Public Service Ministry Proposes 3% COLA for 2025 Amid Growing Budget Deficit Challenges.
The Ministry of Public Service has proposed a 3 percent Cost of Living Adjustment (COLA) for public servants in 2025, aimed at mitigating inflationary pressures. The proposal was announced during a Public Accounts Committee (PAC) hearing last week, where the Ministry’s budget and spending plans came under scrutiny. This proposal is set against the backdrop of a SBD 134 million increase in the public service payroll.
Permanent Secretary Luke Cheka explained that the COLA adjustment is part of ongoing efforts to support public servants. Cheka also informed the Committee that the Ministry is amending General Orders to allow public servants to cash out their holiday entitlements, offering greater flexibility. Additionally, the Ministry plans to streamline house rental payments through public servants accounts.
However, concerns were raised by the PAC regarding the widening budget deficit. PAC Chairman Gordon Darcy Lilo questioned how the Ministry plans to manage its spending given the limited revenue. Lilo warned that the deficit could lead to a freeze on recruitment.
Lilo emphasized that the inability to hire qualified personnel could exacerbate delays in key functions such as auditing and financial reporting. He stressed that without accurate and audited financial data, government budget planning would remain unreliable, resulting in further fiscal challenges. He described the upcoming year as a “challenging 2025,” calling for urgent reforms to align expenditure with performance. Lilo also emphasised the need for broader improvements in financial management across the public sector and urged the Ministry to prioritize recruitment in critical areas. He added that the government must focus on building capacity to produce credible budgets and effectively manage public funds.
The PAC hearing highlighted the challenges facing the Ministry of Public Service as it seeks to balance the competing demands of supporting public servants, ensuring fiscal sustainability, and improving performance across the public sector.
