has stopped as a result of the financial crisis in the United States and the global recession that followed as a result. Each year since that has occurred we have been faced with an ever more increasing problem where the difference between the funds available and the expenditure expectations are slim.”

The Financial Secretary shared, “Every effort has been made to insulate public officers from the reality of the financial situation but for the past two and a half years it has become clear that we are no longer in a position to do so. The margin between the funding available to do the work and the expenditure needed to do the work has disappeared.”

Mr. Smith said, “Whereas our operational expenditure, the cost to run the public service, has been growing at a rate of 10% annually, our revenue has remained the same for the past three to four years. We are now faced with the choice of whether we continue to depend on existing cash balances or make the decision to reverse that trend and build up our cash reserves to ensure we have funds available to sustain Government operations for at least three months.”

The projected savings from the cuts is estimated to be approximately $13 million dollars, which will be used to augment the reserve fund. The operational side of this year’s budget is estimated to be $260,000,000, which indicates very little growth in revenue based on projections.

“Public officers will now have to do more with less. I am encouraging all public officers to do their part to implement cost-cutting measures. Anyone with ideas on what we can do to cut cost in the public service are asked to share those ideas with the Ministry of Finance, the Department of Human Resources or the Deputy Governor’s Office. No idea is too small,” the Financial Secretary added.

Acting Director of Human Resources Mrs. Michelle Donovan Stevens explained, “On the administration side of the performance increments, the Department of Human Resources will make the adjustments to those increments received thus far and the Ministry of Finance will provide us with a revised salary scale. The 50% reduction in performance increments will not affect persons being promoted.”

Mrs. Donovan Stevens added, “I am encouraging all public officers to support Cabinet’s decision to ensure that we are accountable for contributing to the sustainability and success of the public service.”

The cuts in both performance increments and operational expenses are consistent with Government’s agenda to improve fiscal management practices and reduce expenditure levels.

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