Proposed Budget (Government Plan) 2025-2028 (P.51/2024): twenty-first amendment. Transform Project

STATES OF JERSEY

PROPOSED BUDGET (GOVERNMENT PLAN) 2025-2028 (P.51/2024): TWENTY-

FIRST AMENDMENT

TRANSFORM PROJECT

Lodged au Greffe on 12th November 2024 by Deputy A.F. Curtis of St. Clement Earliest date for debate: 26th November 2024

STATES GREFFE

2024  P.51 Amd.(21)

PROPOSED BUDGET (GOVERNMENT PLAN) 2025-2028  (P.51/2024): TWENTY-FIRST AMENDMENT

____________

1  PAGE 4, PARAGRAPH (o) –

After the words "as set out in the Appendix to the accompanying Report" insert the words –

", except that –

1. on page 53, for Table 19 there should be substituted the following table, and all references to the value of the Social Security Fund should be adjusted accordingly –

; and

2. on page 53, after Table 19, there should be inserted the words "The Project Total for the Benefits and Payments (Transform) project has been reduced by £10,000,000, reflected in a decrease of £4,500,000 in each of 2026 and 2027, and a £1,000,000 decrease in 2028. This reduction is implemented to restore the approximate historic budget for the project and to ensure value for money. It will also result in an increased balance of the Social Security fund."".

 DEPUTY A.F. CURTIS OF ST. CLEMENT

Note:  After this amendment, the proposition would read as follows –

THE STATES are asked to decide whether they are of opinion

to receive the Government Plan 2025 – 2028 (entitled "Budget 2025-2028") specified in Article 9(1) of the Public Finances (Jersey) Law 2019 ("the Law") and specifically –

1. to approve the estimate of total States income to be paid into the Consolidated Fund in 2025 as set out in Appendix 2 – Summary Table 1 to the Report, which is inclusive of the proposed taxation and impôts duties changes outlined in the Government Plan, in line with Article 9(2)(a) of the Law.
2. to approve the proposed Changes to Approval for financing/borrowing for 2025, as shown in Appendix 2 – Summary Table 2 to the Report, which may be

obtained by the Minister for Treasury and Resources, as and when required, in line with Article 9 (2)(c) of the Law, of up to those revised approval amounts.

3. to approve the transfers from one States fund to another for 2025 of up to and including the amounts set in Appendix 2 – Summary Table 3 in line with Article 9(2)(b) of the Law.
4. to approve a transfer from the Consolidated Fund to the Stabilisation Fund in 2025 of up to £25 million, subject to a decision of the Minister for Treasury and Resources based on the availability of funds in the Consolidated Fund as at 31st December 2024 in excess of the estimates provided in this plan, or from budgeted underspends identified before 31st December 2025.
5. to approve a transfer from the Consolidated Fund to the Agricultural Loans Fund in 2025 of up to £2 million, subject to a decision of the Minister for Treasury and Resources based on availability of funds in the Consolidated Fund as at 31st December 2024 in excess of estimates provided in this plan, or from budgeted underspends identified before 31st December 2025;
6. to approve each major project that is to be started or continued in 2025 and the total cost of each such project and any amendments to the proposed total cost of a major project under a previously approved Government Plan, in line with Article 9(2)(d), (e) and (f) of the Law and as set out in Appendix 2 – Summary Table 4 to the Report.
7. to approve the proposed amount to be appropriated from the Consolidated Fund for 2025, for each head of expenditure, being gross expenditure less estimated income (if any), in line with Articles 9(2)(g), 10(1) and 10(2) of the Law, and set out in Appendix 2 – Summary Tables 5(i) and (ii) of the Report.
8. to  approve  the  estimated  income,  being  estimated  gross  income  less expenditure, that each States trading operation will pay into its trading fund in 2025 in line with Article 9(2)(h) of the Law and set out in Appendix 2 – Summary Table 6 to the Report.
9. to approve the proposed amount to be appropriated from each States trading operation's trading fund for 2025 for each head of expenditure in line with Article 9(2)(i) of the Law and set out in Appendix 2 – Summary Table 7 to the Report.
10. to approve the estimated income and expenditure proposals for the Climate Emergency Fund for 2025 as set out in Appendix 2 – Summary Table 8 to the Report.
11. to approve an updated and consolidated policy of the Strategic Reserve Fund as follows:

"The Strategic Reserve Fund, established in accordance with the provisions of Article 4 of the Public Finances (Jersey) Law 2005, is a permanent reserve only to be used:

1. in exceptional circumstances  to  insulate  the  Island's  economy  from severe structural decline such as the sudden collapse of a major Island industry or from major natural disaster.
2. if necessary, for the purposes of providing funding (up to £100 million) for the Bank Depositors Compensation Scheme established under the Banking  Business  (Depositors  Compensation)  (Jersey)  Regulations 2009, including to meet the States contribution to the Scheme and/or to meet any temporary cash flow funding requirements of the Scheme.
3. to  support  the  development  of  future  healthcare  facilities  and  the borrowing costs for such work, in line with a financing strategy agreed by the Assembly;
4. as a holding fund for any or all monies raised through external financing until required, and for any monies related to the repayment of debt raised through external financing used to offset the repayment of debt, as and when required; and
5. in accordance with Article 24 of the Public Finances (Jersey) Law 2019, where the Minister for Treasury and Resources is satisfied that there exists an immediate threat to the health or safety of any of the inhabitants of Jersey, to the stability of the economy in Jersey or to the environment, for which no other suitable funding is available."

12. to approve the transfer to the Strategic Reserve of the amounts due as a result of the move from prior-year basis taxation after 31st December 2025, as and when these payments are received (estimated at £280 million).
13. in relation to the new Government Headquarters (office), to approve;

1. the exercising of the option to acquire the new Government Headquarters (estimated at £91 million), by the Public of the Island, in line with the pre-agreed terms; and
2. the acquisition of the new Government Headquarters as an investment of the Social Security (Reserve) Fund (including authorising the meeting of expenses incurred in connection with the acquisition); and
3. the subsequent leasing of the new Government Headquarters by the Public of the Island from the Social Security (Reserve) Fund, with commercial terms to be agreed between the Minister for Infrastructure (on behalf of the Public) and Minister for Social Security and the Minister for Treasury and Resources (both on behalf of the Fund); and

14. in relation to the new Government Headquarters, to authorise H.M. Attorney General, the Greffier of the States, the Ministers for Infrastructure, Social Security and Treasury and Resources, and the Public of the Island, to enter into such arrangements, including financing, and pass any contracts as are necessary to put into effect paragraph (m).
15. to approve, in accordance with Article 9(1) of the Law, the Government Plan 2025-2028, as set out in the Appendix to the accompanying Report, except that

1. on page 53, for Table 19 there should be substituted the following table, and all references to the value of the Social Security Fund should be adjusted accordingly –

; and

2. on page 53, after Table 19, there should be inserted the words "The Project Total for the Benefits and Payments (Transform) project has been reduced by £10,000,000, reflected in a decrease of £4,500,000 in each of 2026 and 2027, and a £1,000,000 decrease in 2028. This reduction is implemented to restore the approximate historic budget for the project and to ensure value for money. It will also result in an increased balance of the Social Security fund.".

REPORT

Summary

The Customer and Local Services programme TRANSFORM's budget is proposed to increase in the Budget 2025-2028 by circa £10million (circa 50%).

No information within the budget justifies this increase. To my understanding scrutiny have not been briefed on this increase, nor have the assembly.

It is essential that we manage our spending on IT and digital to deliver Value for Money, and challenge expenditure to ensure the prudent use of public money.

As such until a clear justification for both this increase and the total budget for TRANSFORM is transparently shared, I ask the Council of Ministers, and the Assembly reinstate the budget for the programme to levels similar to those approved in the Government Plan 2024-2027.

Context

Customer and Local Services currently operate a bespoke Social Security technology system called NESSIE' (New Employment Social Security Information Exchange). This system was introduced in January 20251 and so is now reaching twenty years in production.

Since the 2021 – 2024 Government Plan, a programme to replace NESSIE has been provided for in that Government Plan and subsequent ones. It has since taken on the name TRANSFORM.

It is interesting to note that the concerns about the risks of running NESSIE into the future (such as ageing technology and lack of supportability), whilst understandable, have not materialised in a catastrophic way. That is not to say we should not replace the system, and I fully support replacing NESSIE with a modern fit-for-purpose system that integrates well with other systems and improves productivity for the department, and the quality of service for islanders. It does however suggest that we can take time to do this methodically.

It is also fair to say that the programme has clearly had ambitious timetables in the past. A multi-year project due for delivery in 2024 has yet to see any major expenditure, with no large contracting on delivery completed.

This has led to an ever-moving' proposed expenditure on the project, with a shift in delivery model seen in the 2024-2027 Government Plan as the project moved to a blended  model  of  Capital'  and  Revenue'  expenditure,  proposing  to  deliver  the programme over a longer timeframe however with greater internal resources.

These changes are not necessarily bad things. Indeed, these plans evolved during the implementation of the ITS (now Connect) programme, a delivery plagued with Cost overruns, mismatched capacity between supplier and Government, challenges with scope etc.

1 Microsoft Word - A review of changes to the Incapacity Benefit System by Pr–

It is therefore reasonable to assume that work done in 2023 to redesign the programme were sensible.

What is  concerning however is that the  proposed budget for the  programme  has increased between the 2024 and 2025 Budgets by almost 50%, from an estimated £21m to £31m.

This has occurred at the same time as new productive tooling for building software have emerged  thanks  to  generative  AI  and  new  products,  that  help  lower  the  cost  of implementing new systems.

It is essential that we and the public have a clear understanding of how our money is spent, and that it is spent prudently. In the absence of further information, I see no reason the Assembly should approve such a significant increase in expenditure. If we do it opens us up to the same criticisms of former assemblies on projects such as ITS.

Lastly, this amendment is not seeking to reallocate the money found through a reduction in project spend. The Social Security fund is ringfenced, and this amendment is about ensuring value for money and appropriate spend of an important source of money.

I ask the Council of Ministers to accept this amendment, and the assembly to support as such.

Historic Government Plan Approvals

The  table  below  contains  excerpts  from  the  current  Budget  and  previous  four Government Plans. Total project expenditure was originally budgeted at £23 million, however a significant change in expenditure profile is seen in the Government Plan 2024 – 2027.

During this year as mentioned above, the project was reprofiled and so spend was less than  previously  planned  although  with  expenditure  until  2028  (so  outside  the Government Plan period).

Although not published in an easy to find way, I understand that the proposed total budget for the programme was between £20-£21 million (including expenditure that had occurred to date).

Further, this programme shows the challenges in the public and assembly members scrutinising or even understanding Government budgets. It is essential that it is clear to members what has been spent, what this has been spent on, and what is planned to be spent.

Financial and staffing implications

If adopted, this amendment will decrease the Project Total' for the Benefits and Payments (TRANSFORM) Head of Expenditure by £10 million and increase the long term value of the Social Security Fund by £10 million.

Children's Rights Impact Assessment

A Children's Rights Impact Assessment (CRIA) has been prepared in relation to this proposition and is available to read on the States Assembly website.