Planning to fail

Government paying the price for underestimating utility bills

Hopefully FINANCE Minister Audley Shaw and his team have learnt a lesson that simply wishing that government agencies reduce their consumption of electricity and other utilities leads to nothing but egg on the face.

Last Tuesday, Shaw tabled a second supplementary estimates for the 2010-2011 fiscal year which show increased allocation to for the payment of utility bills, to the tune of $1.4 billion.

What is interesting is that Shaw's changes came four months after he tabled the first supplementary estimates in Parliament.

Then, Shaw, in making allowance for cost incurred as a result of the security forces operation in west Kingston, put several items on the chopping board, cutting among other things, money to pay utility bills.

In one instance, Shaw cut $1 million from the budget of the 4-H Club which he had given them to pay utilities.

In his revised budget last week, Shaw is seeking to give back the same amount to the organisation.

The finance minister was warned by both the Parliamentary opposition and The Gavel that arbitrarily slashing allocations to agencies and departments for utility bills was unwise.

We have long contended that until and unless the government radically changes the way it operates, and until it relies more on renewable energy, the electricity bill will not be significantly reduced.

A failure

As far as we are concerned, the ministry of finance intended to reduce consumption of water and electricity in government departments mainly though a dictate to entities to reduce consumption by 15 per cent.

Financial Secretary Dr Wesley Hughes has admitted that approach to have been a failure.

"Most of the ministries and departments failed to realise the 15 per cent savings in usage that we have targeted," Hughes told the Public Administration and Appropriations Committee (PAAC) of Parliament last Wednesday.

But the failure to attain that unrealistic 15 per cent reduction in consumption is just one issue. There is also the matter of Shaw's projection for property taxes to pay for street lighting.

The Gavel had questioned whether Shaw was being prudent in seeking to raise $3.5 billion in property taxes to pay for street lighting considering the economic climate. Of note, only $1.7 billion was collected in property taxes in the previous fiscal year when a collection of $3 billion was projected.

As the numbers reflects he was dead wrong. He has had to re-allocate some $500 million, which was set aside for contingency, to the department of Local Government to pay street-light bills.

It is interesting to note that for the 2009-2010 fiscal year, Shaw allocated $310 million to the local government department for street lighting grants and had to revise the figure $1.2 billion later in the fiscal year.

And for reasons unknown, Shaw allocated only $550 million to the department of local government to pay street-lighting bills at the start of this fiscal year, and has had to return with a further $500-million allocation.

'If mi ketch' management

This, to our mind, is not budget but 'if mi ketch' management.

Dr Wykeham McNeill, chairman of the PAAC, appropriately said on Wednesday that the unrealistic way in which allocation for street lighting is dealt is "déjà vu. It is a recurrent theme," McNeill said, while adding, "obviously, we have been under-reporting that".

But it is not just the way in which Shaw has gone about handling the allocation for street lighting which is of concern.

As McNeill pointed out on Wednesday, the ministry of national Security received an additional $140 million, and the Ministry of Health $177 million to pay electricity bills.

It appears that the management of some of these departments and agencies chose to put money they received for the payment of utility bills into other areas.

And as Hughes, the financial secretary, said, "there are some departments which might not have prioritised the payment of their electricity bills and might have done some other things and, ultimately, the government cannot allow for critical agencies to lose electricity."

We submit that if these agencies were given sufficient funding to perform critical tasks, then there would be no need to dip into the money they received for utility payment.

As a country, we cannot continue on the path of approving budgets which are unrealistic.

We urge every member of parliament to apply a fine-tooth comb to the 2011-20112 estimates of expenditure which is coming in a matter of weeks.

Email: thegavel@gleanerjm.com