The preparation of the estimates of expenditure is not the result of “advice” from officials as the GSD claims.
The controlling officer of each department makes proposals to increase a service and estimates the cost of these proposals, as they did in the 15 years when Sir Peter Caruana was the Minister for Finance.
No Government has ever accepted each and every proposal made by the departments without taking into account the estimates of revenue provided by the Treasury.
In the context of the estimated resources a policy decision is normally taken about which proposals should be given priority and which proposals should be deferred.
Since the proposals for each head of expenditure is made and costed by a controlling officer without regard to the detail of requests that others would be making, it has always meant that the Government would have to make a policy decision to say yes to some and no to others.
This is what the GSD calls rejecting “advice”.
The alternative would mean saying yes to everyone on everything irrespective of the ability to meet the cost.
So that fact that the choice in selecting what is to proceed is determined by the elected Government does not mean that the departmental expenditure is calculated by a Minister instead of an official.
If the opposition does not understand this then why have they been accusing the Government since 2012 that it has been spending too much when spending less, according to them, is failure to accept the “advice” of departments.
Given the continuous accusations of delivering false numbers in the estimates book that the GSD have been making on numerous occasions, this year in his budget speech Minister Bossano explained in detail how the figures in the book are computed.
He said in Parliament:
“So I will explain to them what happens when the estimates of expenditure are being considered before the book has been finalised and is ready for going to the printers.
For their benefit and the benefit, of our citizens who might have been misled by last year’s criticisms of the estimate, as proving that government ministers had made promises which they have been breaking a year later, if the results anticipated differs from the promised result, which appears to be the understanding of the Leader of the Opposition, and also the honourable Mr Feetham.
If they were correct, then every generation of ministers of every party has been guilty of making promises which were then broken, and I say this in spite of the fact that the departments that I have responsibility for rarely report exceeding the original budgets.
Departments are required by the Financial Secretary to submit estimates for the following financial year four months before the close of the current financial year, that is in November 2020 they had to provide the estimate for the anticipated forecast result for 2020/21, and then their requested estimates for 2021/22.
The same is true this year in respect of forecast results for 2022/23 and estimates for 2023/24.
The directive provided to the controlling officer of the department by the financial secretary’s office in the Treasury is that the estimate for the forthcoming year should be as close as possible to the figure provided in the approved estimate of the preceding year that is to say zero increase, even if the forecast outturn for the current year is expected to be higher in the year when the estimate is being prepared. This part has not always been so, but it has been introduced since we have had to borrow to fund recurrent expenditure and bridge the gap, as a matter of policy.
This is done to comply with the golden rule on public finance, which I know members opposite share, given their concerns over borrowing incurred to bridge the gap that is produced when there is a deficit.
New services are not considered unless a very strong case is made and expansion of existing services can only be considered if they are demand driven.
So the scrutiny of those submissions is what I am involved in as the Minister for restoring Financial Stability, along with the Minister of Finance and the Financial Secretary, in the attempt to bring the budget as close as possible to previously approved levels.
This also includes areas where we agree that it is impossible to realistically estimate demand. It would be a mistake to provide a sum which is going to be overspend anyway and in those cases a token sum is provided. The relief cover of the GHA, highlighted last year by the Leader of the Opposition is specifically a case in point.”
The following is the text circulated by the Treasury to Controlling Officers with the necessary instructions:
“2. Controlling Officers and Agency/Authority Heads are expected to continue to meet any projected budgetary increases that are not driven by agreed pay awards or an annual contract price increase, through offsetting savings elsewhere within their respective Departmental Votes thereby maintaining annual public expenditure going forward to a level no greater than the amount approved in the published Estimates book for the prior year. This concerted effort must be maintained in order to assist the Government, like all other world economies, to recover from the financial effects of the COVID-19 pandemic.
- Controlling Officers and Agency/Authority Heads wishing to bid for expenditure for new or expanding programmes or activities should only do so where prior approval has been granted for such additional expenditure by the Government; this specific documentary authority must be enclosed with the Estimates submission. The same applies for proposed increases or variations to the Government approved Establishment published in the Approved Government of Gibraltar Estimates of Revenue and expenditure 2022/2023.”
I will give an example so that the opposition and the public can understand the difference between the political role and the professional role.
The GSD employed 47 learning assistants in schools to give support to pupils with learning difficulties.
This was a political decision by ministers.
The department has identified an increased need in this area and this has been accepted as a political decision by the government so we now employ 215.
The cost in the book is calculated by the treasury now for 215 and was calculated for 47 in 2011.
The implication of the accusations of the GSD is that the funding provided in the estimates book give a false picture and it is not the first time they make it implying that the officials knowingly do not show the true cost of the increased provision