From John Clennett, former Treasurer of the States.
I WAS not surprised to read (JEP, 4 August) that the Treasury Minister believes that more central control of the Island’s finances is the key to better financial management.
In the far off days of the late seventies and eighties, during one of our periodic periods of financial stringency (yes we did have some, even then), the late Senator Cyril Le Marquand believed that more effective central control of expenditure was essential.
In those days we only had two qualified accountants in the Treasury and Senator Le Marquand authorised the recruitment of several more, who would be deployed in the major spending departments and who would report directly to the Treasurer.
Sadly, Senator Le Marquand died unexpectedly before the reorganisation was complete and his successor, not being convinced that this was the answer, ordered the scheme to be abandoned. I am pleased to say that several of the accountants who had already been recruited soon left the Treasury and found responsible and well paid employment in the private sector.
Then came Clothier, whose conclusions were that the committee system of government, with committees being compelled to submit detailed budgets to the States and to stick to them, was too restrictive and that under a ministerial system ministers needed much greater flexibility.
The result, as I understand it, was the revised Finance Law 2005, under which effectively ministers present to the States a broad budget of their future requirements and they are given a dollop of money to spend very much as they wish. Is the Bel Royal road fiasco a good example?
However, the 2005 Finance Law also provided that departmental accountants should be personally responsible for the proper control of the finances of the department.
Just how this reconciles with the wishes of the minister has never been clear, but the present proposal that there should also be departmental accountants responsible to the Treasurer of the States and, by extension, to the Finance Minister defies comprehension.
Three cheers to Peter Body when he says that the minister’s present proposals are twaddle.
The recent criticisms of the Comptroller and Auditor General regarding what he says is lax financial control in departments should surely be directed at the provisions of the 2005 Finance Law which, as I understand it, gives ministers virtually carte blanche to spend their budget allocation almost as they wish.
Under a ministerial system of government, as proposed by Clothier, it is the minister who is responsible for everything that goes on in his department and he cannot seek to escape responsibility by claiming that he has been badly served by his officers. If his officers’ proposals for achieving his wishes are unacceptable, he must send them back to think again, but at the end of the day the buck stops with him.
The opening paragraphs of the 1968 Public Finances Law stated that the then Finance and Economics Committee was responsible for ‘regulating, controlling and supervising the public finances of the Island’.
These responsibilities appear to have been omitted in the 2005 law and while his proposals that the Treasury should have more direct control over how departments spend their money may have much to recommend them, their implementation under the present Finance Law 2005 are, in my opinion, impracticable.
We all know the old French proverb ‘plus ça change, plus c’est la même chose’.