I am delighted to be back in the Turks and Caicos Islands within a year of my first visit to the territory. I said when I visited last year that I hoped it would be the first in a series of regular visits by Ministers and senior officials.
And so it has proved. Robert Hannigan, a very senior Foreign Office Director General, and Colin Roberts, Director of the Overseas Territories from the Foreign Office have visited. Also, Ian McKendry, senior DFID Director, has visited. Ian Hendry led a constitutional team which came for a week of public consultations in May; and more technical assistance has arrived to strengthen key areas of government.
I am looking forward to spending longer in the TCI than last time in the territory on this occasion and to meeting a wide range of people on several of the islands. During this visit I hope to visit not only Providenciales and Grand Turk, but also Salt Cay and North Caicos. I want to meet a wide range of people in the Turks and Caicos Islands, not just those in the centres of tourism and government. I am also looking forward to visiting a number of projects and developments across the islands.
I know that these are difficult times for Turks and Caicos Islanders. I can all the more readily sympathise as we are going through many of the same problems in the UK. In the UK the Coalition Government has had to prune departmental budgets, other than health and overseas aid with some budgets pruned by 19% over four years. Cut backs in funding are causing understandable concern among British public servants as they are here in the TCI. But there is no alternative if we are going to restore public finances to the sustainable basis necessary to a healthy economy.
I recognise that this is a difficult message and one that gives rise to very real worries about unemployment in both the public and private sectors. However, such has been the extent of the impact of the global economic downturn that, regrettably, many countries in the world face the same challenges.
But I know, too, that the impact of the global economic downturn on the TCI has been exacerbated by the legacy of financial mismanagement of the previous administration and the high probability of systemic corruption that was identified by the Commission of Inquiry. That‘s why we want to help ensure that the restoration of sound public finances is underpinned by a broader framework of good governance.
It is also why the work of the Special Prosecutor and of the Civil Recovery team is so important, and why I am encouraged by the progress made by both.
It is not surprising that our objectives to help restore good governance and sound public financial management to the TCI should be reflected in the Coalition’s developing strategy towards the Overseas Territories in general.
The UK Government has been considering our relationship with the Overseas Territories for some time.
We very much want to strengthen the engagement and interaction between the Territories and the UK, including working more closely with a wide range of UK Government Departments. Also partnerships with local government, the private sector, NGOs and professional bodies in the UK.
We want to continue our work with the Territories to strengthen public financial management, economic planning and good governance arrangements where this is necessary. And we certainly hope to come up with a White Paper which will set out our OTs strategy. I feel strongly about the OTs strategy and want to see OTs that are self sustaining and are proud members of the British family.
I believe that our overall approach to the Territories will help the TCI, not only to overcome its current problems, but also to look forward to the realisation of the bright future of its natural asset.
Let me now turn to the Milestones. The milestones set out by myself and the Minister of State for International Development on 9 December last year, point the way to that future, as well as being crucial to our ability to set a date for elections in 2012. That is why I was delighted that we were able to complete the substantive work on the first milestone at the end of the visit of the Turks and Caicos Island delegation to the UK last month.
I want to look at the milestones now and go through them. The first key milestone is the 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.
As you know, the preparation of the new Constitution has been a considerable undertaking, and rightly so. It has taken 15 months of lengthy, widespread and sometimes emotive public consultations that have involved so many from across the TCI. The consultations were not easy as one would expect, for what will be the single most important piece of legislation for everyone in the Territory.
But I’m pleased with the progress made and please to have helped the process by inviting a delegation from the TCI to come to London for a final round of meetings in the FCO last month. I was delighted to have the opportunity to hear for myself the main areas of outstanding concern. As expected, consensus on all the provisions was not possible; and I had to take difficult decisions on some sensitive and important issues. But I am convinced that we have got a good result for the people of the Turks and Caicos Islands. I am pleased to confirm that yesterday the Order in Council containing the new draft constitution was made at the Privy Council’s meeting and passed.
The conclusion of the consultations was a very considerable achievement on the path back to elected Government. I would like to take this opportunity to thank everyone in the TCI who attended the public meetings and offered their views.
Turning to the next most important milestone, the 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.
The new constitution provides a solid platform for progress on the other milestones. In particular, certainty over the electoral system means that we can now start work on the Ordinance governing the electoral process. The Integrity Commission Ordinance already provides the cornerstone for work on integrity and accountability in public life; and work is in hand to prepare a new public financial management Ordinance which will underpin the provisions in the new Constitution and reflect best practice in other Overseas Territories.
Legislation in this and other areas covered by the milestones is an important priority for the Attorney General’s Chambers. I am pleased to say that the UK Government has offered to fund the cost of hiring additional legislative drafters so that prompt progress can be made.
The third key milestone is the 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 its public finances.
I am encouraged by the progress made by the Chief Financial Officer, Caroline Gardner, and the Ministry of Finance. Robust processes have been put in place to address the most urgent weaknesses in the system of public financial management. Priority has been given to strengthening spending controls including the management of cash flow and supplier payments; and tougher measures have been introduced to ensure everyone pays their taxes in full and on time, such as by monitoring the collection of revenues due to Government and taking swift enforcement action when necessary.
To improve the transparency of the TCI Government’s public finances, work is underway to bring the backlog of financial accounts up to date so that they can be audited and published. This will provide a public record of income and expenditure since 2007 and, importantly, set a baseline for the future. Whilst this work is in hand, I am pleased that the Ministry of Finance has also committed to provide quarterly reports of financial performance during this financial year. These will start with a report for April to June 2011 which will be published next month
Furthermore, succession planning is a key part of this milestone, so I am particularly reassured by the plans that have been put in place to build financial management expertise within the Ministry of Finance and across the Government by training staff, including professional training for Ministry of Finance staff.
Another key milestone is the implementation of budget measures to put the Turks and Caicos Islands Government on track to achieve a fiscal surplus in the financial year ending 2012/13
Since my last visit, the UK Government has guaranteed a significant financing package to underpin the Territory’s financial strategy which has been designed to achieve a fiscal surplus in the financial year ending 2012/13. This has enabled the completion of the 2011/12 budget which itself marks a significant step towards fiscal surplus, with a budgeted deficit of $9million, compared with an unaudited deficit of $64 million last year. This is a very significant improvement and I am grateful to Caroline Gardner and her team for achieving this. To this end, the Ministry of Finance is closely monitoring progress against the budget to ensure that the Government remains on track; and it will take action to tackle any shortfalls in revenue or unbudgeted expenditure.
As I have already acknowledged, many of the measures introduced have been tough at a time of uncertainty for islanders as the TCI struggles in the wake of the global economic downturn. But the TCI, like the UK and many other countries, must take the difficult steps needed to live within its means. Those taken by the Interim Government have been designed to minimise the impact on the public and make the revenue system fairer. I am also pleased that the UK Government was able to contribute £2 million towards putting in place transitional arrangements to ease the impact of some of these steps on public servants and towards wider public sector reform. These steps taken are essential to build a prosperous and vibrant future for the Turks and Caicos Islands so that they can thrive and fulfil their potential as an attractive place to live, visit and do business.
Another milestone is progress towards meeting a fair and transparent process for the acquisition of Belongership.
At the conclusion of the recent meetings in London on the draft Constitution, I agreed minimum conditions for the grant of Belongership, and the replacement of the term ‘Belonger’ with ‘Turks and Caicos Islander’.
Work is now in hand to begin consultations in the TCI in the coming months on all the conditions to be included in a new legal process under which people of good character, who have made a contribution to and are assimilated in the Islands, may qualify for permanent residence; or may proceed in due course to be granted Turks and Caicos Islander status. In parallel the TCI Government is putting in place additional resources, new guidance and improved procedures under existing legislation, to clear the backlog of PRC applications built up over many, many years.
In addition, the UK has funded an expert team from the UK Border Agency who visited the TCI earlier this year to review procedures and to provide training of Immigration staff in the application of British nationality law in respect of British overseas territories citizenship.
It is vital for the implementation of a fair and transparent process that there is in place a strong administrative infrastructure of well-trained staff, applying clear rules against published guidance, under streamlined procedures, which are robust against interference. HMG will continue to support the development of this capability by the provision of assistance and training, by UK officers back in the TCI and by opportunities for TCI officers in the UK.
Another milestone is significant progress with the civil and criminal processes recommended by the Commission of Inquiry, and implementation of measures to enable these to continue unimpeded.
I am pleased to say that the Civil Recovery programme is now well into its second year and I am pleased to see that some sets of proceedings have already been completed, or reached significant stages. The recovery of the 750 acres of Joe Grant Cay in June was very welcome; as this was a development which featured prominently in the Commission of Inquiry Report. Even more significant cases involving other developments identified by the Commission are progressing well, with trials on the Salt Cay and Third Turtle Club cases expected later this year or early in 2012. The interim judgment of $1.25m on the Emerald Cay stamp duty evasion case just a few weeks ago was also very welcome; stamp duty evasion was not an issue identified by the Commission of Inquiry and so is a good example of the type of further cases which have come to light following investigations by the Civil Recovery team. Aside from the major cases, there has been a steady stream of smaller recoveries of land and money this year. I am very encouraged that we have begun to see voluntary settlements as well, and I hope that there will be an increasing number of those going forward which will avoid the need for legal proceedings.
Also the Special Prosecutor and her team are also making good progress. As you would expect and given the sensitivity of their work, I cannot go into detail; but I remain encouraged by the steps in hand.
Another milestone is the implementation of a new Crown Land policy.
I am particularly impressed by the extensive work on Crown Land reform. There has been a significant overhaul of the operational capability needed to implement a new Crown Land policy and to oversee changes necessary to place Crown Land administration in the TCI on a sure and sustainable footing for future generations.
I am very pleased that following public consultations across the Territory last year, work on the new Crown Land policy has now been completed. It places priority on five key areas: transparency; safeguarding Crown land and Protected Areas; priorities for Crown land use; new eligibility requirements for access to Crown land; and, the transition to the new policy. I understand that many of these are already being adhered to by the Crown Land Unit and considerable progress in implementing the transparency measures has already been made.
Looking ahead, the next stage will be to draft the Ordinance that substantially incorporates the terms of the policy and is consistent with the revised constitutional changes.
Another milestone is substantial progress in the reform of the public service. I am encouraged by progress in reforming the public sector to ensure that it is of a proportionate size to deliver the services needed for the future of the TCI. So far reviews have been completed for three ministries, and for a number of support services provided across the whole of the public sector. These have already identified considerable potential savings to the public purse, and work is on track to contribute to the savings needed to achieve a fiscal surplus in 2013.
All Permanent Secretaries have been involved and will continue to have an important role in this delicate process to balance the requirement of improving effectiveness in the delivery of services, and efficient use of resources. Throughout this exercise priority is being given to minimising the effect, both financially and socially, on public service employees. In particular, emphasis is being placed on redeploying staff within the public service where historically there has been under-resourcing.
A good example is that I am pleased that this has already resulted in identifying scope for increasing the number of personnel needed in the fire and rescue services by over 25%. This will be a positive move in the TCI’s commitment to meet internationally required standards of safety.
Inevitably and unfortunately, some staff will leave the public service. But work is already in hand to develop a package of support for staff affected, to be delivered with private sector partners and through the provision of training. It will be designed to help staff move successfully within the public sector or into the private sector as the economy recovers.
So what are the next steps?
I am very pleased that the Interim Government has made such considerable progress against the milestones Alan Duncan, the DFID minister, and I identified in December last year. Similarly, much has been achieved towards implementing recommendations of the Commission of Inquiry. This has been an extensive and difficult task.
There is still a lot of work left to do and many challenges ahead for everyone but I am confident that, by working together, we can meet the objective of achieving the milestones in time to set a date for elections next year in 2012.
And on the future, a reduction in public expenditure has been a recurring theme in what I have said. But we also recognise the importance of encouraging economic activity. Last year I gave approval for the Interim Government to borrow $40 million to repair and extend the runway at Providenciales airport. As I was able to see on arrival today, the expansion has been completed and this investment is already proving its worth, having attracted additional airlines and flights from new North American destinations. International passenger flows at Providenciales rose by 10 per cent in 2010; and have continued to rise significantly this year. I arrived on a Jet Blue airplane this morning and saw four other airlines in the airport; American Airlines, United, Delta and one other. So this is even more welcome progress; it’s all about people coming here to enjoy themselves and spend money.
I am encouraged that talks continue with investors interested in starting new developments or taking over other stalled ones. Accessing finance is not as easy as it was a few years ago.
But I hope that the prospective investors and their backers will be encouraged by this evidence of increasing numbers of visitors to the TCI; and by the new markets the airport redevelopment will help open up.
In short, I know that the Interim Government’s aim is to build a prosperous and vibrant future for the Turks and Caicos Islands so that all who live here will thrive and will fulfil their potential in an environment that offers stability and security for work, investment and tourism.
And finally, as many of you know, our Governor is going to be leaving the Turks and Caicos Islands quite soon. I would like to take the opportunity of my visit here to thank him for his hard work on behalf of TCI over the past three years. He is one of very few FCO senior diplomats who have had the privilege to serve as Ambassador, in Ethiopia, High Commissioner, in Ghana, and Governor, to the TCI. I believe he has steered TCI carefully through very troubled waters during his three years here. He has worked tirelessly, always with the territory’s best interests at heart, with the result that TCI is stronger and better positioned to meet the challenges ahead. I am sure that you will all join with me in recognising his great contribution to TCI and wishing him all the best for the future.
Finally, I am an optimist – a glass half full rather than half empty person. On my visit to TCI last year, I saw spirit, drive and extraordinary natural resources and the self belief of TCI. With this we can get through the current problems. The new constitution is fit for purpose; TCI will go from strength to strength; and the people of TCI will once again be the masters of their destiny with a democratically elected government. Thank you.
HENRY BELLINGHAM
