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Budget Management Report for the Period Ended 30th June 2012

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STATES OF JERSEY

BUDGET MANAGEMENT REPORT FOR THE PERIOD ENDED 30TH JUNE 2012

Presented to the States on 20th December 2012 by the Minister for Treasury and Resources

STATES GREFFE

2012   Price code: B  R.146

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 2012, 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; and
  • Carry forward of revenue balances from 2011.
  1. Use of Trading Funds

The following Ministerial Decision on the use of trading funds was approved in the 6 month period ended 30th June 2012 –

  • MD-TR-2011-0145 – Use of Jersey Airport Trading Fund in 2012 for the height alignment of the Arrivals Building Project.
  1. Borrowing

2.2.1  Jersey Student Loan Scheme

During the 6 month period to 30th June 2012, 32 new loans with a collective value of £47,126.18 were guaranteed by the Treasurer of the States under the Jersey Student Loan Scheme. As at 30th June 2012, the total amount loaned under the Jersey Student Loan Scheme was £1,569,924.13. Terms with the intermediaries require the States of Jersey to underwrite 100% of the value of the loans.

  1. Budget Transfers

Article 2(6) of the Public Finances (Transitional Arrangements) (Jersey) Order 2011 states that any head of expenditure may be varied from time to time in 2012 in accordance with – (a) Article 15 of the Law as it was in force before 1st January 2012 or (b) Article 18 of the Law as it is in force from 1st January 2012.

Budget  transfers  under  Article 2(6)  of  the  Public  Finances  (Transitional Arrangements) (Jersey) Order 2011 are reported on the following basis –

  • Transfers between revenue heads of expenditure;
  • Transfers between capital heads of expenditure;
  • Transfers between revenue and capital heads of expenditure; and
  • Transfers between revenue and capital heads of expenditure where the transfer is required in order to comply with Generally Accepted Accounting Principles

(GAAP).

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

  1. Transfers between Revenue Heads of Expenditure

Revenue transfers during the 6 month period to 30th June 2012 are shown below –

 

Department

£

Funding of:

To

From

T&R

CMD

4,328,700

Pensions Budgets – Transfer of Service Responsibility

H&SS

T&R

88,909

Transfer of Senior Accountant Post

CMD

T&R

20,339,8501

Transfer of HR and IS budget for 2011

Home Affairs

Restructuring Provision

68,300

Restructuring – 2 VR applications

Probation

Judicial Greffe

225,000

Transfer of responsibility for the payment of independent guardians appointed by the Jersey Family Court Advisory Service

H&SS

Restructuring Provision

615,000

Restructuring – LEAN Training and Development and Energy Reduction Projects

Law Officer's Department

Data Protection Registry

25,000

Repayment of Temporary Loan

T&R

Central Reserves

350,437

LVCR Legal Costs

CMD

T&R

13,000

Maintenance of Caesar GST system

CMD

Central Reserves

500,000

Freedom of Information Law Programme Board

DoE

Restructuring Provision

140,000

Restructuring – various projects

CMD

62,000

H&SS

127,000

EDD

205,000

H&SS

Central Reserves

1,758,000

Funding for Service Improvement

 

Total

28,846,196

 

1 Made up of £19,820,948 Net Revenue Expenditure and £518,902 depreciation

  1. Transfers between Capital Heads of Expenditure

Transfers between existing Capital Heads of Expenditure during the 6 month period to 30th June 2012 are shown below –

 

Department

£

Funding of:

To

From

CMD (various)

T&R (various)

4,811,196

Transfer of HR and IS budget for 2011

TTS (various capital projects)

TTS (Infrastructure Rolling Vote)

3,700,0002

Phillips Street Shaft, Ash Waste Storage Cell, Replacement Assets

Harbours (Elizabeth Terminal Trailer Park)

Harbours (Elizabeth Terminal Phase 3 Mezzanine)

200,000

Elizabeth Terminal Trailer Park Enabling Works

T&R (Tax Transformation Programme and IT Systems)

Central Planning Vote

250,000

Taxes Transformation Programme

H&SS

(Minor Capital)

H&SS (ICR and CT Scanner)

110,515

ICU Medical Supply Pendants

T&R (JPH) (A&E/Radiology)

T&R (JPH) (New Oncology Unit)

250,000

Change of scope for Oncology Relocation Project

 

Total

9,321,711

 

2 Only £3.1 million actually transferred

  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

T&R Cap (ITAX Software Fixed Asset)

T&R Rev

402,029

ITAX Software

CMD Rev

Corporate Contingency

78,900

Data Security Officer

T&R Rev

Corporate Contingency

82,706

Project Alpha Legal Fees

T&R Rev

Corporate Contingency

76,000

Pensions Review Project

TTS Cap (Infrastructure)

TTS Rev

25,000

Le Dicq Pumping Station

T&R (JPH) Cap (Prison Improvement Phase 4)

Home Affairs Rev

55,000

Prison Horticulture Project

T&R (JPH) Rev

Central Planning Vote

150,000

Hospital Pre-feasibility Spatial Assessment Project

 

Total

869,635

 

  1. Transfers between Revenue and Capital Heads of Expenditure where the transfer is required in order to comply with Generally Accepted Accounting Principles (GAAP)

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.

GAAP transfers between revenue (Rev) and capital (Cap) during the 6 month period to 30th June 2012 are shown below –

 

Department

£

Funding of:-

To

From

Home Affairs Cap (Minor Capital)

Home Affairs Rev

30,000

Jersey Customs and Immigration Service Information Technology Projects

ESC Cap (Minor Capital)

ESC Rev

83,779

Purchase of two school vehicles

T&R (JPH) Rev

T&R (JPH) Cap (Highlands A Block)

305,000

Highlands College Turner Building refurbishment

 

Total

418,779

 

  1. Carry Forwards (MD-TR-2012-0019 refers) Revenue Carry Forwards

Total 2011 Year End Departmental Revenue Carry Forwards of £22,856,636 were approved by the Minister as shown below –

 

Department

Approved amount

 

£

Chief Minister's

886,755

Overseas Aid

4,202

Economic Development

957,984

Education, Sport and Culture

3,353,660

Health and Social Services

1,028,000

Home Affairs

1,429,035

Housing

1,379,906

Environment

216,608

Social Security

10,482,953

Transport and Technical Services

1,824,841

Treasury and Resources

787,753

Non-Ministerial States Funded Bodies

504,939

States Assembly

Total

£22,856,636

Restructuring Carry Forwards

The Minister also approved Restructuring Costs Carry Forwards of £1,697,882 as shown below –

 

Department

£

Chief Minister's

176,0773

Health and Social Security

290,000

Home Affairs

24,500

Environment

64,000

Transport and Technical Services

25,076

Treasury and Resources

406,3294

T&R Restructuring Costs

711,900

Total

£1,697,882

3 Actual amount transferred £142,677 – a reduction of £33,400

4 Actual amount transferred £439,729 – an increase of £33,400

(Balancing figure of £33,400 refers to Actuarial Review which moved from CMD to T&R during 2012.)

Fiscal Stimulus Carry Forwards

In the same Ministerial Decision, the Minister also approved Fiscal Stimulus Carry Forwards of £155,593 as shown below –

 

Department

Fiscal Stimulus Carry Forward Request

£

Reason

Economic Development

89,999

Single European Payments Area Project

Treasury and Resources

65,594

Grant for Jersey Hospice Care Project

Total

155,593

 

Central Reserves/Contingency

The £2 million allocation for an AME Central Reserve was not required in 2011, but was carried forward to fund increases in Income Support costs as a result of increasing unemployment.

Of the £6.8 million allocated to DEL Central Reserves in the 2011 Business Plan, £950,000 was allocated to departments, leaving £5.9 million to be carried forward to 2012 (£4,550,000 One-Off Reserve and £1,362,000 DEL Reserve as per table below).

 

Department

Central Reserves Carry Forward Request

£

Reason

T&R – Central Reserves

2,000,000

AME Reserve for unemployment

4,550,000

One-Off Reserve balance

1,362,000

DEL Reserve

Total

7,912,000

 

Project Alpha

The £5 million allocation from the Insurance Deductible Fund for Project Alpha has been transferred as a ring-fenced amount in Central Reserves.

Court and Case Costs Smoothing Reserve

The Court and Case Cost underspends from departments, £2,859,917, mainly non- ministerial, have been carried forward to be held in Central Reserves and earmarked in the Smoothing Reserve.

2012 Spending pressures

A number of departments had underspends in their base cash limits which were not requested to be carried forward. This  provided  the opportunity  for the  Corporate Management Board to allocate funding for priority spending pressures identified for 2012 for which no alternative funds were available, as follows –

 

Department

Amount £

Reason

Chief Minister's

100,000

Assisting Developing Countries

100,000

External expert advice on specialist technical matters related to the extension of the WTO membership

127,000

To establish the new roles of HSS HR Director and Medical Staffing Manager as recommended by the Verita report

91,000

Extra Assistant Law Draftsman for various Laws funded by T&R, Housing and JFSC

Economic Development

150,000

Policy and Regulation – Digital Jersey

Health and Social Services

330,000

Activity Increases – Secure Placement

Bailiff 's Chambers

65,609

Queen's Diamond Jubilee Celebrations

Total

963,609