Is the public sector costing the islands far to much ?

by boatyboy Wed 08 Jul 2009, 11:02 am

Most people have heard of Vince Cable the liberal MP. How many people know that he is actually quite a clever cookie. He is always commenting on how the economy should be run. What the hell does he know and what is it to do with our lovely Channel Islands anyway ?

Whether you run your own family finances or a country there are several basic rules. The first do not spend what you don’t have. An Item that really caught my eye and is so relative to our small islands I shall offer for debate later. Have to go to work now. Vince Cable makes and offers a commonsense approach backed up with understanding and knowledge. It is one of his articles that has caused soulsearching by financially stretched politicians. Do they have the backbone in Guernsey and Jersey ?

He went on to study Natural Sciences and Economics at Fitzwilliam College, Cambridge [1] and was elected President of the Cambridge Union in 1965. He later received a PhD in Economics from the University of Glasgow

He subsequently lectured for a time at the University of Glasgow and in addition lectured London School of Economics students.
From 1966 to 1968 he was a Treasury Finance Officer to the Kenyan Government, and married Dr Olympia Rebelo; they subsequently had three children. Dr Rebelo died of breast cancer in 2001.[2]
In the 1970s he was Special Advisor to John Smith when the latter was Industry Secretary. He became Chief Economist for Shell in 1995.

http://en.wikipedia.org/wiki/Vincent_Cable

BB

by boatyboy Thu 09 Jul 2009, 6:18 pm

Most of what we know is learned from others and a wide horizon of information. That is why I am offering an article by Vincent Cable for debate. I agree with his take on pensions in the public sector.

The Government may order, and we have to pay, through stealth taxes and higher charges to run hospitals, schools and look after financially those in our society whom are vulnerable. This is what we are told. Are the proper checks and balances in place to make sure the hard working taxpayer is getting value for money ? Is the large tax take really going to help those that need support ? Could it be that something is going badly wrong ?

In Jersey as in Guernsey (?) we have an auditor general someone called Chris Swinson

The Comptroller & Auditor General, Chris Swinson, OBE examines how public bodies spend money, and looks at how best they can achieve value for money, by managing their finances to the highest standards.

http://www.auditorgeneral-jersey.org/

Like an American Sheriff he was voted in by a full majority for another three year contract. Not one States member voted against and yet he rightly has no political power he is an advisor. Is any of the politicians listening to him though ?

The reason Big Chris Swinson the Auditor General is mentioned here is because like Vince Cable MP and many other leading financial professionals, he has decided the gold plated Public Sector final salary scheme is doomed. The tax payers and private sector simply cannot afford this type of pension and therefore we are in an apartheid situation. Call it discrimination if you like you pay for them but cannot afford it yourself.

All quotes are selective please view full articles.

Pension schemes
64.
At the end of March 2008, I published three reports on various aspects of the pension
arrangements which are available to the States’ staff. In brief, I concluded that:
(1)
whilst the States’ pension schemes offer pension benefits that exceed those made
available in the Island’s private sector,
(1)
the PECRS might be terminated and replaced with a DC scheme,

http://www.auditorgeneral-jersey.org/pdf/Press%20Release%20-%20Pension%20Schemes%20for%20States%20Employees.pdf

Bonuses for senior civil servants have become a concealed pay rise and should stop.
There is no good reason why mandarins with well-paid jobs should need additional inducements to get out of bed in the morning.

We also need transparency over pay and conditions. When I questioned the pay of top public servants last year, I received a volley of aggressive emails and appeals for sympathy and TLC - this from people earning up to 20 times the minimum wage. Actually, I didn't go far enough.

Just as MPs have had to disclose details of their expenses and other payments, so should everyone paid by the taxpayer who earns more than the Prime Minister - say £200,000. The BBC has made a start.

The big test of political courage is public-sector pensions, which are in danger of running out of control. Highly paid staff are obtaining pensions often worth two- thirds of a final salary, index-linked for life.

There must be no question of cutting the entitlements of existing pensioners. Most have modest pensions earned after a career teaching, nursing or in poorly paid manual jobs.

But the fat cats have muscled in in an outrageous way, creating a system that is unsustainable.

There are, of course, fat-cat salaries, bonuses and pensions in the private sector - some extraordinarily generous. But the taxpayer doesn't have to foot the bill. Indeed, many executives are paying the price of excess in the cold reality of recession-hit markets, and shareholders are starting to crack down on their greed.

Behind the fat-cat culture in the public sector is a wish to enjoy the rewards available in the private sector without the risks.

But the truth is that many of those senior civil servants, parliamentarians, local government bosses and others who feel underpaid on their generous packages would sink without trace if they had to manage a business through the recession.

The system has to be reformed and there are various options including shifting to an average salary basis and raising employee contributions which must now be pursued.

http://www.dailymail.co.uk/debate/article-1195993/VINCE-CABLE-Our-test-courage-cut-public-sector-pensions.html

Boatyboy

by karma Thu 09 Jul 2009, 8:26 pm

Very well put BB and I shall be reading through it again - but at a first glance, mainly agree with you

by boatyboy Fri 10 Jul 2009, 9:59 am

£200m loss for pension fund?

THE stock market crash may have wiped more than £200m off the value of the States employee pension fund.

The fund stood at £1.1bn at the start of the year, but has been hit by the 32% plunge in the stock market since January. With an estimated 60% of the total value of the fund tied up in equities, the damage is estimated at anything up to £216m.

The fund was already carrying a £145m deficit, according to the 2007 States Report and Accounts. Those accounts also suggest that the amount of cash held under the scheme went down between the end of 2006 and the end of 2007 from £225m to £9m – while the amount of equities went up a similar amount, increasing the risk from falling share prices.

The Public Employee Contributory Retirement Scheme (PECRS) fund is a final salary scheme for States employees. The scheme is not guaranteed by the States – shortfalls have to be made up by reduced pensions or increased contributions from members, ie States workers. A committee of representatives from the States and employees’ sides manage the scheme, advised by professionals.

A statement from that committee is expected soon, and Treasury Minister Terry Le Sueur has declined to comment on the state of the pension fund.

http://www.thisisjersey.com/2008/11/18/200m-loss-for-pension-fund/

A question has been tabled in the States to debate the £350 million deficit, in the States public sector pension fund. The proposition is that £16 million a year is taken from general income to make up the shortfall.

Jersey so far has resisted supplying tv licences for over 75s ( although this may be about to change ), and had a heated debated for three hours whether to continue providing milk for children in schools. The cost would be £200,000 per annum. So on the question of the taxpayer having to top up the public sector pension the question is simple why ?

Boatyboy

by karma Fri 10 Jul 2009, 10:07 am

I am just listening to the local news and now people will be expected to work until they are 67 to enable them to pick up a pension....it has not mentioned whether the civil servants will have to do the same - IMO at the moment it is not a level playing field - with Islanders working an extra 5 years which seems to be very unfair....why should the ordinary folk with a state pension prop up the public servants with their guaranteed index linked pension.....

by cockney Wed 15 Jul 2009, 10:36 pm

There should be a cull of public sector workers as there are far too many. The trouble is that a lot of them wouldnt survive in the private sector. You have to have a certain mindset to work for the states, a bit like being a sheep.

by karma Wed 15 Jul 2009, 10:37 pm

I agree!!!!

by Sponsored content

Is the public sector costing the islands far to much ?

Is the public sector costing the islands far to much ?

Re: Is the public sector costing the islands far to much ?

Re: Is the public sector costing the islands far to much ?

Re: Is the public sector costing the islands far to much ?

Re: Is the public sector costing the islands far to much ?

Re: Is the public sector costing the islands far to much ?

Re: Is the public sector costing the islands far to much ?

Re: Is the public sector costing the islands far to much ?