The Government has today issued instructions to senior officers on how to manage budget allocations in the final two months of the financial year.

Two circulars have been issued to this effect.

The first is from the Chief Secretary and sets out that given the unprecedented level of spending required to deal with the world wide COVID-19 pandemic, as well as the uncertainty created by the fact that the Brexit negotiations have not yet been finally concluded, Mr Grech asks addressees to ensure compliance with instructions that have Cabinet approval and which he described as ‘absolutely necessary in order to navigate the difficult times still to come in a manner that protects the stability of the public finances of Gibraltar and the sustainability of the public sector’.

The Chief Secretary’s circular goes on to address matters of budgetary control and supplementary expenditure, overtime, inventory management, objective management, substitutions and digitisation.

The second circular is from the Financial Secretary. It reminds Controlling Officers and Accounting Officers that they are expected and required as part of their duties to exercise effective budgetary control and at all times act in accordance with all of the financial instructions issued under their authority. The Financial Secretary reminds addressees that given the uncertainties of Brexit negotiations that we will be facing in the months ahead and the unprecedented levels of expenditure that we have had to incur, and will continue to incur in relation to the Covid-19 pandemic, it is now far more critical than ever for all public servants to ensure that expenditure (both recurrent and capital) is tightly controlled and limited to essential items. Mr Mena adds that the Cabinet has therefore directed that he should contact all Controlling Officers and Accounting Officers to formally remind them that absolutely no "non-essential" expenditure is to be entered into or committed to (be it of a recurrent or capital nature) from now until the end of the financial year unless such expenditure has been pre-approved by the relevant minister. Ministerial approval for expenditure will only be provided after a collegiate decision of the Cabinet.

The Financial Secretary adds that his office and the Treasury are aware that it has become common practice for some Departments, Agencies and Authorities to use up any remaining allocated funds before the close of the financial year. He tells relevant officers that this is never acceptable but that in a situation where COVID related expenditure now exceeds £167m we all need to be extra focused on ensuring Government deploys its available funding on essential spending only. Mr Mena tells addressees that the Chief Minister has specifically directed the Finance team to monitor far more closely than ever the departmental spend from now to the end of the financial year and that they are therefore formally notified that should it appear to his office that proper budgetary control and cost cutting practices have not been observed by any Department, Agency or Authority, appropriate action – including surcharging of unauthorised expenditure - will be taken against the respective Controlling Officer or Agency/Authority Head for failing to adhere to this STRICT Government instruction.

In his circular, on budgetary control and supplementary expenditure, Mr Grech also reminds Controlling Officers that they are to stick to budgets as provided for in the current Estimates. The Chief Secretary highlights that only urgent and essential supplementary funding requests will be considered above approved budget spending. Mr Grech tells addressees that the Chief Minister, as Minister for Public Finance, and Sir Joe Bossano as Minister with responsibility for Financial Stability, have directed, with the unanimous support of the rest of the Council of Ministers, that any such request for supplementary funding will require PRE-APPROVAL by the Cabinet.

In relation to overtime, Mr Grech reminds officers that in the period of the pandemic we have seen huge numbers of workers in our economy having to rely on furlough schemes funded by the BEAT mechanisms introduced by the Government with the unanimous support of all Parliamentarians whilst in the public sector, however, all officers have been paid their full salaries without deduction even when not at work. Mr Grech also adds that many public officers have, additionally, also worked overtime and not charged for the same. Mr Grech adds that now, as we see the effect that the pandemic has had on the finances of governments around the world, not least in Gibraltar, all discretionary overtime is suspended with immediate effect and staff are requested to complete work during working hours. If essential work has to take place after conditioned hours, Mr Grech tells Controlling Officers that they must put this in writing to the Office of the Chief Secretary for approval. He adds that this must be done in advance and overtime will NOT BE PAID if the application for it comes retrospectively. He also reminds addressees that Senior Officers or equivalent or higher pay grade are not entitled to claim overtime at all.

On inventory management, the Chief Secretary tells officers that all non-essential purchases (items the purchase of which would not adversely affect the smooth running of a department) are stopped until the beginning of the new financial year in April when new budgets will be proposed in the Estimates Book subject to debate and approval by Parliament. He also advises addressees that inspection and assessment of inventory management systems per department will be carried out.

Mr Grech also provides that Departments will be required to produce performance related objectives which are measurable quarterly which attempt to marry efficiencies and service for review by my office. These performance related objectives are to be received by the Chief Secretary from Departments by the start of the new financial year on 1st April.

In respect of substitutions, the Chief Secretary’s circular sets out to remind officers that substitutions for an absent colleague of a higher grade are not automatic. Mr Grech therefore sets out that, from the date of issue of his circular, only officers who have been temporarily promoted will be deemed to be substituting. All other officers will revert to their original grade. Any new ‘acting in post’ will have to be approved by the Chief Secretary and will only be approved where necessary and where the functions of the absent grade require activities to be undertaken by the junior officer acting up.

The Chief Secretary also refers addressees to the Government Digitisation Programme and reminds officers that all departments must cooperate with the Digitisation team and start to align internal management systems to incorporate the software.

Mr Grech ends his circular by saying that he knows that none of his instructions will present any difficulties to addressees in the context of the situation in which Gibraltar and the rest of the developed economies of the world find themselves as a result of the pandemic. Mr Grech adds that, ‘in the public sector in Gibraltar we have been lucky to have been able to see this period through with no loss of earnings. Many in the private sector have found themselves relying on BEAT handouts from our Government, in many instances at much lower rates of pay than they are contracted to receive. The Chief Minister has expressed repeatedly how proud he is of the way the public sector has ‘stepped up’ during the pandemic. Now we have to ensure that we protect the stability of our public finances and the sustainability of our service by following these instructions.’

He ends by saying that he has, ‘full confidence that every single one’ of the addressees and their officers will ‘support the work' of the elected Government in seeking to ensure that Gibraltar is amongst the first nations in the world to return to pre-pandemic standards of prosperity. The route to do that lies through ensuring that we comply with the basic rules of budgetary discipline that I have set out above (and those set out in the Financial Secretary’s parallel memorandum).’

His final phrase is to thank addressees for their ‘support throughout this difficult period to date’ and for their ‘continued adherence to the above rules in order to ensure that we emerge stronger than ever from these challenges that all nations face.’


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