As I argued last week, as Parliament debates Budget 2026, the question is not whether the numbers add up, but whether the rules that drive them make sense. Our fiscal architecture still rewards spending, not saving.
Under the Exchequer and Audit Act (EAA), unspent balances lapse at year-end and must be surrendered to the Treasury. The rule was written to protect the public purse, but it has come to disincentivise prudence. The result of this budget disincentive is the ritual September burn, purchases rushed, contracts fragmented, outcomes uncertain.
Other jurisdictions have reengineered this incentive. In the United Kingdom, the Treasury’s budget exchange mechanism allows departments to carry forward a limited share of unspent funds, up to 1 per cent of resource and two per cent of capital Departmental Expenditure Limits (DELs) into the next fiscal year, provided those balances and their purposes are reported to Parliament in the Supplementary Estimates.
The effect is subtle but powerful: prudence is no longer disincentivised. By linking carry-forwards to verified underspends and transparent disclosure, the system turns a culture of “use-it-or-lose-it” into one of measured efficiency.
Behavioural economists Richard Thaler and Cass Sunstein call it “choice architecture”: people respond to how rules frame their options. When rules make prudence visible and rewarding, culture shifts. What we need is not exhortation, but design i.e. rules that make prudence the path of least resistance.
Tobago already operates under a different fiscal logic. Under Section 48 of the THA Act, unspent balances stay in the THA Fund for capital investment, freeing it from Trinidad’s ‘use-it-or-lose-it’ trap. Yet the advantage remains largely dormant. There is, as yet, no transparent system for documenting procurement savings, no structured reinvestment mechanism, and no deliberate strategy to convert fiscal flexibility into innovation.
Tobago’s framework contains the legal plumbing for a better model; what is missing is the system design. With the right architecture, clear reporting, audited savings and open data, Tobago could become a centre for procurement excellence, demonstrating how fiscal discipline and developmental ambition can coexist.
Economist Mariana Mazzucato has long argued that governments must move beyond fixing market failures to shaping markets around public mission outcomes that integrate economic, social and environmental purpose. In her Mission Economy, she reminds us,“the most successful states are not bigger or smaller, but bolder in purpose.”
T&T’s Public Procurement and Disposal of Public Property Act 2015 was designed for such bold public purpose. Section 5 lists among its objectives local industry development, sustainable procurement, and sustainable development. Our missions are already written into law. The challenge now is to align budgetary and procurement practice so that these objectives are not rhetorical, but operational.
At the heart of that alignment lies the principle of Value for Public Money (VfPM) —not a single metric but a compass of the seven Es of ethos, economy, efficiency, effectiveness, equity, ecology and emergence aligning ethics, outcomes, and adaptation. Seen through that lens, mission-oriented procurement is the 7E framework in motion. It asks: what complex value are we trying to create, and which method best realises it?
Sometimes open competition will suffice; at other times early supplier involvement, collaborative partnerships, or framework agreements that let several capable suppliers share the work. Procurement must do both—drive efficiency and elevate value.
Our system redesign could begin with a procurement regulatory sandbox in Tobago. The fiscal architecture requires no amendment. A controlled environment authorised by the Office of Procurement Regulation (OPR) that allows Tobago’s public bodies to test new procurement approaches within defined safeguards. The idea of regulatory sandboxes is not unique. In a complex reality where traditional methodologies are no longer fit for purpose, countries across the globe are recognising the need for change.
First formalised by the UK Financial Conduct Authority in 2016, the idea of a sandbox has since spread far beyond finance: Singapore has used it to pilot digital government and health-tech solutions; Norway’s Data Protection Authority applies it to privacy-friendly artificial intelligence; and the state of Utah has pioneered a legal-services sandbox to widen access to justice.
Most recently, regulatory sandboxes are being linked to public procurement innovation through Pre-Commercial Procurement (PCP) and public procurement of Innovative Solutions (PPI), particularly in the EU context where the AI Act allows sandboxing before deployment.
The European Commission announced plans for 2026 reform of public procurement frameworks to include more targetted procurement with non-price criteria for sustainability, resilience and innovation
The principle is consistent across all sectors: a sandbox is not deregulation but disciplined experimentation, a safe space where regulators permit temporary, supervised trials to learn what works before rules are permanently changed.
In Tobago, no legislative reform would be necessary. Sections 13 and 54 of the Public Procurement and Disposal of Public Property Act 2015 empowers the OPR to approve special guidelines and handbooks for any public body, promote technology and standardise contracts. The Procurement (Methods and Procedures) Regulations 2021, Regulation 5 (1), establishes open bidding as the default but allows other methods where they better achieve value for money.
Using those powers, the OPR could authorise a 24 to 36-month sandbox under special guidelines. The guidelines could permit functional or outcome-based specifications; pilot framework agreements, e-catalogues and collaborative procurement models; use reverse auctions only where goods are standardised; and launch innovation partnerships for needs with no ready solution.
Every sandbox lot would remain fully compliant with the THA Act, estimates, appropriation, internal audit and oversight by the Auditor General.
The goal is not deregulation but learning through controlled experimentation. Each pilot would generate data on price variance, bidders per lot, cycle time and delivery performance, allowing Tobago to build evidence for what works. In this way, the island’s fiscal flexibility becomes an instrument for measured innovation that can be utilised nationally, and even regionally.
To give that innovation lasting form, Tobago could establish a transparent accounting mechanism, a Procurement Savings and Public Value (PSPV) Window within the THA Fund. Verified savings from completed procurements would be credited to this ring-fenced account and, under section 48, retained for capital investment in subsequent years.
This does not increase expenditure; it simply records and redeploys efficiency. By tracing how and where savings arise, the THA could demonstrate that reduced allocations reflect real productivity gains, not underspending.
Over time, transparency itself creates fiscal space: central government can see which projects require less support and which new initiatives merit funding. The PSPV thus becomes both a behavioural and an informational reform, incentivising prudence, innovation and revealing performance.
For Trinidad’s central government, the path is less direct, but it exists. Section 43 of the EAA authorises the Minister of Finance, with the President’s approval, to establish special funds whose balances do not lapse at year-end. Perhaps consideration could be given to using that power to create a Procurement Savings and Public Value Fund or a series of entity-level funds, within which verified procurement savings can be recorded and, where appropriate, retained and re-applied to mission-aligned projects.
Such funds would remain under Treasury direction and audit, operating entirely within the existing fiscal control system. Whether they take the form of individual sub-accounts or a single national window is a policy choice. The principle is what matters: documented efficiency should not vanish into the Consolidated Fund; it should become the foundation for reinvestment and learning.
Different legal routes, one in Tobago, another in Trinidad, can converge on a single national goal: turning savings into a mechanism for the regeneration of public value.
If Budget 2026 is to mark a turning point, it will not be through another tax or deficit target but through coherence, aligning fiscal and procurement systems around learning, innovation, and public value.
