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St Helena : St Helena EXCO Report 26 October 2010
Submitted by Saint Helena Herald (Public Relations Information Office) 28.10.2010 (Article Archived on 11.11.2010)

This EXCO followed hard on the heels of Monday’s LEGCO. Such a proximity of high level meetings is unusual, but it is a reminder that the legislature and the executive are working in harmony as the driving forces in our government.

EXCO REPORT 53 – 26th October 2010


 


This EXCO followed hard on the heels of Monday’s LEGCO. Such a proximity of high level meetings is unusual, but it is a reminder that the legislature and the executive are working in harmony as the driving forces in our government.


 


There were only two substantive items, the first was the Public Finance Bill which is a fundamental piece of legislation to ensure that the management of our finances ties in with both our new constitution and the introduction of accrual accounting next April.


 


I have remarked previously how well our Accounts Department is doing at present and I have long been an advocate of the introduction of accrual accounting. However I suspect that to many people the type of accounting that government adopts is of little interest. Maybe a simple explanation is called for:


 


Most people used to be paid weekly in cash. Up until a few years’ ago that cash would go in the pocket, or under the mattress; some would be spent on food, some on housing, entertainment, travel and even savings. The emphasis was always on cash and what it would be allocated to. This government has been no different for many years. Long before the word “colony” became unfashionable, cash would be allocated at the start of a financial year, spent as the year progressed and then probably spent in a rush at the end of the year if it seemed that one might have some left over!


 


That system has served well for a long time, but it fails to take into account the value of assets. You may have invested in a solar panel to heat your water and so your electricity bills will be reduced each quarter. However that solar panel had a cash cost and was only worth buying if the saving in electricity is more than the cost of that cash over time. What accrual accounting does is to bring the value of assets in to the picture as well as the cost of cash over time. Under a mattress cash will not necessarily maintain its value; inflation, or interest on savings, or both combined, make sure of that.


 


So accrual accounting will give us a much more sophisticated view of our financial situation and provide far better information. The quality of decision making is influenced by the quality of information, and so in recommending that this bill progresses we took a step further down the road to improved management of government finances.


 


The second item was consideration of the Social Security Bill and the approval of it to go forward to the next LEGCO to be held next month. That represents rapid progress of an important bill and as our government activity and our economy speed up over the coming months I hope we will see a real momentum within the administration where that is appropriate.


 


This particular bill has been through a great deal of consultation and public meetings have been well attended. There have been radio discussions, phone-ins, open surgeries and informal chats, and throughout all of it no negative comments have been received. This bill will provide very important and far reaching legislation that we believe will make pensions and Income Related Benefit much fairer. Indeed the increase in pension payments proposed should mean that far fewer people need the support of IRB. It should also have the effect of encouraging those of us who are older to continue working to earn money in addition to our pension.


 


As usual pension matters are complex, but the legislation should bring more simplicity as well as provide the government with the power to put an end to the fraud that can exist in this area. We are aware that there are some citizens who receive a pension from the UK who do not realise that it is classed as income, and therefore should be declared as such here. Such a mistake actually reduces our ability to provide assistance for those in greater need, and our new legislation should make sure that doesn’t happen.


 


There was very little Any Other Business. I showed a draft of the new complaints brochure that is being produced by the Health Department and we discussed some positive ideas with regard to improving our fishery and disaster management.


 


This was a very harmonious meeting. I sense that the business of government is moving along at the increasing pace that is necessary to meet some of the deadlines relevant to the airport memorandum and that is how it should be.


 


The meeting closed unusually early at 11.20 am


 


Andrew Gurr


Governor           


26th October 2010


 

 

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