If all goes well, the people ofAnguillawill have to become conversant with a new financial acronym – FFR – which is currently being tossed about in official circles. It is the abbreviation for “Framework For Fiscal Responsibility” – a proposal said to have been crafted to replace the Borrowing Guidelines which the British Government introduced for Anguilla, and the otherOverseasTerritories, several years ago.
Those guidelines have been the subject of much contention in the territories which, likeAnguilla, have been restricted in obtaining loans under Public Private Partnership and novel financing. It has been the policy of the UK Government not only to carefully scrutinise the conditions involving theborrowing of loans by its territories, but to disallow the actual disbursements in order to avoid the risk of “contingent liabilities.”
The FFR is a very new arrangement forAnguillaand, according to Governor Harrison, its evolution started in April 2011 when the British Government put the proposals to the Anguilla Government. But it was sixteen months later, on August 15, this year,when Chief Minister Hughes presented a paperon the matter to Executive Council where the Ministers agreed to the proposal the following day.
The matter has now reached the point where the British Government undertook to send a team to Anguilla this week to finalise the negotiations on the FFR.While the arrangement is said to be a replacement for the Borrowing Guidelines, it in fact sets out a commitment whereby the Anguilla Government is to deliver “a prosperous and stable future for the people of Anguilla firmly based on the implementation of sound economic and financial principles.”
The opening paragraphs of the document read in part: “The Government of Anguilla will continue to be open and transparent in its management of the public finances consistent with the highest standards of governance and democracy. The principles of the Framework will therefore be encapsulated in new public financial management law in Anguilla which will specify the detailed requirements necessary to deliver the principles in practice…The Government of Anguilla and the United Kingdom reaffirm their commitment to work in partnership and to respect the rights and responsibilities specified in the Framework and the new public financial management law.”
It must be pointed out that agreements have already been reached on a similar FFR arrangement for BVI and the Caymans. It is understood that the Anguilla Government is quite happy with the FFR and is embracing it, but one wonders why there was a delay of well over a year before the Chief Minister took action on it. To be fair to him, perhaps he wanted to be certain about the requirements and value of the proposal, taking into account that it was something new toAnguilla. The delay appears to have held back the passage of the required new public financial management law. According to the document, it seems that the legislation was to have come into force by June 1, 2012.
A considerable section of the FFR document sets out a full range of strict rules regarding the conditions under which the Anguilla Government may enter into Public Private Partnerships to borrow money. Just how much freedom to borrow the Government will really have – and to manage its own finances inadhering to the stringent provisions of the FFR – is left to be seen.But the Chief Minister has now dismissed what he termed as the British Government’s “antiquated Borrowing Guidelines”, obviously in preference to the coming new Framework for Fiscal Responsibility.
The public is basically unaware of the provisions of the FFR which will cover more than just borrowing. The Government now needs to embark on a series of public consultations in order to inform and obtain the views of civil society and the business community. The FFR acronym is not only something for the public just to know what it stands for. The public must also know what good, and what hope, the arrangement will eventually provide forAnguilla.
