Quango Operational Change

15 July, 2022

Mr. Speaker, I am pleased to provide a further update on operational changes at two Quangos – namely the West End Development Corporation and the Bermuda Land Development Company.

Mr. Speaker, before getting into the specifics of those changes – it is worth providing some background to the genesis of this entire project. A project that actually began on 16th July, 2002, when the Cabinet decided that the Central Policy Unit should complete a review of 17 Quango’s which focused on the following objectives:

  1. Determine whether Bermuda’s Quangos as currently constructed are meeting Government’s aims and if not recommend methods of achieving alignment;

  2. Determine whether there is accountability to the Government and if not, recommend an adequate structure to accomplish this; and

  3. Develop mechanisms for ongoing review.

Mr. Speaker, the scope of the review covered a wide range of topics covering the establishment and governance of each body; its existing relevance, feasibility, effectiveness, levels of accountability to Government, expenditure, income, whether the work could be more effectively (or more efficiently) carried out within Government proper; or by some other means;

Determine governance and best practice in other jurisdictions and to develop a mechanism for ongoing review.

All laudable goals – emanating from a report entitled “UNTANGLING BERMUDA’S QUANGOS - A review of Quangos in the Bermuda Government” presented in October 2003 and the subsequent Sage Commission Report presented a decade later in 2013.

Mr. Speaker, this Government took the decision early in our administration shortly after returning to government in July 2017 to have another look at the reports and their recommendations with a view to actioning some of those items. Upon assuming this role – I asked the 3 Managers to meet on a regular basis to discuss ways we could merge operations utilizing the recommendations of the Quango Report as the basis for those discussions.

As a result the following decisions were made:

  • On the 28th September 2018 a freeze on all new hires was issued to all 3  Quangos.

  • Effective November 1, 2018, the then BHC General Manager, Major Barrett Dill assumed management responsibility for the BLDC as interim CEO in addition to his responsibilities at BHC.

  • Effective November 1, 2018 as well the BHC CFO, Mr. Mark Melo assumed financial responsibility for the BLDC in addition to his responsibilities at BHC.

  • The BLDC Board remained intact and continued their work under the new management team.

  • Effective January 29th, 2021 the Wedco General Manager assumed responsibility for BLDC as the Interim CEO

Mr. Speaker, the Ministry viewed these changes as an opportunity to immediately effect some cost savings by reducing duplication of roles, combining responsibilities and bringing a sharper focus to deliver on the governments mandate to control costs and operate more efficiently.

Mr. Speaker, the Cabinet has approved the merging of the West End Development Corporation and the Bermuda Land Development Company into one new entity as these two quangos share similar objectives, mandates, skills, accounting procedures and staffing levels. After much consideration, I confirm that the Bermuda Housing Corporation will remain a single entity as it has different mandates, goals and objectives.

Mr. Speaker, this Government believes in fiscal prudence. This move should not come as a shock to anyone as I have said previously on numerous occasions, it makes no sense that on an island of only twenty-one (21) square miles that we have two (2) organizations (2 CEOs and 2 CFOs) and all the attendant offices, machinery and staffs carrying out very similar functions for the most part – with the full demonstration of unnecessary bureaucracy on display.

Mr. Speaker, a phased approach to the merging will begin shortly with the establishment of a team of technical officers to design an initial roadmap for how the merger will occur.

While the team of technical officers lays out the path forward – it is the Government’s intention during the next session to bring forth legislation to effect the amalgamation.

Mr. Speaker, importantly the Government does not wish to see redundancies - nor is any anticipated. The initial staffing of the new entity will see minimal duplication of roles, but note that reductions will occur overtime through natural attrition through retirement. The reasoning behind this direction is the benefit of ensuring that any important institutional knowledge is retained into future operations while avoiding severances.

As a part of the merger, there will be an on-going assessment of staffing to determine what positions are required and what the full complement should be  over the forthcoming years.

Mr. Speaker, the Permanent Secretary of Public Works joined me in visiting the respective staffs and Boards of the affected bodies to inform them of this decision in advance of this statement today. Many welcomed the move and are looking forward to the future.

Mr. Speaker, both WEDCo and BLDC have Collective Bargaining Agreements (CBA) with the Bermuda Public Services Union and the Bermuda Industrial Union – some with differing provisions. An integral part of the ongoing discussions will occur with both Unions to agree any amendments to form new combined CBA’s.

Mr. Speaker, this is a move for the future. We view these changes as an opportunity which will effect cost savings by reducing duplication of roles, combining responsibilities and bringing a sharper focus to deliver on the governments mandate to control costs and operate more efficiently.

It is anticipated that this process will take 18 months to finally become one entity – thus allowing sufficient time to resolve the changes needed operationally to effect a smooth transition.

Mr. Speaker, I suspect that colleagues will have little trouble in doing the math on how long it has taken to get to this across the finish line – just look at the second paragraph of this statement of the date this project started - July 16th, 2002! 20 years and we still aren’t there yet but I wish to give an undertaking that I shall not rest until this is accomplished. I’ve already marked my calendar for January 16th, 2024. We have got to find a better and quicker way to make progress going  forward.

Mr. Speaker, I would like to take this opportunity to thank the BLDC Chairperson Ms. Lovitta Foggo, JP, MP, members of BLDC Board, the WEDCo Chairperson - Mr. Neville Tyrrell, JP, MP and the Board at WEDCo for their continued service.

Thank you Mr. Speaker.