Whatever happened to the recommendations set out by the Spending and Government Efficiency (SAGE) Commission?

Five years later with a change of Government, what has become of the SAGE Report and the recommendations contained in the more recent  Commission of Inquiry?

The subject was raised by Bermuda’s Auditor General, Heather Thomas, who said the two relevant “important” reports cost taxpayers $1.2 million.

She also noted that the former Government’s response to the SAGE Report included the establishment of “a strategic framework and implementation mechanism” on the recommendations “that it accepted”. 

Heather Thomas, Auditor General

Just over a year since the change of Government, she said the current Government “referenced specific SAGE recommendations in its platform” and incorporated “these initiatives” into “the Public Service Operating Plan”. 

“The recommendations of the COI for the action of the Public Service have been implemented.”  

But she said: “An election intervened and the remaining items were not able to be addressed by the former Government.”       

On that note she added: “The current Government has not referenced the COI.”

The SAGE Commission was charged with conducting “a six-month analysis and making recommendations that will help to establish a more modern, efficient and accountable government – one that Bermuda needs and can afford”.

The COI “was the direct result of the previous report”.

Ms Thomas reminded the PLP government of a number of “overarching themes” and findings:

  • There is a lack of effective, accountable leadership in Bermuda’s Civil and Public Service. If this issue is resolved, other weaknesses are likely to be addressed
  • The Civil and Public Service suffers from a flawed organisational structure in which the principles of best practice management are not enforced and in which a cumbersome, lethargic culture is rife
  • The manner in which the Civil and Public Service is governed and in which reporting lines are identified demands a paradigm shift to meet Bermuda’s needs in the 21st Century
  • Political interference has been allowed to thwart the effective management of the Civil Service
  • The lack of effective leadership is compounded by a lack of fiscal discipline by both Civil Servants and politicians. This shared responsibility to maintain revenue and expense budgets has been ignored for too long
  • The Bermuda Government, including the Legislature, is too big for the size of the country it serves. With too many Ministries and Departments, the organisation has become bloated. As a result, there is evidence of unfocused, duplicated and diluted decision-making
  • Because there is no integrated process for planning and measurement, the Bermuda Government does not have a national strategic plan. Clearly articulated measurable goals and objectives are absent, while stated goals and objectives rarely correlate with cohesive business plans
  • Some of the services provided by Government could be delivered more efficiently and cost effectively by the private sector
  • There is no clear, documented, fully functioning and transparent process to measure efficiencies or to achieve accountability
  • Inefficient use of the resources entrusted to Government by the taxpayer should no longer be tolerated
  • Measuring efficiencies alone will never achieve accountability. Efficiency only matters if Government is effectively contributing to the well-being of the people of Bermuda 

“The Commission stated its belief that ‘many employees in the Civil and Public Service have the skills and expertise, and the desire, to deliver necessary services to the community – provided they are led effectively and accountability in an impartial work environment’.

“The Commission concluded that ‘expense reductions must be made of $65 million, $75 million, $80 million and $90 million a year for the next four years if Bermuda is to regain its financial footing’.

“The Commission also concluded that, ‘just as importantly, any plan for expense reduction must be supported by a plan for generating revenue, increasing the Island’s population and thereby the economy, and establishing jobs for Bermudians’.

“The expense reductions called for by the Commission did not happen,” said Ms Thomas.

While noting that it was “neither practical nor necessary to include the full text”, she said the recommendations  were grouped according to its areas of focus:

  • performance – the critical paradigm shift; x streamlining – creating a nimble government
  • measurement and metrics – the era of accountability
  • privatisation and outsourcing – the right services for the right price, and
  • pensions, retirement leave and government health – securing our future

The report was tabled in the House of Assembly in November 2013 followed by the debate in the Lower House in December.

The COI’s findings did not come through until February 2017. And while the former Premier “made a statement in the House of Assembly regarding the work of the COI”, Ms Thomas noted that “the report itself was not tabled.”

The COI’s terms of reference required it to consider:

  • whether violations had occurred of Financial Instructions and related laws, rules and regulations, and whether there was evidence of possible criminal activity, which should be referred to the Police, or of other matters, which should be referred to other appropriate authorities, and
  • whether the laws and regulations currently in force are satisfactory and in particular, provide adequate satisfactory safeguards against repetition of any violations that it finds have occurred in the past

She also reiterated the fact that the COI “found that there were indeed widespread breaches of Financial Instructions”.

For instance, that “Government contracts be publicly tendered, and approved by the Cabinet when exceeding the value of $50,000 (increased to $100,000 effective November 1, 2016), and that public money is not paid out unless contracts are made and signed on behalf of the Government.”

The COI also considered issues “raised in other parts of the Auditor General’s Report regarding internal accounting matters”.

“It found ‘numerous violations, some of which the COI found to be serious and persistent’,” said Ms Thomas.

The “COI concluded that there was evidence of possible criminal activity requiring referral to the Police”.

But she stressed that “it made no referrals for civil servants, nor did it refer any civil servant for possible disciplinary proceedings”.

The COI’s recommendations:

  • Ensure that Ministers and Senior Civil Servants have More Effective Relationships
  • Improve Transparency and Strengthen Safeguards against Conflicts of Interest
  • Improve the Effectiveness of Financial Instructions
  • Clarify Accounting Officer Responsibility
  • Strengthen the Offices Responsible for Safeguarding the Public Purse
  • Enhance Parliamentary Oversight of Government Spending
  • Hold Civil Servants Responsible with Regard to ‘Ownership’ of Responses to the Auditor General’s Reports
  • Increase Transparency and Make Government’s Financial Reporting More Timely
  • Urgently Review Personnel and Processes in the Civil Service
  • Hold QUANGOS More Responsible

The Auditor General also noted that “the respective roles and focus of the two Commissions were different”.

“The SAGE Commission was forward looking and across-government in focus; the Commission of Inquiry was essentially backward looking in that its primary role was to undertake an in-depth examination of the issues highlighted in section 3 of the previous report regarding the Consolidated Fund.

“However, the resulting collective recommendations provide a detailed road map of how to deal with Bermuda’s current dire financial condition with government that is modern, right-sized, effective, efficient and accountable.”

The former Premier “announced the launch of a ‘Public Sector Reform’ initiative and some other major organizational change initiatives”. 

He also made a statement in the House in June 2014, to update MPs on the new initiative and indicated that ‘action plans (to be developed by the working groups) set out the steps to be taken to implement’ those recommendations ‘that the Government will determine that it supports’.

“Further action on the above ‘initiatives’ appears to have been limited,” said Ms Thomas.

On top of that she added: “Currently, I do not have the resources that would be required to examine the extent or effectiveness to which the Commissions’ recommendations have been implemented.

“Should my office have the resources to do so, I intend to carry out such an examination at some point in the future.

“It is my opinion that it is incumbent upon Government to report publicly on its position regarding the resulting recommendations.”

♦ Recommendation No 6: Government should take the following actions regarding the recommendations of the SAGE Commission and the Commission of Inquiry:

  1. indicate clearly the extent to which it accepts the recommendations along with rationale if there are any recommendations not accepted
  2. set out a plan and a timeline for their implementation and
  3. report out periodically on the status of the recommendations’ implementation