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Budget Management Report for the period ended 30th June 2011.

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STATES OF JERSEY

BUDGET MANAGEMENT REPORT FOR THE PERIOD ENDED 30TH JUNE 2011

Presented to the States on 14th December 2011 by the Minister for Treasury and Resources

STATES GREFFE

2011   Price code: B  R.151

REPORT

  1. The administration of the Public Finances of Jersey

In accordance with the Public Finances (Jersey) Law 2005 ("the Law") (including Regulations  approved  under  that  Law  and  Financial  Directions),  certain  matters relating to budgeting and to the financial control and administration of States Trading Operations are required to be reported to the States twice yearly by the Minister for Treasury and Resources ("the Minister").

This report summarises all decisions made during the 6 month period to 30th June 2011, the majority of which have been previously published. Where decisions have not previously been published, this is due to one of 2 reasons –

  • The decisions were exempted under the States of Jersey ("SoJ") Code of Practice on Public Access to Official Information; or
  • The  decisions  were  taken  by  the  Treasurer  of  the States  under  delegated authority from the Minister.
  1. Reporting on Decisions

The areas of administration which are to be reported on are as follows –

  • The use of trading funds by States Trading Operations;
  • Borrowing;
  • Budget transfers (including Fiscal Stimulus Plan allocations); and
  • Carry forward of revenue balances from 2010.
  1. Use of Trading Funds

The following Ministerial Decisions on the use of trading funds were approved in the 6 month period ended 30th June –

  • MD-TR-2011-0006 – Reinstatement of Jersey Airport revenue budget originally  transferred  from  capital  in  2009  Shadow  Budget  as  no expenditure was made until 2010.
  • MD-TR-2011-0018 – Use of £590,000 from the Harbours Trading Fund in order to expedite works on Elizabeth Harbour Breakwater and the Albert and Victoria Piers.
  1. Borrowing
  1. Small Firms Loan Guarantee Scheme

During the 6 month period to 30th June, the Treasurer of the States did not guarantee any new loans under the Small Firms Loan Guarantee Scheme (SFLGS). Under the terms of the Scheme, the Economic Development Department underwrites up to 75% of the value of a loan. As at 30th June 2011, the total amount loaned under the SFLGS was £600,102, of which £450,076 was guaranteed by the States.

  1. Jersey Student Loan Scheme

The Jersey Student Loan Scheme commenced in September 2007. As at 30th June 2011, 460 students had taken out a loan under the Scheme, and the total amount borrowed was £1,204,620. Terms with the intermediaries require the States of Jersey to underwrite 100% of the value of the loan.

  1. Budget Transfers

Article 15(1)(a) of the Public Finances (Jersey) Law 2005 states that all or any part of the amount appropriated by a head of expenditure may, with the approval of the Minister, be used for the purposes of another head of expenditure.

Budget transfers under Article 15(1)(a) are reported on the following basis –

  • Transfers between revenue heads of expenditure;
  • Transfers between capital heads of expenditure; and
  • Transfers between revenue and capital heads of expenditure.

Budget transfers between departments vary the budgets of individual departments but are net nil in total.

Fiscal Stimulus Plan allocations are reported separately in section 2.3.4 below.

  1. Transfers between Revenue Heads of Expenditure

Revenue transfers during the 6 month period to 30th June 2011 are shown below –

 

Department

£

Funding of:

To

From

Treasury and Resources

Chief Minister's

155,000

Transfer of Director of International Taxation and team

Social Security

Education, Sport and Culture

84,846

Withdrawal of one Voluntary Redundancy (VR) application

Bailiff 's Chambers

Viscount's

98,856

Shortfall in Bailiff 's Chambers budget

Social Security

Home Affairs

10,610

Withdrawal of one Voluntary Redundancy (VR) application

Health and Social Services

T&R contingency

365,000

Restructuring Provision – 1st Tranche

Treasury and Resources

Health and Social Services

22,540

Transfer of one Human Resources Officer FTE and budget

Lt. Gov. Rev.

T&R contingency

27,100

Restructuring provision – restructuring of Housekeeping

Home Affairs

T&R contingency

54,600

Restructuring provision – closure of Police Canteen

Chief Minister's

Treasury and Resources

78,132

Transfer of Head of Strategic Planning

Treasury and Resources

Chief Minister's

25,000

Tax Policy Team – transfer of non-staff costs

Health and Social Services

T&R contingency

486,000

Restructuring Provision – 2nd Tranche

Education, Sport and Culture

T&R contingency

1,326,0001

Transport and Technical Services

T&R contingency

135,000

Environment

T&R contingency

85,000

Chief Minister's

T&R contingency

79,000

Judicial Greffe

Social Security

168,300

Transfer of Jersey Employment Tribunal budget

Education, Sport and Culture

T&R contingency

500,000

Teachers' Terms and Conditions

Economic Development

Chief Minister's

140,700

Transfer of budget for International Finance

 

Total:

£3,841,684

 

1N.B. Actual amount transferred was £616,700 (see MD-TR-2011-0118).

  1. Transfers between Capital Heads of Expenditure

Transfers between existing capital heads of expenditure during the 6 month period to 30th June are shown below –

 

Department

£

Funding of:

To

From

Treasury and Resources (JPH)

Health and Social Services

2,231,905

Transfer of A&E/Radiology extension capital project

Chief Minister's

Chief Minister's

325,400

Web Development project

Harbours

Harbours

2,124,949

Amalgamation of 3 Cap HoE for Elizabeth Harbour East/West Walkways

Transport and Technical Services

Transport and Technical Services

2,258,312

Sludge Thickener

Housing Rolling Vote

Housing

132,352

Le Marais Low Rise Phase 2 and The Cedars: unspent budget

Housing

Treasury and Resources (JPH)

531,725

Pomme D'Or Farm Refurbishment

Housing

Treasury and Resources contingency

3,250,000

Pomme D'Or Farm Refurbishment

Education, Sport and Culture

Education, Sport and Culture

538,558

ICT Phase 3 Strategy

 

Total:

£11,393,201

 

  1. Transfers between Revenue and Capital Heads of Expenditure

Transfers between revenue (Rev) and capital (Cap) during the 6 month period to 30th June are shown below –

 

Department

£

Funding of:

To

From

H&SS Rev

T&R contingency

600,000

Brig-Y-Don refurbishment

ESC Rev

ESC Cap

6,274

Youth Service Mobile Project

H&SS Rev

H&SS Cap

1,200,000

ICR Project

T&TS Cap

T&TS Rev

375,000

Ash Pit

H&SS Rev

T&R contingency

628,000

Flu Pandemic reimbursements

LOD Rev

T&R contingency

92,318

HCAE Q4 2010 reimbursements

Home Affairs

T&R contingency

127,600

Judicial Greffe Rev

T&R contingency

455,082

Additional Court and Case Costs

ESC Rev

ESC Cap

650,000

ICT Strategy Phase 2

T&R (JPH) Cap

T&R (JPH) Rev

89,906

Indoor Market Surplus

CMD Rev

CMD Cap

176,6022

IS/IT Projects

T&TS Rev

T&TS Cap

2,400,000

Asbestos disposal and liquid waste strategy from in-vessel composting funds no longer needed

T&TS Cap

T&TS Rev

450,000

Jersey Harbours Repayment

ESC Rev

ESC Cap

139,300

Secondary School Catering improvements

CMD Rev

T&R contingency

546,338

To meet funding shortfall

T&R contingency

CMD Rev

59,426

VR Clawbacks

T&R contingency

Judicial Greffe Rev

78,588

T&R contingency

ESC Rev

194,521

T&R contingency

T&R Rev

268,030

T&R contingency

P&E Rev

223,947

T&R contingency

Home Affairs Rev

55,234

T&R contingency

H&SS Rev

28,848

T&R contingency

Housing Rev

220,990

T&R contingency

T&TS Rev

244,419

ESC Rev

T&R contingency

89,988

Partial return of VR Clawback

H&SS Cap

H&SS Rev

445,000

Transfer to align budgeting and accounting treatment (GAAP)*

Lt. Gov. Office Cap

Lt. Gov. Office Rev

17,000

Transfer to align budgeting and accounting treatment (GAAP)*

Official Analyst Cap

Official Analyst Rev

46,855

Transfer to align budgeting and accounting treatment (GAAP)*

Probation Cap

Probation Rev

21,563

Transfer to align budgeting and accounting treatment (GAAP)*

Airport Cap

Airport Rev

1,185,209

Transfer to align budgeting and accounting treatment (GAAP)*

Harbours Rev

Harbours Cap

110,000

Transfer to align budgeting and accounting treatment (GAAP)*

T&R Cap

T&R Rev

13,000

Transfer to align budgeting and accounting treatment (GAAP)*

T&TS Cap

T&TS Rev

2,005,000

Transfer to align budgeting and accounting treatment (GAAP)*

Airport Rev

Airport Cap

1,291,403

Transfer to align budgeting and accounting treatment (GAAP)*

LOD Cap

LOD Rev

75,000

Transfer to align budgeting and accounting treatment (GAAP)*

Home Affairs Cap

Home Affairs Rev

13,600

Transfer to align budgeting and accounting treatment (GAAP)*

ESC Rev

ESC Cap

600,000

Transfer to align budgeting and accounting treatment (GAAP)*

 

Total:

£15,224,040

 

2N.B. Actual amount transferred was £168,734.

*The States of Jersey implemented Generally Accepted Accounting Principles (GAAP) in 2009. GAAP accounting requires that expenditure should be accounted for as capital only if it meets the GAAP accounting definition of capital expenditure, and as revenue otherwise. These budget transfers are to correctly align expenditure with GAAP.

  1. Fiscal Stimulus Plan Allocations

The  States  agreed  the  transfer  of  £44 million  from  the  Stabilisation  Fund  to  the Consolidated Fund in order to provide funding for the proposed Economic (Fiscal) Stimulus Plan (P.55/2009 refers).

During the 6 month period to 30th June 2011, the Minister approved the re-allocation of £3,477,419 from the Consolidated Fund as shown below –

 

Department

£

Purpose of allocation:

ESC

393,650

Advance to Work and Careers Strengthening

T&R (JPH)

921,493

Jersey Opera House

ESC

2,162,276

Skills and Training Projects

Total:

£3,477,419

 

  1. Carry Forwards Revenue Carry Forwards

Total 2010 Year End Departmental Revenue Carry Forwards of £11,918,867 were approved by the Minister (MD-TR-2011-0042) as shown below –

 

Department

Approved amount

 

£

Chief Minister's

750,210

Overseas Aid

4,902

Economic Development

712,200

Education, Sport and Culture

2,628,040

Health and Social Services

3,520,000

Home Affairs

655,500

Housing

757,953

Environment

283,340

Social Security

Transport and Technical Services

122,340

Treasury and Resources

751,953

NMSFB

1,732,429

States Assembly

Total:

£11,918,867

In the same Ministerial Decision, the Minister also approved funding of £1.21 million from underspends of spending pressures to Departments as shown below –

 

Department

£

Reason:

Bailiff 's Chambers

125,000

Address the findings from the staff costs review.

Resources

236,000

Unachievable corporate savings in relation to the Joint Fraud Office.

Chief Minister's

84,000

To fund Deputy Director International post in response to recent changes at UK Ministry of Justice who will no longer act as intermediary with other UK departments.

Environment

150,000

IT improvements as recommended by Committee of Enquiry following Reg's Skips review.

Transport and Technical Services

250,000

Bus Contract – £500K is required to conduct a full review of bus contract and service network to improve the service in relation to the Strategic Transport Policy.

Treasury and Resources

143,000

Additional fraud investigations within Taxes Office.

Treasury and Resources

223,000

Taxes Office implementation programme based on recommendations of Deloitte Review.

Total:

£1,211,000

 

Fiscal Stimulus and 11(8) Carry Forwards

In a separate Ministerial Decision, Fiscal Stimulus Carry Forwards of £2,811,703 were approved by the Minister (MD-TR-2011-0040) as shown below –

 

Department

£

Reason:

Chief Minister's

657,112

Finance Industry Support

Economic Development

791,517

Finance Industry Support

Health and Social Services

7,194

Rosewood House

Housing

950,373

Social Housing Maintenance Projects

Treasury and Resources

405,507

Jersey Hospice

Total:

£2,811,703

 

In the same Ministerial Decision, the Minister also approved P.64/2010, Article 11(8) Year End Carry Forwards of £232,100 as shown below –

 

Department

£

Reason:

Chief Minister's

123,000

Improved Procurement

Home Affairs

109,100

Court and Case Costs

Total:

£232,100