States of Jersey Annual Report and Accounts 2017

States of Jersey

Annual Report and Accounts

2017

R.74/2018

Our purpose

Our purpose as the government of Jersey is to serve and represent the best interests of the island and its citizens. In order to do this, we must:

• Provide strong, fair and trusted leadership for the island and its people

• Deliver positive, sustainable economic, social and environmental outcomes for Jersey

• Ensure effective, efficient and sustainable management and use of public funds

• Ensure the provision of modern and highly-valued services for the public.

Contents

Performance Report ....................................5

1. Overview .......................................................................6
2. Key Deliveries 2017 ....................................................12
3. Performance analysis .................................................15
4. Financial Review ........................................................73
5. Sustainability Review ................................................104

Accountability Report ...............................115

1. Corporate Governance Report .................................116
2. Remuneration and Staff Report ................................162
3. Political Accountability and Audit Report ..................180

Primary Statements .................................221 Notes to the Accounts .............................230

States of Jersey 3 Annual Report and Accounts 2017

Performance report Accountability report Primary statements Notes to the accounts

1

Performance report

Our 2015-18 priorities

The 2015-18 Strategic Plan focuses on five priorities to be addressed during the Council of Ministers' term of office:

Sustainable public finances

To place Jersey on a sound path to structural fiscal balance and aim to balance States revenue and current expenditure (including depreciation) over the economic cycle, in line with the advice of the Fiscal Policy Panel.

Improve health and wellbeing

For islanders to live healthier lives, with access to high-quality, sustainable health and social care.

Improve education

For Jersey to benefit from high levels of skills, educational achievement, environmental awareness and participation.

Our focus on early years and education is intended to ensure that every islander has the opportunity to develop the skills and confidence to become a successful, independent citizen.

Optimise economic growth

For Jersey to achieve environmentally-sustainable, productivity-led economic growth, providing rewarding job opportunities and rising living standards across society. Our focus on economic growth

is intended to help create more good jobs and opportunities for islanders, remove barriers to employment and increase participation.

Improve St Helier

To regenerate the town of St Helier as a vibrant, environmentally- aware and attractive urban centre of distinctive character that people want to use, visit, invest and live in. Our focus on St Helier will help improve the quality of its homes and neighbourhood. This includes the supply and quality of housing and the appeal of the public spaces and amenities we all use.

Chief Minister's  foreword

This annual report provides a record  

of the government's outcomes against  its objectives during the last financial  year, and it also provides an opportunity  to reflect on the achievements across  the whole term of the 2014-18 Council  

of Ministers.

Senator Ian Gorst In our 2015-18 Strategic Plan, we set out five strategic objectives: Chief Minister

• sustainable public finances

• improve health and wellbeing

• improve education

• optimise economic growth

• improve St Helier.

I am pleased to report that we made progress on them all, both during our term of office and in the past year. I want to thank all of Jersey's public servants for their work over the past year in serving our island.

We made more progress in some areas than in others, as much of our focus last year was necessarily diverted to dealing with two critical issues: the negotiations by the UK to withdraw from the European Union and the report of the Independent Jersey Care Inquiry.

Brexit involved considerable work by me, the Minister for External Relations and our teams in ensuring that Jersey's voice was heard

in the UK, and that our interests were understood and represented during negotiations with the EU. We have maintained a proactive programme of engagement with UK parliamentarians and government departments, as well as with our EU partners through the Channel Islands Brussels Office.

We have been successful in that endeavour to date, although the uncertainty about the economic and social impacts on Jersey of the UK's exit from the EU remain. This is one of the areas of concern for the Fiscal Policy Panel in assessing Jersey's economic outlook.

Our best protection against these impacts is a strong economy, and strong relations with the UK, EU and further afield, to protect our financial services sector, boost trade and ensure that Jersey remains

While there was a £23 million surplus of core States' receipts over  

expenditure in 2017, this is in part due to high balances on the  

Consolidated Fund, the current account, and favourable market  

conditions, creating returns of £10.6 million. These returns may not  

£23m be repeated each year, and without them, we would have achieved

a smaller surplus in 2017.

surplus of revenue over spending

children in our care were exposed, and I pledged to implement in full the recommendations of the report, which was published in July 2017.

During the second half of the year, a number of the recommendations were implemented, including appointing the first Children's Commissioner, although I regret that the pace of implementation and reform of children's services has not been fast enough.

Further and faster reform of children's services is needed, and the appointment of a new Chief Executive, with extensive experience of children's services, who took up his role in January 2018, is an important step in giving impetus to this critically-important area.

It is right that the government looks to the long-term future at the

same time as managing current needs. During the past two years we developed Future Jersey – a vision for the island for the next 20 years, based on the most extensive consultation exercise with islanders ever undertaken. Islanders told us what is important to them, and in 2017, following further consultation, we finalised this vision, the key outcomes that islanders want the government and society to achieve, and the many indicators that we will measure and be held to account for.

Future Jersey has now been published, and it will be a roadmap  that will guide policymaking for Ministers, the Assembly and the  public service over the next two decades.  

We also continued our programme of public sector reform, which  accelerated towards the end of 2017 with detailed preparation undertaken for fundamental changes to the way the public sector operates and serves islanders. The incoming Chief Executive, Charlie Parker, initiated work and detailed planning ahead of his arrival for restructuring the public service and to improve accountability. I am pleased to report that those restructuring and modernising plans were announced in early 2018, and the States Assembly approved my proposition in April to change the governance of public administration in Jersey, to establish the Chief Executive Officer as Principal Accounting Officer and to establish a single legal entity for Government.

These changes are the essential foundation for a modern and efficient public sector that works together as one government, to deliver quality, value-for-money public services to islanders.

This report is a record of how the public administration and the Council of Ministers have worked together for islanders, and what has been achieved as a result. It is not a varnished account, as it exposes

areas of weakness and underperformance alongside evidence of good service. But it shows how we have laid the foundations for the fundamental reform that this island needs, and which the next Council of Ministers will lead and deliver.

Chief Executive's report

This annual report covers a period during which the States of Jersey was led by

my predecessor. In the detailed financial analysis, and the extensive range of activities that this report seeks to cover, it is possible to overlook that it also represents the hard work and commitment that thousands of public servants show every day to serve our island community.

Charlie Parker Chief Executive

On behalf of the government, I would like to thank our employees for their service and acknowledge and praise what they do to make this island a safe, secure and special place to live.

This report shows a public service that is seeking to meet Ministerial priorities, to develop and grow the economy, to manage public finances responsibly, raising revenues to pay for public services, financial support to families and to provide a cushion against shocks.

It is an organisation that seeks to protect the natural environment, invest in housing, infrastructure and skills, provide healthcare and education, promote sport, culture and heritage, keep islanders and our borders safe and secure, and maintain our position on the world stage.

Through prudent financial management, supported by a growth in tax revenues from expanding employment, we continued to deliver balanced budgets ahead of the 2019 target.

However, the strong public finances in 2017 mask a real structural deficit that will arise if we do not deliver the remainder of the efficiencies, savings and revenue-raising measures. In short, there is an unsustainable gap between revenue and expenditure that must be addressed by 2019 and beyond.

There are many examples of good performance in the report, on which we can build. Social Security, for instance, has shown how building services around customer needs delivers good customer service, as well as how good performance data can be used to inform changes and improve performance. Health and Social Services provides ample evidence of the care with which the medical profession treats islanders, as well as how improvements in preventative care are protecting public

health. And the Department for Infrastructure demonstrates innovation and good custodianship of our island's public realm across a wide range of its activities, from parking to energy-from-waste, and sewage treatment to recycling.

But there are also too many examples where performance is not up

to scratch, where it is uncoordinated, inconsistent and not providing good value for money. It is an organisation that is not performing at the level that it could do and should do. Most worryingly, there are obvious weaknesses in the level of our care for vulnerable people, especially children. These must be – and are being – urgently addressed.

As the Chief Minister remarks, there are also risks and threats to Jersey's continued prosperity. Jersey's public service must support the island to withstand them, as well as provide the high-quality, value-for- money services that islanders have a right to expect. But our current structure, processes, ways of working and culture are impairing the flexibility, responsiveness and effectiveness we need to do this.

That is why, last November, I set out my vision to the organisation and explained why and how we need to reform and transform the States of Jersey. I said that a modern public sector is one that works together, as one government, across departments and functions, and with our external partners – knitting services together, reducing duplication and bureaucracy, and getting better value for taxpayers' money.

A government that focuses inwards on its institutions and longstanding processes isn't focusing on the needs of its customers. So we will build on the examples of good customer service that we can demonstrate and make this the Jersey Standard' – getting things right first time, every time. We will also build on the digital innovation that has taken place over the past year, but innovate faster and invest more to deliver the modern, online services that islanders want from their government.

This report – unlike previous annual reports – is attempting to be more open about the performance of the public service, rather than simply to account for how money is raised and spent. It is seeking to show what outcomes that money has achieved. This is an important step towards the greater transparency and accountability that should underpin public services, and on which I will build during my time as Chief Executive of the States of Jersey.

This report shows an organisation that has worked hard to serve its community, even where it has not always worked well. By improving how it works, by restructuring and modernising, investing in new services and skills, becoming more commercial and more customer focused, and by having a clearer purpose, objectives and accountabilities, we will build an organisation that is more effective, more efficient and delivers outstanding public services – that represent value for money and which contribute to the prosperity and productivity of the island.

1.2 Key Deliveries

Key deliveries 2017

£728m 93% £10.4m £23m

collected in taxes of 999 Police calls  grants paid by  surplus of revenue

answered in 10 seconds Jersey Overseas Aid over spending

944 £7.5m 24,000 £4m+

babies delivered extra tax secured from  adults vaccinated  paid to support Jersey

compliance activity against flu culture and heritage

71% 38,777 1,442 5,333

GCSE passes  Emergency Department  planning applications  operations at grade A*-C patients treated processed performed

Customs and Immigration  seized drugs worth

£3m

2,500km2 9,022 180

sea waters  ambulance  pollution, fly-tipping and

patrolled responses burning incidents investigated £45m 92,108 323 680

paid to support 1,335  surgical outpatient  apprentices placed  emergencies attended people with long term care appointments in 24 industries by Fire and Rescue

2. Key Deliveries

Lowest  unemployment for

8 years

1peo0ple,p0rov0ide0d homes  9chil,dr4en15 166

by Andium Homes vaccinated miles of road maintained 33,578 136 81% 4,727

tonnes of waste  people kept securely  A level passes  adults referred collected and recycled in prison at grade A*-C to community care

4,989 43.8m 136 400,000

police  kWh of electricity  start-ups  library visits stop checks generated from waste supported

13,248 1,704 9.7m m3 £69m

children taught  people detained  of sewage  paid to support 5,763 in schools in Police custody processed low-income families

31,880 27,375 1,800 96

pensioners received  weather forecasts issued  new job starts through  children looked after pensions worth £179m by Jersey Met Back to Work in our care

Performance report Accountability report Primary statements Notes to the accounts

3. Performance analysis

Our performance in 2017

The States of Jersey Group's activities cover every aspect of life in our island, touching every islander, community, business and stakeholder. This performance report refers not just to the departments that make up the States of Jersey, but also the special funds, such as the Strategic Reserve and Social Security Funds, and the wholly-owned subsidiaries owned by the States of Jersey.

See Section 1.4 on page 77 for more details on what comprises the States of Jersey Group.

The following sections provide a summary of the activities and achievements of the States of Jersey in 2017 against our strategic goals.

Our goals

The Council of Ministers has a collective responsibility to deliver better lives for islanders and a better future for Jersey. Its social, environmental and economic goals – which provide direction for the activities and services of the States of Jersey – are to:

1. Look after Jersey's finances and assets,  ensuring responsible use of public funds
2. Increase the performance of the local economy,  encourage economic diversification and improve  job opportunities for local people
3. Promote Jersey's positive international identity
4. Promote health and social wellbeing for the whole  community, providing prompt services for all and  protecting the interests of the frail and the vulnerable
5. Provide a first-class education service, supporting the  development of skills, creativity and life-long learning

6. Maintain a safe and just society
7. Help people in Jersey achieve and maintain financial  independence and safeguard the most vulnerable in  our community

viii.  Champion a proper supply of housing of all types,  

promote affordability, improve housing standards  and build strong communities

9. Promote sporting, leisure and cultural activities  that enrich islanders' lives
10. Protect and enhance the island's natural  and built environment
11. Provide attractive and well-maintained public spaces,  protect the environment from the impact of waste  products and develop public transport, road and cycle  networks that meet the needs of the community.

1. Public finances

Sustainable finances

Delivering sustainable public finances is one of the States' five strategic priorities. The government aims to place Jersey on a sound path to structural fiscal balance and to balance States revenue and current expenditure (including depreciation) over the economic cycle, in line with the advice of the independent Fiscal Policy Panel (FPP).

The current Strategic Plan highlighted the £70 million annual investment needed in services by 2019, predominantly in health

and education. It also outlined the £168 million needed to protect investment in the economy and deliver key items of capital expenditure, including £56 million for new schools.

To fund this investment on an affordable and sustainable basis, and to achieve the aim of balancing the budget by 2019, the States Assembly agreed to maintain investment in the economy and to implement a programme of savings, efficiencies, pay restraint and revenue-raising measures.

The plan laid out in the Medium-Term Financial Plan Addition, and agreed in principle by the States Assembly, included £73 million of staff and non-staff savings over the period 2015-19; containing benefit spending to save £10 million; introducing commercial refuse and liquid waste charges to raise £11 million a year by 2019; and raising £15 million a year through a new health charge.

Work to continue implementing that strategy continued during 2017.

Balancing the books

Delivery of the majority of measures outlined in the MTFP Addition, combined with resilient revenues, contributed to a £23 million general revenue income surplus in 2017, ahead of the target of 2019.

This positive financial performance allows some degree of additional flexibility, given the risks to the delivery of outstanding measures, which will still be needed if we are to continue to balance the books by the start of the next Medium Term Plan.

Updates to income forecasts are being finalised for the period of the next Medium Term Plan for 2020-23 and work is progressing on expenditure and infrastructure investment requirements.

Strong balance sheet

2017 saw a further year of strong growth in reserves at the States of Jersey Group level, with total returns of more than 10% on reserves, equating to £282 million.

These returns, and an increase in the value of property and other fixed assets, were the major contributors to total net assets growing by more than £500 million to £6.8 billion.

Resilient performance in tax receipts enabled the additional flexibility over the medium term, recommended by the Fiscal Policy Panel, by increasing the balances in the Consolidated Fund. We expect that these balances will be released either to the Strategic Reserve or to replenish the Stabilisation Fund to protect against cyclical downturns in the economy.

But the strong balance sheet and performance at a States of Jersey Group level, showing a surplus of £272 million, should not detract from the need to maintain the balance between tax and spending. The strong investment returns, on combined reserves including the Strategic Reserve and the Social Security Funds are not available to fund departmental spend, but are ring-fenced for specific purposes.

These returns further strengthen the balance sheet to provide protection against external shocks to the economy, as well as considerable provision against costs associated with an ageing population – especially pensions and the cost of long-term care.

For a more detailed understanding of the financial performance for the year, please see the Financial Review Section.

Budget 2018

After the States Assembly rejected the Health Charge in 2016, the States agreed to other replacement tax measures, worth £12 million a year in Budget 2018.

Liquid Waste charges were proposed as part of the package of measures to replace the stream of income expected from the Health Charge. However, they are still to be agreed by the States Assembly.

For 2018, the flexibility within plans, as recommended by the Fiscal Policy Panel, allowed for growth in spending in Health and Social Services to be trimmed to reflect the profile of the current rate of project delivery, and redirected to the Department for Infrastructure to fill the gap in its cash limit resulting from the delay in introducing charges.

This still allowed an additional £7 million a year to be invested in Health and Social Services in Budget 2018. But it remains vitally important that waste charges – or alternative measures – are agreed by Budget 2019, if the planned investment in Health for that year is to be affordable within existing expenditure limits.

Fiscal Policy Panel

In its Annual Report in October 2017, the Fiscal Policy Panel emphasised the need to balance the books, and advised that the remaining measures (or ones of equal value) for 2018 and 2019 need to be implemented on time.

Modernising the Taxes Office

In 2017 we took the first significant steps towards modernising the Taxes Office, both in how we targeted our resources to collect unpaid taxes, and in bringing our systems up to date.

In 2017, we secured around £7.5 million from compliance activity, including £1.5 million from a voluntary disclosure exercise.

In addition, we began the work to replace the outdated Taxes Office  £7.5m computer system in earnest. This will lead to online filing of returns,

improving the customer experience as well as leading to a more

efficient and effective tax administration. ecoxtmrap ltiaaxn csee caucrteivdit yfrom

We also developed a Revenue Administration Law, which will assist in modernising tax administration, including the introduction of new civil penalties and sanctions.

We also started a review and transformation of debt collection in 2017.

Improving financial management

In 2017, we also made progress in making the operation of the States Treasury itself more effective and efficient, implementing a new integrated payroll and HR management system for 4,800 pensioners and 7,000 monthly paid staff, as well as a new Income Collection and Reconciliation (ICAR) system, which will provide one system for the collection of income across the States of Jersey. This will improve efficiency, standardise processes across departments and dramatically reduce the number of bank accounts that we administer.

Towards the end of the year, the incoming Chief Executive Officer commissioned due diligence work on the public service, which included a review of the finance function. We also commissioned work to review the financial management maturity of the organisation. Those pieces

of work identified a significant programme of transformation for the finance function and the management of finances, which will improve its effectiveness, professionalism, strategic advice and help secure better value for money across the States.

2. Economy and employment

The economy remains resilient, with some positive indicators in 2017. The Fiscal Policy Panel forecasts 0.9% Gross Value Added (GVA) growth for 2017, following 1% GVA growth in 2016, which would be the fourth successive year of growth. This will only be confirmed with the publication of the Measuring Jersey's economy: Gross Value Added (GVA) 2017' in September 2018.

Employment reached an all-time high of 61,610 in June 2017 and unemployment fell by 330 through the course of the year, to an eight-year low of 950. Average earnings growth, at 2.6%, also exceeded inflation for the fifth consecutive year.

There was a modest rise in inflation in 2017, ending the year at 3.6%, reflecting the impact of the referendum decision on the Sterling exchange rate, although this is expected to ease during 2018 and 2019.

Lowest unemployment for

8 years

The Fiscal Policy Panel highlighted four key issues for Jersey's economic outlook:

• uncertainty around Brexit and its implications for the Jersey economy which remains the biggest challenge in the immediate future

• competitive and regulatory challenges persist for the financial services sector in the medium-to-long term

• Jersey's poor productivity performance over the recent economic cycle (highlighted by another fall in productivity in 2016) which – if repeated in coming years – will act as a drag on the medium-term prospects for the economy

• the projected ageing of our population, as in many other economies, which will bring other fiscal and economic challenges.

Financial services

Financial services are the backbone of our economy, employing 13,330 people, but they cannot be taken for granted, since international finance is mobile and will locate where it has economic and regulatory stability and certainty, and a skilled labour force to draw on.

Maintaining the international reputation, competitiveness and stability of our financial services regulation is therefore critical to the sector, and in 2017, we brought forward a number of policy and legislative changes to underpin this. We launched the Jersey Private Fund, passed the Bank Recovery and Resolution (Jersey) Law and Dormant Bank Accounts (Jersey) Law, and implemented our exchange of beneficial ownership commitment with the United Kingdom.

We also supported Jersey Finance with funding to commission a strategic refresh of Jersey's financial services strategy. The refresh was designed to ensure that the island is well positioned to secure new sources of growth, respond to the opportunities and threats presented by Brexit, and is able to capitalise on advances in digital technology. The programme is being implemented in 2018.

Inward investment and High Value Residents

Locate Jersey focused its inward investment activity on attracting high-value, low-footprint companies that both complement, and add to, existing business sectors in the island, including digital and financial services companies, group HQs and charitable foundations. In 2017, there were:

• 149 new business enquiries – a 12% increase on 2016

• 31 businesses assisted to achieve licence approval – a 24% increase on 2016

• 273 potential job opportunities – a 37% increase on 2016

Last year, Jersey also approved 37 applications for High Value Residency (118% more than in 2016), and 20 recently approved individuals relocated during the year. There were property sales worth £95 million among this group, yielding more than £4.6 million in stamp duty.

Skills

To support future growth, we launched a Skills Strategy, which aims to ensure that all islanders are equipped with the skills required to realise their aspirations, regardless of age. As part of this strategy, Skills Jersey will provide a centre of excellence where industry, education, employees and young people can collaborate and ensure alignment between islanders' skills and employers' skill needs, to support economic growth and prosperity.

The Education Department also launched a degree-level apprenticeship in Construction Management, and developed apprenticeships in Civil Engineering and Digital and Technology Solutions, which will start in 2018.

Digital

We continued to support the expansion of our digital economy, supporting Digital Jersey with £1 million of funding to promote innovation and the start-up and expansion of digital businesses. We also published the Digital Policy Framework, establishing a roadmap for delivering our digital objectives.

We also continued to expand the government's own digital services, to make transactions with government more efficient. We implemented the PayByPhone car parking app, which has had the fastest take-up and deployment anywhere in the world; we launched a beta version

of the one.gov.je customer services online portal, which we formally rolled out in early 2018; we appointed a digital ID service provider also concluded in early 2018; and we implemented an Online Passport application form for Jersey Customs and Immigration Service and the online Pension Plus Scheme for Social Security.

Rural economy

Our Rural Development programme provided direct and indirect grant support to farmers through:

• Rural Support Scheme – £647,500

• Quality Milk Payment Scheme – £400,000

• Rural Initiative Scheme – £93,250

• Grant funding to the Royal Jersey Agricultural and Horticultural Society for the provision of artificial insemination and milk recording services – £180,000.

• Grant funding to JPPL and Farm Jersey – £150,000

• Disease-free status cattle testing – £40,000.

We also introduced a new Rural Economy Strategy in 2017, which altered the way in which land managers access government funds. Instead of funding being linked directly to the area of land managed, applicants must now pass internationally-recognised market-focused audits. In this way, the Rural Support Scheme has begun the process of direct purchase of public goods', while the agreed budget to 2019 gives local producers certainty of future government support during the uncertainty of Brexit. And we supported both Jersey Product Promotion Limited (Genuine Jersey) and Farm Jersey, consolidating off-island promotional efforts and increasing the opportunity for producers to access export markets.

Performance report Accountability report Primary statements Notes to the accounts

1.3 Performance analysis

Tourism

Tourism is growing, supported by a vigorous international campaign of marketing and events by Visit Jersey. In 2017, there were 727,000 visits to Jersey (5% more than in 2016), spending 2.9 million nights in the island and spending £250 million in the island on accommodation, food and drink, transport, attractions, retail, tours and other items (4% more than in 2016).

(See Visit Jersey's 2017 Annual Report for more details.)

Employment rights

During 2017, the Employment Forum reviewed family-friendly employment rights following the introduction of the basic rights established in 2015. Following public consultation the Forum recommended significant changes to family-friendly employment rights to be implemented over a two-year period.

These included entitlement to up to 52 weeks' parental leave, with six weeks being paid by the employer. These rights apply to both parents, as well as to parents who are adopting a child or who become parents through surrogacy. Other recommendations relate to flexible working requests, time off for attending antenatal appointments and making reasonable provision for breastfeeding mothers.

Legislation to introduce the first stage of the changes was drafted towards the end of 2017 and subsequently approved by the States Assembly early in 2018. Legislation for the second stage is due to be completed in 2018.

Minimum wage

We also increased the minimum wage in April 2017 to £7.18 per hour, and following a recommendation by the Employment Forum, the States Assembly approved a 4.5% increase to £7.50 per hour from April 2018.

Back to Work

The Back to Work scheme continued to support people who are

actively seeking work, and to help them back into paid employment.

During 2017, Back to Work continued to improve its provision to

provide a swift and flexible response to the needs of both jobseekers  1,800

and employers and supported more than 1,800 job starts during the

year. More than half of these were in retail, hospitality, construction  new job starts through and finance. Back to Work

Jersey Business also supported 136 start-up clients in 2017, of which 60 are now trading, generating 133 new jobs.

136

start-ups supported

3. Jersey's international identity

With the uncertainties about Brexit and the challenges from the EU to Jersey's reputation as an effective, globally- engaged and well-regulated jurisdiction, it has never been more important to develop Jersey's international identity, and ensure that the island is properly represented on the world stage.

In 2017, therefore, we stepped up our programme of political and official engagement in the UK, EU and further afield, to ensure that Jersey has continued and effective representation, and that we are able to build lasting relationships with priority emerging markets.

Brexit

Through our extensive contingency planning and ongoing dialogue at Ministerial and official level with the UK Government, we are ensuring that Jersey's interests are understood, protected and promoted during the UK's negotiations to leave the EU on matters such as the Customs Union and future trading relationships with the EU. We are also working to prepare for possible impacts on immigration, migration and justice; financial services; agriculture and fisheries; and transport and communications.

EU and multinational issues

In June 2017, Jersey formally signed up to the OECD Multilateral Convention on Base Erosion and Profit Shifting, alongside 60 other jurisdictions and in December, we became one of the first five jurisdictions in the world to ratify the OECD's Multilateral Instrument.

We also successfully engaged with the EU Code of Conduct Group on Business Taxation, ensuring that Jersey was listed as a cooperative jurisdiction' in December 2017.

We also successfully engaged with the EU Code of Conduct Group on Business Taxation, ensuring that Jersey was listed as a

cooperative jurisdiction' in December 2017.

Global markets strategy

Also in 2017, we created a Global Markets Team to develop, consult on and implement a strategy for enhancing Jersey's valuable commercial and political relationships with priority global markets, and especially high-growth economies in sub-Saharan Africa, the Middle East, China and India.

The team established a cross-government Global Markets Coordination Group, comprising representatives from government departments and arms-length bodies, such as Jersey Overseas Aid, Jersey Finance Ltd, and the Jersey Financial Services Commission, to ensure a whole-of-island approach to delivering Jersey's objectives internationally.

It also organised a series of Ministerial visits to priority jurisdictions in Africa, the Middle East, India, and the United States in pursuit of trade and investment opportunities, which provided a solid basis on which to progress discussions with a number of high-growth economies in 2018.

The team is responsible for developing the legislative and treaty framework that underpins trade flows, for example through negotiating Double Taxation Agreements, Bilateral Investment Treaties, Memoranda of Understanding, Asset Sharing and other related agreements.

We spent £1.9 million in 2017 on these activities.

We also spent £0.5 million on Locate Jersey in seeking to attract businesses to Jersey and High Net Worth individuals to relocate to the island and contribute to our economy through taxes and investments (see Economy section).

And we spent £5.1 million in grant funding to Visit Jersey to promote the island as a destination for international visitors.

Overseas aid

Our international identity is also formed from our humanitarian and  

development aid overseas. In 2017 Jersey Overseas Aid spent  

£10.4 million on grant aid to international charities and UN agencies,  

emergencies, Jersey charities supporting international aid and  £10.4m community work projects involving Jersey volunteers.

grants paid by Jersey Overseas Aid

Performance report Accountability report Primary statements Notes to the accounts

1.3 Performance analysis

In 2017 the Commission increased aid for those affected by wars and disasters to £2.9 million, including more than £350,000 to support Rohingya refugees in Bangladesh and almost £1 million for the victims of cholera and conflict in Yemen. An innovative arrangement with the United Nations in Syria, where Jersey participates in Board meetings of the Syrian Humanitarian

Fund, means that the island's aid can now rapidly and safely be deployed to reach the thousands of civilians affected by the worst humanitarian crisis since World War Two.

Jersey Overseas Aid also launched its largest-ever aid project

in 2017 – a two-year grant of £1 million to Jersey's Royal Jersey Agriculture and Horticulture Society, to transform dairy farming in Rwanda.

Jersey can be proud that our small island looks beyond our borders and provides tangible help for people facing disaster and conflict or who are living in some of the world's poorest countries.

4. Health and social wellbeing

Supporting the health and wellbeing of islanders is a primary duty for government, and in 2017 we spent £211 million on these services provided by Health and Social Services, comprising:

Hospital

Services £130.1 million

Community and  Voluntary and Social Services Community Sector

£68.7 million  £12.2 million

We also funded a further £28.5 million of health benefits to islanders from social security contributions into the Health Insurance Fund (HIF) for 338,000 GP visits and two million community pharmacy items.

Prevention

The prevention of disease is both the most effective way to improve health and wellbeing, and is the most cost-effective health intervention for the government, since it averts much more resource-intensive interventions later on, whether by GPs in the community or in hospital.

In 2017, we funded almost 28,000 vaccinations, and made the flu vaccine more accessible to those most vulnerable to the infection through collaborative working of Health, Social Security, GP surgeries, community pharmacists, children's nurseries and primary schools.

Prevention for children

In 2017, we gave 23,429 vaccines to 9,415 children, to protect them against preventable diseases. This included:

• a new programme of vaccination for babies against hepatitis B infection, ensuring all babies are now offered protection 9,415

• 904 seasonal flu nasal vaccinations in nurseries  children vaccinated

• 6,324 vaccinations in schools, including the annual nasal flu vaccine to all primary school children, a vaccination in year 8 to protect girls against cervical cancer and booster vaccinations to all pupils in year 9

• 5,619 vaccination consultations in GP surgeries for children aged between eight weeks and 3.5 years.

As a result of the flu vaccine, 56% of 2-4 year olds and 59% of all primary school children are now protected.

Our Preventive Programmes initiative also funded six-week physical and developmental checks for 961 babies, which were performed by GPs.

Prevention for adults

In 2017, we gave the shingles vaccine to 5,196 adults aged 70 or

older, including 3,940 aged 71-79, in the shingles catch-up vaccination programme, thereby protecting some of our oldest islanders against

a painful and debilitating condition. In total, 62% of elderly islanders have been protected, compared with between 35% and 46% in the UK, depending on locality and age.

Under the new flu vaccination initiative, 24,000 adults were vaccinated, including more than 3,500 who opted to receive it in their local pharmacy. As a result, 59% of those aged 65 and over (50% in previous year) and 35% clinical at-risk adults under 65 (24% in previous year) were vaccinated. Not only did this improve the health of islanders, but the lower infection rates helped to ensure that our hospital was able to cope with demand over the winter months.

We vaccinated 543 pregnant women in 2017, to protect them, and their unborn babies, against whooping cough.

The Preventive Programmes initiative subsidised cervical screening for 5,528 women and provided breast cancer screening for 4,914 women at 180 cervical screening sessions.

24,000

adults vaccinated against flu

Hospital services

Our hospital continued to provide a wide range of out-patient and in- patient care for islanders in 2017.

Surgical Services and Theatres provided surgical care and other specialist services, including operating theatres, day surgery, endoscopy, intensive care and wards for surgical patients. Other specialist services include ear, nose and throat, ophthalmology, dental and urology services.

In 2017, we handled:

• 41,407 medical outpatient appointments (39,488 in 2016). Almost one in ten of all of these appointments were missed by patients despite our sending text reminders

• 92,108 surgical outpatient appointments (91,801 in 2016) 92,108 surgical outpatient

• 38,777 Emergency Department attendances (39,164 in 2016)  appointments

• 5,333 main theatre procedures (5,431 in 2016)

• 5,455 surgical inpatient admissions (5,260 in 2016). This includes

admissions for procedures, but also emergency admissions

38,777 under the care of the surgical team, where assessments and

non-surgical treatments were provided.

Emergency Department patients

• 4,865 day surgery (5,494 in 2016) and 5,163 endoscopy

procedures (5,041 in 2016).

In 2017, the radiology department performed 52,650 X-rays (53,880 in

2016), 11,400 CT scans (10,570 in 2016) and 7,940 MRI scans (7,570

in 2016). The pathology department performed 113,926 renal profiles  5,333 (blood sciences) (108,718 in 2016).

operations

Waiting time performance

At the end of 2017, 563 patients (29.5%) had been on the waiting list for an inpatient or day case procedure for more than 90 days, compared to 402 (25.9%) at the end of 2016. Some of the increases in waiting lists are as a result of increasing surgical complexity (which can result in procedures taking longer, thereby reducing the number of procedures that can be carried out each day). There has also been an increase in new procedures undertaken in Jersey that were previously treated in the UK.

In December 2017, 3,368 people had been waiting longer than 90 days for an outpatient appointment. This represents an increase to 36.8%

of people waiting longer than 90 days for an outpatient appointment, compared to 2,705 or 32.3% at the end of 2016. The areas with the longest out-patient waiting times are Community Dental and the Orthodontic Service, Dermatology and Gastroenterology. In 2018, there will be additional consultant appointments in all three specialties, which will create more capacity to meet the additional demand.

Ambulance Service

In 2017, the Ambulance Service responded to 9,022 emergency calls  

(8,713 in 2016). Of these, 68% arrived on scene within the target  

time of eight minutes. This was an improvement of 1.7%, compared  

to 2016, which was a particular achievement as the volume of calls  9,022 increased by 3.5%.

ambulance responses The Patient Transport Service also carried patients on 14,729 journeys

(14,828 in 2016).

UK acute referrals

Jersey is well equipped to deal with a wide range of medical care needs locally. But there are instances where patients require specialist treatment that cannot be provided in the island, such as radiotherapy treatment for cancer. Jersey partners with a number of leading UK hospital and care providers where patients are referred for complex care if required.

In 2017, there were 1,577 acute referrals to the UK (1,622 in 2016),

at a cost of £10.2 million. The number of referrals to the UK fell, because our investment in recent years in new permanent and

visiting consultant staff and specialist equipment allows us to carry

out procedures in Jersey that were previously performed in the UK. However, UK costs continue to put pressure on our finances, as

the average complexity of treatments commissioned in the UK has increased. In addition, unit prices charged by UK hospitals have risen and continue to exert an upward pressure on the costs of services from the UK.

Women and children

The hospital provides medical care and wards specifically for women,  

maternity and child patients. In 2017, we had 10,537 woman and child  

outpatient appointments (9,951 in 2016), 3,096 inpatient treatments  

(3,241 in 2016) and we delivered 944 babies in our maternity unit  944 (1,011 in 2016).

babies delivered

Hospital pharmacy

In 2017, the hospital pharmacy dispensed 122,404 items to outpatients (118,410 in 2016) in addition to 66,954 items for patients being discharged (65,729 in 2016). The pharmacy also supplied 283,554 items to wards, 3,492 chemotherapy treatments and 695 ready- prepared chemotherapy treatments.

Community health and social care

In 2017, community-based teams provided Adult Social Care, Children's, Adult and Older Adult Mental Health Services, Alcohol and Drugs Services, Learning Disability and Autism Services, Occupational Therapy, Older Adults Services, Psychology, Social Inclusion and Speech and Language Therapy.

We received more than 4,700 referrals into our community services

for adults. We provided many of them with assessments of their needs

and support with getting long-term care, primarily from voluntary and

private sector providers and funded by the Long Term Care Benefit.  4,727 Health and Social Services continues to provide or specifically

commission care where individual needs are particularly complex

and costs exceed the Long Term Care Benefit. By the end of 2017,  atodcuoltsmrmefuenrirteydc are Health and Social Services was commissioning 79 domiciliary care

packages in Jersey, and three social care placements in the UK.

The Long Term Care scheme was so successful in the early years that a waiting list built up and the Adult Social Care team was overwhelmed by demand. By the beginning of 2017 there were an average of 100 clients on the waiting list and those clients were waiting an average

of 54 days from referral to first contact. However, by the end of 2017 these issues had been addressed, and the average wait had been reduced to 6.5 days. The team is now keeping pace with demand and providing a timely service to their long-term care clients.

Mental health

The Child and Adolescent Mental Health Service (CAMHS) provides mental health services to young people, through joint working with a wide range of partners.

The Primary Mental Health Team worked to embed a new service offer from June 2017, to promote mental wellbeing in children and young people. This is co-located within the Psychology and Well- being Service and the team comprises two professionals working alongside educational psychologists and well-being facilitators to raise awareness, upskill professionals and offer support to children and young people regarding mental health.

This is an early intervention service supporting mild to moderate mental health challenges, boasting strong links with our colleagues in CAMHS. During the last quarter of 2017, the service offered professional consultation to schools, including:

• termly, multi-agency planning and review meetings in 14 schools (leading to advice given regarding 18 young people)

• 21 requests for involvement agreed and one-to-one support provided

• 12 school-based meetings, in addition to professional support, for 27 young people.

During 2017, CAMHS accepted 303 referrals for assessment (302 in 2016), and a further 53 were signposted to other agencies (52 in 2016). In the last quarter of 2017, we implemented a new process to improve access to CAMHS and offered a consultation triage appointment to an additional 93 young people. On average, 42 young people were waiting at any one-time and 62% of assessments were completed within the target time.

In Adult Mental Health, we conducted a thorough review of the discharge process from the inpatient facility in advance of the accreditation review. As a result, all patients discharged have a plan within 48 hours and we reorganised work to reduce travel time in the community and dedicate an extra 200 hours of contact time to community support.

During 2017 we had 34,288 contacts within Adult Mental Health Services, and 169 Mental Health Law Applications (161 in 2016). The most common reason for applications for compulsory detention in hospital is to ensure that the person receives medical treatment, either in their own best interest or for the protection of others. There was 70% bed occupancy in the adult mental health treatment unit, which was slightly less than in 2016.

At the end of 2017, 86% of people waiting were within target timescales for initial assessment with a community service. The Alcohol and Drug Service reviewed its target times in May 2017, with all urgent cases now to be seen within three days, and all other cases within 20 working days, instead of a ten working day turnaround on all assessments. This is now more in line with UK best practice.

In 2017, 871 patients were referred to the Alcohol Liaison Nurses (813 in 2016), 339 of whom were screened or offered a brief intervention. In addition, 85 individuals took part in the home detox programme and we distributed 85,450 needles through the needle exchange.

In Older Adult Mental Health, the community team provided 8,600 contacts for older adults. We maintained our provision of 25 beds for long-term mental health care for older adults at Clinique Pinel and 37 long-term beds for older people with age-related illnesses, such as dementia, at Rosewood House. We have continued to manage risks and monitor the quality of care using best practice techniques, such as the Patient Safety Thermometer.

Other community-based services

The Occupational Therapy Service received 7,060 referrals (6,911

in 2016) and discharged 6,068 cases. On average, 3,187 cases were active in each quarter. The service also carried out 9,341 home visits in 2017 (10,235 in 2016), and carried out an average of 284 outpatient sessions and 655 inpatient therapy sessions a month.

Health and Social Services provided 26 continuing care beds for older adults at Sandybrook.

The Speech and Language Therapy Service also provided 2,646 contacts for adults (2,466 in 2016).

Health and social care transformation

Islanders have told us that they want to be cared for at home wherever possible, so we have worked closely with our partners in the voluntary and independent sectors and in primary care to improve existing services and develop new services as part of our transformation programme, A New Way Forward for Health and Social Care'.

Community services

The Rapid Response and Reablement Service is delivered by our partners, Family Nursing and Home Care. In 2017, we expanded the team to include mental health, in order to provide a holistic service that cares for a range of islanders' needs. The service responds quickly

to needs and helps people regain life skills in order to avoid hospital admission, or helps an individual to return home quickly and remain healthy, well and independent for as long as possible.

In 2017 the service responded to 1,219 referrals, contacting 89.5% of patients within two hours. They provided 591 pieces of equipment and 237 people were treated and avoided hospital admission. The top five conditions were cellulitis, wound infections, falls, urinary infections and chest infections.

Reablement is also provided in Silver Lea (Silver Springs), for individuals who are not yet able to return home. In 2017, 84 individuals were cared for, and in November we funded a further bed, in order to provide more opportunities to access this care.

Community services continued to be provided for people with long- term conditions. In 2017 the Pulmonary Rehab Service expanded into a Breathlessness Rehab' service, providing exercise programmes

to help people with lung disease and heart disease to cope with their condition. This service complements the Community Respiratory, Heart Failure and Home Oxygen services, which are also funded through the transformation budget.

In 2017, Jersey Hospice led the rollout of the Life Gold Standards Framework' across a wide range of health and social care settings. Jersey is the first jurisdiction to implement this consistently across so many different settings – including GP surgeries and care homes. The Hospice Community Team continued to provide services for any islander in their own home. In 2017, there were a total number of 536 referrals to the Special Palliative Care Team. This is a 20% increase from 2016, with the result that an average of 77% of people achieved their preferred place of death in 2017.

During 2017, we also developed plans for the future of Primary Care, progressing reports about workforce and funding and starting three sustainable primary care pilots. These test out new ways of delivering care for patients with long-term conditions, such as breathing difficulties and diabetes, and partnerships between hospital and community pharmacy, which reduce medicines errors and improve communication with patients.

The pilots involve more care being provided in the GP surgery,

delivered in partnership between practice nurses and specialists,

as well as proactively identifying patients at the early stages of their condition and providing early help, support and guidance to help people take control of their own health. Health and Social Services and Social Security are also working with colleagues in Social Security to identify how we can further improve support for people with health and care needs on low incomes.

Mental health transformation

Mental ill-health is often hidden, but is as debilitating to those who experience it as more visible health problems. Good mental wellbeing must also be supported; it is an essential part of remaining healthy, well and independent.

In the Mental Health Strategy 2015, the government made a commitment to support people living with and recovering from mental ill health.

In 2017, the Recovery College provided courses for 320 students, which were co-delivered by peer trainers and people with lived experience'. Both students and trainers agreed that they benefited from the courses: 94% of students stated that they would recommend the course to family and friends and 100% of trainers who worked with the College would recommend working there.

Jersey Talking Therapies (JTT) continued to provide services for islanders with low-level mental health needs in non-stigmatising settings, such as GP surgeries and local offices. In 2017 they cared for 439 islanders. However, the waiting list is still long for some of the steps in its service. For a Step 2 assessment, the wait is two to four weeks, but it is 13 weeks for a Step 3 assessment. The wait for a Step 2 therapeutic intervention is 23 weeks, and it is 34 weeks at Step 3. Improvement work is underway to reduce these waiting times.

Partnership working between Police, Ambulance and Mental Health services also developed in 2017. We trialled a six-month Community Triage' service, where specialist mental health support could be called on by phone or in person, if someone was demonstrating mental health issues. This helped to reduce the number of people brought into hospital or the police station, and helped increase skills and awareness in appropriate care.

The Criminal Justice Pathway working group also started, led by the Department of Community and Constitutional Affairs, to identify priority pathway and service improvements.

We also introduced link workers for older adults with mental health needs. Staff work with four groups of GP practices, where each group has around 25,000 patients. GPs now have a named person from whom to seek guidance and support, which helps them to provide high-quality care for their patients who have dementia.

Link workers have also been introduced into schools, providing specialist guidance to help teachers to identify and provide support to children who may be experiencing mental health issues or have mental health needs.

In 2017 a feasibility study and strategic case was produced, to scope the service needs and identify a site for new, modern mental health facilities. The outline business case is now nearing completion.

Jersey has a high incidence of people consuming alcohol to dangerous levels. The Alcohol Liaison Service works with Arrest Referral Workers, emergency services, GPs and voluntary and community sector organisations, to provide a seamless pathway of care for

clients with identified alcohol misuse. The service offers screening, brief intervention and support at the hospital and refers people to

the Alcohol Pathway Team for assessment following discharge from hospital.

The service also offers alcohol awareness training in hospital wards, and organisations within the community. Services continued to develop in 2017, including:

• the community-based relapse prevention programme – up to eight sessions of individual motivational counselling, abstinence and support to make lifestyle changes, including housing, employment, family and social relationships, advice, guidance and support on accessing benefits, return-to-work programmes and educational and/or volunteering opportunities

• Alcohol Assessment and Support Clinics in GP surgeries and in other venues, such as the Salvation Army Hub Cafe and Eagle House

• two Lifestyle/Alcohol Support Clinics in the General Hospital Outpatients Department.

In 2017, 113 detoxifications were completed, compared to 102 in 2016.

Also see section on Financial independence and safeguarding vulnerable people on page 52.

5. Education, skills and lifelong learning

Investment in our children's education is an investment in our island's wellbeing, social stability and future economic prosperity, and in 2017 we spent £103.7 million on caring for and teaching 13,248 schoolchildren and supporting 1,964 young people with further and higher education.

This spending comprised:

Early Years Services

£4.5 million

Non-provided schools

£4.8 million

Non-fee-paying  Fee-paying provided schools provided schools £68.6 million £6.3 million

Further and higher  Youth, careers education and libraries

£18.6 million £4.5 million

Early years services

In 1997, we formulated an early years strategy to support children right at the beginning of their educational journey. In January 2017, 18 of the 24 States primary schools offered nursery provision (for children aged three to four years), and this increased to 19 States primary schools

in September 2017. Alternative early years provision is through private sector nurseries, with funding for 20 free hours through the Nursey Education Fund (NEF).

Schools

• Jersey has 13,248 children in education, comprising  493 in nursery, 6,814 at primary school and 5,941  at secondary school. They are taught by 1,192  teachers and teaching assistants and took a total  

of 9,790 GCSE and A level exams in 2017.

• There were 1,003 year 11 children and 71% achieved  grades A*-C exam pass rate in GCSEs (66% in  England), with 24% achieving the highest grade  (20% in England).

• 498 children were entered for A levels and achieved  a 99.5% pass rate, with 81% achieving grades A*-C  (77% in England).

13,248

children taught in schools

71%

GCSE passes at grade A*-C

81%

A level passes at grade A*-C

We also continued to make new investments in education, to ensure that we provide a high-quality environment for learning and support our children through further and higher education. We:

• opened three new classrooms

• secured planning approval for a £45 million investment in a new Les Quennevais School, which is scheduled to open in September 2020 and will accommodate up to 800 pupils

• proposed a new student finance scheme to support young people through higher education, which was agreed by the States early in 2018.

Jersey Premium

Following a successful pilot in 2016, we rolled out the Jersey Premium to all States schools in 2017, at a cost of £1.9 million. Schools are provided with additional funding and support to help raise the attainment of pupils most likely to underachieve. Funding was distributed across all schools, based on the need of the pupils. The scheme is based on the UK Pupil Premium, but is tailored specifically for Jersey and uses Income Support as the basis for eligibility in place of free school meals, which are not available in the island.

As a result of collaboration between Education and Social Security, more than 3,000 students have now been identified as eligible for support. The extra help they receive from teachers will ensure they are more likely to overcome social challenges and reach their full potential in educational terms.

Family Support Workers

In 2017, we recruited a team of Family Support Workers to help families to resolve a range of background issues that can affect a child's ability to learn well at school. They can advise on a range of problems, including poor sleep routines, organisation, housing issues, wellbeing, and can help parents through difficult periods in a way that teachers often do not have the time or expertise to do. The Family Support Workers have been warmly welcomed and fill a previous gap in services that should mean our students arrive at school ready for lessons.

Further and higher education

Highlands College provides 30 full-time and 70 part-time vocational courses, 11 higher education on-island degree courses and more than 280 adult education leisure classes for around 6,000 students. The online portal which provides the prospectus for adult education courses and the ability to enrol and pay online has become an embedded process in 2017 and its use has steadily increased with 34% (2016: 24%) of enrolments between January and December 2017 made online.

Highlands has launched a new Progression Diploma, specifically designed to prepare local young people for the job market on island if they do not choose higher education.

The Trackers apprenticeship scheme has expanded the opportunities for apprentices and industries and now includes brewing, bricklaying, health care, culinary arts, cyber security, dental nursing, digital, electrical, general building, green keeping, hairdressing, hospitality management, motor vehicle, painting and decorating, plumbing, veterinary nursing, and welding and fabrication.

By December 2017, there were 323 apprentices in the Trackers  scheme across 24 industry areas, with 97% retention rates for  apprentices.

New apprenticeships were launched in retail at level 2 and hospitality  323 management at level 3. Both have proved successful resulting in  apprentices in 24

progression in both areas to levels 3 and 4 respectively into 2018. And  industries extensive research and collaboration with industry into higher and

degree-level apprenticeships has also resulted in apprenticeships in

civil engineering and digital and technology solutions being offered at

this level. Both are expected to launch in September 2018.

Highlands College has also continued to develop extra options

for degree-level study in Jersey, while the Education Department

has worked to strengthen links with universities in other European countries. An agreement has been reached with nearby Caen University in Normandy to welcome Jersey students and provide specific support and priority for places in the campus accommodation. A number of European universities are now regular attendees at the annual Higher Education Fair, which takes place every March.

University funding

Since 2012, there has been increasing financial pressure on families as UK universities raised annual tuition fees to £9,000. The majority of Jersey students attend universities in England and the rising costs were directly linked to a falling number of undergraduates. Since the graduate workforce is important for our economy, the government explored a range of options and developed a proposal, announced in the 2017 autumn Budget speech and passed by the States Assembly in 2018.

The government will now pay up to £9,250 a year in tuition fees and provide maintenance grants of up to £7,500 for students, with the actual amount determined on a sliding scale, depending on their parents' household income and assets.

Youth Service

The Youth Service provides a broad range of personal and social development opportunities and services to Jersey's young people, between the ages of 9 and 25, with a priority focus at the 12 to 18 age group. The Youth Service has 14 community-based youth clubs, which meet the needs of local young people and provide a safe space for them to meet with friends, engage in positive activities and have a voice in community affairs.

In 2017, 3,052 young people attended on a total of 59,721 occasions.

Careers support

In 2017, we launched Skills Jersey – a new service linking learners and businesses, which brought together several teams, including Careers Jersey, Trackers apprenticeships, work experience, education liaison and Student Finance. Funding has been agreed for Skills Jersey for three years to enable the team to raise standards in this crucial area and ensure we can prepare the resilient, highly-skilled workforce needed for improved productivity and future prosperity.

Libraries

In 2017, islanders made around 400,000 visits to our three public  

libraries – the main Town Library, the Les Quennevais Branch and the  

Mobile Library – and borrowed around 380,000 items. Library staff  

handled around 90,000 enquiries from the public during the year, and  400,000 more than 20,000 items were added to the Library's collections.

library visits The Library ran a diverse range of activities throughout 2017 to support

reading, including visits from storytellers, performers and authors for

audiences of all ages. More than 2,200 children and young people

registered for the Summer Reading Challenge, which 75% completed

in full. During the Jersey Festival of Words, the Library hosted 16

events, which were attended by around 350 people, with several events

selling out.

The launch of the Eagle Lab in partnership with Barclays in December 2016 also enabled the Library to expand its services during 2017. Alongside ongoing support for entry-level ICT skills, the Library also ran workshops on 3D design, coding and virtual reality in the Eagle Lab, with more 2,125 people visiting the new facility in 2017.

6. Safe and just society

Safety, security and justice are critical components of social stability. The primary organisations in Jersey that promote these and protect islanders are:

• States of Jersey Police

• Jersey Customs and Immigration Service

• Criminal justice bodies

• States of Jersey Prison Service

• Jersey Fire and Rescue Service.

States of Jersey Police

We spent £24.5 million in 2017 on the States of Jersey Police. Our 204 police officers:

• recorded 3,068 crimes – up by 165 from 2016,

but 164 lower than the five-year average

• detected 37% of recorded crimes – down from 39% in 2016 and a peak of 43% in 2014

• detained 1,704 people in custody

• carried out 4,989 police stop checks

• made 2,444 licensing checks on licensed premises.

In protecting vulnerable people, the police also dealt with:

• 2,168 child protection notifications

• 680 adult protection notifications

• 995 domestic violence incidents

• 777 missing person reports.

The modernisation of our police services continued, with the opening of the new Police Headquarters and SMARTpolice project, which uses advanced technology, such as hand-held devices for police officers, to improve their working practices and efficiency.

1,704

people detained in Police custody

4,989

police stop checks

93%

of 999 Police calls answered in 10 seconds

Jersey Customs and Immigration Service

With a budget of £5.5 million in 2017, our 82 Customs and Immigration officers protect our border against the threat of illegal immigration and the import and export of prohibited or restricted goods, collect Customs and Excise duties, and facilitate the smooth, lawful flow of people and goods through our ports and airport.

Customs and Immigration issued 10,111 passports to islanders

in 2017, collected £65 million in duties, seized drugs worth £3 million and 250,000 cigarettes, identified 16 individuals at the immigration controls without the necessary leave to enter the island and carried out 20 deportations.

Criminal Justice

Criminal Justice in Jersey is administered by a number of departments and organisations:

• Bailiff 's Chambers support the role of the Bailiff as President of the Royal Court and the States Assembly, and in his other customary and statutory duties as Civic Head of the island.

• Law Officers' Department provides the criminal prosecution service for the island and legal advice to the Crown and the States, including ministers, States members and States departments.

• Court Service (Judicial Greffe and Viscount's Department) provide an efficient and effective Court Service; to administer insolvency proceedings, provide a coroner service and enforce Court orders.

• Jersey Probation and After-Care Service works with the judicial system, courts, parish halls, victims of crime, and the community to help reduce criminal activity in Jersey.

Customs and Immigration seized drugs worth

£3m

Expenditure by these organisations in 2017 was:

Bailiff 's Chambers £1.8 million

Viscount's Department £1.0 million

Law Officers'  Judicial

Department Greffe £7.6 million £6.1 million

Jersey Probation and After-Care Service £2.0 million

Cases taken through the criminal justice system resulted in sentences being handed out ranging from life imprisonment to fines and community service. Last year, convicted criminals worked 19,390 hours of community service.

During 2017, the Jersey Probation and After-Care Service prepared 460 reports for the Jersey Courts, against 513 in 2016 and administered 143 probation orders.

The government has also updated Jersey's criminal justice legislation, aspects of which had not been reformed for more than a century.

The Criminal Procedure (Bail) Law was adopted by the States Assembly in November 2017, ensuring that our criminal justice system is supported by a world-leading legislative framework. Work also began on the updated Sexual Offences Law, which was adopted in 2018.

The States Assembly also approved amendments to the States of Jersey Police Force Law, to maintain alignment with modern approaches to British policing.

Performance report Accountability report Primary statements Notes to the accounts

1.3 Performance analysis

States of Jersey Prison Service

We spent £10.6 million in 2017 in keeping an average daily population  

of 136 people in custody in a safe, decent and healthy environment,  

ensuring that there were no prisoner escapes for the seventh year in  

a row. We worked to reduce re-offending by providing constructive  136 regimes for prison inmates, which address offending behaviour and

improve educational and work skills. people kept securely

in prison

In 2017, the government and the States Assembly also agreed to

fund the next phase of the Prison Masterplan in the 2018 capital

programme, which will ensure that prison facilities are kept modern

and fit for purpose.

Jersey Fire and Rescue Service

We spent £5.5 million on preventing and responding to fire and non-fire incidents in 2017. Our firefighters attended 177 fires, 431 false alarms and 503 non-fire emergencies, an 8.1% reduction on 2016.

7. Financial independence and safeguarding vulnerable people

Several departments have responsibility for supporting people to have financial independence through their working lives and in retirement, and for supporting and safeguarding vulnerable people – whether children or adults.

Safeguarding vulnerable children

Children's Services includes residential facilities and community-based services, mental health services, support services and fostering and adoption, and we spent £22.7 million in this area in 2017. The service is responsible for the management of Greenfields Secure unit, which is now able, following a change in the law, to hold children held on remand in custody and serving custodial sentences, in addition to supporting children who require secure care because of the risk to themselves or others.

At the end of 2017, we had 96 looked-after children in the care of the Minister (2016: 90) of whom 20 were supported in UK placements (2016: 22). At the end of December 2017, there were 102 children on the Child Protection Register.

Throughout the year there were an average of 160 monthly referrals to MASH (Multi-Agency Safeguarding Hub), with urgent cases being dealt with in four hours. The caseload in Children's Services at the end of 2017 was 757 individual children.

The Child and Adolescent Mental Health Service (CAMHS) accepted 303 referrals for assessment in 2017 (2016: 302), and a further 53 were signposted to other agencies (2016, 52). In the last quarter of 2017, we implemented a new process to improve access to CAMHS and offered a consultation or triage appointment to additional 93 young people. Primary mental health support workers were employed as part of the CAMHS provision to offer earlier intervention to children and young people who require emotional support.

96

children looked after in our care

At the end of 2017, we had 96 looked-after children in the care of the Minister of whom 20 were supported in UK placements.

Multi-agency work took place to develop a new approach to working with children in Jersey. Frontline practitioners, managers and a parent worked together to develop a framework that all services working with children will use. It provides a strong focus on the team around the child, identifies who the lead worker will be and all staff, irrespective of service, will use the same assessments, plans and toolkit when supporting children and families.

Following the publication of the report of the Independent Jersey Care Inquiry in July 2017, the Chief Minister committed to implementing all of its recommendations. By the end of the year, the government had completed six of these recommendations, was implementing 29 and had not yet begun to implement eight of them.

Among the actions that we had taken by the end of the year were:

• appointing a Children's Commissioner, who took up her post

in January 2018

• scoping children's rights and inspection services for implementation in 2018

• launching a programme to redesign working practices in Children's Services, which continues in 2018

• conducting a public consultation on the future of Haute de la Garenne, which closed in April 2018 and will be reported on

in summer 2018

• planning and implementing engagement with the survivor community, to recommend an appropriate memorial, which will report in June 2018

• progressing the archiving of all inquiry evidence and material, which will complete in December 2019

• beginning the process of drafting a revised Children's Plan, with clear outcomes and priorities for action, in December 2017. The Plan will be launched in summer 2018

• agreeing the terms of reference for an independent inspection of children's social work, which will take place in July 2018 and report in autumn 2018.

We also prioritised the ongoing training and development of children's staff and agreement is in place to train all staff in systemic practice, which will lead to a consistent and skilled approach to improving practice and supporting improved outcomes for children and young people.

In November, we launched an advocacy service for children subject

to child protection plans or who are looked after, to ensure that their views, wishes and voices are included in meetings and in forums which make plans based on their needs. Feedback from children about this service has been positive.

In 2017, we sought to redesign Children's Services, to put the child at the centre of service delivery, reduce handoffs, improve consistency of practice and develop relationship-based practice. The redesign is also expected to lead to improved quality and timeliness of assessments. We also implemented a new client record system with business and performance reporting in November 2017, and the initial indications are that it is improving timescales, recording and reporting, along with evidence of the child's voice and views.

However, it is clear from the slow pace at which the Care Inquiry recommendations have been acted upon that more fundamental reform of the service is needed.

To support the development of a sustainable workforce in children's social work, we scoped the potential and viability of establishing a social work degree in Jersey. This would allow Jersey residents to train in a professional social work qualification, without having to leave the island for three or four years. We have developed a relationship with a UK university and progressed proposals to take forward in 2018.

Safeguarding vulnerable adults

Adult Services provide social care and services to adults within the community, and we spent £36.8 million on this area. This includes those with mental health problems, special needs, and those affected by alcohol and drugs. The service works with third party organisations, such as Shelter Trust and the Citizen's Advice Bureau.

In 2017, 4,727 adult referrals to the community care services were received through the Single Point of Referral (4,029 in 2016).

Following a service redesign of Learning Disability Services (formerly the Special Needs Service), we are now supporting five clients in residential homes, 16 clients in their own homes and around 165 in the community.

Learning Disability services received 278 new referrals and continued to support its long-term clients in conjunction with its partners, especially Les Amis.

Also in 2017, Jersey Talking Therapies – a joint project between Health and Social Services, GPs and the charity MIND – received 1,823 referrals (2016: 1,656). The scheme enables adults suffering from common mental health issues to talk to professional therapists, either in their doctor's surgery, at a central hub in St Helier, or over the phone.

Providing financial support

In 2017, we spent £370.6 million on providing financial assistance to families and individuals (£365.2 million in 2016) across a range of contributory and non-contributory benefits, as well as making statutory grants into the Social Security Fund and the Long Term Care Fund.

Old-age

pension £179.4 million

States contribution to Long-Term Care Fund £31.8 million

Income  States contribution

Support to Social Security Fund £69.9 million £65.3 million

Other  Grant-aided benefits bodies

£1.7 million £2.4 million

Contributory old-age pension

The contributory old-age pension is by far the largest single benefit,  

and in 2017 we paid £179.4 million to 31,880 pensioners. The value  

of the old-age pension is increased automatically every year, and to  

protect the spending power of pensioners, both the average earnings  31,880 index and the retail price index (pensioner) are taken into account. In

2017, the average earnings index was 2.6% and we increased the old  pensioners received age pension by the higher figure of 2.8%, in line with RPI (pensioner). pensions worth £179m

Working age contributory benefits

The Social Security Scheme collects contributions from working-age people and their employers and provides the old-age pension and working-age benefits to people at times when they may be less able to support themselves.

In 2017, the scheme provided benefits worth £22.2 million to 4,686 working-age people with a long-term health condition, and a further £13.8 million to individuals with a shorter period of illness, with a total of 501,616 days' benefit paid.

The scheme provides maternity allowances for a mother who takes maternity leave and a maternity grant in respect of each child covered by the scheme. In 2017, we provided a total of £3.2 million to new parents.

The government provides financial support to people following the death of a spouse or civil partner, and in 2017 we provided 744 survivors with benefits costing £4.2 million.

The government also provides financial support to working-age carers who give up work to provide unpaid care for a family member, through the Home Carers Allowance. In 2017, we paid £2 million to 176 people under this scheme.

Finally, the Social Security Scheme provides a lump sum death grant, and in 2017 the government paid 790 grants at a total cost of £0.6 million.

The value of each of these benefits is based on a standard rate, which is increased each October in line with the index of average earnings for the year. The standard rate at the start of 2017 was £204.19 a week and this was increased by 2.6% on 1 October 2017 to £209.51 a week.

Health Insurance Fund

A proportion of social security contributions is paid into a separate Health Insurance Fund, which is used to support the cost of GP services and medicines dispensed by community pharmacists. In 2017, the fund provided £9.5 million to GP practices and £19.8 million to community pharmacists, who dispensed two million items.

During 2017, new contractual arrangements were agreed with GPs and community pharmacists, to allow a wider range of services to be funded through the Health Insurance Fund. The first service to be

provided in this way was the 2017 flu vaccination programme, which was funded jointly through budgets held by the Health and Social Services Department and the Health Insurance Fund.

Long-Term Care benefits

The Long-Term Care Fund provides benefits to adults aged 18 and  

older who have long-term care needs to receive care in their own  

home or in a care home. In 2017, the government paid £44.6 million to  

support long-term care costs for 1,335 people. £45m

The benefit rates payable under the long-term care scheme were  paid to support 1,335 increased by 2.67% in April 2017. people with long term care

Income Support

Some households need additional help and this is mainly provided through Income Support. Income Support benefits provide financial help for individuals and families with low incomes, including pensioners, parents with young children, unemployed people, carers and people with a disability or a long-term health condition.

In 2017, the government provided £68.9 million to 5,763 low income  

households through the Income Support scheme, which is a  

reduction of nearly 200 households from 2016, as people moved  

into employment or secured higher incomes. Spending on Income  £69m Support was £3.1 million less than in 2016.

paid to support 5,763 Income Support components were increased by 2.9% from 1 October  low-income families

2017. At the same time, there was an increase in the income incentive

(disregard) from 23% to 25%, which provides an incentive for claimants

to move towards financial independence, by encouraging them to

increase their wages, maintenance or pension income.

New flexible personal care component

In July 2017, we launched the new Flexible Personal Care component for Income Support customers who need a formal care package, but have care needs below the threshold for the Long-Term Care benefit. The component helps with the cost of an approved care package and forms part of the overall Income Support claim.

Pension Plus and other pensioner benefits

We launched the new Pension Plus scheme in January 2017, to deliver support for pensioners on lower income, to assist with dentistry, chiropody and optician costs. It replaced the previous 65+ Health Plan and the value of benefits payable under the scheme was increased. The new scheme covers:

• £40 towards a dental check-up each year and up to £700 towards treatment/dentures every two years

• up to £120 per year for chiropody

• £40 towards an eye test every two years and up to £120 towards eye wear every two years.

The new scheme also removes the burden of the customer having to pay their bill in full and then submit the receipt to get a rebate. Under the new scheme, the customer receives the full value of their benefit at the time of payment. Lower income pensioners received £0.5 million from the new scheme in 2017 to cover 5,777 check ups and treatments, alongside existing support for the cost of a TV licence for 1,730 lower income pensioners aged 75 and above, costing £0.3 million.

Other means-tested support

A range of smaller schemes provide targeted support to vulnerable groups. The government pays a Christmas bonus to low-income pensioners and to families receiving Income Support which include a carer or someone with a disability. We paid this bonus to 3,927 individuals in 2017, at a total cost of £0.3 million.

A cold weather supplement is also included within the Income Support scheme for pensioners and other vulnerable groups. Pensioners

who do not qualify for Income Support, but who have a relatively low income, can claim a separate cold weather bonus. The value of this bonus is calculated using the actual temperatures experienced during the winter months.

A food costs bonus is also available to families who do not qualify for Income Support, but have a relatively low income. In 2017, we paid this benefit to 1,189 households at a cost of £0.3 million.

viii.   Housing

Good-quality and affordable housing is a critical issue for Jersey. The government provides social housing through Andium Homes, which owns and maintains 4,500 properties, providing homes for more than 10,000 people. As part of its relationship with the States of Jersey, Andium made a return of £28 million to the Treasury in 2017, and has returned £96 million to the States since incorporation in 2014.

In 2017, Andium undertook work to refurbish and develop a range of properties, including 52 housing units at Windsor Court (previously Caesarea Court), 147 housing units at Le Collette low rise, 74 units at Summerland and 15 units at the Ann Street Boiler House.

Andium aims to build 1,000 new homes by 2020 and is planning to build 2,000 new homes by 2025. In particular, it is looking to increase the number of sales it makes to first-time buyers through its Andium Homebuy scheme, and is planning to sell more than 1,000 homes for purchase by 2025.

In pursuit of this target, Andium bought the former Ann Street Brewery site, in St Helier, which could provide 253 new homes; the Robin Hood site, which could provide 23 homes; and the Gas Works Site, which could provide 110 new homes, up to 200 underground parking spaces and the potential to increase the town park by half.

Andium also bought the Samares Nursery site at St Clement, where work is now underway to build 200 new affordable homes, including 40 for first-time buyers, with the remaining 160 earmarked for social rental. It applied to build 65 new three-bedroom homes (Ville Du Manoir) in St Peter, in support of a parish-led scheme and secured approval for 151 new homes in the final phase of the Le Squez redevelopment.

Andium has housing stock available to assist in providing homes for key workers, and is actively working with the Strategic Housing Unit, Jersey Property Holdings and Health and Social Services Department to identify long-term solutions for staff. In 2017 it bought and refurbished the former Limes Residential Home on Green Street, to be used in the short-term for key-worker housing, principally for junior doctors.

10,000

people provided homes by Andium Homes

The quality and safety of housing is also important. Andium carried out a comprehensive review of fire safety in its properties, following the Grenfell Tower fire in London. As a result, all high-rise flats will now be fitted with sprinklers. It also achieved the Decent Homes Standard in 96% of its properties, ahead of the target of 93% and up on the 91% achieved in 2016. Andium will meet the Decent Homes Standard on all its properties by 2020 – four years earlier than originally planned.

In December, the States Assembly adopted the Public Health and Safety (Rented Dwellings) Law, which is a step towards ensuring that housing standards are met across the rented sector and for many of our most vulnerable households.

In December, a major independent review of access to social housing in Jersey commenced. The independent review, which will report in Q3 2018, will consider the policies and procedures that apply to accessing social housing in Jersey and how greater support can be provided to vulnerable people with specialist housing needs.

The Affordable Housing Gateway waiting list fell to approximately 750 applications in 2017, down from more than 1,200 in 2014. As more homes are built, there will be opportunities to open the waiting list to more people, such as single persons and couples under the age of 50.

9. Sport, leisure and culture

Sport, leisure and culture are not just important contributors to islanders' quality of life, but are also a draw for overseas visitors.

Sport

In May 2017, the States Assembly approved the establishment of Jersey Sport and the transfer to it of the States Sports Development staff. Jersey Sport has already begun to enhance the voice of sport locally and to provide access to new opportunities previously not available through working inside government.

Appleby's has recently announced its sponsorship of the "Active Adults" programme and a local philanthropic trust has provided funding for another programme addition.

The government also brought the Super League Triathlon to Jersey in 2017 and, given the strong support from both islanders and visitors, agreed that Jersey will continue to host this global event for up to the next five years.

Culture

We carried out work to develop a culture strategy in 2017, with significant consultation and input from local key stakeholders.

This informed the development of the new Culture Strategy which was completed in 2018.

The government continued to provide financial support to culture

and heritage organisations. Jersey Heritage received £2.8 million to support the operations of the Jersey Heritage Trust; Jersey Arts Trust received £198,000 to support their activities and £572,000 to repay the Opera House loan; the Jersey Arts Centre received £450,000 to cover operating costs; and Le Don Balleine Trust received a grant of £63,000.

We also secured funding in 2017 for the £3.5 million Jersey Archive extension, which will help the government and other island-based entities comply with record-keeping legislation over the next 25 years.

We developed plans to expand the teaching of Jèrriais and to ensure that local history and culture is present in the school curriculum.

£4m+

paid to support Jersey culture and heritage

10. Built and natural environment

In 2017, the government spent £5.7 million via the Environment Department on the environment (95%) and planning and building (5%, with the rest of the costs being covered by fees and charges).

Service reviews and improvements on behalf of department customers in support of Public Sector Reform continued, and enabled MTFP savings of £206,000 from the department's recurrent cash limit during 2017. This has meant that we have been required to adopt broader responsibilities and some research and contract work is outsourced as required. This forms part of department's wider MTFP2 cash limit change of 32% net reduction.

Environmental management and protection

Managing and protecting the natural environment is critical to our small island, and the government is very proactive in developing and applying rigorous standards of environmental protection. In 2017, we:

• managed 550 hectares of environmentally-sensitive land

• protected and patrolled 2,500 square kilometres of sea waters around Jersey

• managed 70 kilometres of footpaths and 10 kilometres of bridle paths for public use

• took 1,500 samples to monitor island groundwater, stream and coastal waters

• investigated 180 cases of pollution, fly-tipping and burning

• inspected 2,500 consignments of plant imports to prevent on- island plant disease and pest outbreaks.

The Rural Economy Strategy received Ministerial approval in February, introducing a new method of financial aid delivery to rural industries (see Economy section on page 22).

2,500km2

sea waters patrolled

180

pollution, fly-tipping and burning incidents investigated

Managing and protecting the natural environment is critical to our small island, and the government is very proactive in developing and applying rigorous standards

of environmental protection.

Environmental policy

To fulfil the 2017 action from Pathway 2050: An Energy Plan for Jersey, the government provided £650,000 of contingency funding to conduct climate risk assessments of the most vulnerable areas of coastal

and pluvial flooding and to develop shoreline management plans

for these areas of coastline. This work has so far been progressed from business as usual budgets, including stakeholder engagement and desk research carried by the Environmental Policy team, and development of a Jersey Shoreline Climate Resilience Management Plan, in preparation for the climate risk assessment work which will be tendered for and completed during 2018 and 2019.

In 2017, the Community Building Programme focused on returning to nine organisations that had previously received energy efficiency measures from the scheme and 19 other community buildings to upgrade all of their lighting to LEDs.

191 businesses engaged in the eco active business programme in 2017, and more than 12,000 children in the eco school programme (See the Sustainability section on page 104 for more details).

Environmental Health

To protect our public health, in 2017 the Environmental Health team:

• dealt with 2,787 formal requests for service

• increased the Eat Safe participation to 1,080 businesses

• increased to 99.8% the number of food businesses which meet the "generally compliant" status used as a measure in the UK

• visited more than 1,000 food businesses, some more than once

• carried out more than 150 infectious disease investigations

• carried out 200 housing inspections

• carried out 22 tenancy relations investigations

• consulted on more than 85 licensing requests

• consulted on more than 398 planning applications

• issued 58 food export certificates and carried out three ship sanitation inspections

• dealt with more than 395 nuisance complaints, 220 of which were for noise, and 78 for birds or animals.

Jersey Meteorological Service

The Jersey Met provided a continuous 24-hours, 365-days service  

during 2017, to keep islanders informed about the weather and to  

issue warnings to keep us safe. During the year, they issued 27,375  

forecasts – 75 a day – and issued 780 weather warnings for the  27,375 Channel Islands. Islanders made 24,000 visits a day to the Jersey Met

web pages, against 11,000 in 2016.  weather forecasts issued

by Jersey Met

Planning and building

In 2017, we processed 369 major planning applications, with  

72% (61%, in 2016) determined within 13 weeks. And we processed  

1,073 minor planning applications, with 88% (79% in 2016) determined  

within eight weeks. We also processed 238 pre-application enquiries  

1,442 within the six-week target.

planning applications During the year, we received 1,228 building by-law applications, and  processed

processed 98.7% within five weeks. And we undertook more than

10,000 by-law compliance inspections.

Improving St Helier

A review of the Esplanade Quarter Masterplan began in 2017, the Historic Environment Review continued to formally list the status of the island's heritage assets and we gave support to a St Helier tree survey. We also provided planning policy support for other States initiatives in St Helier (Future Fort Regent, Ports of Jersey Masterplan).

The Department for Infrastructure (DFI) Highways section completed several projects in St Helier, improving the street scene and providing better pedestrian facilities. Minden Place car park was refurbished in late 2017. Work also began on the multi-use path around St Helier's heritage waterfront (See xi. Public spaces, waste and transport on page 68 for more details).

11. Public spaces, waste and transport

The government builds, owns, maintains and operates much of the essential infrastructure needed to ensure that Jersey can continue to function, such as solid waste facilities, including the Energy from Waste plant; waste recycling facilities; the sewerage network and sewage treatment works; highways, sea defences and public spaces.

We also operate the inert waste landfill area at La Collette Phase II and re-invest some of the income from this activity into enhancing facilities at La Collette, to ensure that waste reception and processing is efficient and sustainable in the long term.

In 2017, the Department for Infrastructure spent £35.1 million (net operational costs, excluding capital works), which was made up of:

Waste and Municipal Services £18.4 million

Transport and  Jersey Highways Property Holdings

£6.4 million £10.3 million

In addition, £4.8 million was spent from the Infrastructure Rolling Vote on maintaining the island's infrastructure (roads, sewers and sea defences).

Throughout 2016 and culminating in 2017, the department reviewed

a number of the services it provides and the method by which those services were provided. These reviews informed the decision to outsource a number of services to the private sector under contractual arrangements and the loss of over 100 full time equivalent posts, achieving more than £1 million of annual new savings.

Performance report Accountability report Primary statements Notes to the accounts

1.3 Performance analysis

Waste and recycling

Our island's homes and businesses generate significant liquid and solid waste, which needs to be processed safely to ensure it does not pollute our environment. In 2017, Jersey generated:

• 33,578 tonnes of waste collected separately for recycling

• 74,692 tonnes of non-recyclable residual' waste for recovery in the Energy from Waste plant

• 83,547 tonnes of other waste (scrap metal and aggregates inert' waste)

• 9,721,736 cubic metres of sewage (pumped and conveyed to the Sewage Treatment Works at Bellozanne).

Jersey only recycled 31% of its waste in 2017, although in January we opened the new Household Reuse and Recycling Centre at La Collette to widen the range of materials that can be recycled and reused. Alongside it, the Acorn Reuse Centre received over 100 tonnes of material in the first year and reported a reuse rate of 94.2%.

We started to export incinerator bottom ash to the UK for recycling

in June, which means that we will no longer be burying around 13,500 tonnes of waste in engineered waste cells every year.

The Energy from Waste Facility generated 43.8 million kWh of electricity during 2017. The entire La Collette site was migrated over to using electricity generated by the EfW in order to achieve savings and use the energy recovered from incinerating waste in the EfW plant.

The biosolids processing combined heat and power unit at the Sewage Treatment Works produced 3.2 million kWh of electricity (7.3% of the amount produced by the Energy from Waste Plant), generating an effective saving of £328,161 a year.

After many years of trying to find a suitable solution for disposal of the island's legacy asbestos waste, by May 2017 the entire stockpile of 320 shipping containers of waste at La Collette had been securely disposed of in a lined pit and the containers disposed of following decontamination.

33,578

tonnes of waste collected and recycled

9.7m m3

of sewage processed

43.8m

kWh of electricity generated from waste

Travel

In 2017, we undertook extensive work to enhance and encourage  sustainable travel. We completed works on a shared footpath and  cycle route in St Peter's Valley and the first phase of a new off-road  multi-use "safer routes to school" path in St Clement.  

We received planning permission to create a multi-use path around  and over the English and French Harbour heads, to provide a  continuous promenade from Havre des Pas to St Aubin, around  

St Helier's heritage waterfront. The first phase around the English  Harbour was substantially completed during 2017.

We also undertook the important Charing Cross and Conway Street public realm improvement schemes, in support of Future St Helier, and we installed a new crossing facility at the bottom of Wellington Road to improve the safety of students travelling to the St Saviour's school cluster.

We launched a disabled persons' concessionary bus pass, funded from the financial return from the Jersey Car Parking operation, and its use grew throughout the year, with around 5,000 journeys a month being taken by the end of the year. We also installed seven new bus shelters.

Roads

We resurfaced 3.52 miles (6 metre width) of the 165.5 mile road  network in 2017. Of this total, 1.12 miles were resurfaced using  micro-resurfacing product. The main road resurfacing projects were:

• Sections of La Route de la Trinité 166

• Green Street Roundabout and new zebra crossing miles of road maintained

• St Saviour's Road, from the JSPCA to La Rue Le Masurier

• St Saviour's Road, from Wellington Road to Stopford Road

• La Route d'Ebenezer and La Rue de la Petite Falaise

(micro-resurfacing)

Public realm

The island's sea defences withstood the weather, without any breaches, despite severe storms and high waves. An important upgrade to the seawall at Beaumont was undertaken in the form of increasing the wall's height and adding a wave return profile to the front face to reduce over-topping.

Public land and buildings

The Department for Infrastructure, holds land and buildings on behalf of the public. The vast majority of these buildings are held to allow the provision of services (Health, Education, Emergency Services), and an office estate to support these services. As well as this, the department holds parks and open spaces in the public realm, it also holds a number of properties that are used as beach cafes, which enhance the environment while providing some income to the States of Jersey.

During the year a full revaluation was carried out on the States' land and buildings, and the portfolio is valued at over £1 billion.

Non-Ministerial States-funded bodies

£21 million of public funding was made available in 2017 to fund

the following 10 non-Ministerial bodies: the Bailiff 's Chambers, Law Officers' Department, Judicial Greffe, Viscount's Department, Official Analyst, Office of the Lieutenant Governor, Office of the Dean of Jersey, Comptroller and Auditor General, Probation, and the Office of the Data Protection Commissioner.

States Greffe

£5.3 million of public funding was also made available in 2017 to fund the States Greffe, including the States Assembly, Scrutiny and Assembly Members' remuneration, as follows:

States Assembly

general

£1.5 million

Members' remuneration £2.4 million

Scrutiny £1.1 million

Independent Jersey Care Inquiry

£0.4 million

In 2017 the States Assembly sat for a total of 41 days, compared to 33 days in 2016.

In 2017 Scrutiny conducted 26 reviews and published 74 reports and other publications, compared to 21 reviews and 42 reports in 2016.

Minister for Treasury and Resources foreword

Jersey's financial position strengthened in 2017 and I am delighted that we are able to report a £23 million financial surplus of general revenue income over departmental spend, two years ahead of the target to balance the books.

Our tax receipts have remained resilient, despite the uncertainties we faced globally and arising from Brexit. These revenues, once again, have been supported by strong investment returns.

Senator Alan Maclean Minister for Treasury and Resources

In addition, more tightly controlled departmental expenditure increased only slightly over that of 2016, while we again provided additional funds for investment in services.

The strength of our economy, with a third successive year of positive growth and a further one forecast, contributed to the record levels

of employment, while the Back to Work scheme helped achieve the lowest unemployment level for eight years. This twin success fuelled our tax receipts and held down benefits expenditure.

Our financial performance was also underpinned by the delivery

of much of the plans approved in principle by the States Assembly

for efficiencies, savings and revenue raising measures to fund vital investment in public services for islanders, notably in Health and Social Services.

I am grateful to the public servants who contributed to this success.

Nevertheless, it is critical that remaining measures are implemented as previously agreed by the States Assembly and consistent with the advice of the independent Fiscal Policy Panel.

The Panel made clear that if the commercial waste charges are not progressed then measures equivalent in value should be delivered, and I encourage the incoming Assembly to proceed with this advice. It is not only necessary to assist with balancing the books, but will also deliver environmental benefits through incentivising behaviour change.

Equally important is the delivery of efficiency savings and I support the emphasis of the new CEO to do so while improving service to islanders. I also wholeheartedly agree with another recommendation of the Fiscal Policy Panel, that a permanent programme of efficiencies be delivered.

The full extent of the strength of Jersey's finances is only truly appreciated once the value and performance of our investments, reserves such as the Strategic Reserve and Social Security Funds, and companies, such as Jersey Telecom and Andium Homes, are taken into account.

At the Jersey Group level, the surplus recorded in 2017 amounted to a sizable £272 million and the combined balance sheet grew by more than £500 million last year, to a record £6.8 billion. This leaves us well placed to meet the challenges arising from Brexit, from our ageing population and from artificial intelligence.

But it also allows us to leverage opportunities from these challenges too, using our financial strength to invest in long-term infrastructure and in innovations that will improve our productivity. Long term planning and investment is of critical importance.

Once again growth has come from strong investment returns, totalling £282 million from the Common Investment Fund – a return of over 10% - contributing to record levels in the Strategic Reserve and Social Security Funds, with total reserves amounting to over £2.8 billion

The Annual Report and Accounts for 2017 reflect a considerable change in emphasis, away from solely reporting what Departments spend, to providing a more comprehensive focus on what has been achieved for islanders with those funds.

This reflects the influence of the new CEO and a move common in the business world, but also public services elsewhere, towards improved and integrated performance and financial reporting.

I will look forward to and will take a keen interest in this important transformation in public accountability and transparency.

The resilience and robust health of Jersey's finances is to be cautiously welcomed. Nevertheless, we must continue to be vigilant as economic uncertainty, across the globe and closer to home arising from the UK decision to leave the EU makes continued financial discipline critical.

I extend my thanks and appreciation to dedicated colleagues across the States during my time as Minister and in particular the hard working team at the Treasury. On a personal level, I also thank my Assistant Minister, Connetable John Refault, for his tireless support.

Senator Alan Maclean

Minister for Treasury and Resources Date: 30th May 2018

Financial performance - key figures

Income

Consolidated (Group) Income remained broadly

level with a net £51 million (3%) reduction from 2016 made up of an increase in taxation and contributions receipts offset by lower investment returns in comparision to 2016.

States Assembly

An increase in General Revenues Income, as approved by the States Assembly, of £30 million (4%) from 2016 primarily due to increases in income tax revenue, GST and stamp duty.

Expenditure

Consolidated (Group) Income remained broadly level with only a net £16 million (1%) reduction from 2016 primarily resulting from a revaluation of pension liabilities.

States Assembly Departmental net expenditure increased marginally by

£6 million (1%) which was largely driven by pay awards recognised across the organisation partly offset by lower social benefits payments.

2016 2017

£1,502m  £1,451m 2016 2017

£737m  £767m

2016 2017

£1,195m  £1,179m 2016 2017

£698m  £704m

Balance Sheet

Consolidated (Group)

An increase in the net asset position of £527 million (8%) mainly due to the increase

in value of property, plant and equipment.

Strategic Reserve

The Strategic Reserve achieved investment returns

of £70 million in 2017 - representing net performance of 9% - and there were transfers out of the Fund of £50 million. Protected capital value based on 2012 value is £715 million.

Social Security Funds The Social Security Funds have increased in value by £219 million from 2016.

The Social Security (Reserve) Fund achieved income of £193 million, representing a net rate of return in excess of 12%.

2016 2017

£6,244m  £6,771m 2016 2017

£820m  £840m 2016 2017

£1,751m  £1,970m

Financial review

The 2017 Annual Report and Accounts presents the financial outturn for the Consolidated States of Jersey Group, as well as the outturn for the income and expenditure approved by the States of Jersey Assembly.

Principal Activities of the States of Jersey

The States of Jersey collects taxes and other levies to fund the provision of a wide range of public services, which it administers. These include health care, education, social security, the administration of justice, the provision and maintenance of infrastructure, the protection of the environment, and support for the economy, agriculture, fisheries, arts, culture and sport. These functions are primarily carried out by departments, both Ministerial and Non-Ministerial.

The States of Jersey Accounting Boundary

The entities included within the States of Jersey Accounting Boundary are shown on the following page. More information on specific entities is given below.

Consolidated Fund

The Consolidated Fund is governed by the Public Finances (Jersey) Law 2005 and is the fund through which the majority of the States' income and expenditure is managed, including General Revenue Income and departmental income and expenditure.

Trading Operations

Under the Public Finances (Jersey) Law 2005, the States can designate any distinct area of operation as a States Trading Operation. Estimates for Trading Operations are approved in the Medium Term Financial Plan.

Special Funds

In addition to the Consolidated Fund, the Public Finances (Jersey) Law 2005 names four Special Funds – the Strategic Reserve, the Stabilisation Fund, the Currency Fund and the Insurance Fund.

These relate to the operation of the States of Jersey in general. The Public Finances (Jersey) Law 2005 also allows the States to establish special funds (also known as Separately Constituted Funds) for specific purposes. These are usually established by legislation or a States decision, and more detail is given in Note 34.

Social Security Funds

In 2013 the Accounting Boundary was expanded to include the Social Security Fund, Social Security (Reserve) Fund and Health Insurance Fund. The Jersey Dental Scheme and the Long Term Care Fund, when established in 2014, were also included in this category. Details of the purpose of the funds are given in Note 34.

States-owned subsidiary entities

Andium Homes Limited

The incorporation of the Housing Department into a separate legal entity, a company limited by guarantee (other than the Strategic Housing Policy Unit, which was retained by the States) was approved by the States under P.63/2013. The transfer into the new company was effective from the 1 July 2014.

The agreement of the Memorandum of Understanding for Andium Homes, resulted in a more significant involvement of the States

of Jersey in decision making than was the case for the Strategic Investments. By virtue of those arrangements, it was deemed that the States operates direct control of Andium Homes.

To reflect this, the results of Andium Homes are shown within the consolidated financial statements.

Ports of Jersey Limited

The incorporation of Jersey Airport and Jersey Harbours Trading Operations into a separate legal entity, Ports of Jersey Limited, took place on 1 October 2015. Similarly to Andium Homes Limited, the States of Jersey is deemed to operate direct control of Ports of Jersey and, as a consequence, the results of Ports of Jersey are shown in the consolidated financial statements.

States of Jersey Development Company

This is a wholly-owned subsidiary company of the States.

It was originally incorporated in 1996 as the Waterfront Enterprise Development Board (WEB) and vested with responsibility for the co-ordination and promotion of development in the St Helier Waterfront Area on behalf of the States of Jersey. In 2010, the States approved proposition P.73/2010, which set out proposals for the restructure of

WEB into the SOJDC, clarifying the role of the company and widening the company's remit to cover all designated Regeneration Zones'.

Public sector bodies outside of the Accounting Boundary

Some functions of Government are carried out by public sector bodies that are outside of the Accounting Boundary (and so are not included in these accounts). These include:

PARISHES

The Parishes perform various government functions, including refuse collection, provision of some parks and gardens and the issuing of some licenses. Details of the functions of individual parishes can be found on the parishes' websites. http://www.parish.gov.je/

TRUST AND BEQUEST FUNDS

The States administers a number of trust and bequest funds. These funds commonly set defined purposes for the use of their assets, and so are not controlled by the States directly.

STRATEGIC INVESTMENTS

The States owns controlling investments in these utility companies, but as it does not exert direct control these are accounted for as strategic investments in the accounts.

• Jersey Electricity plc

• Jersey New Waterworks Company Limited

• JT Group Limited

• Jersey Post International Limited

More information about the valuation of these companies is given in Note 4.17.

INDEPENDENT BODIES

Independent bodies, including the Channel Island Competition Regulation Authority and the Jersey Financial Services Commission, for example, mainly provide supervisory and regulatory functions, and are established by legislation to be independent of the States of Jersey.

States of Jersey Group

STATES ASSEMBLY APPROVED

Consolidated Fund

Ministerial Departments Non Ministerial Departments

Jersey Overseas Aid Commission*

General Revenue Income

Trading Operations

Fleet Management Car Parking

*The Jersey Overseas Aid Commission is a separate entity funded by a grant from the States Assembly but is included in this group for reporting purposes as it includes Commissioners who are States Members.

WHOLLY OWNED SPECIAL FUNDS

COMPANIES

Special Funds  States of Jersey Development named in the PFL1 Company Ltd

Andium Homes Ltd Strategic Reserve

Ports of Jersey Ltd Stabilisation Fund Currency

Fund Insurance Fund

Special Funds for Specific Purposes

Loans Funds Tourism Development Fund Lottery Fund

Housing Development Fund Confiscations Funds Ecology Fund

Social Security Funds

Social Security Fund Social Security (Reserve) Fund Health Insurance Fund

Long Term Care Fund Jersey Dental Scheme

1 Public Finances (Jersey) Law 2005

Financial Performance

The highlights for the States of Jersey Group and for the States Assembly Approved financial results are as follows:

£272m surplus

Income £1.5 billion Expenditure £1.2 billion

Other Departmental

Consolidation  non-cash expenditure adjustments £6m

£6m Trading operations net income

£2m

£27m  £23m deficit surplus

Income £767 million Income  Department Expenditure

£108 million £704 million Expenditure  Department Depreciation

£135 million £286m  £40 million surplus

Income £633 million Expenditure £347 million

Income vs Expenditure

SoJ Group

Income: Total revenue remained at 2016 levels at £1.5 billion

SoJ Ebixllipoennditure: Total expenditure also remained stable at £1.2  Group

£272m Iwnictho ma es uerxpcluese doef d£ 3e0x7p emnidlliitounreinb2y0£1267. 2Tmhisill iroenp rines2e0n1t7s, ac onmetpared  surplus

effect of increased taxation and contributions receipts, offset by

2017 investment income totalling £317 million, compared to £425

million in 2016 and an overall drop in expenditure principally

resulting from a revaluation of pension liabilities.

States Assembly Approved

Income: General Revenue Income £767 million (2016: £737  AsSstea  million)

Appr Expenditure: Department Net Revenue Expenditure, including

depreciation, £744 million (2016: £739 million) £23  Income exceeded expenditure by £63 million before  surp

depreciation, and £23 million after depreciation. This compares

to a 2016 surplus before depreciation of £38 million and a £2

million deficit after depreciation. This movement is the net effect

of an increase in General Revenue Income of £30 million and

only a £5 million increase in departmental expenditure.

General Revenue Income

Net general revenue income - outcome compared to prior year and Budget Summary Table A

Difference Difference  Budget  from

2016 2017 from Prior  2018 Budget

Actual Actual year Forecast Forecast

£'000 £'000 £'000 £'000 £'000

487,965 Net Income Tax 514,930 26,965 84,798 Goods and Services Tax 87,946 3,148 58,410 Impôts Duty 59,999 1,589 30,305 Stamp Duty 33,283 2,978 12,141 Island Rate 12,427 286 12,568 Other Income (Dividends) 12,323 (245) 22,760 Other Income (Non-Dividends) 17,927 (4,833) 27,856 Other Income (Return from Andium) 28,417 561

483,000 31,930 87,428 518 58,420 1,579 29,055 4,228 12,427 - 12,332 (9) 15,726 2,201 28,380 37

Other Income (Non-Dividends) £17.9m  Other Income Other Income (Dividends) £12.3m  (Return from Island Rate £12.4m Andium) £28.4m

Stamp Duty £33.3m

Impôts

Duty £60.0m

£767 Goods million

and Services (2016: £737m) Tax £87.9m

Net Income Tax £514.9m

Rounding applied.

All references to 2017 forecast' are based on the most recent published forecast for 2017 which was included in the Budget 2018.

Net general revenue income

2016

£736.8m Actual

2017

£767.3m Actual

Budget

£726.8m 2018

4.1% higher than last year

5.6% better than the 2017 forecast

The largest element of income received by the States is General Revenue Income', comprising income to the Consolidated Fund which is subject to the Annual Budget Statement, and including taxes, duties and investment income, in the form of returns on the balances held in the Consolidated and Currency Funds and returns from wholly and part owned subsidiary companies.

In the Budget Statement, General Revenue Income estimates are voted net of directly-related expenditure, such as Irrecoverable Debts or Investment Management fees, to represent the amount that is available to spend on providing services.

Net General Revenue Income for 2017 was £767.3 million, compared to £736.8 million for 2016, largely as a result of a £27 million increase in Income Tax, a £3.1 million increase in GST and a £3 million increase in Stamp Duty. This was partially offset by a fall in investment income compared to 2016, where returns were bolstered following the devaluation in Sterling after the EU Referendum and subsequently protected by a special hedging arrangement. Income from Impôts was also £1.6 million higher than in 2016.

The remainder of income received by the States core entities includes charges raised by departments included in their cash limits, and income relating to Trading Operations and Special Funds.

Net income tax

2016

£488.0m Actual

2017

£514.9m Actual

Budget

£483.0m 2018

5.5% higher than last year

6.6% better than the 2017 forecast

Personal Income Tax

The standard rate of personal income tax is 20%, although personal taxpayers are entitled to a limited number of allowances or reliefs

that can reduce their effective personal tax rate. To protect lower and middle income earners, a separate calculation is also performed using exemption thresholds and a greater number and value of allowances and reliefs, together with a higher tax rate (26%). The lowest of the two tax calculations is then used to determine the tax charge. This is explained in a video available on the States' website:

www.gov.je/TaxesMoney/IncomeTax/Individuals

Net Income Tax for 2017 was £514.9 million, which is £27 million (5.5%) more than in 2016. Within this, Company Tax decreased by £4.2 million and Personal Tax increased by £31.2 million.

The increase from the previous year is partly because there were more taxpayers. In addition, year-on-year comparisons between those liable to pay tax showed an average increase of £360 tax payable

per taxpayer, in part as a result of higher income and the cumulative effect of changes in tax policy. A favourable movement of provision for doubtful debts accounted for £1.5 million (0.4%) of the year-on-year variance.

Company income tax

Companies pay tax under the 0/10 regime. Three tax rates are possible:

• 0% – all non-financial service entities (except those at 20% below)

• 10% – financial services companies (a company registered, or holding a permit, by virtue of various laws administered by the Jersey Financial Services Commission)

• 20% – utility companies, rental and property development activities.

There is high volatility in company income tax due to a small number of companies being responsible for a large percentage of the total amount of corporate income tax payable. For example, in 2017 the Top 20' companies were responsible for 62% of total company income tax receipts.

Within this population of Top 20' companies, a small number of companies experienced changes which resulted in a lower tax liability falling due in 2017.

Net income tax was £31.9 million (6.6%) more than the 2018 Budget Forecast produced in September 2017, at which point there were a high number of personal assessments still to complete. The main factors for the difference compared to that last forecast are increased earnings and pension income in respect of personal taxpayers and higher tax liabilities in total than companies had estimated in 2017 arising from their 2016 profits.

Goods and Services Tax (GST)

2016

£84.8m Actual

2017

£87.9m Actual

Budget

£87.4m 2018

3.7% higher than last year

0.6% better than the 2017 forecast

Goods and Services Tax is a consumption tax of 5% on imports and supplies made in Jersey. For businesses within the financial services industry, which generally have the majority of their activity outside Jersey, a flat rate annual fee may be applied as an International Services Entity (ISE).

Income from GST increased from 2016 by £3.1 million (3.7%) and was £0.5 million higher than forecast in Budget 2018. The increase in GST was due to the increased volume, particularly on import GST on goods imported into the Island, along with price inflation.

Impôts Duty

2016

£58.4m Actual

2017

£60.0m Actual

Budget

£58.4m 2018

2.7% higher than last year

2.7% better than the 2017 forecast

Impôts duties are duties charged on certain goods as they are imported into the Island. The duties apply to a range of commodities, including alcohol, tobacco and fuel. Duties revenues increased by £1.6 million (2.7%) in 2017, compared to 2016.

The quantities of alcohol and fuel imported in 2017 were comparable to 2016, with the increase in duty rates approved in Budget 2017 resulting in an increase in revenue collected. Tobacco continued a downward trend in quantity imported, reflecting the success of reducing the incidence of smoking, with the increase in revenue collected also attributable to the increase in duty rate, compared to 2016.

The £1.6 million overachievement against the Budget 2018 forecast is primarily due to duties from fuel, which were £1.1 million higher than forecast. This movement is the result of a new fuel importer not previously included in the forecast process.

Stamp Duty

2016

£30.3m Actual

2017

£33.3m Actual

Budget

£29.1m 2018

9.8% higher than last year

14.6% better than the 2017 forecast

Stamp duty is charged on property and share transfer transactions according to the value of the transactions. Jersey operates a discount scheme for first-time property buyers. Duty is also collected on wills, probate and obligations.

Stamp Duty collected in 2017 was £3.0 million (9.8%) higher than in 2016 and £4.2 million or 14.6% higher than the Budget 2018 forecast. The increase in 2017 is primarily due to the volume and value of property transactions over £2 million, particularly in the last quarter. This is the most volatile and unpredictable sector of the property market. 2017 has seen a continuing high level of activity from High Net Worth individuals. In contrast, property transactions under £2 million have performed broadly in line with budget and forecast.

In addition, probate duty in 2017, at £3 million, is the highest since the cap on probate duty was reintroduced in Budget 2013.

Island Wide Rate

2016

£12.1m Actual

2017

£12.4m Actual

Budget

£12.4m 2018

2.4% higher than last year Equal to budget

The 12 Parishes in Jersey levy rates to pay for parish services. In addition, the Parishes collect an Island-Wide Rate, which is levied by the States. The Island-Wide Rate was introduced in 2006 to provide a contribution to parish welfare costs, which were incorporated into the Island's Income Support System.

Island-Wide Rate income was slightly higher than in 2016 and as forecast in Budget 2018.

Other Income (Dividends)

2016

£12.6m Actual

2017

£12.3m Actual

Budget

£12.3m 2018

1.9% lower than last year

0.1% less than the 2017 forecast

Income from dividends received from the States' investments in the utility companies fell by £0.3 million against 2016, with a fall of £1 million from JT Group following special dividends paid in 2016 offset by increases across the other companies.

Other Income (Non-Dividends)

2016

£22.8m Actual

2017

£17.9m Actual

Budget

£15.7m 2018

21.5% lower than last year

14.0% better than the 2017 forecast

Other income from non-dividends within General Revenues is primarily derived from investment returns on balances in the Consolidated and Currency Funds. Investment returns were strong in 2017, reflecting market performance during the period as well as high balances on the Consolidated Fund, however, the returns were £4.8 million lower than in 2016 when exceptional returns were achieved, in part because of the devaluation of Sterling following the EU Referendum. The exceptional returns in 2016 were protected by a special hedging arrangement which remained in place throughout 2017.

Other Income (Return from Andium)

2016

£27.9m Actual

2017

£28.4m Actual

Budget

£28.4m 2018

2.0% higher than last year

0.1% better than the 2017 forecast

The return from Andium Homes also includes returns from the other housing trusts (£0.2 million in 2017). The Andium return will continue to increase in line with inflation with the other housing trusts increasing above inflation over the coming years.

Changes in General Revenue Income

The following chart shows how Net General Revenue Income has changed since 2007, indexed at 2017 prices. 2014 and 2015 have been restated to reflect the change in accounting policy for current-year-basis taxpayers, to improve comparability.

The graph shows a large drop in General Revenue Income between 2009 and 2010, which was anticipated in the Budget as a result of the introduction of 0/10, and subsequently offset by the introduction of GST. Actual income in 2017 was £30.4 million higher than in 2016.

The main changes from 2016 were an increase in Income Tax of £27 million, primarily as a result of an increase in the yield from existing income tax payers, and increases of £3.1 million in GST and £3.0 million in Stamp Duty. This was offset by a decrease in non-dividends income.

850

800

750

700

Budget

Actual 650

600

550

500

2007 2009 2011 2013 2015 2017

Departments' Revenue Expenditure

Net revenue expenditure – outcome compared to prior year and medium term financial plan summary table

Difference Restated Difference  Final from

2016 2017 from Prior  MFTP Approved Budget

Actual Actual year 2017  Budget  Forecast

£'000 £'000 £'000 £'000 £'000 £'000

Ministerial Departments

33,876 Chief Minister 34,233 357 26,482 35,213 (980) 10,288 - Grant to the Overseas Commission Aid  10,355 67 10,339 10,396 (41)

1,804 External Relations 1,923 119 1,746 2,340 (417) 49,783 Community and ConstitutionalAffairs 50,994 1,211 48,783 51,486 (492)

19,830 Economic Development, Tourism, Sport and Culture 18,820 (1,010) 101,551 Education 107,342 5,791

6,178 Department of the Environment 5,650 (528)

199,569 Health and Social Services 211,030 11,461 185,735 Social Security 178,788 (6,947)

40,989 Department for Infrastructure 35,100 (5,889) 21,493 Treasury and Resources 23,168 1,675

19,183 19,358 (538) 105,944 108,959 (1,617) 5,856 7,020 (1,370)

207,908 215,687 (4,657) 186,226 189,759 (10,971)

39,981 36,864 (1,764) 21,447 24,503 (1,335)

The key element of the States Expenditure is the Near Cash Net Revenue Expenditure of Ministerial and Non Ministerial Departments, through the Consolidated Fund. As departments raise charges for some of the services that they provide, and may also receive other income, the Medium Term Financial Plan approves Net Revenue Expenditure limits for departments, which take this income into account, and so represents the amount funded from taxes.

In 2017, Near Cash Net Revenue Expenditure for departments was £703.8 million (2016: £698.5 million). This included departmental income of £96.5 million (2016: £94.5 million), giving gross expenditure of £800.3 million (2016: £792.9 million).

The £5.3 million (0.8%) increase in departmental net expenditure was largely driven by pay awards recognised across the organisation and the impact of the Workforce Modernisation pay deals for those groups who accepted the offer. This was partly offset by lower social benefit payments and higher levels of income. The position includes:

• Health and Social Services - £11.5 million increase in net expenditure from 2016 reflecting the investment in Health and Social Services approved in the MTFP, allowing the implementation of P.82/2012 A New Way Forward for Health and Social Care' to continue. The increase also includes investment in specialist care treatment placements, the increasing cost of specialist and interim staff and the 2017 pay awards offset by further efficiency savings delivered as part of the 2016 – 2019 MTFP. The Department successfully achieved its 2017 savings programme, saving over £5 million without impacting on the quality of service.

• Education - £5.8 million increase in net expenditure from 2016 with the biggest single movement being £2.6 million on pay awards as well as increases as a result of the investment in the Jersey Premium to provide additional funding and support to help raise the attainment of pupils most likely to underachieve, pupil numbers and the investment in standards.

• Social Security - £6.9 million decrease in net expenditure from 2016 mainly due to a reduction in income support payments and spend on the Back to Work programme, reflecting the changes to benefits proposed by the Minister in the MTFP and the low levels of unemployment combined with the highest total employment recorded to date.

• Infrastructure - £5.9 million decrease due to one-off non- recurring costs in 2016, the restructuring of cleaning and parks and gardens services and other efficiency savings, and non- capitalisable costs of the Future Hospital project which were reflected in the 2016 accounts.

Ministerial and non-ministerial departments – net revenue expenditure (near cash)

Non-Ministerial

Departments and the

States Assembly

£36.8m Health and

Social Services Other Ministerial £211.0m

Departments

£118.9m

£703.8 Communityand Constitutional million

Affairs £51.0m (2016: £698.5m)

Education Social Security £107.3m £178.8m

Rounding applied.

Departments' Near Cash Net Revenue Expenditure

MTFP 2017 Approval

£700.6m

Budget carried forward from 2016

£22.5m

Other Allocations and Transfers

£6.9m

Actual 2017

£703.8m

Underspend Actual 2016

£26.3m  £698.5m 3.6%  0.8%

Less than Final  More than last year Approval Budget

Near-cash expenditure represents amounts that transacted in cash during the year, or will be shortly after (e.g. departmental income charged that will be collected after the year-end). It excludes amounts relating to the use of fixed assets, such as depreciation and impairments, which are covered later in this section. Accounting Officers are accountable for near-cash expenditure.

During the year, budgets can be varied for limited reasons.

Table A on page 194 reconciles departmental approvals in the Medium Term Financial Plan to the Final Approved Budget. More detail on these changes is given in Section 2.3.

£'000

2016 Departmental Approvals Carried Forward to 2017 22,547 Allocation of Contingency 14,097 Transfers between Capital and Revenue (7,210)

Departments' non cash expenditure

Depreciation remained static at £40.1 million in 2017, but impairments were higher in 2016 as a result of a review of the Hospital estate, to reflect the impact of the Future Hospital plans.

Special Funds and Social Security Funds

Income/expenditure approvals for Special Funds are not currently included in the Medium Term Financial Plan, and so results for these entities cannot be compared to budget.

Special Funds

During 2017, Special Funds saw Net Revenue Income of £66.6

million, comprising income of £104.6 million and expenditure

of £38.0 million. The majority of this figure was income in the

Strategic Reserve. The Net Asset Value of the fund increased  Special

from £819.6 million to £840.1 million over 2017, an increase of

£20.5 million (2.5%). £28  The movement reflects net earnings of £70.8 million,  Surp representing a net performance of 8.7%, but drawings of £50.3

million. Drawings on the fund were approved in the Medium

Term Financial Plan 2016-19 principally for the funding of

capital expenditure, in particular £39 million towards the new

Les Quennevais school.

Social Security Funds

During 2017, the funds saw Net Revenue Income of £219.1 million, comprising income of £528.4 million and expenditure of £309.3 million. This income includes contributions received and returns on investments held in the Social Security (Reserve) Fund of £192.5 million, representing a net rate of return

of more than 12.2%. This fund sets aside financing for the future provision of pension benefits for those currently in employment, so as to smooth the impact on future workers.

The Social Security Fund, Health Insurance Fund and Long Term Care Fund also grew in 2017 as contributions and investment income exceeded the benefit payments made.

Subsidiary Companies

These accounts consolidate the activities of three wholly-owned subsidiary companies: the States of Jersey Development Company, Andium Homes Limited and Ports of Jersey.

In 2017, the subsidiaries had combined net expenditure  Subsidiaries of £27.4 million, comprising £107.8 million of income and

£135.2 million of expenditure. This is compared to net  £27m expenditure of £14.7 million in 2016. Deficit

The majority of the increase in net expenditure is due to

impairments recognised in Ports of Jersey and Andium Homes

during 2017. In Ports of Jersey, this was the result of a review

of operational assets, which concluded that it would be appropriate

to impair the value of the Arrivals 1937 Building, due to the initial demolition works having been undertaken, and a significant element of the building no longer being available for occupation.

In the case of Andium Homes, the impairments relate to assets where future rental income will not cover the costs of acquisition or redevelopment. The largest example was the purchase of the Jersey Gas Works site, which was impaired to recognise the reduced rental potential following the States decision to use part of the land to extend the Town Park.

Capital Expenditure

A total of £108.8 million - equivalent to 3% of the total value of property, plant and equipment

- was spent on capital projects across the States of Jersey Group, comprising:  £14.8 million on the Future Hospital project.

 £6.9 million on the ongoing development of the £47.6m sewage treatment works at Bellozanne.

by Departments  £4.8 million on infrastructure projects across the

including: road, drainage and sea defences network.

 £2.6 million on a replacement MRI scanner at the

Hospital.

£2.7m £2.0 million on vehicle and plant replacement by Trading  across the organisation.

Operations  £0.7 million on the automated charging system

including: in Jersey Car Parking.

£5.5m £0.9 million on the Integrated Terminal

Development.

by Ports  £0.9 million on IT systems infrastructure. of Jersey

 £0.6 million on work to replace including:

the Les Platons Radar.

 £20.7 million on the Esplanade Quarter International £36.1m Finance Centre to provide modern and efficient office space both for existing businesses to expand and for

by States  new businesses to locate to the Island.

of Jersey  £13.5 million on the College Gardens residential Development  development at the old Jersey College for Girls site. Company on:

 £1.9 million on the Horizon residential development

at the waterfront site.

The States of Jersey Group Balance Sheet

The States net asset position of £6.8 billion is illustrated by the chart below. The States has total assets of £7.8 billion compared to total liabilities of £1.0 billion. This is an increase in the net asset position of £526.2 million from £6.2 billion in 2016.

States Assets and Liabilities

8.0 7.0

0. Property and other

Fixed Assets

5.0

0. Strategic investments

3.0

Other investments

2.0

1.0

External Borrowings

Pension Liabilities

Cash and other current assets

0 Other Liabilities

Assets Liabilities

The majority of the States assets comprise property, plant and equipment of £3.7 billion, which includes the Island's infrastructure assets, States land and buildings and the social housing stock administered by Andium Homes Limited.

Breakdown of property and other fixed assets

Plant and Equipment £132m  Other Assets £109m

Marine, Airport

and Other  Social Housing Services £317m £823m

£3.7 billion

(2016: £3.4bn)

Other Property £1,013m

Highways, Drainage and Sea Defences £1,291m

The second biggest group of assets totalling £3.0 billion comprises the cumulative States investment holdings and includes the funds of the Strategic Reserve and Social Security Funds.

The largest distinct liabilities held by the States relate to the pension debt liabilities totalling £423 million and the external bond taken out in 2014 of £243 million.

Key Movements in Assets and Liabilities

The majority of the movement in the value of the assets is on property and other fixed assets, which increased by £253 million (7.4%) in 2017. This follows a full external professional valuation of land and building assets, as well as interim external professional valuations

of infrastructure and social housing assets. The increase in value reflects the increases in building costs experienced in 2017, which is a key input driver for the asset replacement values.

The value of States investments increased by £196 million (6.9%) to £3 billion, following another good year of returns in line with the investment strategies in place.

Pensions liabilities relating to past service liabilities have increased by £16.4 million, as set out in Note 4.29. The PECRS pre-87 debt increased by £12.3 million and the provision for JTSF pre 2006 debt increased by £4.1 million. The value of both liabilities is calculated

by the scheme actuaries and details of the assumptions are given in Note 4.29. The biggest single change in the assumptions driving the increase in the valuation is the reduction in the discount rate reflecting the actuary's assessment of long-term investment returns specific to these arrangements.

The £29.5 million increase in external borrowings relates to the bank borrowing that the States of Jersey Development Company has

in place to progress the developments at the Jersey International Finance Centre and College Gardens.

Performance of States Investments

The States operates a Common Investment Fund as an administrative arrangement to maximise efficiency and returns across all funds under the administration of the States. This includes some funds not under the direct control of the States and therefore not consolidated in these accounts – most notably the Jersey Teachers Superannuation Fund.

During 2017, the Common Investment Fund generated a net return of £344 million, a rate of return of approximately 10.3%. The return consolidated into the States accounts in relation to States of Jersey Group entities equalled £282 million.

The pooled investments contain a diverse range of growth and capital preservation-focused assets. Variation in the level of earnings is expected as the growth assets, while generating higher gains, are also subject to greater short-term volatility. Due to this volatility, the earnings are best reviewed over a long-term investment horizon. The long-term net return, measured over three years, shows annualised performance of 9.4%; over five years, the annualised return rises to 10.4%. Over one, three and five years, the performance exceeds its market benchmarks.

The allocation to the underlying asset classes of the Common Investment Fund is determined by the investment strategy of individual funds. Overall, the States portfolio has a 55% allocation to equity, reflecting the long investment horizon of some of the larger funds. During the year, the majority of the performance of the States' investments was generated by this equity allocation. Of the £282 million gain generated during the year, £261 million was generated by equities. This continues a prolonged period of good performance for the class, which has seen continued strong growth and has added considerable value to the States portfolio over the last three years.

In reaction to the rises in asset values, action has been taken to

capture these gains, particularly from the equity portfolio, through increased strategic rebalancing into alternative asset classes. This includes hedge funds and the new opportunities' class managers who were appointed during 2017.

The Opportunities Pool invests in non-traditional asset classes, which seek to generate long-term growth, but are expected to be less correlated with other growth class assets, such as equities. The portfolio will seek to access the illiquidity premium associated with investing in asset classes which require money to be locked up for a period of time.

The performance of the alternative class managers, and particularly the hedge fund managers, has so far been muted relative to the strong performance of equity. The Opportunities Managers remain in the drawdown stage, with only £20.1 million drawn by the year end, and insufficient time has elapsed properly to assess their performance. The hedge fund managers, making up £323 million

of the portfolio value, generated a disappointing 3.1% return. Given high market valuations, however, these managers are expected to provide downside protection and steadier returns. Furthermore, it is anticipated that conditions for hedge funds managers will improve in the future.

Pooled investment performance compared to RPI (indexed)

Sustainability

The States of Jersey recognises our environmental responsibilities and the impacts of our many and varied operations upon the environment.

This Sustainability Report is the fifth to be included in the Annual Report and Accounts In line with the States of Jersey Financial Reporting Manual (JFReM). The report includes information on key areas of environmental performance, such as emissions and finite resource consumption. The States will continue to develop and enhance this information in future years.

A key environmental initiative is the Eco Active States' (EAS) programme, which has been developed to support the States of Jersey in managing our environmental performance and resource management with consequent efficiency savings.

We are committed to reducing the environmental impacts caused by the day-to-day operations of our services and activities. We will work to reduce the negative environmental impact of departments by:

• complying with the requirements of environmental legislation and approved codes of practice

• improving environmental performance

• reducing pollution, emissions and waste arising from our activities

• reducing the use of all raw materials, energy and supplies

• raising awareness, encouraging participation and training employees in environmental matters

• encouraging similar environmental standards from all suppliers and contractors

• assisting customers and clients to use products and services in an environmentally-sensitive way

• liaising with the local community.

• participating in discussions about environmental issues

We have continued to run a programme of staff engagement, to

raise awareness of corporate commitments and priority actions. The programme is coordinated by the Department of the Environment and information is cascaded to designated eco officers in each department. Budget reductions in 2016 reduced the amount of time available to provide direct officer support for the programme, but the volunteer network of eco officers has continued to operate. All departments have pollution prevention plans in place and have completed an environmental legislation compliance check. Each department has developed its own eco active action plan, according to the service and operational impacts of its activities. These action plans are monitored and managed by the relevant department.

The principles of EAS are promoted on the staff intranet and through an online collaboration space. The principles are:

We:

• Save energy by shutting down all computers, monitors and non- essential equipment at the end of the working day

• Reduce waste by reducing, reusing and recycling batteries, metals (including packaging and cans), electrical items, glass, plastic bottles (that are clean with no tops), and paper

• Only buy recycled paper, Fairtrade tea, coffee and sugar, and other environmental products where possible

• Think about whether we need what we're buying in the first place

• Think about how we travel for work: is the journey necessary?

• Can you lift share or video conference instead?

• Don't leave the taps running and waste water

• Dispose of chemicals the proper way. Don't put them down a surface water drain, which could cause pollution.

Greenhouse gas emissions

Jersey has lower carbon emissions per capita than other jurisdictions, because the island has little manufacturing or on-island power generation. Jersey's emissions originate principally from the space heating and cooling of residential, commercial and institutional premises, as well as from road transport.

Jersey is a signatory to the Kyoto protocol through the UK, and in 2017 the government confirmed to the UK that it would extend the Doha amendment to Jersey.

This required completion of a transposition table, to demonstrate how Jersey meets the relevant requirements of the amendment. Pathway 2050: An Energy Plan for Jersey (P38/2014) sets out a series of 27 actions to reduce on-island greenhouse gas emissions, in line with the 80% reduction target by 2050 against a 1990 baseline, as set out in the Kyoto protocol. Action statement 7 sets out targets for the public sector to reduce energy use and associated greenhouse gas emissions from heating of buildings, operational activities and use of equipment and transport.

Greenhouse gas emissions are calculated from consumption data collected from bill information from energy providers. This covers the use of energy for the heating and lighting of States of Jersey properties, running IT systems and use of fleet vehicles. To calculate emissions, carbon emissions factors from the building by-laws regulations are applied.

Reducing emissions from heating and energy use in buildings

The programme to reduce energy demand has continued to focus on procurement, reducing waste and increasing efficiency.

Procurement and specification of both energy source and equipment to ensure that the most suitable option is secured for the relevant property. Jersey Property Holdings manages a portfolio of more than 130 properties. These vary greatly in terms of construction, age, location, size and function. There is no single energy solution that

is appropriate for all properties. Refurbishment and replacement of systems is carried out on a case-by-case basis to assess and evaluate the most appropriate solution in terms of efficiency, emissions and

lifetime costs. All property refurbishment and new builds meet the energy performance requirements of the building by-laws.

The EAS programme runs awareness campaigns to remind all staff to switch off devices when not in use and to turn down heating controls. Information is distributed through a network of eco officers and staff newsletters and the intranet.

The ongoing maintenance programme run by Jersey Property Holdings ensures that when services such as lights, boilers and heating that maintain the building environmental conditions are upgraded, the replacement systems are specified to meet low energy standards and have extended warranties of up to five years. This reduces both energy use and expenditure. Since 2016, all lighting replacements are made with low energy LED's.

Reducing emissions from transport

The States of Jersey vehicle fleet is made up of low-emission lease- hire pool cars, including a small number of electric vehicles and owned vehicles. The owned vehicle fleet, internally leased to departments by Jersey Fleet Management (JFM), are subject to a fleet replacement policy that ensures ongoing compliance with European emission standards as they develop, as well as being in line with the vehicle's planned economic life.

During 2017, overall States fleet fuel usage has continued to drop

(a 16% reduction, which follows a 10% reduction in 2016) with the greater reduction being in the use of diesel products compared with unleaded petrol. This reduction is partly due to the full-year effect of the Department for Infrastructure's fleet size reduction, arising from service reorganisation and an element of outsourcing in the Cleaning Services and Gardens sections in the last quarter of 2016. It is also partly due

to procuring more fuel efficient vehicles through JFM's ongoing fleet replacement policy.

Since 2015, all off-island travel has been booked through a travel provider, managed through the corporate procurement service. Emissions from air travel have been estimated using UK government emissions factors for business travel by air.

Air travel 2015 2016 2017

Only flights booked through this service are included, which includes all States departments, Andium Homes and Ports of Jersey.

Greenhouse Gas

(GHG) Emissions Air travel 2015 2016 2017

TOTAL emissions (ktCO2e) 19.1 19.0 18.6 Financial Indicators TGas, Heating Oil and Votal energy expenditure (Electricityehicle Fuel) ,  £11.1m £10.2m £10.5m

The number above includes all departments within the States of Jersey Accounting Boundary.

*The Building Bye-Laws (Jersey) 2007/Technical Guidance Document 11.1B (Appendix E)

Finite Resource Consumption - Water

Water Use

The total amount of water used by the States of Jersey includes all public toilets, showers and schools, plus the airport, hospital and

all other States of Jersey activities. This means that it is difficult to compare overall performance against recognised good practice benchmarks, as much of the water use is outside the States direct control. For example, water use will increase if there are more visitors using public facilities.

By 2017, 100% of States properties had water meters in place, enabling more accurate reporting of water consumption. Water metering also makes it much easier to identify leaks and take corrective action more quickly to avoid waste. Reducing water consumption is a priority of the EAS programme. In reducing water consumption, there is potential for significant cost savings, as well as reducing the energy used to collect, process, clean and transport potable water to the workplace.

Finite Resource

Consumption  2015 2016 2017

- Water

Financial

Indicators Water Supply Costs (£m) 2.3 2.0 1.9

Water protection

The Department of the Environment respond to around 100 water pollution incidents a year. Oil incidents make up about a third of the incidents, although other types of pollution include sewage, chemical, construction, agricultural and contaminated land. The States of Jersey is responsible for a proportion of these incidents each year. The Department of the Environment runs ongoing pollution prevention campaigns and public engagement activities to raise awareness and to reduce incidents.

As part of the EAS programme, all departments have a pollution prevention plan in place to raise awareness and ensure potential environmental risks from building or sites are identified. All buildings with oil storage on site are provided with an oil spill kit, which enables a trained person to respond effectively to an oil spill.

Water pollution incidents 2015 2016 2017

Paper

In 2015 the Corporate Management Board endorsed a policy of using recycled white A4 paper where possible. In 2017, while the total amount of recycled paper purchased increased, the percentage of total paper purchased on contract fell from 60% to 59%. This is due to more departments being brought into the corporate contract and improved reporting.

The States of Jersey has a managed office print service, which provide printing configuration controls, such as pull printing where users have to manually recall their printing from machines, rather than have it printed automatically, as well as default double-sided mono printing. This provides more control and visibility over printing jobs and the number of pages actually printed.

Finite Resource

Consumption  2015 2016 2017

- Paper

Waste

Jersey's Solid Waste Strategy (2005) provides a set of waste reduction and recycling targets for the island and follows the internationally- recognised waste hierarchy, which prioritises waste prevention and minimisation ahead of reuse, which is prioritised above recycling.

A review of the Solid Waste Strategy has taken place, but the development of a new strategy has been delayed due to wider changes being considered to improve the future management of the island's waste, such as the introduction of commercial waste charges.

In the absence of an updated strategy, the Department for Infrastructure has continued to follow the waste hierarchy, by prioritising alternative waste management options for those materials that are unacceptable for energy recovery and focusing on reducing the environmental impact of Jersey's waste through waste reduction, reuse and recycling strategies.

The Department continues to work closely with the eco active programme across the States of Jersey to raise staff awareness and support departments to reduce, reuse and recycle. A core message, which remains a priority, is the importance of separating materials that should not be thrown away with general waste, such as glass, batteries, metals and electrical items.

Climate change adaptation and mitigation

Pathway 2050: Energy Plan for Jersey outlines how Jersey can mitigate some of the impacts of climate change, and meet the 80% emissions reduction requirement by working towards a low-carbon future.

The States of Jersey published Turning Point in 2009, explaining both the science and possible impacts of climate change for Jersey.

In 2017, a baseline report on sea level rise was completed by the National Oceanography Centre. The report will be used to develop a shoreline climate resilience management plan in 2018. This will identify areas at risk from coastal and pluvial flooding and set out a series of options and action plans.

Jersey's greenhouse gas emissions are published online and are updated annually. The infographic uses the data submitted to compile the UK greenhouse gas inventory which is a requirement of the Kyoto Protocol.

Biodiversity and the natural environment

The Biodiversity strategy was produced in 2008, and identifies habitats and species to be protected. Jersey is a signatory to a number of multilateral environmental agreements on biodiversity, which are implemented through local legislation, policies and education and awareness-raising programmes. The Department of the Environment's natural environment team is responsible for implementing these agreements.

The biodiversity strategy has established the Jersey Biodiversity Partnership and a network of species and habitat Champions. Full details of the Biodiversity Strategy and international commitments are available on www.gov.je.

In addition to reducing water use, the EAS programme has a priority action to ensure that pollutants do not enter the water course. This includes a requirement for a pollution prevention plan to be produced for all buildings, in order to reduce the risk of pollution occurring and any breaches in the Water Resources (Jersey) Law.

Sustainable procurement

The States of Jersey is committed to the principles of sustainable procurement. The EAS commitment requires all departments to ensure that sustainability is considered as part of the procurement process.

Some examples are included below:

• Supplier questionnaire and pre-qualification questionnaires used by Corporate Procurement include a section seeking detail of suppliers' environmental or sustainability policies and consideration of these forms part of evaluation process where appropriate

• Jersey Property Holdings' tender and maintenance contracts require suppliers to have environmental management systems in place

• Department for Infrastructure's cleaning contracts require suppliers to have environmental management systems in place.

Data Sources

The sustainability report, which has not been audited, uses the following data sources: Electricity Usage – based on information provided by the Jersey Electricity Company

Heating Oil Usage – based on information provided by Corporate Procurement and relates to the total deliveries received, rather than use

Vehicle Fuel Usage – based on information provided by Jersey Fleet Management (JFM) on fuel purchases for lease cars made through JFM

Business Miles – Air – based on information provided by the States corporate travel management provider

Gas Usage – based on information provided by Jersey Gas

Water Usage – based on information provided by the Jersey New Water Works Company Paper Usage – based on information provided by the States corporate supplier for stationery

Fairtrade supplies – based on information provided by the states corporate supplier for consumables

Relevant amounts have been converted into emissions information using standard conversion factors provided by the Department of the Environment in line with building by-laws. These are based on a three-year rolling average and are updated each year. This means that the factors change slightly from year to year, depending on the amount of on-island electricity generation that has taken place as a proportion of total electricity demand. The CO2 equivalent figures for all fuels include the global warming impact of CH4 and N2O as well as CO2.

Emission factors for business air miles – are based on UK government emission reporting factors.*

Richard Bell

Treasurer of the States Date: 30th May 2018

2

Accountability report

2.1

Corporate Governance Report

The Corporate Governance Report explains the composition and organisation of the States of Jersey  and our governance structures and  how they support the achievement  

of the States' objectives. It includes the Management's Report, the Statement of Accounting Officer's Responsibilities and the Governance Statement which includes descriptions of significant governance issues and key risks facing the organisation.

116 States of JerseyAccountability report

The Management's Report

Ministers and Accounting Officers

Details of individuals who served as Ministers and Accounting Officers are set out in the Governance Statement with disclosures in respect of remuneration included in the Remuneration and Staff Report.

Directorships and Significant Interests

Under the Standing Orders of the States of Jersey, details of directorships and other significant interests held by Ministers (and all States Members) are set out in the Register of Interests held by the Greffier of the States and are available on the respective Members' pages on the States Assembly website.

The Register of Interests is used to identify parties related to the States of Jersey through senior management for the purpose of preparing disclosure of related party transactions in the States of Jersey Annual Report and Accounts.

In accordance with Financial Direction 10.2 Register of Interests and Related Parties', the States maintains a register of interests which records details of directorships and other significant interests held by Accounting Officers. For this section, Management are defined as Accounting Officers, with the exception of the Comptroller and Auditor General and Accounting Officers of minor departments as approved by the Minister for Treasury and Resources.

Details of Related Party Transactions, including those arising as a result of the interests of Ministers and Accounting Officers, are listed at Note 38 – Related Party Transactions.

Statement of responsibilities

The Treasurer of the States is required by the Public Finances (Jersey) Law 2005

to prepare the annual accounts and financial statements of the States of Jersey. The annual financial statements must be prepared in accordance with Generally Accepted Accounting Principles, and accounting standards prescribed by the Treasurer of the States with the approval of the Minister for Treasury and Resources. Under the Social Security (Jersey) Law 1974, Health Insurance (Jersey) Law 1967 and Long-Term Care (Jersey) Law 2012, accounts of the relevant funds are to be prepared in such form, manner and at such times as the Minister for Social Security may determine. The Minister considers the consolidation of the funds into the States of Jersey Accounts sufficient for statutory reporting requirements, and so for 2017 will prepare an Annual Performance Report for the funds that reports upon their performance with reference to the relevant statements in these accounts, rather than a separate set of accounts.

Under the Public Finances (Jersey) Law 2005, Accounting Officers are responsible for ensuring that the body for which they are responsible keeps proper accounts of all its financial transactions and proper records of those accounts, and that the records of the body are promptly provided when required by the Treasurer for the production of the annual financial statements. The statutory responsibilities of Accounting Officers are set out in full in the Governance Statement.

In preparing the accounts, detailed in the following pages, the Treasurer has:

• applied the going-concern principle to all entities included within the accounts;

• applied appropriate accounting policies in a consistent manner; and

• made reasonable and prudent judgements and estimates

The Treasurer confirms that, so far as he is aware, there is no relevant audit information of which the States' auditors are unaware; and he has taken all steps that he ought to have taken as Treasurer to make himself aware of any relevant audit information and to establish that the States' auditors are aware of that information.

Richard Bell

Treasurer of the States Date: 30th May 2018

Governance Statement

Scope of Responsibility

Details of individuals who served as Ministers and Accounting Officers are set out in the Governance Statement with disclosures in respect of remuneration included in the Remuneration and Staff Report.

Under the Public Finances (Jersey) Law 2005 (hereafter referred to as the Law'), an Accounting Officer has been designated for all States-funded bodies. The Accounting Officer usually holds the post of Chief Officer of a department. The Law permits the appointment of an additional Accounting Officer for a States-funded body, a fund, a special fund, any States income and money derived from taxation or any money forming part of States assets.

Each Accounting Officer is personally accountable for the proper financial management of the resources under their control in accordance with the Law, any sub-ordinate legislation and financial directions. Accounting Officers must ensure that public money is safeguarded and properly accounted for, and used only for those purposes approved by the States and economically, efficiently and effectively.

The same financial responsibility extends to the financial resources of the special funds for which an Accounting Officer is also responsible.

In discharging their financial responsibilities, Accounting Officers must ensure that robust governance arrangements are in place, which include a sound system of internal control and arrangements for the management of risk.

Each Accounting Officer has formally declared in a Governance Statement the basis upon which they believe their duties have been properly discharged during 2017 for their area(s) of responsibility or any exceptions in the year.

The States of Jersey Governance Statement summarises the high-level arrangements, and considers controls, risks and mitigation measures from a States- wide perspective.

The Purpose of the Governance Framework

The Governance Framework comprises the systems, policies and procedures through which the States of Jersey as a whole organisation is directed and controlled. Furthermore, the Governance Framework includes routes through which the organisation engages with and is accountable to the Island's citizens. This framework enables the organisation to monitor the delivery of its strategic objectives and reflect on whether services have been provided in a cost-effective way.

The system of internal control is a significant part of that Framework and is designed to manage risk to a reasonable level. The system is intended to support the achievement of departmental and strategic objectives; it cannot eliminate all risk

of failure and therefore only provides a reasonable and not absolute assurance of effectiveness.

The Governance Structure

Ministerial Government

The States Assembly

Executive Privileges and  Scrutiny Procedures Committee

Council of Ministers Comité des Connétable s ScruCtinoymCmhiattiermeen's

Individual Ministers PlanningPAanpepllications  PuCbloicmAmcicttoeuents 10 States Departments Overseas Aid Commission Five Scrutiny Panels

Key elements of the States of Jersey Governance Framework

POLITICAL/LEGISLATIVE

Council of Ministers  Decision making Scrutiny and review (COM) • Consider the Propositions  • Scrutiny panels review

• Provide leadership, develop  of the CoM and other  Council of Ministers policy and set strategic priorities Members and can challenge decisions

• Support Jersey's community  • All States sittings are  • Audit Committee reviews to thrive and succeed held in public governance, value for

• Decisions are recorded in  money and delivery of Hansard and on the website agreed plans

ADMINISTRATIVE

Corporate Management Board (CMB) Risk management

• The Chief Executive and Chief Officers collectively  • Risk registers identify both form the CMB operational and strategic

• Provides advice to the Council of Ministers on all  risks

strategic matters. • Key risks are considered

• Provide a forum for discussion of all significant  by CMB every quarter corporate, cross cutting or departmental policies. and presented to the Audit Committee

Organisational Change

The new Chief Executive, Charlie Parker, joined the States of Jersey on 8 January 2018. Before he started, in November 2017, he met 120 senior leaders of the organisation to set out his vision and priorities. At that meeting he talked about his plans to develop a single public service: one government, with all parts working together, to serve the needs of all Islanders.

The Chief Executive explained that he intended to review the current operations, policies and programmes for delivering public services; to understand what

was working well, what needed to improve; and to recommend and implement the necessary changes. That work started with a transition team who were commissioned in October 2017.

In March 2018, the Chief Executive then announced proposals for a comprehensive restructuring and modernising of the States' public services, reiterating his ambition to create one government service, which is focused on the needs of customers, with clear accountability for both decision- making and performance, with modern services and a right-first-time culture at its core.

Subject to consultation, the proposals also aim to reduce duplication, promote collaboration, increase productivity, and ensure better value for money for the taxpayer. As a result of the reorganisation, a number of functions will move between a reduced number of departments. Some new departments will be created and some departments will cease to exist in their current form.

The changes are to be delivered in a phased approach, with the movement of services and activities between departments and functions, and the creation of new and fewer departments out of the existing structure.

The proposals were previously approved by the States Employment Board, shared with the Council of Ministers and endorsed by the Chief Minister. When P.1/2018 was approved by the States on 20 March 2018, the foundations needed to create this new approach for the government were agreed.

The proposed new structure

ONE GOVERNMENT

States Treasurer Growth, Housing and  Strategic Policy,  

and Exchequer Island Environment Performance and Population

Chief Operating Office

Office of the Chief Executive – initially responsible for keeping oversight of two critical areas of activity: Brexit and trade, plus the impact of changes on financial services. It is also responsible for the effective coordination of the government's relations with Ministers, islanders, island stakeholders and international governments, financial regulators, partners and stakeholders.

Department for the States Treasurer and Exchequer – will ensure that the financial responsibilities of public servants are properly discharged and that public service administration finances are better managed. It will give greater emphasis to the strategic finances of the island, with a focus on the organisation's longer-term goals and improved value for money.

Department for Customer and Local Services – will put customers at the heart of the new government structure. It will be the front door to all of our frontline customer services, except health and education. At present, islanders have to deal with multiple teams in multiple departments in lots of different ways – face to face, by post, by phone and online – and in most cases they have to provide the same information to us each time.

This new department will establish a single, streamlined service for all those direct interactions that islanders have with government, from applying for income support to filing taxes. We'll also seek to integrate this front door approach with closer working arrangements with the parishes.

Department for Children, Young People, Education and Skills – will put the care, welfare, education and whole life chances of children and young people absolutely at its heart. The pace of reform, and the scale of cultural and service change we need to ensure that our children and young people are protected and enabled to flourish, is currently too slow.

This new department will be responsible for putting children first, completing the urgent Care Inquiry reforms and adopting worldwide best practice in the care of children and young people. It will also modernise and improve the standards of academic education and vocational skills in Jersey.

And it will strengthen the links between Jersey's businesses and our schools and colleges, so that our young people have better opportunities to build careers in the island, reducing our reliance on skilled migrants, and improved whole life chances.

Department for Health and Community Services – will be responsible for health matters from the cradle to the grave, and will coordinate the wide range of frontline health services, whether in the community or in hospital.

The department will retain most of the functions of the current Health and Social Services Department, but will place a greater emphasis on community care for vulnerable groups and stronger preventative services.

Department for Justice and Home Affairs – will integrate the elements of public protection that in bigger countries are too cumbersome to bring together. It will provide more effective and co-ordinated management of the services that keep islanders safe, including the bringing together of key blue light and emergency services, including Police, Fire and Rescue, Ambulance Service, Customs and Immigration, Field Squadron, Emergency Planning and Coastguard.

Department for Growth, Housing and Island Environment – will bring together all the elements we need to provide the right environment for economic growth and business competitiveness – from the smallest start-up to the largest multinational.

It will ensure that we continue to develop a sustainable island, with urban planning that enhances, rather than undermines, our natural and cultural heritage. It will enforce the many regulations – from consumer protection to biodiversity – that protect our quality of life in our unique island environment.

It will ensure that the environment and economy are not competing forces, but are complementary partners in developing our island's future, and it will also include a stronger focus on special infrastructure projects and partnership with our arm's length organisations

Department for Strategic Policy, Performance and Population – will bring together the long-term strategy and the policy and performance framework that underpins the effective functioning of government in delivering for our island. It will also help improve the oversight of Future Jersey.

Chief Operating Office – will bring together the many internal and back office services that support and enable the effective functioning of our public service, and will be a hub and spoke' operation. It will have centrally-provided and co-ordinated hub' services, partnered with the spoke' departments that include HR and IT activities.

It will also host a new Commercial Division, which will create a more rigorous approach to contract management, procurement and commercial negotiations for services on behalf of the States of Jersey.

The States Assembly

The States Assembly is the highest decision-making authority of the Island and makes decisions about new laws or major policy changes. The principal functions of the States Assembly are:

• To represent the people of Jersey

• To debate and decide issues of public importance

• To pass laws (which require the sanction of Her Majesty in Council) and regulations on all domestic matters

• To approve estimates of public expenditure (revenue and capital) and income

• To appoint a Council of Ministers (CoM) charged with responsibility for the different aspects of public business

• To appoint a Public Accounts Committee (PAC) and Scrutiny Panels to hold the Executive to account

• To determine policy on propositions presented by Ministers, Scrutiny Panels and other bodies or individual members, and executive matters such as compulsory purchases

• To consider petitions for the redress of grievances.

The constitution of the States, and all general provisions governing procedure, are set out in the States of Jersey Law 2005, and in the Standing Orders of the States of Jersey made under that law. The present composition of the States, as determined by the States of Jersey Law 2005, is shown below.

Only elected States Members have voting rights. Composition of the States

Ministerial Government

Jersey's government comprises the Chief Minister and ten Ministers, who, with the support of the Assistant Chief Ministers, collectively form the Council of Ministers.

The States Assembly elects the government by way of appointing the Chief Minister, and voting on the Chief Minister's nominations for Ministers.

In addition, Ministers, with the consent of the Chief Minister, may appoint their own Assistant Ministers, ensuring that the combined total of members appointed as Ministers and Assistant Ministers does not exceed 21, and therefore remains in the minority in the States Assembly.

The Assembly comprises 49 States Members with voting rights, including Senators who hold an Island-wide mandate, Deputies from individual parishes, and a Constable for each parish.

The Assembly also appoints Scrutiny Panels to scrutinise the work of the CoM, the PAC, and the Privileges and Procedures Committee to govern the functioning of the Assembly.

The Assembly's presiding officer is the Bailiff , and in his absence, the Deputy Bailiff , the Greffier of the States, the Deputy Greffier of the States or an elected Member chosen by the Bailiff may preside.

The Council of Ministers

From top left: Ian Gorst , Lyndon Farnham , Rod Bryans, Steve Luce , Sir Philip Bailhache , Kristina Moore , Andrew Green, Anne Pryke, Susie Pinel, Eddie Noel, Alan Maclean

Each Minister is legally and politically accountable for the discharge of their functions, which are outlined at the outset of each CoM.

The CoM is, in particular, responsible for producing Jersey's Strategic Plan, Medium Term Financial Plan, and a Common External Policy. The CoM meets approximately fortnightly and is bound by the Code of Conduct and Practice for Ministers and Assistant Ministers.

The exercising of ministerial functions is recorded either by way of a minute of the Council of Ministers, or by individual Ministerial Decisions (in accordance with the Guidelines for Recording Ministerial Decisions, which is appended to the Code of Conduct); or these powers are delegated to officers (in which case, that delegation is presented to the Assembly for information). This ensures a proper record of decisions taken.

The CoM is supported by the Chief Executive, who is the head of the public service, and the Chief Minister's Office, and each Minister is supported by a Ministerial Department, each of which has a Chief Officer.

In 2017, there were 10 Ministerial Departments. This means that in some cases, a number of Ministers are supported by a single Department, to enhance effectiveness and efficiency, including the coordination of ministerial functions.

In addition, there are a number of non-Ministerial Departments discharging functions in support of the Assembly and the Royal Court.

The 11 Ministers and 1 Assistant Minister who formed the Council of Ministers during 2017 are shown in Table 1.

Table 1

Responsibility Minister Appointment Date AttendanceMeeting

Chief Minister Senator Ian Gorst 14/11/2011 21/28 Assistant Chief Minister Senator Paul Routier 25/11/2011 20/28

Economic Development,

Tourism, Sport and Culture Senator Lyndon Farnham 06/11/2014 21/28

Education Deputy Rod Bryans 07/11/2014 21/28 Environment Deputy Steve Luce 07/11/2014 24/28 External Relations Senator Sir Philip Bailhache 06/11/2015 19/28 Home Affairs Deputy Kristina Moore 06/11/2014 25/28 Health and Social Services Senator Andrew Green 06/11/2014 25/28 Housing Deputy Anne Pryke 07/11/2014 25/28 Social Security Deputy Susie Pinel 07/11/2014 23/28 Department for Infrastructure Deputy Eddie Noel 06/11/2014 26/28 Treasury and Resources Senator Alan Maclean 06/11/2014 23/28

The Corporate Management Board

The Chief Officers of each Ministerial and non-Ministerial Department are also appointed as Accounting Officers, accountable for the efficiency and effectiveness of expenditure although, in some cases, a Department may have more than one Accounting Officer. In addition, each States Fund also has an Accounting Officer.

The Chief Executive and Chief Officers collectively form the CMB, which provides corporate leadership to deliver services efficiently and effectively as directed by the CoM, and in line with the polices and strategies of the CoM.

In 2013, the principal Law was amended to extend the Accounting Officer role by empowering the Minister for Treasury and Resources to appoint an Accounting Officer who will be personally accountable for the proper financial management for all non-departmental States Income and Special Funds.

The role of CMB is to provide corporate leadership in order to deliver policies and services efficiently and effectively as decided by the States, the CoM and Ministers. The CMB meets fortnightly.

To replace the CMB, a Corporate Strategy Board (CSB) was formed in early 2018 with the arrival of the new Chief Executive. An Executive Management Team was

also formed.

The CSB is a senior leadership team of the States of Jersey's public service.

It exists to deliver modern, efficient, customer-focused public services that work together as one government, supporting the policy objectives of the Council of Ministers.

CSB provides quality assurance to the Council of Ministers, in respect of the operational elements and ensuring the viability of all proposals. It reviews all items under consideration by the Council of Ministers and assumes responsibilities for supporting the forward planning of the work of the Council.

CSB is chaired by the Chief Executive and its membership includes:

• the Chief Operating Officer (COO)

• the Treasurer of the States

• Chief Officers of the following Departments: Social Security, Health and Social Services, Education, Community and Constitutional Affairs, Infrastructure, Environment, Jersey Police and Financial Services, Digital and Enterprise

• Heads of Service for External Relations and Economic Development, Tourism, Sport and Culture

• Director of Communications

• Greffier of the States of Jersey

• Senior Representative of the Law Officers' Department.

The Executive Management Team (EMT) is a senior leadership team of the States of Jersey's public service.

It exists to deliver modern, efficient, customer-focused public services that work together as one government, supporting the policy objectives of the Council of Ministers.

EMT is focused on the operation of an efficient and effective public service, in particular, managing operational risk, resource planning, programme delivery, budgets and performance.

EMT is chaired by the Chief Executive and its membership includes:

• the Chief Operating Officer

• the Treasurer of the States

• Chief Officers of the following Departments: Social Security, Health and Social Services, Education, Community and Constitutional Affairs, Infrastructure and Environment

• the Head of Service of Economic Development, Tourism, Sport and Culture

• the Director of Communications.

Accounting Officers

The following individuals held the post of Accounting Officer for all or part of 2017:

States Body/Fund Position Accounting Officer  Appointment Date CMB Meeting Attendance Ministerial Departments

Chief Minister's Department Chief Executive John Richardson 18/05/2011 to  15/16 (includes Legislation Advisory  02/11/2017

Board, Human Resources  Head of the Public  Richard Bell 03/11/2017 14/17 and Information Services) Service Charlie Parker 08/01/2018

Chief Officer John Richardson 01/10/2016 to  15/17 Chief Minister's Department

02/04/2017

(Financial Services,  Chief Officer

Digital & Enterprise)  Financial Services Richard Corrigan 03/04/2017 14/17 Chief Officer John Richardson 01/01/2017 to  15/16

05/02/2017

Economic Development,

Interim Accounting  Ian Burns 06/02/2017 to  17/17 Tourism, Sport & Culture

Officer 06/07/2017

Head of Service Daniel Houseago 07/07/2017 3/7 Department for Education Chief Officer Justin Donovan 01/09/2014 14/17

Department of the

Chief Officer Andrew Scate 26/08/2008 12/17 Environment

Head of Service

External Relations Kate Hall s-Nutt 13/05/2016 10/17

External Relations

Health and Social Services  Chief Officer Julie Garbutt 01/06/2010 13/17 Department for Community

and Constitutional Affairs Chief Officer Tom Walker 01/05/2015 14/17 (excluding States of Jersey Police)

Michael Bowron 01/01/2012 to  8/11

05/07/2017

States of Jersey Police Chief Officer

Julian Blazeby 06/07/2017 3/7 Social Security Chief Officer Ian Burns 01/04/2015 17/17 Department for Infrastructure

Chief Officer John Rogers 17/04/2009 15/17 (including Property Holdings)

Treasury and Resources  Treasurer of the

Richard Bell 15/01/2015 14/17 Department States

Accounting  Appointment States Body/Fund Position Officer Date

Non-Ministerial Departments

02/10/2006 to Bailiff 's Chambers  Chief Officer David Filipponi 23/04/2017

Steven Cartwright 24/04/2017 Practice Manager and Director

Law Officers' Department Alec le Sueur  01/12/2014

of Administration

Judicial Greffe Judicial Greffier Paul Mathews 01/05/2015 Viscount's Department  Viscount Elaine Millar 01/05/2015 Official Analyst Official Analyst Nick Hubbard 01/01/2006 Office of the Lieutenant Governor Secretary and Aide de Camp Justin Oldridge 17/10/2014 Data Protection Commission Data Protection Commissioner Emma Martins 01/01/2006 Probation and After-care Services Chief Probation Officer Brian Heath  01/01/2006

States Assembly

(including States Greffe, Scrutiny panels  Greffier of the States Dr Mark Egan 19/12/2015 and Public Accounts Committee)

Trading Operations

Jersey Car Parking Chief Officer - TTS John Rogers 17/04/2009 Jersey Fleet Management Chief Officer - TTS John Rogers 17/04/2009

States Body/Fund Position Accounting  Appointment

Officer Date Special Funds

Strategic Reserve  Treasurer of the States Richard Bell 15/01/2015 Stabilisation Fund Treasurer of the States Richard Bell 15/01/2015 Jersey Currency Fund Treasurer of the States Richard Bell 15/01/2015 Insurance Fund Treasurer of the States Richard Bell 15/01/2015 Agricultural Loans Fund  Treasurer of the States Richard Bell 15/01/2015 Dwelling House Loan Fund  Treasurer of the States Richard Bell 15/01/2015

Assisted House

Treasurer of the States Richard Bell 15/01/2015 Purchase Scheme

Housing Development Fund Treasurer of the States Richard Bell 15/01/2015 99 Year Leaseholders Fund  Treasurer of the States Richard Bell 15/01/2015

Criminal Offences

Treasurer of the States Richard Bell 15/01/2015 Confiscation Fund

Civil Asset Recovery Fund  Treasurer of the States Richard Bell 15/01/2015 Social Security

Treasurer of the States Richard Bell 15/01/2015 (Reserve) Fund

States Body/Fund Position Accounting  Appointment

Officer Date Special Funds

Social Security Fund Chief Officer - SSD Ian Burns 11/08/2014 Health Insurance Fund  Chief Officer - SSD Ian Burns 11/08/2014 Long Term Care Fund Chief Officer - SSD Ian Burns 11/08/2014

John Richardson 01/01/2017 to Chief Officer - EDTSC

05/02/2017

Tourism Development Fund  Interim Accounting Officer  Ian Burns 06/02/2017 to

- EDTSC 06/07/2017

Head of Service - EDTSC Daniel Houseago 07/07/2017 Chief Officer - EDTSC John Richardson 01/01/2017 to

05/02/2017 Channel Islands Lottery

Interim Accounting Officer  Ian Burns 06/02/2017 to (Jersey) Fund

- EDTSC 06/07/2017

Head of Service - EDTSC Daniel Houseago 07/07/2017 John Richardson 17/11/2016 to

Jersey Innovation Fund Chief Executive –  02/04/2017 Financial Services

Richard Corrigan 03/04/2017

Notes

1. In accordance with the Public Finances (Jersey) Law 2005, the Jersey Overseas Aid Commission dis not have an Accounting Officer. Subject to Privy Council approval, the Machinery of Government Law approved by the States in March 2018 enables the Chief Executive to designate Accountable Officers for arms length bodies.
2. Karen McConnell was re-appointed as Comptroller and Auditor General with effect from 1st May 2015 and until 31st December 2019 (P.99/2014). The C&AG is accountable for the budget and spending decisions of the Jersey Audit Office.

Standards of Conduct

Legal Framework

The following laws deal with the procedures for government, public finances, and the employment of States employees. They collectively and substantially govern the operation of the States of Jersey.

The States of Jersey Law 2005, and underlying Standing Orders, set out the constitution, composition, powers and procedures of the States Assembly and its Committees and Panels, and of the CoM. The purpose of the Law, noting this,

is to recognise Jersey's autonomous capacity in domestic affairs, the increasing need for Jersey to participate in international affairs, and the need to enhance and promote democratic, accountable and responsible government which implements fair, effective and efficient policies in accordance with international principles. The Law also includes the requirement to issue codes of conduct for States Members, Ministers, and Panels and Committees.

The Public Finances (Jersey) Law 2005 provides for the administration of public finances, including financial planning and budgeting, establishing the medium term financial plans and budgets, taxation plans, trading operations, the creation of funds, administration, including the duties of the Treasurer and Chief Internal Auditor, and of employees, and the establishment of a Fiscal Policy Panel.

The Employment of States of Jersey Employees (Jersey) Law, 2005, sets out matters relating to the employment of States employees, including the establishment of the States of Jersey Employment Board as the employer, its powers, including as to employment policies, terms and conditions, recruitment procedures, and generally, to ensure the efficiency and effectiveness of the public service and the health,

safety and well-being of States' employees. It also establishes the Appointments Commission to oversee the appointment of persons to significant public positions and to determine appointment procedures, and the position of Chief Executive of the States of Jersey.

Financial Directions

Financial directions help ensure the proper stewardship and administration of the Law and of the public finances of Jersey. Accounting Officers are required to comply with the financial directions and other key controls, including departmental risk management measures, and resource management policies issued by Corporate

Human Resources and, where appropriate, the Information Services Department.

Following recommendations from the PAC, C&AG and Internal Audit, a review of

the existing financial directions is being carried out and a collaborative approach

has been taken to rewriting the financial directions together with an overarching framework. The Chief Internal Auditor has been consulted on the preparation of all financial directions and regular meetings continue to ensure that relevant points

or matters arising from Internal Audit reviews are addressed. In addition, the Audit Committee are consulted in respect of issuing any new financial directions. A number of new financial directions are currently in draft form and will be issued during 2018.

Codes of Conduct

The Code of Conduct for States of Jersey employees also exists to provide guidance as to how employees should behave in their day-to-day work. Specifically, there

is a code of conduct for Accounting Officers to provide policy in respect of their leadership roles.

Gifts and Hospitality Register

All departments are required to maintain a Gifts and Hospitality Register in which entries are made of gifts and hospitality received by departmental officers that have been approved in line with the Department's Scheme of Delegation. The Registers are subject to review by Internal Audit.

Internal Audit Service

The conduct of work by Internal Audit is governed by the Public Sector Internal Audit Standards (PSIAS) issued by HM Treasury in the UK. The PSIAS provide guidance and a benchmark against which the quality of Internal Audit in the UK public sector is assessed. The PSIAS are based on the mandatory elements of the Institute of Internal Auditors (IIA) and International Professional Practices Framework (IPPF). The Internal Audit function has procedures and processes in place to ensure compliance with PSIAS and an independent review of compliance will be undertaken in 2019.

Scrutiny and Risk Management

The Audit Committee

The Audit Committee is an independent, standalone body that provides oversight, advice, support and constructive challenge in order to help Accounting Officers to discharge their responsibilities for monitoring and reviewing governance, risk and control processes within their individual area(s) of responsibility. The Audit Committee also provides independent oversight of the Internal Audit function.

For 2017, membership of the Audit Committee comprised an independent Chairman, and at least 3 other independent members. A minimum of two independent members need to be present for a meeting to be deemed quorate.

The membership of the Committee throughout 2017 comprised:

Name Position Appointment Date AttendanceMeeting

Chairman

Alex Ohlsson Independent Member 17/03/2009 7/7 Daragh McDermott Independent Member 28/11/2011 5/7 Steven Austin-Vautier Independent Member 14/12/2015 4/7 Ian Wright Independent Member 14/12/2015 7/7

In accordance with the Audit Committee terms of reference, members are initially appointed for a period of four years and may be re- appointed for a further four years. The Chairman extended his second term of membership and retired on 5 January 2018.

The Chief Executive, the Treasurer of the States and the Chief Internal Auditor are required to attend each meeting. External audit and the Comptroller and Auditor General are given an open invitation to attend each meeting.

The cycle of the work programme of the Audit Committee is timed so that the last Committee meeting of the year corresponds with the signing of the States of Jersey Annual Report and Accounts and the issue of an opinion by the external auditors in May. The Committee prepares an annual report to 30 June each year.

The Audit Committee met seven times in 2017 and Committee activity addressed the key roles above. Specific agenda items included:

• the States of Jersey Financial Report and Accounts 2016 and the external audit plan

• the outcome of internal audits and review of their charter

• internal financial controls

• corporate risk management framework

• regularity report to be included in 2017 financial statements

• grant -making and significant capital projects

• e-government and public sector reform

• IT strategy and developments

• risk management.

Internal Audit

The Internal Audit function provides an independent, objective assurance and advisory service to assist management in improving the organisation's business performance and to give assurance to the CMB that the States of Jersey's financial and operational controls designed to manage the organisation's risks and achieve the organisation's objectives are operating in an efficient, effective and ethical manner.

The Internal Audit function is led by the Chief Internal Auditor as required in the Public Finances (Jersey) Law 2005.

Internal Audit reviews both key financial and non-financial policies and operations. To determine the scope and extent of Internal Audit's work, the Chief Internal Auditor uses a risk-based methodology to draw up an Internal Audit Plan.

The 2018 Internal Audit Plan was presented to the Audit Committee in October 2017 for scrutiny prior to approval by the Treasurer and CEO. Internal Audit presents

a quarterly report to the Audit Committee, the Treasurer and the Chief Executive setting out progress made in completing the Internal Audit Plan, and key control issues arising from Internal Audit work.

Review of Effectiveness

Internal Audit provides assurance based on a risk-based audit plan. It is the responsibility of Accounting Officers to maintain adequate systems and controls and comply with the relevant legislation, financial directions and policies. Management is responsible for implementing Internal Audit recommendations within agreed timescales and in a number of departments this is achieved by senior management teams monitoring and considering outstanding recommendations routinely at their meetings. Accounting Officers have been asked to confirm any outstanding Internal Audit recommendations in their 2017 Governance Statement.

Scrutiny

The Scrutiny function is an integral part of the States system and ensures democratic accountability and rigorous questioning of proposals at an early stage. Scrutiny works to ensure that the decisions taken are the best of the possible options.

Scrutiny is made up of the following elements:

• The Chairmen's Committee – co-ordinates Scrutiny and ensures that it is effective and well run. It maintains regular contact with the CoM and acts as the link between Scrutiny and the Executive. The Committee is formed by the Chairmen of the Scrutiny Panels and the PAC Chairman.

• The Public Accounts Committee – reviews all public expenditure. The role of PAC is to consider reports prepared by the C&AG, to assess whether public funds have been applied for the purposes intended by the States and to assess whether extravagance and waste are being eradicated and sound financial practices applied throughout the administration of the States. PAC liaise with the C&AG in order to do so. Membership includes non- States Members.

• Five Scrutiny Panels – are able to scrutinise new laws, existing and proposed new policies, international agreements that might be extended to Jersey and the MTFP and Budget. Each Scrutiny Panel is free to choose which issues it works on and may also accept suggestions from the public.

• Four Specific Scrutiny Review Panels – set up with their own terms of reference to focus on particular issues.

The remits of the five Scrutiny panels and four Scrutiny review panels are shown in Table 2.

The PAC and the five Scrutiny panels have extensive powers to require witnesses to give evidence or to supply relevant documents. These powers ensure that Scrutiny can operate effectively.

Review of Effectiveness

Scrutiny reports acknowledge good practice and, where necessary, recommend change and improvement to services or government policies. Information on Scrutiny panels and committees including transcripts and reviews can be found via the States Assembly webpage or directly on the Scrutiny webpage.

Table 2 - Remit of the Scrutiny Panels

Panel Remit

Corporate services, Corporate policies, external Corporate Services relations and Jersey Property Holdings

Environment, Housing and Infrastructure Environment, housing, transport and infrastructure Economic Affairs Financial services, economic afdevelopment fairs and economic

Education including the Youth Service, and Home Education and Home Affairs Affairs which includes Fire and Police services,

Customs and Immigration and Registrar

Health, Social Security Health and Social Services, Social Security Policies, legislation and actions of the CoM

Care of Children in Jersey Review Panel following the recommendations of the Independent Jersey Care Inquiry

Brexit Review Panel Jersey's policy towards Brexit

Domestic Property Transactions Review Panel Process of domestic property transactions in Jersey Future Hospital Review Panel Future Hospital project

The Comptroller and Auditor General (C&AG)

- Jersey Audit Office

The Office of the C&AG is responsible for public audit in Jersey.

The Comptroller and Auditor General (Jersey) Law 2014 requires the C&AG to provide the States with independent assurance that the public finances of Jersey are being regulated, controlled, supervised and accounted for in accordance with the Law.

The responsibilities of the C&AG, fulfilled through the Jersey Audit Office (JAO), relate to the Accounts of the States of Jersey (on which an opinion is given) and wider aspects on the use of public funds. The C&AG has a duty to consider and report on:

• general corporate governance arrangements

• economy, efficiency and effectiveness in the way resources are used i.e. value for money

• effectiveness of internal controls.

Under the leadership of the C&AG, the JAO team provide specialist knowledge and experience where required. The team's programme is formalised in an Audit Plan, which provides both an annual audit timetable as well as an indicative audit plan for the next three years.

The JAO follows a Code of Audit Practice'. The Code is an important means by which stakeholders can secure a common understanding of what the C&AG and audit firms appointed by the C&AG will do, what they will not do, how they will operate and how they will interact.

External Auditor

The financial statements for the States of Jersey are audited by Price waterhouseCoopers LLP, who are appointed by the C&AG under the Law. The report of the auditor on the accounts is included with the accounts.

The external auditors provide an opinion which states whether the accounts give

a true and fair view, in accordance with the Public Finances (Jersey) Law 2005, of the state of the States of Jersey's affairs as at 31 December 2017, and whether the accounts have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, as interpreted for the States of Jersey by the Jersey Financial Reporting Manual. The external auditors will also provide an opinion on the regularity of the transactions of the core States of

Jersey entities in the 2017 financial statements for the first time.

They also make recommendations for improvement based on their annual audit

of the States of Jersey Annual Report and Accounts. The agreed actions are then reported in a communication to the Minister for Treasury and Resources. Progress against implementation is monitored and routinely reported to the Audit Committee. Any outstanding recommendations are picked up by the external auditors as part of the audit for the following year.

Accounting Officers

All Accounting Officers have confirmed in their Governance Statements that, to the best of their knowledge, governance arrangements operated adequately in their area(s) of responsibility during 2017 and/or steps are being taken to address known areas of weakness. In addition, the review of effectiveness is informed by the work of Internal Audit, Scrutiny, the C&AG, the PAC and External Audit.

Management of risk

During 2017 the CMB Risk Sub-Group supported the CMB in their responsibilities for monitoring and reviewing risk management, processes and good governance within the States funded bodies and advised on the adequacy and effectiveness of risk management arrangements. The Sub- Group members included the Chief of Police, the Chief Fire Officer, the Treasurer (or delegate), the Deputy Chief of Police, the States of Jersey Enterprise Risk Manager (or alternate); in addition the Chief Internal Auditor attends all meetings. Other parties are invited to attend as and when required.

Corporate Governance and Risk Framework

The States of Jersey is in the process of developing and implementing a comprehensive, unified Corporate Governance and Risk Framework which will support risk management activities.

The overall approach to corporate governance is based on the separation of functions. The structure will be appropriate to the States but typically will provide for three levels of governance with respect to risk – known as the Three Lines of Defence:

• first line - senior management (i.e. the Chief Executive, CSB (previously CMB) and EMT) is responsible for governance within the organisation

• second line - specialist risk management and governance functions such as business continuity, human resources, finance, health and safety, information security, insurance and information and records management are responsible for risk management and governance activities

• third line - assurance on adequate compliance is provided by internal audit, external audit, the C&AG, Scrutiny and the PAC.

The risk management framework has two separate considerations:

• be supportive of the risk management process

• to ensure that the outputs from the process are communicated into the organisation and achieve the anticipated benefits for the States of Jersey.

Further to a review of the C&AG, a new Risk Management Strategy is being developed which will aim to embed a culture of active risk management from the setting of strategic objectives through to departmental processes.

Business Continuity Management continues to be rolled out across the organisation and is supported cross-departmentally by the Departmental Risk Management Group.

Assurance Framework

The CMB needs to be confident that its governance arrangements are operating effectively. The CMB has to know that it will identify, manage and minimise the risks inherent in the provision of public services and that it will be able to achieve its strategic objectives.

The Chief Internal Auditor meets with departments to assess risk on a regular basis which feeds into the risk-based audit plan which is approved by the States of Jersey Audit Committee.

The assurance framework is endorsed by the Audit Committee. This assurance framework provides the organisation with a comprehensive method for effectively managing the principal risks to meeting its objectives.

Emergency planning

The Emergencies Council, chaired by the Chief Minister, is the responsible body under the Emergency Powers and Planning (Jersey) Law 1990 for emergency planning in Jersey. The Emergencies Council is supported at a strategic level by the Emergency Planning Board, chaired by the Chief Executive, who leads a programme of improvements to emergency planning, training and exercising of plans.

A Community Risk Register has been developed to provide an overview of the potential risks in Jersey which could result in a major incident. This is used to prioritise plans and training to prevent, reduce, control, mitigate and take other actions in the event of an emergency.

The Emergency Planning Board and Emergencies Council are supported by the Chief Fire Officer, who is the designated Emergency Planning Officer, and an Assistant Emergency Planning Officer who are responsible for developing and implementing emergency plans, policies and training to ensure the Island is well placed to respond to major emergencies or crises.