States of Jersey Financial Report and Accounts 2012.

ANNEX TO ANNUAL REPORT | CONTENTS

Contents

Introduction to the Annex  04-05 Final Approved Budgets  07-11

The Consolidated Fund  13 Aggregated Statements  14-17

Chief Minister's Department  18-29 Jersey Overseas Aid Commission  30-31 Economic Development Department  32-43 Education, Sport and Culture Department  44-55 Department of the Environment  56-67 Health and Social Services Department  68-79 Home Affairs Department  80-91 Housing Department  92-103 Social Security Department  104-115 Transport and Technical Services Department  116-127 Treasury and Resources Department  128-139

Non Ministerial Departments  140-151 States Assembly  152-163

General Revenue Income  164-167 Other Consolidated Fund Items  168-169

Trading Operations  171 Jersey Airport  172-181 Jersey Harbours  182-191 Jersey Car Parking  192-199 Jersey Fleet Management  200-207

Special Funds Named in the Public Finances (Jersey) Law 2005  209 Strategic Reserve  210-213 Stabilisation Fund  214-217 Jersey Currency Fund  218-221

Special Funds for Specific Purposes  223

Dwelling Houses Loan Fund  224-227 Assisted House Purchase Scheme  228-229 99 Year Leaseholders  230-231 Agricultural Loans Fund  232-233 Tourism Development Fund  234-235 CI Lottery Fund  236-239 Housing Development Fund  240-241 CriminalOffences Confiscations Fund 242-243 DrugTrafficking Confiscations Fund 244-245 Civil Asset Recovery Fund  246-247

Glossary  248-253 Appendix A - Grants under £100,000  254-265

ANNEX TO ANNUAL REPORT | INTRODUCTION

1. Introduction to the Annex

The  principal  accounts  document  is  the  Financial  1.1 Explanation of the contents of

Report and Accounts, which includes high level financial Department/Fund Pages

summaries and the Minister's and Treasurer's reports. The

aim of the Financial Report and Accounts has been to  The detailed information includes narrative information on produce a concise annual report which will appeal to the  the key financial results in a format that is comparable majority of users of the accounts. between Departments/Funds. However, some variation is

necessary due to the differing nature of the entities. The This supplementary accounts document sets out more  table below shows which sections apply to each type of

details about figures in the accounts, which should entity.

be read in conjunction with the Financial Report and

Accounts.

The remainder of the Annex is divided as follows: •Changesfrom the Original 2012 Business Plan;

•TheConsolidated Fund, including Ministerial

and Non-Ministerial Departments Pages, General Revenue Incomes and other items;

•TradingOperations;

•SpecialFunds named in the Public

Finances (Jersey) Law 2005;

•SpecialFunds for Specific Purposes; •Glossaryof Terms;

•Grantsmade by the States of Jersey in 2012.

The  Treasury  and  Resources  Department  hopes  that readers will find the information in this annex of benefit and would encourage any queries in relation to the annex to be addressed to the relevant Department.

Key Results

A copy of the 2012 Financial Report and Accounts can

be found on the States of Jersey website (www.gov.je); This  section  examines  the  highlights  for  the  entity's alternatively a hard copy can be obtained from the States  performance. For Departments and Trading Operations Book shop at the following address: thiswillnormallyconsiderperformanceagainsttheBudget

approved by the States, and changes from the previous Morier House year.

St. Helier

Jersey SpecialFundsmayfocusinsteadonthefinancialpositionat JE1 1DD the end of the year and will also consider the performance

of investments held in the Common Investment Fund (CIF).

The  Treasury  and  Resources  Department  thanks  all

departments  for  their  co-operation  in  providing  the  Participants in the CIF recognise all income and gains on information to allow this annex to be produced. these investments as gains or losses on the units held, and

so when considering the performance of these funds it is important to consider the performance of its investments in the CIF as well as the results in the Statement of Comprehensive  Net  Expenditure.  Further  information about how information is presented is given in the next section.

ANNEX TO ANNUAL REPORT | INTRODUCTION

Service Analysis 1.2 Note on the performance of

This  section  looks  at  where  the  expenditure  in  a  Investments held in the Common department/trading operation was spent (and income  Investment Fund

received), and what the key variances from budget and

changes from the previous year were. Near-Cash and  During 2010 a Common Investment Fund was created Non-Cash items are separately identified. to allow funds (both inside and outside of the States

accounting boundary) to pool funds for investment Staff Full Time Equivalent Employees purpose. The CIF is an administrative arrangement,

not  a  separate  fund,  and  provides  a  simple  cost This considers how many Full Time Equivalent (FTE)  effective way of pooling funds for investment purposes.

employees the department/trading operation had at the  The aim of the CIF is to provide greater investment end of the year. It also compares this to the position at  opportunities, economies of scale and minimise fees the previous year end.  and costs.

Financial Statements In operation, participant funds buy "units" in various CIF

pools. Each pool will then buy individual investments in Thesethe wholestatementsStates ofareJerseysimilarin theto thosemain accountsincluded forfor line with agreed strategies. This means that individual

participants do not own investments, but rather units in individualcharges to entities,allow a properbut arecomparisonshown grossagainstof budget.internal the relevant CIF pool. As a result, participants recognise

Non-cash items are shown separately in the Statements  gains or losses based on the units held rather than the of Comprehensive Net Expenditure. underlying investments.

Trading Fund Balance The amount of income, expenditure, gains and losses

incurred in the CIF attributable to each participant is Under the Public Finances (Jersey) Law 2005, Trading  tracked, and the results included in the participants Operations must maintain a Trading Fund that does not  pages in the Annex. These amounts are equivalent form part of the Consolidated Fund. The Fund balance  to  those  that  would  have  been  included  in  the for each operation is calculated on the same basis as  financial statements of the participant if they held the the Consolidated Fund (see the Consolidated Fund  investments directly, and it is important to consider section for details), and shown in this section. these results in conjunction with those in the Statement

of Comprehensive Net Expenditure.

1.3 Effect of the move to IFRS In addition to changes in terminology, there have been some changes in how some items are accounted for. The move to IFRS has led to several changes in the  Note 3 of the main Accounts document gives detailed Accounts, with one of the most noticeable being the  explanations of each of these changes for the States of changes in terminology used. Details of these changes  Jersey as a whole, but the changes have affected the are given in Section 6 of the main Accounts document. previousyears'figuresfordepartmentandfundpages.

Statement of Financial Position (previously the Balance Sheet)

Standard Impact Affected Pages

Current portion of Finance Lease Obligations now  Other Consolidated Fund Items IAS 1

shown separately to other Payables Jersey Airport Classification of some investments as "Cash General Revenue Income

IAS 7

Equivalents" Currency Fund

Fixed Assets now split into:

IAS 16

Property, Plant and Equipment All Departments and Trading Operations IAS 38

Intangible Assets holding Fixed Assets

IFRS 5

Non-Current Assets held for Sale (Current Asset)

Housing

IAS 32 Minor reclassifications of Financial Assets

Transport and Technical Services

Statement of Comprehensive Net Expenditure (previously the Operating Cost Statement)

Standard Impact Affected Pages

Impairments of Financial Assets now shown

IAS 32 Most Departments and Funds

separately to Other Operating Expenditure

Final Approved Budgets

Revenue Approvals

Whilst the following departmental pages compare actual results against budget at a detailed level, the States approve only the total departmental budget.

The final approved budget for each department may vary fromthatapprovedintheAnnualBusinessPlanforseveral reasons,  including  additional  budget  allocations  during the year, transfers between revenue and capital heads of expenditure and other transfers between departments (which are approved by formal Ministerial Decisions).

A summary is set out in the table overleaf:

Final Approved Budgets

Notes:

1. Carry forwards from 2011

Carry  forwards  from  2011  were  approved  by Ministerial  Decision  (MD-TR-2012-0019:  "2011 Year End Carry Forwards"), which approved the carry  forward  of  £27,821,737  of  departmental underspends from 2011 to 2012, and the carry forward of £13,623,900 of unallocated contingency funding into 2012.

2. Additional Funding Approved in Year

The  Public  Finances  Law  allows  the  States Assembly to approve budgets in addition to those approved in the Annual Business Plan, under specific circumstances. These are:

• Article11(8) allows the States to amend an

 expenditure approval on a proposition lodged by  the Minister for Treasury and Resources on the  grounds  that  there  is  an  urgent  need  for  expenditure  and  no  expenditure  approval  is  available.

• Article16 allows the Minister for Treasury and

  Resources to approve an expenditure approval  where a state of emergency has been declared or

where the Minister is satisfied that there  otherwise  exists  an  immediate  threat  to  the  safety of all or any of the inhabitants of Jersey.  In this case the Minister must lodge a proposition  seeking expenditure approval.

In  addition,  amounts  previously  approved  may  be reallocated by the Treasury Minister under Article 15(1).

The approvals under which monies have been drawn down in 2012 are set out below.

Economic

Stimulus Other

P55/2009 Approvals TOTAL £'000 £'000 £'000

Total Approval 44,000  -  44,000 Unallocated - 1 Jan 2012  2,323  5,190  7,513 Allocations 2012

Ministerial Departments

Chief Minister  -  79  79

- Grant to the Overseas Aid Commission  -  -  - Economic Development  12  129  141 Education, Sport and Culture  1,371  30  1,401 Department of the Environment  -  -  - Health and Social Services  -  (40)  (40) Home Affairs  -  -  - Housing  -  -  - Social Security  -  -  - Transport and Technical Services  -  -  - Treasury and Resources  4  980  984

- Contingency  -  -  -

Non Ministerial States Funded Bodies

- Bailiff 's Chamber - 1 1

- Law Officers' Department - - -

- Judicial Greffe  -  -  -

- Viscount's Department  -  -  -

- Official Analyst - - -

- Office of the Lieutenant Governor - 5 5

- Office of the Dean of Jersey - - -

- Data Protection Commission  -  -  -

- Probation Department  -  -  -

- Comptroller and Auditor General  -  -  -

States Assembly and its services  -  -  - Total Allocations to Revenue  1,387  1,184  2,571 Allocations to Capital  (47)  250  203 Returns to Consolidated Fund  983  -  983 Remaining Unallocated Balance 31 Dec 2012  -  3,756  3,756

Final Approved Budgets

Notes:

3. Transfers between Capital and Revenue and Transfers between departments

From 2010, every effort has been made to prepare Business Plans to accurately estimate the split of Capital and Revenue budgets according to GAAP. However, where variations to these estimates occur in year, adjustments may still be required. Capital approvals in previous years were not necessarily fully GAAP compliant, and where these included approvals for revenue expenditure in 2012, budget adjustments have been required to bring the budget into line with accounting definitions.

These are approved by a Treasurer's Delegated Decision, and reported to the States as part of the "BudgetManagementReport".Transfersbetween departments are approved by formal Ministerial Decision.

Capital Approvals

The table below shows how total Capital

Approvals within the Consolidated Fund

have changed during 2012.

£'000 Previous Approvals  71,551

2012 Approval  25,778 Revenue to Capital Transfers  3,240 Other Transfers  203 P.40/2012 Social Housing  27,100 Disposal Receipts Applied  4,233 Capital Grants Applied  75

2012 Capital Expenditure  (33,252) Amounts Returned to Consolidated Fund  (11) Unspent Capital Approvals Carried Forwards  98,917

ANNEX TO ANNUAL REPORT | CONSOLIDATED FUND | THE CONSOLIDATED FUND

The Consolidated Fund

The fund through which the majority of the States' income

and expenditure is managed.

Net Revenue

Net General Revenue Income  £627.7m Expenditure (Near Cash)  £600.6m

£586.9m £627.7m£612.3m £598.6m£600.6m £615.8m

GRI NRE

Actual 201Actual 20121 Budget 2012 Actual 201Actual 20121 Budget 2012

Available Consolidated

Fund Balance  £31.2 m

Consolidated Fund Balance

£m

60 50 40 30 20 10

0

2008 2009 2010 2011 2012

13

Statement of Comprehensive Net Expenditure

2011 2012 Actual Actual

£'000 £'000

Revenue

Taxation Revenue  477,056  513,542 Duties, Fees, Fines and Penalties  92,431  95,296 Sales of Goods and Services  106,413  112,595 Investment Income  17,507  22,644 Other Income  28,079  21,678 Total Revenue  721,486  765,755

Expenditure: Near Cash

Social Benefit Payments 166,287 164,794 Staff Expenditure  330,250  333,361 Other Operating Expenditure  185,656  193,764 Grants and Subsidies Payments  38,432  35,227 Impairments of Financial Assets  1,893  4,353 Finance Costs  15,216  14,940 Foreign Exchange (Gain)/Loss  288  73 Total Expenditure: Near Cash  738,022  746,512

Net Revenue Expenditure/(Income): Near Cash  16,536  (19,243)

Non Cash Amounts

Investment Income  (49)  (43) Staff Expenditure  396  94 Depreciation and Amortisation  34,067  39,437 Impairments of Property, Plant and Equipment  8,276  (534) Gain on Disposal of Non-Current Assets  (1,674)  (103) Movement in Penison Liability  (4,654)  (50,844) Total Non Cash Amounts  36,360  (11,993)

Net Revenue Expenditure/(Income)  52,896  (31,236)

Other Comprehensive (Income)/Expenditure

Revaluation of Property, Plant and Equipment  (138,757)  (151,418) (Gain)/Loss on Revaluation of Strategic Investments during the period  (72,400)  8,100 Reclassification adjustments for gains/losses included in Net operating costs - 9,500 Loss/(Gain) on Revaluation of Other AFS Investments during the period  458  (73) Reclassification adjustments for gains/losses included in Net operating costs - - Actuarial Loss in respect of Defined Benefit Pension Schemes 92 452

Total Other Comprehensive Income  (210,607)  (133,439) Total Comprehensive Income  (157,710)  (164,675)

Statement of Financial Position 2010 2011 2012

Actual Actual Actual

£'000 £'000 £'000

Non-Current Assets

Property, Plant and Equipment  2,460,294  2,620,153  2,760,932 Intangible Assets  10,209  10,074  9,648 Loans & Advances  4,615  3,200  2,157 Strategic Investments  274,000  346,400  308,800 Other Available for Sale Investments  14,457  14,335  14,589 Investments held at Fair Value through Profit or Loss 110,081 138,453 195,798 Derivative Financial Instruments expiring after more than one year  -  201  230 Trade and Other Receivables  12  9  7 Total Non-Current Assets  2,873,668  3,132,825  3,292,161

Current Assets

Non-Current Assets classified as held for sale 4,304 3,264 538 Inventories  4,304  5,314  5,216 Loans & Advances  987  1,474  993 Derivative Financial Instruments expiring within one year  -  98  263 Trade and Other receivables  98,967  102,942  101,478 Cash and Cash Equivalents  140,611  91,702  77,186 Total Current Assets  250,963  204,794  185,674

Total Assets  3,124,631  3,337,619  3,477,835

Current Liabilities

Trade and Other Payables  116,226  119,795  131,454 Balance due to Other States Funds 48,065 50,641 60,846 Finance Lease Obligations  667  742  871 Provisions for liabilities and charges  4,448  100  1,327 Total Current Liabilities  169,406  171,278  194,498

Total Assets Less Current Liabilities  2,955,225  3,166,341  3,283,337

Non-Current Liabilities

Finance Lease Obligations  8,271  7,528  6,658 Provisions for liabilities and charges  4,387  6,308  4,989 PECRS Pre-1987 Past Service Liability  246,317  229,998  228,396 Provision for JTSF Past Service Liability  114,000  135,100  97,747 Defined Benefit Pension Schemes Net Liability 11,152 11,493 9,282 Total Non-Current Liabilities  384,127  390,427  347,072

Assets Less Liabilities  2,571,098  2,775,914  2,936,265

Taxpayers' Equity

Accumulated Revenue Reserves  2,163,156  2,160,841  2,196,021 Revaluation Reserve  202,661  338,914  485,067 Donated Asset Reserve  39,084  39,053  35,558 Capital Grant Reserve  261  227  267 Investment Reserve  165,936  236,879  219,352 Total Taxpayers' Equity  2,571,098  2,775,914  2,936,265

Consolidated Fund Balance

The Consolidated Fund balance is calculated in a way to represent funds available to be spent in future years, and therefore includes:

• FinancialAssets (Advances and Investments

  held at Fair Value through Profit or Loss).

• NetCurrent Assets or Liabilities (adjusted for

 elements  of  Pension,  Finance  Lease,  and  other obligations, which will be included in  future expenditure approvals).

• Provisionsfor liabilities and charges.

The Consolidated Fund excludes:

• Assetswhich can not be easily converted

  into  cash  (Property,  Plant  and  Equipment,  Intangible Assets and Strategic Investments).

• OtherLong Term Liabilities – which will be

 settled from future expenditure approvals.

Available Consolidated Fund Balance

The balance calculated does not take into account withdrawals from the Consolidated Fund that have already been approved (and so are not available to spend). The balance must be adjusted for these to give the balance available, at the end of the year. With the move to three year planning under the MTFP, elements of this balance may be allocated by the States to fund expenditure in future years. For 2012, whilst £31 million was "available" at the year end the States have already approved the use of these funds over 2013-2015 in the MTFP 2013- 2015.

Capital projects are approved on an allocation basis and so unspent amounts are removed. Similarly, amounts approved for specific purposes (e.g. through requests under Article 11(8) of the Public Finances (Jersey) Law 2005), but that have not yet been allocated to departments, and property receipts that will be used to purchase assets under Article 15(3) of the Law must be adjusted for. The States  also  approves  expenditure  each  year  to provide a suitable insurance provision. Finally, an adjustment must be made for amounts that will be included in a future revenue head of expenditure through the carry forward process.

Consolidated Fund Balance

2011 2012 Actual Actual

£'000 £'000

Available Non-Current Financial Assets  141,863  198,192 Net Current Assets  33,516  (8,824) Less: NCA Held for Sale  (3,264)  (538) Less: Non-Current Provisions  (6,308)  (4,989) Add Back: Current Finance Lease Liabilities 742 871 Add back: Current Pension Liabilities  3,894  4,041 Add back: Accruals for untaken leave  2,778  2,872 Consolidated Fund Balance  173,221  191,625

Unspent Capital  (71,551)  (98,917) Voted amounts to be allocated  (7,513)  (3,756) Provision for Decommissioning  2,080  2,080 Insurance Provision  (7,615)  (7,762) Departmental Carry forwards  (27,822)  (22,125) Carry forward of Contingency  (13,624)  (29,985)

Available Consolidated Fund Balance  47,176  31,160

Reconciliation of movement in Available  2012 Consolidated Fund Balance £'000

Opening Balance  47,176

Net General Revenue Income  627,733 Net Revenue Expenditure - Near Cash  (600,644) Add Back: Carry Forwards from 2011 41,446 Add Back: Additional Allocations 2,571 Remove: Transfers between Capital and Revenue  (3,240)

Approvals Carried Forward:

Departmental Carry forwards  (22,125) Carry forward of Contingency  (29,985)

Capital Approval in the Year  (25,778) 2012/P40 Social Housing  (27,100) JPH Receipts Applied  418 Transfer to JFM for Vehicle Purchases  (1,000)

Redemption of JT Preference Shares  20,000

Returns to the Consolidated Fund  994 Other Movements  694

Fund Movement  (16,016) Closing Balance  31,160

ANNEX TO ANNUAL REPORT | CONSOLIDATED FUND | CHIEF MINISTER'S DEPARTMENT | KEY RESULTS

Key Results

Performance against Near Cash Final  Performance compared to 2011 Approved Budget

Key Variances from Budget £'000 Key Variances from 2011  £'000

Policy projects spanning > year  975 2011 NRE  26,101 Public Sector Reform > year  633 PECRS  (4,082) External Relations  102 Staff  (861) Statistics re HES  188 Staff VR paid in 2011  (550) Other Variances  396 Other Variances  (100)

Net Underspend  2,294 2012 NRE  20,508

£974,970 underspend (there was only minor expenditure  £4,081,638 reduction relates to the transfer of PECRS to of £140) due to additional funding being allocated during  Treasury and Resources.

the year for projects which would span more than one  £861,459 reduction in staff costs due to vacancies and financial year, being the implementation of the Freedom deferred recruitment.

of Information Act (£500,000), and the Vulnerable Adults  £549,577 reduction due to fewer voluntary redundancies and Children's Policy Groups and Protection Committees  paid in 2011 (£605,619) than 2012 (£56,042).

(£474,970).  £100,427 reduction due to other minor variances across

the Department.

£633,370 underspend due to the Department achieving

planned savings in 2012 in order to fund the Public Sector

Reform that was planned to span more than one year, and

other funding pressures in 2013, as debated in the Medium

Term Financial Plan (MTFP) process.

£102,387  underspend  in  External  Relations  due  to  the necessary postponement of major events, for example the Developing Countries Conference and scheduled visits to China and Washington. These are now due to take place in 2013.

£187,546 planned underspend in Statistics will provide funds to deliver the Household Expenditure Survey within the usual five year cycle.

£395,742  other  variances  are  staff  cost  savings  and vacancies across the Department, training initiatives within Human Resources being deferred, and lower than expected recruitment costs.

CHIEF MINISTER'S DEPARTMENT

Minister's Overview

The  Chief  Minister's  Department  provides  admin- istrative and executive support and advice on policy to the Chief Minister and Council of Ministers. The Department has managerial accountability for providing Information Services (IS) and Human Resources (HR) to other States Departments. The Department is also responsible for the Island's external relations, including our constitutional relationship with the United Kingdom.

In addition, the Chief Executive is Head of the Public Sector  and,  through  the  Corporate  Management Board of departmental Chief Officers, co-ordinates the development and implementation of policy.

In order to deliver its objectives, the Department is arranged into sections dealing with domestic policy, IS and HR functions, External Relations and Law Drafting. For further detail, see Service Analysis.

The appointment of an Assistant Chief Minister with responsibility  for  External  Relations  has  fostered increased recognition of Jersey's international identity anddevelopmentoftheIsland'sbeneficialrelationswith other countries.

The main objectives for the Department in 2012 were based upon providing support and advice to the Chief Minister, direction and leadership to the public services, and the development and promotion of the Island's External Relations.

In furthering these aims, the Department's work in 2012 included:

Policy  work  focused  on  population  issues,  the Control of Housing and Work Law, preparation for implementing the Freedom of Information (Jersey) Law 2011, and developing a programme of Public Sector Reform. The Department consulted widely on these policy issues and continues to be committed to improving communication.

Funding was granted in the final quarter of 2012 for a three year period to develop the Vulnerable Adults Policy Group and Jersey Vulnerable Adults Protection  Committee. Requests  are  therefore being made to carry forward the funding in respect of 2013 and beyond.

The Information Services area of the Department saw successful completion of two major projects. The new off-site Data Centre (in addition to the refurbished centre at Cyril le Marquand House) and the migration of 49 States sites from the traditional connectivity arrangements to a new managed Wide Area Network agreement, has achieved a resilient infrastructure for the States of Jersey. This adoption of  a  "cloud"  based  technical  infrastructure  will enable a further consolidation of business systems as part of the reform programme and has reduced the underlying cost of operations.

Future Developments

The Department will continue to lead a programme of Public Sector Reform, the implementation of Freedom of Information and the replacement of the States-wide telephony system.

The Department will also be responsible for The Control of Housing and Work Law and the draft register of Names and Addresses Law, both of which will be underpinned by new technological solutions.

In  2012  the  Law  Draftsman's  Department  took  on additional  resource  to  deliver  the  Comprehensive Spending Review (CSR). It will require further resource in 2013 to complete the legislation for CSR and to support additional initiatives to grow the economy and protect jobs. It proposes to create one additional post in order to be able to provide support on a permanent basis.

External Relations will take forward the establishment of a London Office to strengthen relations with the United Kingdom.

ANNEX TO ANNUAL REPORT | CONSOLIDATED FUND | CHIEF MINISTER'S DEPARTMENT | KEY RESULTS

Changes from Budget Voted in the Business Plan

Reconciliation of 2012 Business Plan

to Final Approved Budget £'000

Business Plan 2012 22,952 Carry Forwards  1,253 Allocation of Contingency  2,798 Allocation of Additional Funding  79 Transfer to/from Capital  (412) Departmental Transfers  (4,060)

Final Approved Budget  22,610

In 2012 adjustments to the original budget voted in the Business Plan totalling (£341,787) were made. £1,252,677 was carried forward from 2011 to contribute to funding pressures in External Relations and Human Resources, the funding of additional law drafting work, completion  of  the  Census,  and  other  various  funding pressures.

£2,798,390 was allocated from contingency for various Staff FTE initiatives; the management of the CSR programme and to

develop the Public Sector Reform agenda (£1,823,280), Atemployedthe yearthe endequivalentthe departmentof 200 full to support both the implementation of the Freedom of

Information (£500,000), the establishment of the Vulnerable time192 FTEs.employees.This isIn an2011,increasethere wereof 8 Adults  and  Children's  Policy  Groups  and  Protection

(4.4%) from 2011, and is due to an  Committees (£475,110).

increase in HR and Law Draftsman  £78,900additionalbudgettofundtheDataSecurityOfficer posts, and net transfers relating to  post.

Customer  Services  Centre,  Policy,  £412,000 transfer to capital in respect of various projects, and RUDL. including,  Migration  Control,  HR,  and  Taxes  Online

Payments.

£4,059,754 of Department transfers, the largest of which represents the PECRS transfer to Treasury and Resources.

Detailed Financial Analysis Snapshot summary

£2,294,015against Near Cash Final(Approved10.Budget2 ) Underspend %)

Net Revenue ( % Expenditure  21.4

£20,507,918

decrease on 2011

21

ANNEX TO ANNUAL REPORT | CONSOLIDATED FUND | CHIEF MINISTER'S DEPARTMENT | SERVICE ANALYSIS

Service Analysis

Information Services £9.8m

There was a minor underspend (£82,695) mostly  Other Services Policy Unit

due to lower staff costs, and a reduction (£370,639)  9% 14%

compared to 2011, mainly due to the closure of the

Customer Services Centre. External

Relations Policy Unit  £2.7m 6%

Around £1 million of the £1,627,351 underspend  Human

relates to transfers from contingency during the year  Resources

to fund planned expenditure over more than one  23%

year  on  the  implementation  of  the  Freedom  of

Information  Law  and  the  establishment  of  joint

safeguarding arrangements for vulnerable adults

and children. In addition, there was a deliberate

policy  to  make  savings  in  2012  to  fund  known

pressures in 2013 including the operational budget

of  the  External  Relations  function  and  other  Information Services commitments  which  are  not  recognised  in  the  48%

Medium Term Financial Plan until 2014.

Human Resources  £4.6m Net Revenue Expenditure by Service Analysis

The  underspend  (£380,320)  was  mainly  due to  the  late  commencement  of  projects  relating to  the  public  sector  reform  such  as  Workforce Modernisation, HR Fit for Purpose and Employee Relations  which  will  continue  into  2013.

There was also a reduction in expenditure compared to 2011 (£4,531,033) mainly due to the transfer of  pensions  (£4,328,700)  to  the  Treasury  and Resources Department and various other minor variances.

External Relations  £1.3m Policy UnitExternal RelationsInformation ServicesOther Services£'000

The underspend is due to the planned postponement

of major events including the Developing Countries

Conference  and  long  haul  trips  within  External

Relations, which are now scheduled for 2013.

-500 -1000 -1500 -2000

Underspend Breakdown

22

Service Analysis Overview

£4.4m

£3.6m

£2.7m

Policy Unit

Actual 201Actual 20121 Budget 2012

£1.2m £1.3m £1.4m

External Relations

Actual 201Actual 20121 Budget 2012

£10.1m£9.8m £9.9m

Information Services

Actual 201Actual 20121 Budget 2012

£10.4m

£6.7m £6.3m

Other Services

Actual 201Actual 20121 Budget 2012

ANNEX TO ANNUAL REPORT | CONSOLIDATED FUND | CHIEF MINISTER'S DEPARTMENT | SERVICE ANALYSIS

25

ANNEX TO ANNUAL REPORT | CONSOLIDATED FUND | CHIEF MINISTER'S DEPARTMENT | FINANCIAL STATEMENTS

Financial Statements

Income £1.6m

The largest income stream relates to recharges by Human Resources and Information Services to other Departments. In addition to this, income is received in respect of Registration and Inspection, the issue of Housing Consent fees, and recharges to the Airport in respect of the Director of Civil Aviation (DCA). The reduction in income compared to 2011 is due to a one off recharge to Guernsey for their proportion of the set up costs of the Brussels Office which is now funded by a grant payment.

Non Cash Expenditure  £0.4m

The variance against budget is due to the rapid completion of fixed assets, causing depreciation to  be  higher  than  anticipated.  Depreciation  has reduced by 50% between 2011 and 2012 due to assets depreciating over a short life of five years

Major Income Streams

£'000

HR/IS support to Departments  1,040 Population Office Fees 197 Airport Payment for the DCA  148 Other  170

Total Income  1,555

Near Cash Expenditure £21.7m Near Cash Expenditure Analysis

Other Expenditure

38%

Grants and Subsidies Payments 2%

Staff Expenditure

60%

£27.0m

£23.7m £21.7m

£1.7m £1.6m £1.2m £0.8m

£0.4m £0.2m Income Near Cash Expenditure Non Cash

Actual 201Actual 20121 Budget 2012 Actual 201Actual 20121 Budget 2012 Actual 201Actual 20121 Budget 2012

Staff Expenditure

The large reduction in expenditure (£1,845,589) compared to 2011 is mainly due to the transfer of pensions to the Treasury  and  Resources  Department,  and  funding  of voluntary redundancies in 2011.

The underspend against budget is mainly due to staff cost savings and vacancies across the Department, including the part year vacancy of the Chief Executive post.

Supplies and Services

This area had very little change in expenditure (£162,639) compared to 2011.

The underspend against budget (£385,029) is mainly due to the delay of some projects, for example the new States wide telephony system.

Finance Costs

The large reduction in expenditure (£3,641,345) compared to 2011 is due to the transfer of the Pre-1987 Debt to the Treasury and Resources Department.

Statement of Financial Position

Property,  plant  and  equipment  reduced  mostly  due  to depreciation being charged in the year. Depreciation is high, as many of the fixed assets are IT assets that have a short useful economic life. Bothtradereceivableandpayableshavereducedcompared to 2011 following an active effort for more efficient debt management.

22

27

ANNEX TO ANNUAL REPORT | CONSOLIDATED FUND | CHIEF MINISTER'S DEPARTMENT |FINANCIAL STATEMENTS

Statement of Comprehensive Net Expenditure

2012 2012 2012 Final 2011

Business Approved  Actual

Plan Budget Actual

£'000 £'000 Revenue £'000 £'000 212  231  Duties, Fees, Fines and Penalties  188  198

995  995  Sales of Goods and Services  1,394  1,355 5  5  Other Income  93  2

1,212  1,231  Total Revenue  1,675  1,555

Expenditure: Near Cash

SocialBenefit Payments

13,089  14,632  Staff Expenditure  14,866  13,020 5,791  7,548  Supplies and Services  7,325  7,163 471  583  Administrative Expenditure  516  512 393  418  Premises and Maintenance  600  554

- -  Other Operating Expenditure  9  3

442  492  Grants and Subsidies Payments  42  451

- -  Impairments of Financial Assets  8  -

3,810  -  Finance Costs  3,641  - 23,996  23,673  Total Expenditure: Near Cash  27,007  21,703 22,784  22,442  Net Revenue Expenditure: Near Cash  25,332  20,148

Non Cash Amounts

168  168  Depreciation and Amortisation  769  360 168  168  Total Non Cash Amounts  769  360 22,952  22,610  Net Revenue Expenditure  26,101  20,508 22,952  22,610  Total Comprehensive Expenditure  26,101  20,508

Statement of Financial Position

2010 2011 2012 Actual Actual Actual

£'000 £'000 £'000

Non-Current Assets

Property, Plant and Equipment  979  797  363 Intangible Assets  1,336  1,114  2,082 Total Non-Current Assets  2,315  1,911  2,445

Current Assets

Trade and Other receivables  422  341  267 Total Current Assets  422  341  267

Total Assets  2,737  2,252  2,712

Current Liabilities

Trade and Other Payables  2,075  1,438  1,394 Provisions for liabilities and charges  779  -  30 Total Current Liabilities  2,854  1,438  1,424

Total Assets Less Current Liabilities  (117)  814  1,288 Assets Less Liabilities  (117)  814  1,288

Taxpayers' Equity

Accumulated Revenue Reserves  (117)  814  1,288 Total Taxpayers' Equity  (117)  814  1,288

ANNEX TO ANNUAL REPORT | CONSOLIDATED FUND | JERSEY OVERSEAS AID COMMISSION | KEY RESULTS

Key Results

Most of the expenditure in 2012 was by way of direct grants  Changes from Budget Voted in the

to 64 agencies, both large and small, with all grants based  Business Plan

on the individual merits of projects covering clean water,

Reconciliation of 2012 Business Plan

health, sanitation, education, agriculture, livestock, and  to Final Approved Budget £'000 revolving credit schemes for small businesses.

Business Plan 2012 8,881 The Commission received applications which totalled in  Carry Forwards  4 excess of £10 million and had to reject many worthy projects  Allocation of Contingency  1 due to its budget limits. The Commission also received  Final Approved Budget  8,886 additional funding enquiries from over 50 other agencies.

In 2012 adjustments to the original budget voted in the Requests for emergency funding of disasters throughout  Business Plan totalling £4,202 were made. This amount

the year remained constant. The Commission allocated  represents the small underspend from the prior year that slightly less than its budget to this area allocating the  is normally granted as a matter of course.

remaining funding to grant relief projects. As for previous

years the majority of funding allocated was in respect of

natural disasters with £360,000 allocated to IDP (Internally  Breakdown of Net Revenue Expenditure Displaced People) response.

£'000 Community Work Projects were organised for Uganda,

Bangladesh and Nepal involving 36 volunteers at a net Grant Aid  6,851 cost inclusive of materials and equipment of £175,771. Local Charities  100

Disaster Fund  1,652 A total of 15 applications were approved for grants made  Work Projects  176 to local organisations which raise funds for aid projects  Administration  99 overseas. All met the established criteria and were awarded  Total  8,878 matching pound for pound funding based on monies raised

by the organisation itself.

Administration costs remained low at £98,499 compared to  Net Revenue Expenditure by Service Analysis a final approved budget of £117,650.

Work

Projects Administration

2% 1%

Disaster Fund

19%

Local Charities

Detailed Financial Analysis 1%

Snapshot summary

Underspend £7,692(0.1%) Grant Aid 77%

against Near Cash Final Approved Budget

£8,877,860 5increase on 201. 1

Net Revenue Expenditure 0%

ANNEX TO ANNUAL REPORT | CONSOLIDATED FUND | JERSEY OVERSEAS AID COMMISSION | KEY RESULTS Statement of Comprehensive Net Expenditure

2012 2012 2012 Final 2011

Business Approved  Actual

Plan Budget Actual

£'000 £'000 Expenditure: Near Cash £'000 £'000

77  77  Staff Expenditure  74  82 18  18  Supplies and Services  11  12 22  22  Administrative Expenditure  7  5 8,764  8,769  Grants and Subsidies Payments  8,367  8,779

8,881  8,886  Total Expenditure: Near Cash  8,459  8,878 8,881  8,886  Net Revenue Expenditure: Near Cash  8,459  8,878 8,881  8,886  Net Revenue Expenditure  8,459  8,878 8,881  8,886  Total Comprehensive Expenditure  8,459  8,878

Statement of Financial Position

2012

ANNEX TO ANNUAL REPORT | CONSOLIDATED FUND | ECONOMIC DEVELOPMENT | KEY RESULTS

Key Results

Performance against Near Cash Final  Performance compared to 2011 Approved Budget

Key Variances from Budget £'000 Key Variances from 2011  £'000

Policy & Regulation  1,183 2011 NRE  18,266 Tourism Destination & Marketing  (448) Durrell Stimulus Grant  (1,122) Skills  110 Policy & Regulation  1,119 Other Variances  69 Tourism Destination & Marketing  (838) Net Underspend  914 Other Variances  (127)

2012 NRE  17,298

Overall the department had a net underspend of £913,866

(5.0%) against Near Cash Final Approved Budget. The decrease in Net Revenue Expenditure (NRE) from

2011 to 2012 was £967,890 including depreciation.

This was mostly due to the underspend in Policy and

Regulation of £1,183,058 which resulted from higher than  This was mainly due to Fiscal Stimulus funding to assist expected receipts from Ofcom, delays in the appointment  Durrell (£1,121,898) with the development of a new visitor of  a  Financial  Services  Ombudsman,  slippage  in  the  centre in 2011 and a grant to the Tourism Development development  of  Intellectual  Property  regulations,  and  Fund (£650,000) that did not receive funding in 2012. transfers between service areas which are discussed in

more detail under the Service Analysis. Policy and Regulation had a net increase of £1,119,183

which was primarily as a result of an increase in the grant The overspend in Tourism, Destination and Marketing was  paid to Jersey Finance Limited (£1,157,898) as per Service mainly due to additional events and marketing activities as  Analysis discussed later.

per the Service Analysis.

The underspend on Skills was due to the phasing out of the old Apprenticeship Scheme.

ECONOMIC DEVELOPMENT DEPARTMENT

Minister's Overview

The  Economic  Development  Department  (EDD)  is responsible for a broad portfolio of strategy, policy development, and delivery of a range of services. All of the work undertaken by EDD is consistent with the States Strategic Plan priority "Getting People into Work" and the objective of delivering sustainable economic growth,  improving  competitiveness,  diversifying  the local economy and creating employment.

In 2012, EDD made significant progress in the delivery ofourobjectives.JerseyBusinesswascreated,bringing togetherJerseyEnterpriseandJerseyBusinessVenture into one organisation, at arms length from Government. TheBoardofJerseyBusinessconsistsofprivatesector entrepreneurs, capitalising on the wealth of expertise we have on the Island. The Inward Investment team from Jersey Enterprise has remained within EDD and was renamed "Locate Jersey". These changes emphasised the importance placed on diversifying and developing new high value businesses opportunities. In addition, Digital Jersey was established as a body to promote the development of Jersey as a leading e-commerce jurisdiction.

EDD has also undertaken substantial research and analysis to develop a strategic framework to address the economic challenges that lie ahead. The Economic Growth and Diversification Strategy (EGDS), approved by the States in July 2012, provides the framework for our activity in the years to come.

The organisational and strategic development of EDD has been achieved whilst delivering significant outputs across our areas of responsibility. Financial services legislation has been developed and progressed through the States, in particular in relation to the banking and funds sector; Intellectual Property legislation and regulations have been approved; and we have

continued to deliver and improve regulatory oversight across areas such as gambling, consumer protection and Competition Law. Furthermore, we have maintained our investment in the tourism sector and followed through with the implementation of the Rural Economy Strategy.

All of this has been achieved at the same time as meeting our CSR target of reducing the Department's budget by a further 5% in 2012.

Future Developments

Whilst EDD has been successful in reducing spend over the last three years, continuing economic uncertainty both locally and globally requires additional resources to be focused on economic development. The EGDS established four key aims:

1. To encourage innovation and improve Jersey's internationalcompetitiveness;
2. Togrow and diversify the financial services sector,capacity and profitability;
3. To create new businesses and employment in highvalue sectors; and
4. To raise the productivity of the whole economy and reduce the reliance on inward migration.

After a thorough analysis of our work programme, it was clear that it would not be possible to achieve these aims without additional, targeted financial resources. These resources, approved in the Medium Term Financial Plan,willenableasignificantstepchangeinactivityover 2013 and beyond. Additional funding will be allocated across a range of areas including: increasing the activity ofLocateJersey;addedinvestmentintheSkillsagenda; and enhancement of our support for the growth and diversification of the finance sector, which plays such a critical role in our economy. At the same time, we will also continue our programme of organisational reform throughtheestablishmentoftheTourismShadowBoard in early 2013.

Therefore, with the additional allocation of resources and the certainty of our medium term budget, in 2013 we will be able to build on our achievements of 2012. It is critical that we capitalise on this additional investment in economic development to ensure that the EGDS can be delivered; and so that the Department can make a significant contribution towards one of the key priorities set out in the States Strategic Plan, namely – to get people into work.

ANNEX TO ANNUAL REPORT | CONSOLIDATED FUND | ECONOMIC DEVELOPMENT | KEY RESULTS

Changes from Budget Voted in the Business Plan

Reconciliation of 2012 Business Plan

to Final Approved Budget £'000

Business Plan 2012 15,902 Carry Forwards  1,198 Allocation of Contingency  1,366 Allocation of Additional Funding  141 Departmental Transfers  (390)

Final Approved Budget  18,217

In 2012 adjustments to the original budget voted in the BusinessPlantotalling£2,314,924weremade.Thisamount includes funds carried forward from 2011 of £1,197,983 to contribute to funding pressures in Inward Investment and Diversification.

Of the £1,365,550 which was transferred from Contingency, £1,146,500 was allocated to the Finance Sector (see Policy and Regulation in the Service Analysis), £205,000 for the restructure of on Island business support and other minor transfers (£14,050).

Additional funding of £141,122 is largely made up of Fiscal Staff FTE Stimulus funding for Apprenticeship Schemes in States

At  the  year  end  the  department  Departments  (£102,072).  The  Departmental  Transfer employed the equivalent of 56.1 full  mostly relates to the move of Regulation of Undertakings time employees. This is an increase  to CMD (£373,300).

of 3.6 (6.0%) from 2011, and is due

to vacancies at the end of 2012.

Detailed Financial Analysis Snapshot summary

£913,866Underspend(5.0%) against Near Cash Final Approved Budget

17,298,482Net Revenue Expenditure (5.2%)

decrease on 2011

35

ANNEX TO ANNUAL REPORT | CONSOLIDATED FUND | ECONOMIC DEVELOPMENT | SERVICE ANALYSIS

Service Analysis

Tourism, Destination

and Marketing £6.4m

Other Services

The overspend of £447,938 is essentially due to  2%

additional events including the Diamond Jubilee and

the Olympic Torch event and to restoring the Jersey  Economic Growth

International Air Display and the Battle of Flowers & Diversification

grants to the 2011 level of funding. Following the  13% Tourism, Destination successful television advertising campaign in 2011,  & Marketing

it was also decided to undertake additional marketing  Rural 37% activity in 2012 (£275,070). Support

12%

The decrease in expenditure compared to 2011

(£837,374) was primarily a result of extra funding in

2011 for the Tourism Development Fund (£650,000)

and funds carried forward from 2010 (£500,000)

Rural Support  £2.0m

The underspend of £92,641 and the decrease in

expenditure compared to 2011 (£182,517) is due to  *Policy and Regulation the reduction in grants paid in line with the objectives  36%

of the Rural Economy Strategy.

Net Revenue Expenditure by Service Analysis Policy and Regulation  £6.2m Policy and Regulation includes 29% (£4.9m) Finance Sector expenditure

The  underspend  of  £1,183,058  is  a  result  of to  the  receipt  of  unexpected  Ofcom  income  of £212,216, together with delays in the Financial Services Ombudsman (£65,000), Spectrum Policy development  (£100,000)  and  IP  development (£50,000),  and  transfers  between  service  areas (£714,984) as per Near Cash Expenditure discussed later.

The  increase  in  expenditure  compared  to  2011

(£1,147,768) was mainly due to an additional grant

to Jersey Finance Limited (£1,157,898) including  Rural SupportPolicy and RegulationTourism, Destination & MarketingOther Services£'000 £990,000 for research into opportunities for Jersey  600

as an International Finance Centre and a further

£200,000 for Inward Investment.

400 Economic Growth and

Diversification and Skills  £2.7m 200 The underspend of £86,106 and the decrease in  0

expenditure compared to 2011 is mainly due to a

reduction of Apprenticeship grants paid under the  -200 old scheme. A new programme will be launched

in 2013.

-400 -600 -800 -1000 -1200

Underspend Breakdown

36

Service Analysis Overview

£7.2m

£6.4m

£5.9m

Tourism, Destination & Marketing

Actual 201Actual 20121 Budget 2012

£2.2m£2.0m £2.1m

Rural Support

Actual 201Actual 20121 Budget 2012

£7.4m

£6.2m

£5.1m

Policy and Regulation

Actual 201Actual 20121 Budget 2012

£3.8m

£2.7m £2.8m

Economic Growth, Diversification and Skills

Actual 201Actual 20121 Budget 2012

ANNEX TO ANNUAL REPORT | CONSOLIDATED FUND | ECONOMIC DEVELOPMENT | SERVICE ANALYSIS

39

Financial Statements

Income £2.1m

The increase on budget (£392,713) is mainly due to higher than expected income from Ofcom in respect of Wireless Telegraphy Licence fees (£212,216) whichwasnotintheBusinessPlanandfromlottery ticket sales in Trading Standards (£141,782).

Near Cash Expenditure £17.3m

Near Cash Expenditure Analysis

Major Income Streams

£'000

Duties, Fees, Fines and Penalties  873 Sales of Goods and Services  1,153 Investment Income  105

Total Income  2,131

Staff Other  Expenditure

Expenditure 19% 37%

Grants and Subsidies Payments 44%

£20.4m £20.0m

£19.4m

£2.1m £2.1m £1.7m

£0.0m £0.0m £0.0m Income Near Cash Expenditure Non Cash

Actual 201Actual 20121 Budget 2012 Actual 201Actual 20121 Budget 2012 Actual 201Actual 20121 Budget 2012

Grants and Subsidies

Grants were £643,443 over budget essentially as a result of additional grants funded by transfers from other EDD service areas to:

JFL - Inward Investment  £200,000 Jersey Hospitality Association  £66,000 Route Development  £74,528 Tourism events  £54,625 Canbedone Productions Ltd.  £150,000 Jersey Business Ltd. £100,000

Staff Expenditure

Staff costs were £179,616 under budget due to vacancies in Tourism and Policy Development.

There was a reduction in staff expenditure from 2011 (£282,506) due to the transfer of staff from Regulation of Undertakings to Chief Minister's Department (£167,643) and vacancies during the year.

Other Expenditure

Other expenditure was £984,980 under budget which was mainly the 2011 Ofcom carry forward budget of £714,984. This was transferred to other areas (primarily Grants and Subsidies) in EDD due to reprioritisation during the year.

There were also underspends in the Renewable Energy budget  due  to  delays  in  legal  advice  (£115,050)  and slippage in other areas as discussed previously.

The reduction on 2011 (£394,661) is mainly due to £500,000 carry forward received for Tourism Marketing in 2011 and other minor variances including the purchase of lottery tickets in Trading Standards (£131,069) see Income.

Statement of Comprehensive Net Expenditure

2012 2012 2012 Final 2011

Business Approved  Actual

Plan Budget Actual

£'000 £'000 Revenue £'000 £'000 685  666  Duties, Fees, Fines and Penalties  359  873

926  926  Sales of Goods and Services  785  1,153 147  147  Other Income  959  105

1,758  1,739  Total Revenue  2,103  2,131

Expenditure: Near Cash

4,120  3,924  Staff Expenditure  4,027  3,744 6,191  7,109  Supplies and Services  6,904  6,542 314  300  Administrative Expenditure  293  308 606  587  Premises and Maintenance  387  336 177  177  Other Operating Expenditure  -  4 6,246  7,853  Grants and Subsidies Payments  8,744  8,496 2  2  Finance Costs  1  -

- -  Contingency  -  -

17,656  19,952  Total Expenditure: Near Cash  20,356  19,430 15,898  18,213  Net Revenue Expenditure: Near Cash  18,253  17,299

Non Cash Amounts

4  4  Depreciation and Amortisation  13  4

- -  Gain on Disposal of Non-Current Assets  -  (5)

4  4  Total Non Cash Amounts  13  (1) 15,902  18,217  Net Revenue Expenditure  18,266  17,298 15,902  18,217  Total Comprehensive Expenditure  18,266  17,298

ANNEX TO ANNUAL REPORT | CONSOLIDATED FUND | EDUCATION, SPORT & CULTURE | KEY RESULTS

Key Results

Performance against Near Cash Final  Performance compared to 2011 Approved Budget

Key Variances from Budget £'000 Key Variances from 2011  £'000

Schools and Colleges  2011 NRE  103,561 Non Fee Paying Provided  1,153 CSR savings  (1,456) Fee Paying Provided  732 Ad hoc grants  (635) Culture and Lifelong Learning  Teachers terms and conditions  800 Further and Higher Education  1,373 Pay award  706 Other Variances  375 Other Variances  383

Net Underspend  3,633 2012 NRE  103,359

The underspend amounting to 3.4% of Final Approved  The decrease in spend from 2011 to 2012 of 0.2% was Budget primarily reflects the arrangement for Delegated achieved through CSR savings, user pays initiatives and Financial  Management  that  allows  Non  Fee  Paying  ad hoc grant reductions, partly offset by staff costs. Provided Primary and Secondary schools to carry forward

funds, to manage the differential between the academic and  The CSR programme, produced savings of £1,456,000 financialyear.Schoolfundingisdeterminedlargelybypupil as  a  result  of  grant  reductions,  including  independent numbers which can fluctuate and have a significant impact preparatory  schools  (St  George's  and  St  Michael's), on budgets. Allowing schools to carry forward underspends  procurement savings, additional sports income and the enables them to more effectively manage these changes  introduction of new fees for States nurseries to bring the over a longer period. For 2012 the Primary and Secondary  public provision for nursery education in line with the private schools  underspend  was  £885,300.  In  addition  under- provision.

spends were reported in Pre-School Education £158,500,

as a result of reduced pupil numbers accessing the Nursery  Adhocgrantsrelatetoone-offfiscalstimulusawardsin2011 Education Fund provided for private day nurseries, and  to Beaulieu (£510,500) and the Glass Church (£125,000) Special Needs Education £211,400 due to a reduction in  for refurbishment of buildings.

pupils at Mont-à-l'Abbé. The Jersey Music Service incurred

an overspend of £103,700 due to delays in the introduction of  Staff  cost  increases  include  £1,506,351  relating  to fees which form part of the Department's CSR programme.  revised terms and conditions for teachers and the 1% non

consolidated pay award for 2012.

Fee Paying Provided schools comprise Victoria College, Victoria College Prep, Jersey College for Girls and Jersey College for Girls Prep. The same Delegated Financial Management principle applies to Fee Paying Provided schools, which together with prudent planning and spending provides the schools with the ability to manage minor school improvement works and minimise fee increases in future years.

Further and Higher Education savings reflect savings on university grants to students due to a year delay in the significant UK fee increases to September 2012. Whilst student numbers attending UK universities has remained constant at c.1,400 there has been a notable increase in  the  number  of  students  (from  44  to  95)  opting  for the  comparatively  cheaper  (fees  capped  at  £4,500pa) alternative  being  offered  by  the  University  Centre  at Highlands College. The underspend for the year will be used to meet increased tuition fees in 2013 avoiding the need for a growth bid in the MTFP.

EDUCATION, SPORT AND CULTURE DEPARTMENT

Minister's Overview

During  2012  the  Department  continued  to  provide high quality services, ensuring they are efficient and providing the best value for money. In particular, there has  been  further  development  of  our  Professional Partner programme which, coupled with improved data management, will ensure Jersey has a more robust monitoring and reporting system for its schools.

There  was  an  increase  in  the  number  of  primary school students in 2012, which required the opening of two additional reception classes from September 2012. There was also an increase in special needs requirements,  particularly  to  support  students  with English as an Additional Language.

Social inclusion and equal opportunity remain a high priority so that as many islanders as possible have access to learning, sport and cultural activities. A review of social inclusion was initiated in 2012 to ensure that we take account of best practice in other jurisdictions and continue to direct our resources according to the changing needs of our community.

Training and the acquisition of new skills continue to be important in Jersey as increasing numbers of people find themselves without a job. The department has ensured that Highlands is well placed to meet these needs through increased capacity, and in September we launched Trackers', a new, modern apprenticeship programme. The Advance to Work and Advance Plus schemes transferred to Social Security in September 2012.

Balancing the needs of students entering higher education with the funds available remains a challenge. We  need  to  ensure  that  university  options  remain accessible at a time when UK universities are increasing their fees.

Sport has continued to grow throughout the year with an increase in both Active card memberships and visitors to the States sports centres. The Olympic Games in London 2012 gave an opportunity to showcase sport within the Island, culminating in the torch relay. The Department will work with the Island Games Committee to continue to plan for the 2015 NatWest Island Games in Jersey.

Future Developments

Jersey's Education Service is facing two considerable and relatively recent pressures that will impact on 2013 and beyond; the rise in unemployment and changing demographics.

The Department has received growth monies in 2013 to continue to provide the increased capacity at Highlands, expand the 14-16 vocational training provided and to continue participation on the Trackers' apprenticeship scheme.

Rising student numbers not only puts pressure on the free nursery education and primary education but also extends to special needs. It will also feed through to other sections of the Department, notably the Youth Service and sports facilities that will be used by the same growing pool of school children and their families. The challenge for ESC will be to maintain and improve existing standards despite demographic and financial pressures.

The other area of pressure, which lies beyond Jersey's direct control, is the radical overhaul of university funding in the UK. As new cohorts go to university over the next few years, the Island will feel the full financial impact of higher fees. To help meet this additional cost we have secured extra funding from the Medium Term Financial Plan for 2014 and 2015 but it will be an ongoing concern. It is recognised that Jersey graduates are vital for the future  prosperity  of  the  Island  and  wish  to  support continued equality of access for all.

Another significant project is the development of a new IT Skills Strategy to meet the needs of learners and the future needs of the economy. The Department has additional funding in 2013 to progress this important piece of work

ANNEX TO ANNUAL REPORT | CONSOLIDATED FUND | EDUCATION, SPORT & CULTURE | KEY RESULTS

Changes from Budget Voted in the Business Plan

Reconciliation of 2012 Business Plan

to Final Approved Budget £'000

Business Plan 2012 101,831 Carry Forwards  3,353 Allocation of Contingency  506 Allocation of Additional Funding  1,401 Transfer to Capital  (510) Departmental Transfers  457

Final Approved Budget  107,088

In 2012 adjustments to the original budget voted in the

Business Plan totalling £5,207,430 were made. This

amount represents £3,353,660 carried forward from the

2011  departmental  underspend,  allocations  from  the

Central Contingency Fund of £706,350 for costs associated

with the 1% non consolidated pay award for 2012 and

£60,000 for Les Creux Bowls Club for the renovation of Staff FTE artificial greens. A transfer of £259,540 was made back to

the Restructuring Provision for the realignment of insurance At  the  year  end  the  department  budgets (£234,060) as part of the CSR programme and

employed the equivalent of 1,531  initial procurement savings (£25,480).

full time employees. This is a net

increase  of  1  (0.1%)  from  2011,  Additional funding of £1,400,882 was transferred to the and is due to additional teaching  department, £30,000 to assist with travel costs associated resources following the introduction  with the 2013 Island Games in Bermuda and net fiscal of two new forms of Primary school  stimulus funding of £1,370,882 to support the Advance to entry in September 2012, an increase  Work, Advance Plus, Careers strengthening and additional in Special Needs requirements for  student numbers at Highlands College (to August 2012). English as an Additional Language,  The departmental transfer of £456,516 from Social Security the  increase  in  students  attending  represents  further  funding  for  additional  students  at Highlands  College  and  the  new  Highlands College for the period September to December Trackers apprenticeship scheme less  2012.

18 posts transferred with Advance to

Transfers from revenue to capital of £510,438 were made Work and Advance Plus to the Social

to comply with GAAP rules on capital expenditure covering Security  Department  in  September

the purchase of minibuses (£110,438) and Victoria College 2012.

projects (£400,000).

Detailed Financial Analysis Snapshot summary

ANNEX TO ANNUAL REPORT | CONSOLIDATED FUND | EDUCATION, SPORT & CULTURE | SERVICE ANALYSIS

Service Analysis

Non Fee Paying

Provided Schools  £60.4m

Non Fee Paying Provided or States schools comprise: 17 Nursery, 22 Primary, 5 Secondary and 3 Special Needs schools together with the Jersey Music service with a total annual near cash budget in 2012 of £61,591,100.

Whilst overall pupil numbers in States schools has remained  constant  at  c.8,600,  the  increase  from 2011 is primarily due to changes in teachers' terms and conditions, namely lunchtime supervision and planning,  preparation  and  assessment  time  less nursery CSR savings.

This,togetherwithannualpayawards,nonstaffinfla- tion and an increase in Special Needs requirements resulted in a £592,600 or 1% increase in spend over 2011. As noted previously, there is a net underspend of£1,151,500or1.9%againstFinalApprovedBudget primarily due to the Delegated Financial Management arrangements in place for schools.

Non Provided Schools  £4.8m

Non Provided or Private schools comprise: 4 Primary (5 in 2011) and 2 Secondary schools and are funded by way of grants and subsidies with an annual near cash budget in 2012 of £4,851,500.

Annualgrantpaymentsin2012toBeaulieuConvent, De La Salle and Convent FCJ were broadly in line with budget, with minor changes reflecting student numbers and the reduction in St Michael's school of £100,000, in line with the CSR phasing out of the grant by 2016.

The main reason for the decrease on 2011 spend of £1,370,600 were one off grant payments in 2011 to St George's school £705,379 (CSR) and Beaulieu Convent £510,500 (for a special needs centre).

Further and Higher Education £18.9m

Further and Higher Education comprise: Highlands College, Skills Board and the provision of Higher Education grants for students attending university with total annual near cash budgets in 2012 of £20,233,100.

As a result of the economic downturn Highlands College has experienced a significant increase in student numbers in 2012. The increase in spend over 2011 is matched by additional budget allocated to fund these students, initially from fiscal stimulus to August 2012 and latterly from Social Security to December 2012 taking total student numbers to 985. The total underspend for the year of £211,300 was mainly due to delays in implementing Skills Board initiatives.

The total cost of Higher Education depends not only on the number of students attending university but also which universities and courses are chosen, the level of UK fees attributed to those courses and parental income. The underspend on budget of £1,162,100 for the year resulted from more students selecting the university provision available within the Islandandacombinationofadelayinthesignificant UK university fee increases from September 2011 to September 2012 and negotiation of better Island rates.

Sports Division  £4.2m

The Sports division comprises 3 main sports centres with a variety of sports facilities and playing fields spread throughout the Island. The division also has responsibility for sports development, grants, and community sports with a net annual near cash budget in 2012 of £4,273,900.

Spend for 2012 was £247,400 less than 2011 due to increased sports income, through a combination of increased participation and price rises.

In challenging economic times, Active Card income remains buoyant at £1,827,205 and the centres continue to attract in excess of 1.2 million visits per year.

48

Non

Provided  Sports Division Schools 4%

Paying PFee rovided  5%

Schools

5%

Non Fee Paying Provided School

59%

Culture and Lifelong Learning 27%

Net Revenue Expenditure by Service Analysis

Non Fee Paying PFee Proaying Pvided SrFochoolsurvidedther and HOther igher EVar£'000iancducaestion

-300 -600 -9000 -12000 -15000

Underspend Breakdown

£59.8m £60.4m £61.6m

Non Fee Paying Provided Schools

Actual 201Actual 20121 Budget 2012

£18.1m £18.9m £20.2m Further and Higher Education

Actual 201Actual 20121 Budget 2012

£6.1m £4.8m £4.9m Non Provided Schools

Actual 201Actual 20121 Budget 2012

£4.4m £4.2m £4.3m

Sports Division

Actual 201Actual 20121 Budget 2012

ANNEXANNEXTOANNUALTOANNUALREPORREPORT | CONSOLIDAT | CONSOLIDATED FUNDTED FUND| EDUCA| ECONOMIC DEVELOPMENTTION, SPORT & CULTURE | SERVICE ANALYSIS

51

Financial Statements

Income £18.4m

Fee Paying Provided Schools

Income compared to 2011 increased by £243,489 (2.7%) due to annual school fee increases at Victoria College, Victoria College Prep, Jersey College for Girls and Jersey College for Girls Prep and additional income from school lunches and facilities hire. Pupil numbers across all schools remained unchanged from 2011 at c.2,100.

Highlands College

Fees from courses exceeded budget by £64,354 (2.2%) mainly as a result of local degree courses which provided a more attractive option than UK universities  for  students,  coupled  with  students staying  for  an  additional  year.  Degrees  proving particularly  popular  were  in  Financial  Services, Childhood Studies and the London South Bank degree courses.

Sports Division

Sports income was up on 2011 by £91,212 (2.3%) due to a combination of Active Card membership receipts, hire of facilities and significant one off successes such as the Learn to Swim course at Les Quennevais.

Non Cash Expenditure  £0.1m

Non Cash Expenditure represents depreciation on property, plant and equipment together with small gains on the disposal of assets at the end of their useful lives.

Major Income Streams

£'000

Fee Paying Provided Schools  9,239 Highlands College  2,960 Sports Division  4,026 Other  2,143

Total Income  18,368

Near Cash Expenditure £121.6m

Near Cash Expenditure Analysis

Other Expenditure

14%

Staff Social Benefit Payments Expenditure

7% 69%

Grants and Subsidies Payments

10%

£121.2m£121.6m £124.9m

£17.8m £18.4m£18.1m

£0.1m £0.1m £0.2m Income Near Cash Expenditure Non Cash

Actual 201Actual 20121 Budget 2012 Actual 201Actual 20121 Budget 2012 Actual 201Actual 20121 Budget 2012

Staff Expenditure

Staff expenditure represents 68.7% of total expenditure. Cost increases over 2011 of £1,807,153 (2.2%) are due to the changes in teachers' terms and conditions (in relation to lunchtime supervision and planning, preparation and assessment time), the 1% non consolidated pay award, additional  social  security  above  the  2%  cap  and  staff redundancies. The reduction against budget of £989,730 (1.2%) is due to a reduction in sickness and therefore supply teacher costs and timing on the recruitment of unfilled vacancies.

Grants and Subsidies Payments

Grant reductions over 2011 of £1,037,115 (8.0%) were achieved as a result of the phased removal of subsidies to independent preparatory schools, as part of the CSR programme, and the non recurrence of one off fiscal stimulus payments in 2011 to Beaulieu Convent and the Glass Church.

Social Benefit Payments

Payments comprise student grants for university tuition fees and maintenance to help towards living expenses, accommodation, travel, food and books. Funding is based on parental income and covers c.1,400 students. Costs for 2012 exceed 2011 by £399,029 (5.0%) due to higher fees being charged by UK universities from September 2012 but represent a saving on budget of £1,145,029 (12.0%) as, due to the one year delay, the full year impact of these increases has yet to be felt requiring the carry forward of the underspend to 2013.

Statement of Financial Position

Property,  Plant  and  Equipment  of  £1,797,998  include Antiques and Works of Art £679,756, Transport (school minibuses)  £430,816  and  Assets  under  the  course  of Construction (central database and minor capital) £321,548.

Trade  and  other  receivables  are  considerably  lower than 2011 due to a significant reduction in the value of prepayments at the year end as a result of changes to payment dates of several large grants.

Trade and other payables increased by £1,120,642 as a result of accruals and an increase in the value of goods received prior to the end of the year.

Statement of Comprehensive Net Expenditure

2012 2012 2012 Final 2011

Business Approved  Actual

Plan Budget Actual

£'000 £'000 Revenue £'000 £'000

23  23  Duties, Fees, Fines and Penalties  23  21 17,803  17,723  Sales of Goods and Services  17,376  17,873 309  309  Other Income  376  474

18,135  18,055  Total Revenue  17,775  18,368

Expenditure: Near Cash

8,766 9,566 SocialBenefit Payments 8,022 8,421 82,562  84,566  Staff Expenditure  81,769  83,576 8,806  10,497  Supplies and Services  9,550  9,001 757  1,093  Administrative Expenditure  1,212  1,085 6,958  6,844  Premises and Maintenance  7,538  7,352

75  75  Other Operating Expenditure  67  135 11,831  12,241  Grants and Subsidies Payments  13,032  11,995 19  19  Impairments of Financial Assets  (5)  7

16  16  Finance Costs  24  25 119,790  124,917  Total Expenditure: Near Cash  121,209  121,597 101,655  106,862  Net Revenue Expenditure: Near Cash  103,434  103,229

Non Cash Amounts

176  176  Depreciation and Amortisation  125  116

- -  Loss on Disposal of Non-Current Assets  2  14

176  176  Total Non Cash Amounts  127  130 101,831  107,038  Net Revenue Expenditure  103,561  103,359 101,831  107,038  Total Comprehensive Expenditure  103,561  103,359

Statement of Financial Position

2010 2011 2012 Actual Actual Actual

£'000 £'000 £'000

Non-Current Assets

Property, Plant and Equipment  1,578  1,517  1,586 Intangible Assets  112  212  228 Total Non-Current Assets  1,690  1,729  1,814

Current Assets

Trade and Other receivables  3,600  5,025  4,000 Cash and Cash Equivalents  50  55  56 Total Current Assets  3,650  5,080  4,056

Total Assets  5,340  6,809  5,870

Current Liabilities

Trade and Other Payables  4,487  4,970  6,091 Provisions for liabilities and charges  204  -  - Total Current Liabilities  4,691  4,970  6,091

Total Assets Less Current Liabilities  649  1,839  (221)

Taxpayers' Equity

Accumulated Revenue Reserves  (128)  1,070  (1,003) Donated Asset Reserve  777  769  782 Total Taxpayers' Equity  649  1,839  (221)

ANNEX TO ANNUAL REPORT | CONSOLIDATED FUND | DEPARTMENT OF THE ENVIRONMENT | KEY RESULTS

Key Results

Performance against Near Cash Final  Performance compared to 2011 Approved Budget

Key Variances from Budget £'000 Key Variances from 2011  £'000

Supplies and Services  451 2011 NRE  6,738 Restructuring Provisions  164 CRS / CES grants  (305) Planning fee income  118 EES grants  (233) Staff savings  89 Appeal costs  (169) Building fee income (153) Planning fee income  310 Other variances  (38) Other Variances  3

Net Underspend  631 2012 NRE  6,344

The  majority  of  the  departmental  underspend  against  The decrease in Net Revenue Expenditure (NRE) from 2011 budget of £631,339 (9.2%) relates to general underspends  to 2012 was £395,038 (5.9%); the majority of the variance in  supplies  and  services  of  £450,566  and  delays  in  in grants and subsidies relates to the reduction in Energy restructuring projects under the Comprehensive Spending  Efficiency Scheme (EES) allocations in year of £232,785 Review (£164,000), both of which have been requested  and Countryside Renewal Scheme (CRS) / Countryside as carry forwards to 2013. Although there has been an  Enhancement Scheme (CES) grants of £304,795 due to increase in Planning application fees of £117,598, there  introduction of new grant schemes in 2011 and cessation has been a larger reduction in building fees of £152,749.  of old schemes during 2012; the majority of the variance The reason for this is although planning applications may  in duties, fines, fees and penalties relates to additional be submitted and approved, construction may not always  planningfeeincomeduring2011of£310,156;appealcosts occur straight away or may be abandoned in the current  were £168,781 higher in 2011 than 2012.