Good afternoon, President Simons, members of the Hamilton Rotary Club and invited guests:

It’s a privilege to be here today to speak with you in my role as chairman of the SAGE Commission.

I’ve spent the last few decades working in some aspect of the insurance sector. Since coming back to Bermuda in 1994, I’ve been involved in the Island’s charitable sector.  This volunteer work has included chairing The Centre on Philanthropy and, before that, The Council Partners Charitable Trust.

The Council Partners worked to address substance abuse in Bermuda. I was always impressed with the men and women involved in this work. It seemed that through their struggle with various types of addiction, they learned to speak honestly, from their heart and with great simplicity. Some of the most moving experiences I’ve had were through meetings with these courageous people.

You might be wondering what this has to do with the work I’m doing at the SAGE Commission. Well, I keep in touch with many of the people I met through The Council Partners and recently, one of them sent me a quote that I’d like to share with you.

It goes something like this:

“The external events of our lives are largely beyond our control. We don’t choose our parents, our emotional environment, the historical period in which we live, or the flow of circumstances that shape our experience. These are givens. We don’t select them, but we can choose how we react to them, and in that choice lies our freedom and our responsibility.

“Instead of complaining about the hand we've been dealt, we can concentrate on playing it well. This is the way we exercise our freedom.

“Our responsibility is to do the best we can with what we have.”

While this quote addresses challenges faced by those struggling with addiction, I think it captures what Bermuda needs to do in creating a more modern, efficient and effective government.

We Bermudians are in a tough situation. As a country, we owe more than we earn, and the amount we owe is growing daily. We have ballooning health and pension costs that threaten to sink our economy. 

For whatever reason, this is the hand that we’ve all been dealt. You can point the finger of blame in many directions, but it’s not going to solve the problem. 

Shooting the messenger doesn’t help. Band-Aid solutions don’t do any good.  Neither does punting the problem down the road for a few more years.

Here’s what’s going to solve a problem this big:  all of us making a conscious choice about how we’re going to react.

Are we going to retreat into our traditional comfort zones? Are we going to look for scapegoats to bear the brunt of what has to be done? Or are we going to reach out to each other, with mutual respect and decency, to find a way to fix our broken government?

Are we going to adopt the pragmatic attitude shown by BPSU President Kevin Grant last week when he spoke to the Royal Gazette about creating a sustainable Civil Service? We have a meeting planned tomorrow with Mr. Grant and his colleagues, and I look forward to a thoughtful discussion.

In order to safeguard our children’s future, we have a responsibility to do the best we can with what we have.

This means putting the best interests of Bermuda, and future generations, first. We have a chance to make a real difference. These opportunities don’t come along all that often. It would be a tragedy to let this one slip by because we shirked our responsibility to do our best.

So - when I say “Do the best we can with what we have,” what exactly do we have in the Bermuda Civil Service?

To explain, let me give you an update on the work of the SAGE Commission.

The six Commissioners, four Committee Chairs and 35 committee members are deep into a review of Government ministries and departments.  This includes extensive interviews with members of the Civil and Public Service and data analysis by a team donated to the Commission by the Island’s accounting firms.

We got off to a slow start in being provided with some of the information we had requested but things seem to have sorted themselves out now. Our committees are working hard to catch up for the time they lost waiting for this information.

We’re wading through thousands of pages of financial information and internal Government reports, and sifting through the results of public submissions, feedback from three public meetings and meeting with key stakeholders.

And we do read the posts on blogs and on our Facebook page, and make a note of suggestions and comments posted there.

One of our key priorities is to review existing information and to listen to key stakeholders, including those currently working within Government.

Each of the four committees has defined the scope of their work. The Chairs meet often to make sure there’s no redundancy in the work their committees are doing and to ensure a synergy in the direction they’re moving.

Dame Jennifer Smith, who heads the Streamline Committee, is looking at government’s organizational structure. She and her Committee began by determining what matters the Bermuda Constitution identifies as the Government's responsibility. They also obtained data on similar sized island countries for comparison.  Dame Jennifer and her committee members have defined basic human needs that they feel government could be tasked with managing. They are:  a safe place to live; the ability to get an education; the ability to gain access to health services and to promote healthy living; a managed and healthy environment to live in; and a sustainable financial system.

Dame Jennifer tells me that she and her committee members will be spending the next two weeks in interviews with representatives of the Civil Service, including twelve Permanent Secretaries, five Assistant Cabinet Secretaries and 78 Department Heads.

Interviews will be taking up a lot of time during the next two weeks for the Performance Committee, chaired by Martha Dismont. This committee is looking at efficiencies in operations and technology, as well as personnel function, performance management and service delivery.

Henry Smith’s Outsourcing and Privatisation Committee has almost completed its review of a slew of documents: internal and external reports on the Civil Service, information from other jurisdictions who have been through a similar process, the most recent Government Budget Book, baseline data summaries on each government department, and submissions from the public. Henry’s committee is also preparing for two weeks of in-depth interviews with members of the Civil Service.

The Measurement and Metrics Committee, chaired by Tom Conyers, has selected a number of government ministries for a “deep dive” into how they measure efficiencies and accountability. Two of the criteria they’ll be using as they speak to Ministry representatives are: size in terms of dollars spent, and impact on the economy using a qualitative assessment.  Tom tells me the committee’s initial work has revealed some disconnects:  while missions and objectives seem to be in order, they address administrative issues rather than strategy. Tom’s committee feels important questions aren’t being asked, such as: Why are we in this business? What do we want to do with it? Where do we want to take it?

We’ve had a good response to our request for input from the public and, to date, have received almost 200 submissions.  These are being collated and will be put into the mix for the awards that will be given out at the end of our review. 

On that note, we’d like to encourage any young people with ideas they’d like to share to get in touch with us. We created two categories in the awards scheme for young people: one for a young person aged 18-25, and one for a young person under the age of 18. We’d like to make sure this group is well represented.

At this point, while the size of the task seems bigger by the day, I feel good about the work we’re doing. Our four committees have put an effective structure in place and their commitment to what their work – all done on a volunteer basis - is impressive.

It’s still early days as far as concrete recommendations are concerned, but the “what do we have?” question is becoming clearer to us.

As we get further and further into our review, it becomes more and more apparent that one of the biggest challenges we have to face is the culture of the Bermuda Civil Service.

It’s been a surprise to private sector members of the Commission to learn of the number of reports produced by civil servants that outline plans for progressive change, and the number of people who have worked hard to try to implement the recommendations in those reports.

But this is not a culture that supports, encourages and rewards creativity and innovation. This is not a culture that promotes brave leadership.

What we have is a lumbering organization with cumbersome bureaucracy, a vestige of a colonial mindset that can’t adapt to the 21st century because it hasn’t been given the tools to do so.

In most organizations, there’s what I’d call a natural cleansing process in the way personnel are managed. You do your job well, you’re rewarded and possibly promoted. You don’t do your job well, you get some assistance for professional development, you get some coaching, and if that doesn’t work, you leave the organization to make way for someone else.

But this isn’t how it works in the Civil Service. The performance process doesn’t seem to produce reasonable outcomes that support healthy, well-managed growth and development.

Staff who enter the Civil Service with a zeal to make a difference are worn down by a system that thwarts progress. Their ideas are ignored. If they’re not ignored, they drift for years before they’re implemented.

Staff who feel they can sit back and coast in their jobs aren’t called to account.

Staff who violate Public Service regulations might face a mild slap on the wrist. The chances of them being dismissed are slim to none.

At the SAGE Commission, we’re beginning to believe that if we can find a way to help effect real systemic change in the Civil Service, to infuse it with a “can do” culture, we will be well on our way to creating the government Bermuda needs and can afford.

We need leaders, and we need them to know we want them to lead. We need staff to know they’re expected to perform. And that they’ll be rewarded if they do. If they don’t, they’ll have to make way for the many Bermudians who would take their job in a heartbeat. We need to set goals and objectives, and stick to them.

I don’t want to give you the impression that there aren’t good people working in Government. There are many of them. But the strong, passionate and innovative workers within Government are being hampered by a system that suppresses the development of positive initiatives. We’ve been told by many Civil and Public Servants that they desperately want the SAGE Commission to recommend a culture in Government that both rewards excellence and also deals with non-performance. They want a culture that attracts, and keeps, strong performers.

While we desperately need to establish a culture of accountability, it isn’t the only thing we need to do.

It’s a given that costs related to personnel need to be reduced. The question is how and when so that our economy isn’t sent into a tailspin. This is an issue of implementation, and it has to be done with a brain and a heart – a brain, in the sense that you don’t want to do more harm than good; and a heart, in the sense that you have to plan properly for any social ramifications.  

I mentioned that there are four committees with specific responsibilities. The six members of the SAGE Commission have taken on two areas to review – health care and pensions.

Bermuda isn’t alone in struggling with how to pay for pensions. There’s a great article in last week’s issue of The Economist that I’d urge you to read. It’s called “Ruinous Promises”.  It lays out how the States got into the mess they’re in with pensions, which is pretty much the same way we did. It notes that even though California Governor Jerry Brown is “basking in glory” because his state is reporting a $1.2 billion surplus, the shortfall in funding state pensions will sink California if changes aren’t made to the way these benefits are structured and managed. We’re going to have to do the same type of thing in Bermuda. We can fix all the other problems we have but if we don’t fix pensions, the issue will overwhelm us at some point and drain our budget.

I’m pleased with the analysis the Commissioners have done so far on government pensions but I’m concerned about the review of health care costs. This type of review isn’t the same as finding ways to cut government spending. It needs the eye of professionals with specialist expertise. There’s been a profound demographic shift in our population that’s going to haunt us in years to come: we have an aging, less healthy population, and we’re going to have fewer working adults who are taxed but don’t spend. This is a complicated problem.  As we prepare our interim report, which we’ll be submitting in mid July, we’re thinking that we might make a separate recommendation on how a review of health care might be handled.

We’ll also have to make some mention of revenue. While this isn’t our remit, there’s no point to what we’re doing if new sources of revenue aren’t identified. Bermuda needs growth. We need jobs. We can’t cut our way to economic recovery.

So – coming back to that quote I gave you when I started this speech:

“Instead of complaining about the hand we've been dealt, we can concentrate on playing it well. This is the way we exercise our freedom. Our responsibility is to do the best we can with what we have.”

We have a difficult hand to play. But we always have a choice about how to react. Please join me, and the SAGE Commission, and all the hard working members of the Bermuda Civil Service, and let’s react, together, with the right choice – the one that serves Bermuda best, for generations to come.

Thank you.