Robert Wynter, Contributor 
WYNTER
THE STATED vision of the Public Sector Reform is "an open and impartial public sector, which puts the public's interests first, and in which valued and respected professionals deliver high quality services efficiently and effectively".
Such a public sector will be a facilitator rather than a hindrance to individual citizens, groups and private companies. A lean, mean enabling public sector is a necessary condition in achieving a better quality of life for all Jamaicans.
Faced with rising costs over the past 10-15 years, the private sector, operating in a competitive environment, has been forced to restructure. Not so for the public sector which has seen its wage bill balloon at the same time as the country has demonstrated pathetic GDP growth. It is against this background that we believe the Memorandum of Understanding (MoU) between the Government and trade unions is antithetical to the transformation to a lean, mean and enabling public sector.
NARROW CONSTITUENCY
While the Government represents all Jamaicans, the same cannot be said of the trade unions as they represent a narrow constituency less than 10 per cent of the population. Understandably, the principal interest of the unions is the retention of jobs for their members, regardless of how little value some may add. This goes against the goal of an efficient and effective public sector. In dealing with this conflict, the Government needs to exhibit strong leadership and ought not to shackle itself by any MoU.
In a 2004 article entitled "In whose interest is the MoU", we concluded that it was in the interest of the unions, the Government and those public sector employees adding little or no value. It was not, however, in the best interest of those public sector employees adding value, Jamaican citizens in general and the private sector. Further, the then projected $5 billion annual savings paled in comparison to the estimated $10 billion savings had there been rationalisation of the public sector.
MoU 1 was really a deal allowing public sector employees to retain their jobs while being limited to 3 per cent annual increases. MoU1 promised low inflation, robust growth, job creation, training in preparation for new careers and an Oversight Committee that would review and approve public sector organisations restructuring. At the end of the period however, there was relatively high inflation, insignificant growth, little or no job creation, a bureaucratic Oversight Committee and no approved organisation restructuring.
LITTLE VALUE
The cookie cutter approach used in Government/union negotiations mask the fact that many public sector employees are adding little or no value while many others who do add value are underpaid. The excuse from several commentators is that most public sector employees are nurses, teachers and security personnel and as such there is little room to manoeuvre for rationalisation. Our information tells us that of the approximately 90,000 persons on the Central Government payroll, only 39,000 (23,000 teachers, 4,000 nurses and 12,000 security forces) fall in those categories. This leaves a whopping 51,000, many of which are adding little or no value. This figure does not include many parastatal agencies, which are also overstaffed.
Several commentators suggest that we should look at cutting waste and corruption rather than people. However, in many ministries, departments and agencies, a significantly high per cent of their budget (in some cases over 90 per cent ) is spent on staff costs, leaving little room for any significant reduction in waste.
MoU2 allows cash rich public sector companies to pay their employees more. We totally disagree with this. These surpluses were generated by statutory means and have no correlation with the productivity of the entity. Such surpluses do not belong to the agencies to do as they please and ought to be for the benefit of the shareholders, i.e. the citizens of the country.
Under MoU2, a 20 per cent cap has been placed on the public sector wage fund increase, representing approximately $15 billion. However, nothing is said of restructuring that we believe could save $10-15 billion per annum. This could go a far way in funding the transformation of the education system for example which would set the groundwork for future growth maintaining the status quo in the public sector will not.
Robert Wynter is a partner in the firm, Growth Facilitators. He can be reached at robwyn@cwjamaica.com.
