How many worms are in that can?

The role of senior civil servants, and in particular whether they are held accountable, is a question that always surfaces, especially during a crisis. Mr Duckworth’s recent response to a commentary regarding party politics contained a reference to the role of the Financial Secretary that in effect opens a can of worms that should be addressed.

I will assume that Mr Duckworth’s reference to “the Financial Secretary’s radical reassessment after the 2009 election” is not meant to intentionally open this can of worms. At the same time, his reference does remind me of the suggestion, usually made by the PPM, that the FS’ fiscal reassessment post-election was not just a case of an error or incompetence but that it may have been politically motivated. This has been suggested often enough publicly to address it here.

I will try not to make too much of a judgment here about the FS or his performance, but I'm not so convinced that his actions are as political as they are sometimes made out to be and here's why:

First, it should go without saying that the FS is accountable to the public. So, for example, when we witness financial mismanagement, poor government budget forecasts, a surplus pronouncement one day and deficit the next, some of that blame should be placed squarely on this senior official and his team.

But elected officials should also be held accountable for these mishaps and we should not buy the political cop-out that elected ministers have no control over the civil service.

Irrespective of the constitutional position that is used when they wish to run away from public criticism, ministers in particular do have a material element of day to day control over what goes on within their portfolio. They should not be allowed to claim victory and political points when an initiative goes well and yet say “we are not responsible” when things go wrong. The truth is if they are in control enough to claim credit then they are in control enough to also take the blame.

When we focus on the role of the FS post the 2009 election, we should also recall his role (and the role of other financial secretaries) in the years before the 2009 election as well. We might recall that for years we have accepted the practice of having unaudited financials used as the main document by which the public assesses how the country is doing (since the audited financials were usually anywhere from several months to a year behind).

We should also accept that the FS and his team have always carried out projections and that those projections have frankly not always been accurate. In other words, these errors are nothing new.

We should also remind ourselves that this is the same FS who gave the go-ahead, according to the PPM, for their projects and they had no reason to doubt his judgment then. And finally, the PPM should remind itself that for four years straight they accepted his work, for better or for worse, as being credible enough to approve the annual budget in the Legislative Assembly. Same goes now for the UDP.

If all we were saying was that the FS and his team made some serious errors and one of those errors was that they got the size of the deficit wrong in 2009, that would be a reasonable opinion for anyone to have. But what has been suggested (and strongly implied by the PPM on occasion) is that he first suggested a deficit of one size and then “all of a sudden” projected that the deficit would be 81 million post-election day (with the emphasis being on ‘post-election day’).

I, for one, have also lost confidence in these numbers, but we should also consider the direct role of elected officials because that contributes significantly to the problem. Here is how that part of the process works:

A group of politicians and several senior civil servants from the finance department get into a room to finalise the annual budget. The officials provide their reasons for the projections. The politicians come up with some other ways to earn revenue or claim to commit to reduce expenditures further (i.e. they don’t like the projections). The actual projections agreed are based on the unsubstantiated claims and proposed actions of the government as promised by the politicians. The senior officials and his team then get blamed for publishing an erratic budget.

If there is anything that shows just how elected officials can muddy the waters and their true influence/control (yes, I said control) over civil servants, it is the above example, which does reflect reality on many, many occasions. But what may surprise you is to find out how often this occurs and for how many years it has been going on.

All of this is to say this: feel free to criticise the FS and the current “system of financial management” all you want, but it is highly unlikely that the reasons for the financial debacle are mainly due to errors or incompetence of a few senior officials, or worse that they are simply politically motivated. This way of looking at things is equally alarming, whether we view the system under the PPM or the UDP. The FS and his team have been a constant in this process for both groups. In other words, whether you believe he is very competent or not that good, he has been the same. So who really then is to blame? Is it not the politicians themselves?

Whether it is the failure of our elected officials to heed warnings from senior civil servants or their political maneuvering to get the numbers they prefer, the truth behind this story has a lot more to do with the actions of the politicians (both present and past) than any of them would have us believe.

Ironically, if we were to start looking deeper into this issue we would likely need an accountant to help us assess the overwhelming number of worms in that can.