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STATES OF JERSEY
FINANCE LAW DELEGATION REPORT FOR THE SIX-MONTH PERIOD TO 30TH JUNE 2023
Presented to the States on 5th September 2023 by the Minister for Treasury and Resources
STATES GREFFE
2023 R.132
REPORT
Summary:
The purpose of this report is to satisfy a requirement of the Public Finances (Jersey) Law 2019 for the Minister to report to the States Assembly, twice yearly, decisions taken by the Minister under certain Articles of that Law. Details of such decisions are set out in the body of this report. In most cases these decisions vary the amounts for heads of expenditure approved by the Assembly in the Government Plan.
In summary, during the six-month period ending on 30th June 2023 the Minister or Treasurer (acting under delegation from the Minister) approved the following:
• Two transfers between approved heads of expenditure totalling £483,390;
• Three transfers to the Reserve in 2023, from unspent budgets in 2022 totalling £56.9 million;
• Three uses of additional departmental income above that included in the Government Plan, totalling £755,000;
• Five allocations from Reserves totalling £48.85 million. Of these:
- £29.5 million was to fund pay awards.
- £1.65 million was allocated from amounts held centrally for additional pressures (two decisions);
- £6.28 million was allocated from unspent 2022 approvals to departmental heads of expenditure in 2023; and
- £11.41 million was allocated from unspent 2022 approvals to project heads of expenditure in 2023; and
• 17 Letters of Comfort to Accountable Officers, totalling up to £29.6 million (NB These are now included in this report).
Approvals in the period are detailed below.
- The administration of the public finances of Jersey
In accordance with the Public Finances (Jersey) Law 2019 ("the Law") certain matters are required to be reported to the States Assembly twice yearly by the Minister for Treasury and Resources ("the Minister").
The Public Finances Manual requires that this report includes a list of all letters of comfort issued during the preceding six-month period. A letter of comfort from the Minister for Treasury and Resources confirms to an Accountable Officer that additional funding will be allocated from Reserves in that financial year if it appears that the approved head of expenditure may be exceeded.
This report summarises all decisions made and letters of comfort issued during the six month period to 30th June 2023. Where decisions have not previously been published, this is due to one of two reasons –
• The decisions were exempted under the Freedom of Information (Jersey) Law 2011; or
• The decisions were taken by the Treasurer of the States under delegated authority from the Minister.
- Reporting on decisions
The areas of administration which are required to be reported on are as follows:
- each function undertaken, within the applicable 6-month period under any of Articles 18 to 21, 24 and 26 to 28; and
- each direction given, within the applicable 6-month period by the Minister under Article 15(3) with respect to the amounts appropriated for a reserve head of expenditure.
Article 18 relates to transfers between heads of expenditure.
Article 19 relates to transfers to the following year's reserve.
Article 20 relates to transfers of major project amounts to the following year. Article 21 relates to the power to allocate excess income.
Article 24 relates to emergency expenditure. Article 26 relates to financing (borrowing). Article 27 relates to loans.
Article 28 relates to guarantees and indemnities.
There were no approvals in the period under Article 20 and 24. Other approvals are detailed below.
- Transfers between heads of expenditure under Article 18.
NB A list of abbreviations used can be found at the end of this report.
Where Ministerial Decisions were public the full decisions can be read on www.gov.je.
Head of expenditure | Amount £ | Purpose | |
From | To | ||
Infrastructure | CO-COO (P&CS) | 41,352 | Recurring transfer. The Cabinet Office is restructuring its Soft Facilities Management SFM' provision to create a single soft facilities team by bringing facilities staff from the various departments under one umbrella. (MD- TR-2023-298) |
Environment | Infrastructure | 442,038 | Recurring transfer of Driver & Vehicle Standards from the Environment head of expenditure to the Infrastructure head of expenditure. This transfer will allow movement of the entirety of the revenue budget attached to Driver & Vehicle Standards to the Infrastructure head of expenditure. (MD-TR-2023-395) |
- Transfers of unspent 2022 approvals to the following year's Reserve under Article 19.
From Head of expenditure | Amount £ | Purpose |
General Reserve | 49,614,292 | Unspent 2022 approval. (MD-TR-2023-451) (NB This decision was made on 7th July 2023 but is included for completeness as it relates to the 2022 year end.) |
Reserve for Centrally Held Items | 5,432,971 | Unspent 2022 approval. (MD-TR-2023-451) (NB This decision was made on 7th July 2023 but is included for completeness as it relates to the 2022 year end.) |
Reserve for Central Risk and Inflation | 1,900,000 | Unspent 2022 approval. (MD-TR-2023-451) (NB This decision was made on 7th July 2023 but is included for completeness as it relates to the 2022 year end.) |
- Approvals of the allocation of excess income under Article 21. Excess income in this regard is income over and above 10% (up to a maximum of £100,000) of the relevant departmental income estimates in the Government Plan 2023- 2026.
Head of expenditure | Amount £ | Purpose |
CYPES | 207,000 | Additional income from fee increases for fee- paying provided schools – Jersey College for Girls (JCG) and Jersey College Preparatory School (JCP). (MD-TR-2023-152) |
CYPES | 173,000 | Additional income from fee increases for fee- paying provided schools – Victoria College (VC) and Victoria College Preparatory School (VCP). (MD-TR-2023- 189) |
Infrastructure | 375,000 | The raising of additional recurring income into the Car Park Trading Fund to fund specialist road safety resources within Infrastructure, including a Road Safety Co- Ordinator, Road Safety Officer and Technical Support Officer posts, as per the recommendation of the Island Road Safety Review'. The income will pass to the Operations and Transport function in Infrastructure, where the additional expenditure budget has been created. (MD- TR-2023-823) |
- Approvals of financing (borrowing) under Article 26
During the six months to 30th June 2023 the Minister signed one decision in relation to the replacement of the Revolving Credit Facility:
MD-TR-2022-327 approved the implementation of a Revolving Credit Facility of £300,000,000 (three hundred million pounds) with a £200,000,000 (two hundred million pounds) accordion option. It should be noted that utilisation of the facility is capped at the borrowing limit approved in the Government Plan 2023-26.
As of 30th June 2023, there had been a single drawdown from the facility of £28.4million, to fund the New Healthcare Facilities budget approved by the States Assembly.
- Approvals of loans under Article 27 (as amended by P.28/2020)
- Housing Development Fund
During the six-month period to 30th June 2023, no new loans were approved by the Minister for Treasury and Resources.
The net value of loans outstanding from the Housing Development Fund increased from £221,813,088 at 31st December 2022 to £228,861,407 as of the 30th June 2023.
Loans from the HDF were split between the following loan holders:
Andium £227,615,777 Le Vaux Housing Trust £1,245,630 Total loans £228,861,407
- Other loans
There were no decisions relating to other loans during the six months to 30th June 2023.
- Approvals of guarantees under Article 28 (as amended by P.28/2020)
- Jersey Student Loan Scheme
During the six month period to 30th June 2023, no new loans were guaranteed by the States under the Jersey Student Loan Scheme, which provided financial guarantees to four banks. The Scheme closed to new loans in 2018.
P53/2007 (Student Loans for higher education – guarantees) was debated by the States Assembly on the 6th June 2007 and a maximum outstanding limit of £10 million for an unlimited time period was approved. The outstanding balance of these loans guaranteed as at 30th June 2023 was £403,000. At the end of 2022 this was £540,000.
- Disruption Loan Guarantee Scheme (Covid)
The scheme was not extended after 31st December 2021; therefore no new applications have been made, nor guarantees granted since that date.
169 enquiries had been made by clients to banks under the scheme at the end of 2021, of which 70 had progressed and a facility issued. Whilst £4.3 million of facilities had at one stage or another been approved, by 30th June 2023, 35 facilities remained active with the total value of all outstanding facilities being approximately £1.4m.
To date, there has been one confirmed default (in 2021) which resulted in a claim. This was for a value of £28,645 (reference MD-TR-2021-0144) and was paid in January 2022. There has been one further default reported to 30th June 2023 and the Minister is awaiting the formal submission of a claim. The outstanding value of the facility relating to the claim, including accrued interest, is £38,214.
- Allocations from the Reserve under Article 15(3)
Further information on the Minister's policy for the types of allocation from the Reserve is contained in "Procedures for allocations from the Reserve", published as R.76/2022.
From | To | £ | Purpose |
General Reserve | JHA | Up to 190,519 | Funding for Justice and Home Affairs to assist with the additional costs arising in 2022 from a Major Incident. (MD-TR- 2023-015) |
Reserve for Centrally Held Items - Capital Smoothing Reserve (This Reserve includes several sub-components – see *1 below). | Various heads of expenditure – see *2 table below | Up to 1,462,124 | To fund projects in 2022. (MD-TR-2023- 042) |
Reserve for Centrally Held Items - Pay Provision (This Reserve includes several sub- components - see *1 below). | Pay Award – see *3 table below | Up to 29,511,253 | To fund the budget allocation of the 2023 pay award. (MD-TR-2023-156) |
General Reserve | Various departmental heads of expenditure – see *4 table below | Up to 6,280,768 | To fund ongoing departmental expenditure in 2023. (MD-TR-2023-451) (NB This decision was made on 7th July 2023 but is included for completeness as it relates to the 2022 year end.) |
General Reserve | Various project heads of expenditure – see *5 table below | Up 11,410,619 | To fund ongoing project expenditure in 2023. (MD-TR-2023-451) (NB This decision was made on 7th July 2023 but is included for completeness as it relates to the 2022 year end.) |
*1 Sub-components of the Reserve for Centrally Held Items
Sub-components | Purpose |
Pay award inflation | Provision for the forecast costs of future inflationary pay awards including associated social security and pension requirements. |
Pension and Social Security Increases | Centrally held increases to meet pension and social security increased costs. |
Non-pay net inflation | From 2021 onwards funding is held in reserve for the forecast net non- pay inflation requirements across government. |
Court and Case Costs smoothing reserve | Departments involved in civil and criminal judicial proceedings hold annual budgets for court and case costs. Expenditure on court and case costs is highly variable and driven by demand that is largely outside of the control of departments. The court and case costs smoothing reserve provides a source of funding to meet peaks in demand. In years where court and case costs are lower than budgeted, surpluses are allocated to the smoothing reserve in order to build capacity for the future. |
Markets smoothing reserve | Income from market traders is used to run and maintain the Island's public markets. When income from the public markets exceeds expenditure, the surplus is transferred to the markets smoothing reserve to build capacity for future expenditure such as maintenance or refurbishment needs. In years where expenditure is higher than income funding can be withdrawn from this reserve. |
Independent Jersey Care Inquiry | Centrally held provision for costs associated with the Independent Jersey Care Inquiry and its recommendations. |
Revenue consequences of capital schemes | Centrally held reserve for the revenue consequences of capital initiatives, which will be released once projects in the capital programme have reached the point of incurring associated revenue costs. Funding is held in the reserve due to the inevitable variability involved in the timescales for capital projects, which are subject to assumptions and estimation. |
Capital Smoothing Reserve | The capital smoothing reserve is intended to support improved cashflow management for projects. Allocations of funding to the reserve will typically be linked to individual projects, but where no longer required for previously identified purposes, funding can also be used to support other smoothing requirements including inter alia: opportunities to accelerate delivery of existing projects, further initiatives within the scope of an existing project head of expenditure, project cost pressures. |
*2 Reserve for Centrally Held Items "up to" allocations from MD-TR-2023-042
Head of Expenditure | Accountable Officer | Amount £ |
C00MP20003 - Cyber (Major Project) | John Quinn | 895,905 |
FA0MD16054 - Grainville Phase 5 | Andy Scate | 14,767 |
FA0MF14040 - Demolition Fort Regent Pool | Andy Scate | 12,313 |
N00GP21019 - New Skatepark | Andy Scate | 85,415 |
Q00BT14022 - Sewage Treatment Works | Andy Scate | 453,724 |
Totals |
| 1,462,124 |
*3 Pay award breakdown by department (MD-TR-2023-156)
Head of Expenditure (£) | |
2023 Pay Award | |
Cabinet Office | 3,213,417 |
Children, Young People, Education and Skills | 5,449,657 |
Customer and Local Services | 1,213,440 |
Infrastructure | 1,955,487 |
Environment | 1,113,189 |
Health and Community Services | 8,236,461 |
Justice and Home Affairs | 2,259,321 |
States of Jersey Police | 1,858,633 |
Economic Development, Tourism, Sport and Culture | 284,005 |
External Relations | 146,703 |
Financial Services | 123,714 |
Treasury and Exchequer | 1,800,410 |
Ministerial Total | 27,654,437 |
Bailiff 's Chambers | 104,596 |
Comptroller and Auditor General | 8 ,848 |
Judicial Greffe | 315,842 |
Law Officers' Department | 680,822 |
Office of the Lieutenant Governor | 60,830 |
Official Analyst | 35,155 |
Probation and Aftercare Service | 180,199 |
States Assembly | 317,817 |
Viscount's Department | 152,707 |
Non-Ministerial Total | 1,856,816 |
Total - Reserve for Centrally Held items | 29,511,253 |
*4 Amounts to be transferred to department Heads of Expenditure from the Reserve in 2023 (MD-TR-2023-451).
Head of
Specific Use £
Expenditure
Westaway Court Infrastructure 1,671,119 Samares/Plemont relocation HCS 1,009,613 Provision for Pilot Schemes CBO - OCE 795,000 Economic Recovery: RIS Covid-19 Response 600,000 Economic Recovery: Skills Covid-19 Response 452,750 Social Recovery - Developing Understanding and Actionable Insight Covid-19 Response ( 314,250 Economic Recovery: Economic Analysis Covid-19 Response 300,000 Economic Recovery: JFL Asia Covid-19 Response 231,000 Economic Recovery: JFL London Covid-19 Response 208,080 Economic Recovery: JFL Asia 2 Covid-19 Response 175,000 IJCI CBO - SPPP 167,250 Social Recovery: Early Years & Best Start Programme CYPES 160,000 Social Recovery: Further Education Covid-19 Response 105,000 Social Recovery: Arts and Physical activity for wellbeing Covid-19 Response 57,706 Les Amis HCS 24,000 Covid-19 Review Covid-19 Response 10,000
6,280,768.00
*5 Amounts to be transferred to project Heads of Expenditure from the Reserve in 2023 (MD-TR-2023-451).
Head of Expenditure Department £
Major Projects
Integrated Tech Solution (Major Project) CBO - COO 2,099,266 Jersey Opera House (Major Project) ECON 2,079,123 ITS Release 3 & 4 CBO - COO 1,281,000 Inspiring Active Places Sports Strategy (Major Project) I&E 207,897 Cyber & Cyber ORI (Major Project) CBO - COO 154,096 ITS Release 3 Additional (Major Project) CBO - COO 119,157 Vehicle Testing Service (Major Project) I&E 85,605 Total Major Projects 6,026,144
Other Projects
Orchard House I&E 1,319,415 Combined Control IT JHA 768,757 IT for Migration Services CBO - COO 610,432 Regulation Digital Assets I&E 533,214 Prison Phase 6 JHA 307,702 Infrastructure Assets IHE 296,813 Revenue Transformation Project (Major Project) T&E 241,945 Electronic patient records JHA 222,837 Feasibility T&E 220,000 States of Jersey Police Firearms Range SOJP 216,962 Service Digitisation CBO - COO 210,329 Victoria College capital project I&E 135,257 ESC Minor Capital CYPES 106,294 Prison Phase 8 JHA 78,597 Desastre Database Visc 65,000 Phoenix Software Visc 44,800 Victoria College CYPES 5 ,924 Magistrates' Court Conversion JG 197 Total Other Projects 5,384,475
Grand Total 11,410,619.10
- Letters of Comfort
A letter of comfort from the Minister for Treasury and Resources confirms to an Accountable Officer that additional funding will be allocated in that financial year if it appears that the approved head of expenditure may be exceeded, even after appropriate actions have been taken to control spending levels, or if urgent funding is required. The Minister decided, when approving the relevant Public Finances Manual section, that a list of these decisions should be published twice-yearly in this report. Letters of comfort provide temporary assurance, pending preparation of full business cases, to Accountable Officers so that necessary expenditure can continue. Budgets are not formally increased until such time as an allocation of funding is made under the Minister's powers in the Public Finances Law.
Some of the letters in the list below may have been superseded by formal allocations of additional expenditure approval, for example LOC-2023-4 relating to the Integrated Technology Solution project. Some letters may not result in a formal allocation if expenditure can be managed within existing approvals.
There were 17 Letters of Comfort issued during the six-month period to 30th June 2023:
Letter ref no | Department | Subject/ Pressure | Maximum amount £ |
LOC-2023-4 | CO | Funding for the Integrated Technology Solution project. This letter was superseded by MD-TR-2023-451. | 1,281,000 |
LOC-2023-5 | SoJP | Funding for costs relating to Major Incidents. | 8,000,000 |
LOC-2023-7 | JHA | Funding for costs relating to Major Incidents. | 4,000,000 |
LOC-2023-9 | Economy | Funding for costs relating to Major Incidents. | 1,345,000 |
LOC-2023-11 | Economy | Funding for costs relating to Major Incidents. | 500,000 |
LOC-2023-12 | CO | To fund the psychological support and physical health check components of the Emergency Health and Wellbeing Recovery Programme. This letter supersedes two previous letters, from 1st March and 31st March (LOC-2023-6 and LOC-2023-8). | 1,575,000 |
LOC-2023-13 | T&E | Funding for Value for Money Programme to enable recruitment of key members of the programme team to commence. | 250,000 |
LOC-2023-14 | CYPES | Funding for costs relating to development of a Cultural Centre. This funding is held centrally following allocation in the Government Plan 2023-26. | 300,000 |
LOC-2023-15 | CO | Funding for the Provision for Pilot Schemes. Confirmation that unspent amounts from 2022 will be made available in 2023. | 795,000 |
LOC-2023-16 | HCS | Funding for specialist support to develop and implement a financial recovery plan. | 800,000 |
LOC-2023-17 | T&E | Funding for substantially increased insurance costs in 2023. | 2,200,000 |
LOC-2023-18 | Infrastructure | Contingency planning relating to major incident. | 245,000 |
LOC-2023-19 | CO | Funding for the Integrated Technology Solution project, inclusive of £1.9 million to be transferred within the project, to enable delivery of Release 2. | 3,900,000 |
LOC-2023-20 | CLS | Funding for the relining of the Crematorium Furnace. The furnace has reached the end of its safe operating life and there are no other | 110,000 |
|
| alternatives on-Island that could provide a substitute in the short term |
|
LOC-2023-21 | Economy | Funding for Economic Recovery Initiatives from the unspent 2022 allocation pending MD-TR-2023-451. | 1,970,000 |
LOC-2023-22 | HCS | Funding for costs related to a review of rheumatology services. | 1,300,000 |
LOC-2023-23 | Economy | Funding for costs relating to Major Incidents. | 1,000,000 |
Minister for Treasury and Resources August 2023
Abbreviations
CLS CBO-COO CBO-SPPP CO CO-COO CYPES HCS
JHA P&CS
. SoJP
T&E
Customer and Local Services
Cabinet Office - Chief Operating Office
Cabinet Office – Strategic Policy, Planning and Performance Cabinet Office
Cabinet Office - Chief Operating Office
Children, Young People, Education and Skills
Health and Community Services
Justice and Home Affairs
People and Corporate Services
States of Jersey Police
Treasury and Exchequer