Medium Term Financial Plan 2013 – 2015 (P.69/2012): ninth amendment.

STATES OF JERSEY

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MEDIUM TERM FINANCIAL PLAN 2013 – 2015 (P.69/2012):

NINTH AMENDMENT

Lodged au Greffe on 23rd October 2012 by the Corporate Services Scrutiny Panel

STATES GREFFE

2012   Price code: A  P.69 Amd.(9)

MEDIUM TERM FINANCIAL PLAN 2013 – 2015 (P.69/2012): NINTH AMENDMENT

1  PAGE 2, PARAGRAPH (c)(i) –

After the words "Summary Table B" insert the words –

"except  that  for  the  financial  years  2014  and  2015  the  net  revenue expenditure of the States funded bodies listed in the table below shall be decreased by the amounts shown.

".

2  PAGE 2, PARAGRAPH (c) –

After sub-paragraph (c)(iii) insert a new sub-paragraph (c)(iv) as follows –

"(iv)  the amounts of £5,690,000 and £7,730,000 that, in the budgets for

2014  and  2015  respectively,  may  be  appropriated  to  growth expenditure.".

3  PAGE 3, PARAGRAPH (f) –

After paragraph (f) insert a new paragraph (g) as follows –

"(g)  to request the Minister for Treasury and Resources to develop a

defined performance-monitoring and reporting framework which produces a high level of transparency on the tracking of actual performance against the Medium Term Financial Plan and to report to  the  Assembly  on  the  development  of  such  a  framework  by July 2013.".

CORPORATE SERVICES SCRUTINY PANEL

REPORT

The Scrutiny Report, Review of the Medium Term Financial Plan (S.R.18/2012) was presented to the States on 22nd October 2012 on behalf of the Corporate Services (MTFP)  Sub-Panel.  We  would  invite  Members  to  refer  to  that  report  for  a  full understanding of why these amendments have been lodged. A brief description of the rationale underlying each one is set out below.

AMENDMENTS 1 and 2:

The MTFP Sub-Panel found that expenditure proposals within the draft MTFP rely too heavily upon income and economic forecasts and that consequently there may be little room for flexibility if intended income is not realized. The Sub-Panel also found that the draft MTFP does not include a specific allocation for growth as envisaged by the Public  Finances  (Jersey)  Law  2005  (and  contrary  to  the  advice  provided  to  the Assembly  when  it  agreed  to  amend  the  Law  to  establish  the  MTFP).  The  first amendment seeks to address both findings.

The Sub-Panel has considered the section of the draft MTFP relating to new bids for growth'. It has identified schemes for which the Council of Ministers has proposed growth funding but for which the funding is not to be provided until 2014. The Sub- Panel is proposing that the funding for those schemes be removed from the relevant Departments' net expenditure limits and that, instead, growth allocations for 2014 and 2015 be created. This would allow the Assembly opportunities at the time of the 2014 and 2015 Annual Budgets to consider how those growth allocations should be used (if at all). The schemes identified in the draft MTFP which could be affected by this amendment are as follows –

Page - 3

P.69/2012 Amd.(9)

Removal of these amounts from the relevant Departments' expenditure limits would therefore create growth allocations of £5.69 million for 2014 and £7.73 million for 2015.  The  ability  of  the  Assembly  (and  individual  Members)  to  influence  the allocation of funding  would, therefore, to an extent be restored, and a degree of flexibility would be incorporated within the MTFP for later years of the plan.

AMENDMENT 3:

On the basis of the advice received from CIPFA (one of its expert advisors), the Sub-Panel has found that an appropriate reporting and monitoring mechanism must be established for the MTFP. This mechanism is required to ensure not only the sound management of States finances but also the delivery of decisions made by the States Assembly. For example, a sound reporting system would reassure the Assembly that growth funding provided for a particular service was indeed used for that service and not (as has sometimes happened in the past) diverted for use on a different matter. We understand, for instance, that the Minister for Treasury and Resources could undertake to present a report twice-yearly to the States detailing progress on each item of growth approved in the MTFP. For each item this could include –

• The amount approved in the MTFP;
• The amount spent to date;
• The amount to be returned to the Consolidated Fund as not needed (if any);
• Brief details of how the money was spent;
• Outcomes anticipated from the expenditure; and
• Actual outcomes achieved.

The  Sub-Panel  has  therefore  recommended  that  the  Minister  for  Treasury  and Resources develop an appropriate monitoring and reporting mechanism. Approval of this amendment would provide a clear steer to the Minister that this was indeed an expectation of the Assembly.

Financial and manpower implications

The financial implications of Amendments 1 and 2 are self-evident from their content and the report above, although it is worth noting that their adoption would not increase overall States expenditure and manpower resources. In terms of Amendment 3, it is anticipated  that  enhancements  and  amendments  to  current  financial  reporting processes (that would be required in order to implement the amendment) could be undertaken within current resources.