Turks and Caicos Islands (Progress Report)

Monday 30th January 2012 Written Statements

[The Minister of State, Department for International Development (Mr Alan Duncan)]

Further to the written statement of the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for North West Norfolk (Mr Bellingham) of 9 December 2010, Official Report, columns 40-41WS, setting out milestones that Ministers judged would have to be met before elections could take place in the Turks and Caicos Islands (TCI), my hon. Friend and I wish to update the House.

The Department for International Development and the Foreign and Commonwealth Office currently jointly assess progress towards achieving the milestones to be the following:

Implementation of a new Turks and Caicos Islands constitution order, in support of recommendations of the commission of inquiry, which underpins good governance and sound public financial management.

A new constitution order was laid before Parliament in July 2011. In due course it will be brought into force by the Governor, after which elections must take place within 30 days.

Introduction of a number of new ordinances, including those making provision for: (i) the electoral process and regulation of political parties; (ii) integrity and accountability in public life;(iii) public financial management.

A legislative drafting team is working on numerous ordinances (locally enacted laws) relating to TCI Government business, including public accountability and financial management. Ordinances relating to elections, conduct of political parties and the Integrity Commission are also all currently being drafted. It is expected that drafting of a number of these should be completed by the end of March.

Establishment of robust and transparent public financial management processes to provide a stable economic environment and a strengthening of the Turks and Caicos Islands Government’s capacity to manage their public finances.

Expenditure control has been largely re-established. Consolidated Government financial statements have been produced and submitted for audit for three of the past four years. Public reports on the state of the public finances are being issued quarterly. Rolling 13-week cash-flow forecasts are being produced. The Finance Ministry is being restructured to be more effective in managing the finances and newly appointed permanent secretaries will be firmly held to account for the sound management of finances in their Ministries.

Implementation of budget measures to put the Turks and Caicos Islands Government on track to achieve a fiscal surplus in the financial year ending March 2013.

New taxes and fee increases are expected to boost revenue by 20% compared to 2010-11, reaching US$164 million in 2011-12. But expenditure is expected to be higher than originally forecast leading to a budget deficit of US$26.8 million, which is considerably higher than the budgeted deficit of US$3 million. Additional revenue measures, a reduction in the size of the public service and revisions to the national health insurance plan have been put in place designed to bring the budget into surplus in 2012-13.

Implementation of a transparent and fair process for acquisition of belongership.

In November the TCI Consultative Forum launched a territory-wide consultation on the options for a new pathway to Turks and Caicos Islander status. The consultation process will finish in February. Initial reaction has been favourable. In the meantime, the backlog of permanent residence applications has been cleared.

Significant progress with the civil and criminal processes recommended by the Commission of Inquiry, and implementation of measures to enable these to continue unimpeded.

To date, over 900 acres of Crown land worth approximately US$150 million and US$2 million in cash has been recovered by the civil recovery team. In December 2011, 11 people, including four former Ministers, appeared in court to face criminal charges. They are due to appear before the Supreme Court in TCI in early February.

Implementation of a new Crown land policy.

Key decisions have been taken on this sensitive issue. A new policy to manage Crown land better in the future was announced in 2011 after discussion in the Consultative Forum and Advisory Council. The Crown land ordinance will be ready soon.

Substantial progress in the reform of the public service.

Plans have been drawn up to reduce the number of Ministries from nine to five by the end of March. Five new permanent secretaries have been recruited by rigorous open competition and have been appointed on fixed-term, performance-monitored contracts. Technical support to ensure the effectiveness of the new Ministries is under consideration. A voluntary severance scheme, which will reduce numbers in the public sector by 300-400, is due to be completed in February.

Summary

Much work has been done by the TCI Government and by the TCI public service, with the support of the United Kingdom Government. Assistance has also been provided by the European Union and Canada. Good progress is being made thanks to the commitment and hard work of the interim TCI Government and the people of TCI. However, there is much still to be done.

Finally, setbacks last year have adversely affected progress towards achieving a budget surplus. Our view remains that the UK Government will only be able to set a date for the elections when the milestones have been reached. It is not yet certain when we will be able to say that all of the milestones have been met, but the interim Government, with UK-financed technical assistance, is working hard to achieve them. We still hope that they will be met in time for elections to take place during 2012.