States Meeting Transcript - 11th September 2013

STATES OF JERSEY OFFICIAL REPORT WEDNESDAY, 11th SEPTEMBER

PUBLIC BUSINESS - resumption................................................................5

1. Draft Public Finances (Amendment No. 4) (Jersey) Law 201- (P.73/2013) - Articles 9 to 12 - resumption ........................................................................5

1. Senator S.C. Ferguson:..................................................................5

1. Deputy J.G. Reed of St. Ouen:...........................................................7
2. Deputy J.M. Maçon of St. Saviour:......................................................8
3. Senator P.F.C. Ozouf :....................................................................9

4. Deputy J.H. Young of St. Brelade:......................................................11

2. Public Finances (Amendment No. 4) (Jersey) Law 201- (P.73/2013) - reference back13

1. Deputy J.H. Young:....................................................................13
2. Deputy J.A.N. Le Fondré of St. Lawrence : .............................................13
3. Deputy J.A. Martin of St. Helier:.......................................................14
4. The Deputy of St. Ouen:................................................................15
5. Senator I.J. Gorst :......................................................................15
6. Senator S.C. Ferguson:.................................................................16
7. Connétable P.J. Rondel of St. John : ....................................................16
8. Deputy M. Tadier :......................................................................17
9. Deputy G.P. Southern :..................................................................17
10. Deputy E.J. Noel of St. Lawrence : ..................................................17
11. Deputy J.M. Maçon:.................................................................18
12. Deputy T.A. Vallois of St. Saviour:..................................................18
13. Senator L.J. Farnham : ...............................................................18
14. Deputy J.H. Young: .................................................................19

3. Draft Public Finances (Amendment No. 4) (Jersey) Law 201- (P.73/2013)............20

1.3.1 Senator P.F.C. Ozouf :..................................................................20

4. Draft Public Finances (Amendment No. 4) (Jersey) Law 201- (P.73/2013) - Articles 13 to17......................................................................................24

1. Senator P.F.C. Ozouf (The Minister for Treasury and Resource):.......................24
2. The Deputy of St. Ouen:................................................................25

5. Draft Public Finances (Amendment No. 4) (Jersey) Law 201- (P.73/2013) - Article 18..25 1.5.1Senator P.F.C. Ozouf (The Minister for Treasury and Resources): ......................25

1.5.2 Deputy J.M. Maçon:....................................................................25

6. Draft Public Finances (Amendment No. 4) (Jersey) Law 201- (P.73/2013) - Article 19 ...........................................................................................26

1.6.1 Senator P.F.C. Ozouf :..................................................................26

7. Draft Public Finances (Amendment No. 4) (Jersey) Law 201- (P.73/2013) - amendment (P.73/2013 Amd.)...........................................................26

1. Senator S.C. Ferguson (Chairman, Corporate Services Scrutiny Panel):................27
2. Senator P.M. Bailhache : ................................................................27
3. The Deputy of St. Ouen:................................................................29
4. Senator P.F.C. Ozouf :..................................................................30
5. Deputy T.A. Vallois: ...................................................................32
6. Deputy R.G. Le Hérissier of St. Saviour:...............................................33
7. Deputy J.A. Martin:....................................................................34
8. Senator F. du H. Le Gresley:............................................................35
9. Deputy J.M. Maçon:....................................................................35
10. Deputy G.P. Southern : ..............................................................36
11. Senator A. Breckon:.................................................................36
12. Deputy E.J. Noel:....................................................................37
13. Deputy M. Tadier :...................................................................37
14. Senator S.C. Ferguson:..............................................................38

8. Draft Public Finances (Amendment No. 4) (Jersey) Law 201- (P.73/2013) - Article 20 to23......................................................................................40

1.8.1 Senator P.F.C. Ozouf :..................................................................40

2. Jersey Appointments Commission: Reappointment of Member (P.79/2013)..........41

1. Senator I.J. Gorst (The Chief Minister):................................................42
2. Deputy M. Tadier :......................................................................42
3. Deputy T.A. Vallois: ...................................................................42
4. Senator I.J. Gorst :......................................................................42

3. Draft Adoption (Amendment No. 6) (Jersey) Law - (P.80/2013).......................43

Senator I.J. Gorst :............................................................................43

1. Senator P.M. Bailhache (Chairman of the Legislation Advisory Panel - rapporteur):....43
2. Connétable M.P.S. Le Troquer of St. Martin:...........................................43
3. Senator P.F.C. Ozouf :..................................................................44
4. Connétable S.A. Rennard of St. Saviour : ...............................................45
5. Senator I.J. Gorst :......................................................................45
6. Deputy G.C.L. Baudains of St. Clement : ...............................................46
7. Deputy M. Tadier :......................................................................46
8. Deputy T.M.Pitman:...................................................................47
9. Deputy J.A. Martin:....................................................................47
10. Senator P.M. Bailhache : ................................................................48

LUNCHEON ADJOURNMENT PROPOSED..................................................50 LUNCHEON ADJOURNMENT................................................................50

4. British Nationality Act (H.M. Armed Forces Exemption) Bill: extension to Jersey (P.81/2013)...............................................................................50

4.1 Senator P.M. Bailhache : ................................................................50

5. Commissioners of Appeal for Taxes Office: Re-Appointment of Members (P.83/2013) ...........................................................................................51

Senator P.F.C. Ozouf (Minister for Treasury and Resources):................................51

1. Deputy E.J. Noel (Assistant Minister for Treasury and Resources - rapporteur):........51
2. Senator S.C. Ferguson:.................................................................52
3. Deputy R.G. Le Hérissier: ..............................................................52
4. Deputy J.M. Maçon:....................................................................52
5. Deputy J.H. Young:....................................................................52
6. Deputy E.J. Noel: ......................................................................52

6. Draft Customs and Excise (Amendment No. 7) (Jersey) Law 201- (P.85/2013)........53

1. Senator B.I. Le Marquand (Minister for Home Affairs): ................................53
2. The Connétable of St. Martin:..........................................................54
3. Deputy G.C.L. Baudains:...............................................................54
4. Senator B.I. Le Marquand:..............................................................54

7. Planning Appeals: Revised System (P.87/2013) ........................................56

1. Deputy R.C. Duhamel (The Minister for Planning and Environment): ..................57

2. Planning Appeals: Revised System (P.87/2013) - amendment (P.87/2013 Amd.)......59

1. Deputy J.H. Young:....................................................................59
2. Deputy R.C. Duhamel: .................................................................64
3. Senator F. du H. Le Gresley:............................................................67
4. Deputy S.Power:.......................................................................69

5. The Deputy ofSt.Ouen:................................................................71
6. Deputy R.G. Le Hérissier: ..............................................................71
7. Senator S.C. Ferguson:.................................................................73
8. Senator P.F.C. Ozouf :..................................................................74
9. Deputy J.A.N Le Fondré:...............................................................75
10. Deputy J.M. Maçon:.................................................................76
11. Senator L.J. Farnham : .................................................................77
12. Connétable J.L.S. of Gallichan of Trinity :...........................................79

3. Planning Appeals: Revised System (P.87/2013) - second amendment (P.87/2013 Amd. (2))........................................................................................82

1. Deputy R.G. Le Hérissier: ..............................................................82
2. Deputy R.C. Duhamel: .................................................................83
3. Deputy S.Power:.......................................................................85
4. Senator F. du H. Le Gresley:............................................................85
5. Mr. H. Sharp Q.C., H.M. Solicitor General:............................................86
6. Senator P.F.C. Ozouf :..................................................................86
7. The Solicitor General:..................................................................86
8. The Connétable of Trinity :..............................................................87
9. Deputy G.C.L. Baudains:...............................................................88
10. Deputy J.H. Young: .................................................................89
11. Deputy R.G. Bryans of St. Helier:...................................................89
12. Senator P.F.C. Ozouf : ...............................................................89

12. Connétable J. Gallichan of St. Mary:................................................90
13. Deputy R.G. Le Hérissier:...........................................................90

4. Planning Appeals: Revised System (P.87/2013) - as amended..........................93

1. Deputy S.Power:.......................................................................93
2. Deputy J.H. Young:....................................................................93

3. Senator L.J. Farnham :..................................................................93
4. Deputy J.M. Maçon:....................................................................94
5. Deputy R.C. Duhamel: .................................................................94

ARRANGEMENT OF PUBLIC BUSINESS FOR FUTURE MEETINGS ....................95

1. Deputy J.M. Maçon:....................................................................95
2. Senator I.J. Gorst :......................................................................96
3. Deputy G.P. Southern :..................................................................96

ADJOURNMENT................................................................................97

[09:31]

The Roll was called and the Dean led the Assembly in Prayer.

PUBLIC BUSINESS - resumption

1. Draft Public Finances (Amendment No. 4) (Jersey) Law 201- (P.73/2013) - Articles 9 to 12 - resumption

The Bailiff :

We return to the matter we were dealing with when we adjourned yesterday, that is Projet 73, Draft Public Finances (Amendment No. 4) (Jersey) Law 201-, lodged by the Minister for Treasury and Resources. We were debating Articles 9 to 12 and I had seen Senator Ferguson.

1. Senator S.C. Ferguson:

Oh, it is a bit early in the morning, Sir, I apologise. Basically, we are on a tale of 2 Articles. There is Article 10 of the amendment, which covers the resuscitation of Article 11(8) requests and Article 12 of the amendment, which covers internal movements between heads of expenditure. We have had a long email last night from the Minister for Treasury and Resources making a number of explanations, but I would like to take us back a step. What is a contingency? A contingency is an unexpected event. I have known it called in a household the wife can call it the running away money' or it is money for a new washing machine, things like that, but it is money that is set aside for unexpected events, things you have not planned for. If you are an investment adviser, you never invest 100 per cent of your client's funds, you leave them a certain amount of money for contingencies. So we have established that. We have contingency funds, but what do we do? We allocate them: we use them as part of the budget. It beggars belief. Our contingency fund allocation is full of things which we have agreed in the States. We have asked for them to be put in the budget and they have not been included in the budget. The Committee of Inquiry, for example, that should have been put in the budget, but no, it is in the contingency fund. It is absolutely incredible. Then if we look at the email from the Minister for Treasury and Resources, he has been talking about events and these were funded as Article 11(8) requests, but I do wonder. We are told: "Additional funding for unavoidable court and case costs" but there is not any overnight urgency about things like that."The cessation of the U.K. (United Kingdom) Reciprocal Health Agreement." That came as a combination of political bias plus incorrect charging, or in fact over-charging by N.H.S. (National Health Service). These were not overnight urgencies, but anyway, that is as far as I say. We are not using contingency funds correctly. In fact, Article 9 of the Law provides particular circumstances when the M.T.F.P. (Medium-Term Financial Plan) can be amended: states of emergency, threat to the health and safety of Islanders, threat to the economic, environmental or social wellbeing of the Island. This is Article 9 of the main law, and this Article 10 of the amendment is amending Article 9 of the main law. I hope I have not lost anyone there. So basically, we can alter the Medium-Term Financial Plan under certain specific requirements, but the point about that is that you can only alter them by bringing a proposition to the States. Article 20 also provides for urgent expenditure, but these do not have to come to the States because this is a movement of monies between Heads of Expenditure. So we have 2 existing routes of providing money for emergencies. Article 9 under the existing Law, it is under a range of scenarios and under strict conditions, but the Council of Ministers must lodge a proposition with the States, whereas Article 20, a state of emergency - i.e. a state of emergency has been declared and there is

an immediate threat to the health and safety of all Islanders and immediate expenditure is required - has to be funded by a withdrawal from the Consolidated Fund or met by existing Heads of Expenditure as determined by the Council of Ministers. So we can get emergency funding. We have contingency funds and we want to bring back Article 11(8) - we call them 11(8) requests - to provide additional flexibility, so we now have 2 pots of money where we used to have one. As I

have said, we are using the replacement to 11(8) - the contingency funds - and we were promised that contingency funds, as Deputy Vallois said yesterday, when the contingency funds came in, 11(8) requests were gone. Now we have 2 pots; we have the contingency fund pot and we have the 11(8) availability. We do not need both, not if we are practising good financial management and sound budgeting. Then Article 12 gives even more flexibility: "Currently, a Minister can vary a Head of Expenditure under certain specific circumstances to transfer from capital to revenue or vice versa to comply with accounting practice, to reflect a transfer of Ministerial functions or the transfer of a service or function from one States-funded body to another, to transfer to contingency expenditure or to withdraw funds after the year end." The main thing is that the transfers are for very specific purposes. Under this amendment, a transfer will now be allowed between Heads of Expenditure for any reason without coming back to the States. It will be recorded for the States, but it will be 6 months after the changes have been made, so we are not going to be able to comment on it. It will be done.

[09:45]

In other words, this gives a potentially unlimited operational service capability, and as our advisers said, will allow a level of in-year flexibility which we have not seen among organisations we have worked with. This is C.I.P.F.A. (Chartered Institute of Public Finance and Accountancy), the finance and accounting professionals. As I say, it is a very-known and very well-respected organisation. Our advisers are particularly concerned that this inherent flexibility will have the potential to undermine the rigour of the Medium-Term Financial Plan if budgetary resources can be moved. The Minister for Treasury and Resources will have the ability to answer at the amendment. I do wish he would possess his sole impatience.

Senator P.F.C. Ozouf :

Would the Senator give way, because I just wanted to try to be helpful to her, because she said something that was inaccurate, if I may. It is designed to be helpful, if she would give way.

Senator S.C. Ferguson: Absolutely.

Senator P.F.C. Ozouf :

Just to reassure the Senator, what she said in terms of reporting is not quite right, because every transfer will be subject to Ministerial Decision, the actual giving Minister must sign a Ministerial Decision which is then published, then the receiving Minister signs it and then the Minister for Treasury and Resources does it, so what she said was not quite right. The actual reporting of it is done prior to even the Minister for Treasury and Resources signing off. That is why I was remonstrating, sorry.

Senator S.C. Ferguson:

It comes back to the States in the budget transfer list 6 months after it has happened and 9 times out 10, you find that it is an exempt decision so it is not listed. Anyway, it is not a very good way to start the morning.

The Bailiff :

The Minister will have the opportunity of responding at the end. Senator S.C. Ferguson:

As I say, our advisers are particularly concerned about this inherent flexibility because it does have the potential to undermine the rigour of the Medium-Term Finance Plan if budgetary resources can be moved around with impunity and/or transferred to contingency for any reason. Effectively, we can agree the bottom line of net revenue expenditure, but anything you like can happen above the bottom line and we shall be lucky if we hear about it in less than 6 months. I detect the odd look of disbelief. I can assure Members that we do find that a function will move from A to B without so much as a how's-your-father, and it would be a good thing if procedures were followed, but frankly, this is no way to run a chip-shop, let alone a national government. On the other hand, this may be one of those unintended consequences, and I would ask the Minister for Treasury and Resources to withdraw this particular part of the amendments and bring them back after they have been reworked. For example, the Minister could use something similar to Standing Order 168 that we use for property or something like that, but if he is not going to withdraw it, then I would ask Members to reject Articles 10 and 12.

The Bailiff :

Does any other Member wish to speak on these Articles? Then I invite the Minister .. Deputy of St. Ouen .

1. Deputy J.G. Reed of St. Ouen :

I would just like to focus on Article 10 and it is worth reminding Members what decisions were made and what we were told of by this Council of Ministers about a year ago, and it starts with the Strategic Plan, and we were told in the Strategic Plan under the resource summary: "Our early work demonstrates that there is sufficient flexibility within our financial estimates to enable the Council of Ministers to deliver against the proposed strategic priorities." We then were presented with a Medium-Term Financial Plan which started with quite considerable amounts of money allocated for contingency and, equally, growth. On the proposition of the Council of Ministers, the amounts of contingency and growth were significantly reduced, but again, we got assurances that that was quite feasible because the flexibility within the Medium-Term Financial Plan still allowed us to deal with any unforeseen changes in priority over the period of the plan. Let us not forget the whole point of having a 3-year plan was introduced to try and stop what we could term expenditure creep', and it is something that the C. & A.G. (Comptroller and Auditor General), Chamber of Commerce and others have continued to criticise the States Assembly about, because we agree a budget and then when it comes to it, we increase it for various reasons. It can be argued at the time that there are legitimate reasons, but that is what happens. The whole idea of the Medium-Term Financial Plan is to control States spending, because let us not forget it is the taxpayer that ultimately pays the cost. What are the public saying to us? The public are saying to us and continue to say: "Please control expenditure. Please manage within the budgets that are being set by the Council of Ministers" and indeed agreed by this Assembly. The removal of Article 11(8) that we keep talking about was due to the fact that it did allow that budget creep and it was determined that there was a much better way of dealing with it, which is why significant sums were allocated, as I say, for contingency and growth over the period of the plan. I do not know if other States Members are confused, but we have the Minister for Treasury and Resources who continues to tell us how well we are doing and how well the Government is performing. Yet less than 12 months after the new Medium-Term Financial Plan was introduced: "Oh, we might need some extra money for urgent need." What is "urgent need"? No explanation has been given, a couple of examples, but some of those examples, if you look in the documentation that we have been provided, have already been allowed for. Also, as the Chairman of our panel has already mentioned, there is also already an Article that allows the Council of Ministers to come back if there is an urgent need, which is described and outlined and expressed in Article 9. The Minister seemed to raise doubts or issues regarding the comments that the Chairman made yesterday, I believe, regarding the fact that the Scrutiny Panel and States Members had not had a Ministerial response to the Scrutiny report. I would just like to say that it is important for us to see the full picture, and part of the reason there is a requirement to present a Ministerial response is it provides and responds to a Scrutiny report and recommendations and findings contained in it. There is good reason for that, because if we look at S.R.18(Res), which was presented to the States on 5th December 2012 by the Minister for Treasury and Resources in response to the Scrutiny Panel's review of the Medium-Term Financial Plan, and we go to the response to finding 7, we get confirmation in a response from the Minister that flexibility is still there, flexibility has been provided for. He highlights in his response a number of different areas and options that the Council of Ministers, together with the Minister for Treasury and Resources, can use if there is a change of priority or a need to deal with certain matters within the period of the plan. Yet today - or yesterday, should I say - we are being told a totally different story. What has changed? Have we been told what has changed? No, we are just told: "Oh well, we have got to do it just in case. We need that extra flexibility." Where is the evidence? Where is the evidence that the Council of Ministers have demonstrated that they are delivering the savings, they are dealing with the priorities, they are managing within budget? In fact, the opposite exists, because the Minister for Treasury and Resources announced and shouted from the rooftops: "We have underspent by £42 million in 2012." £42 million. Well, if that is not flexible enough, Minister, and the Council of Ministers, I ask what is? Yet we are told: "Well, we need a bit more flexibility." I do not believe that the case has been made to reintroduce into the Public Finances Law (Jersey) Law 2005 at this time when we are only part-way through the very first Medium-Term Financial Plan that there is a need for this particular Article. I really do ask States Members to consider whether or not we should or there is a need and there is proof that this particular reintroduction of this Article 11(8) is required. Thank you.

The Bailiff :

Does any other Member wish to speak? Deputy Maçon.

2. Deputy J.M. Maçon of St. Saviour :

Very briefly. First of all, I would like to congratulate the Corporate Services Scrutiny Panel in what has been a thorough examination of these Articles. What is striking me is that, unanimously, all the members of the Corporate Services Panel are standing up and saying that first of all they would like an actual response to their report before we proceed, and I cannot understand for a moment why the Minister for Treasury and Resources is so keen on dealing with this. That does not seem to me as appropriate. I think that just out of courtesy, given that this is not an urgent matter, that it cannot wait, I do not think that it is appropriate to proceed in that manner. Secondly, I have concerns that the Corporate Services Scrutiny Panel have raised which is a u-turn on this case of 11(8) requests. Yes, we were told in the Medium-Term Financial Plan that we would bring in contingency funds in order to do away with this particular Article because it would not be needed, and the issue for that was to include contingency funding, but that put up the net expenditure of the States overall. I believe it was about approximately £20 million, but it was a figure to increase the overall States budget under the understanding that we would not need 11(8) requests, and now all of a sudden we are turning around and coming back and saying: "Well, thank you very much for that extra pot of money. Now we want this extra flexibility in the plan." It does not seem to make any sense to me and we are just making a u-turn. I did not support it then and I am very concerned about changing it yet again. I am also alarmed by what the Corporate Services Scrutiny Panel have brought to our attention today, which is about changing some of the governance procedures between shifting monies between departments - the Heads of Expenditures - for absolutely any reason whatsoever, which again does cause me alarm. The reason for this is because as it is currently constituted under the Public Finances (Jersey) Law 2005, it is in order to protect services because it is tagged to certain services when they are transferring functions, but if we start to remove that, then what is the safeguard in order to protect the services that we as a States Assembly have agreed when debating the Medium-Term Financial Plan? Obviously one of

our key functions is expenditure, agreeing that as a States Assembly, and providing to the Council of Ministers in order to carry out their spending plans again giving them the ability to change it basically as and when they see fit.

[10:00]

Where does that leave Back-Benchers, where does that leave other Members of the Assembly when we pass something in the Assembly? I am very concerned about these amendments and I would ask the Minister for Treasury and Resources to consider deferring this debate so that he can have proper time in order to consider the Corporate Services Scrutiny Panel's response, to allow the Corporate Services Scrutiny Panel as we are often told that: "Scrutiny is held in such high regard and we appreciate the work of Scrutiny so much that we believe it is an important part of how the States Assembly functions.. Oh, unless it is something we want, in which case we will carry on and ignore it." I do not think that is acceptable. I do think we need to stand up for Scrutiny and our colleagues on Scrutiny, who have worked incredibly hard over the summer in order to deliver this for us today and I would ask the Minister for Treasury and Resources to consider that, because I do not think at the moment it is appropriate to proceed.

The Bailiff :

Does any other Member wish to speak? The Bailiff :

Very well, I invite the Minister to reply.

3. Senator P.F.C. Ozouf :

I will address immediately Deputy Maçon's remarks, because I have a high regard for Scrutiny, but at the end of the day we sometimes have to agree to differ and I am sorry that on this occasion I have not been able - as I explained to Members in my email last night - to respond to the Corporate Services Scrutiny Panel report in a formal way. I would say in my defence, as I said in my email last night, I have already considered - and the Deputy Chief Minister was kind enough to sign-off an amendment while I was on leave - responding immediately to the Corporate Services Scrutiny Panel's report in relation to the issue, not a matter of these Articles, but immediately on issue of the reporting of the Treasurer of the States to the Council of Ministers. It is just simply not fair to say that we have not. I would also respectfully say to Deputy Maçon that he might not be aware that I addressed the panel on these amendments prior to lodging them, I think on 2 occasions. I wanted this debate and was requesting this debate because of the importance putting in on the statutory basis the Fiscal Policy Panel, whose terms of office have expired and have created a problem for me. I wanted this debate before the summer break. I briefed the Corporate Services Scrutiny Panel before lodging the amendments in June and I extended the period of time. I said "Yes, we would debate this in September", and I am afraid this is urgent, this is an issue that needs to be resolved because of the other provisions there and I want the Public Finances Law put in place on a proper basis so that we can do it, because much of this is agreed. I am afraid to say that on some occasions there is a political colour of different Members and the Corporate Services Scrutiny Panel have particularly strong views about issues in terms of public finance which might not even accord to what Deputy Maçon believes, and so it is not a bad thing, it is not a criticism, it is not a slur against Scrutiny to say that on occasion we will have differences of opinion. There are 2 issues which we do not agree on which I will address during the course of my remarks and I will be saying to Members that there is an entirely reasonable argument to allow Heads of Expenditure to be moved between departments. Frankly, on the other issue of whether or not this Assembly wants to give itself provision to make additional allocations during a 4-year term, that is a joint issue between me and this Assembly. Does the Assembly believe that it wants the ability during a 4-year term to allocate something additional to a department given a political priority, because this Assembly could be in a position that it wants to do something, but the law does not allow it. That is clearly a matter for Members, but I do not think it is fair that Deputy Maçon casts me or the relationship with Scrutiny in that way. Now, Deputy Vallois, Senator Ferguson, Deputy Le Fondré spoke strongly, and indeed, Deputy Vallois, if I may say, she went perhaps a little too far in saying that on the 11(8) thing, that she was going to bring forward a proposition to completely do away with contingencies. I ask her to reflect upon those remarks and really whether or not that is the kind of Stateswoman- like approach that one may take. I think that was probably a petulant remark, because contingencies are absolutely required and they have improved the running and the appropriate running of the Council of Ministers. Contingencies were not available before, hence 11(8) requests were required and they came regularly. The Assembly allocated tough budget allocations to departments and contingencies were put in place, for example, as a protection to deliver some savings such as procurement and it is simply not right for Senator Ferguson also to say that the Council of Ministers has earmarked or has spent contingencies before they have been made. The Treasury and Resources Department this morning has given me a list of potential risks in 2014 and 2015 of new things that have come forward. Well, Senator Ferguson again seems to know what is on this list before I have even said anything, which is interesting. I will give one example of something that this Assembly today will deal with, which is an Assembly request potentially already endorsed by Deputy Young which was not foreseen in the M.T.F.P., which is a real-live example. The fact that the planning appeals alternative system is going to be more expensive - that was not envisaged in the M.T.F.P. - is an absolutely good example of this Assembly having something additional which we need to find resources for, which this Assembly is asking me in a later debate to find resources for. That is on the list of contingencies. Can we say to the Minister for Planning and Environment: "We want you to give a new appeals mechanism. We know it is going to cost more money, but you have to live within your own budget to do it" when it is going to cost £200,000 on a relatively small department that has been one of the leaders, if I may say, to the Minister for Planning and Environment in terms of delivery C.S.R. (Comprehensive Spending Review) cuts? Now, that is an example of a political priority which shows that you need

contingencies and some flexibilities, and yes, I will give way to Senator Ferguson. Senator S.C. Ferguson:

I wonder, Sir, for the purposes of clarification the Minister would like to read out the list of contingencies he has there in front of him.

Senator P.F.C. Ozouf :

Well, they are quite long, I am not going to read out everything, but some of them - because it would just be not a good use of the Assembly's time - yes, I will summarise, because some of them are quite lengthy - the H.C.A.E. (Historic Child Abuse Expenses) expense claims. Now, that is the expense claim for the Historic Abuse Redress Scheme. That has been a use of the contingency. I defy any Member of this Assembly to say that that is not an absolutely appropriate and unforeseen amount in expenditure and the amounts have been there. There is an amount for the Band of the Island of Jersey. I cannot remember exactly what it is; I think it is for uniforms. That was something that was forgotten. Is there any Member of this Assembly that is going to say to me, to the Minister for Treasury and Resources, in something .. and yes, there will be things that are forgotten. We are a £700 million organisation and it is £20,000, and should we say the Band of the Island should not or: "No, the Treasury cannot sort it?" Yes, we have put in place provision for additional funding for a Cadet and Military Liaison Officer, which is run out of Government House, doing excellent work in Grainville School and others with cadets and, yes, we put the additional funding, reaching disadvantaged youngsters and helping Grainville in terms of their arrangements. A bad thing? Something that was foreseen 2 years ago? I do not think so. There are contingencies for pay awards, the doctors' pay award, which Members may be aware of. There are other things to

do with the nurses' pay award and others. So are some contingencies held for the flexibility of negotiating the pay settlement. Entirely appropriate arrangements and Deputy Vallois knows the contingency has got some sub-allocations in terms of the pay award and others, and yes, looking forward there is a contingency item here forecast potentially for other Members bringing propositions for things that we may be asked to be spending money for and Members do bring propositions. There is a proposition from Senator Breckon asking for us to come forward with the compensation amount. Where will that come from? So yes, it is earmarked in Treasury contingency. Is that the Treasury being wrong, is that us saying .. "I am not saying we should agree to it" but it is there to do it. Nurses' pay award, countryside infrastructure, some Parish schemes that we want to do and bring forward. L.V.C.R. (Low Value Consignment Relief) costs, that was unexpected and nobody would ever say anything for that. There are other things in relation to, certainly, some aspects of the London Office were not originally put in place. Those are relatively small amounts. So the Charities Law, there are some arrangements that we think we need to put in place that was not provisioned there. That is a one-off amount. The Discrimination Law, there are some additional costs that were not envisaged at the time of the M.T.F.P. - I am just running through these - and there is the planning appeals thing there, which will come forward later, which is in 2015 at £148,000. Simply the issue, contingencies are agreed and an amount of money is agreed by this Assembly to be held by the Treasury to be released for departmental challenges and yes, it is difficult, and that is appropriate and we do need to assist. We need to be tough on departments, we need to be tough on them delivering their savings, but we do need to have some flexibility where that is the case and I need that flexibility, and surely it is not right for Deputy Vallois to simply say: "Do away with contingencies and every time a Minister has a problem, they need to come to this Assembly to solve that problem". That is simply unreasonable, Members are delegating to the Government of Jersey and the Treasury the operational running of departments and there are going to be unexpected items and we are tough on contingencies and contingencies are working well. The Deputy of St. Ouen: I am grateful to the Corporate Services Scrutiny Panel for recognising the tough financial management that has been improved over the last few years and certainly in my tenure and in the tenure of Deputy Noel and the former Connétable of St. Peter, and in our term of tenure at the Treasury and Resources Department, we have been tough and we have improved financial management. I will give way to Deputy Young, if he

wishes.

4. Deputy J.H. Young of St. Brelade :

I am sorry to interrupt the Minister for Treasury and Resources, but I am concerned about his explanation on the difference between contingencies and transfers. He has cited a number of examples where I am sure Members would want to ensure that we have flexibility, but I am still very confused over what are those changes; for example, the example he gave about planning applications, just what comes under the notion of requires additional sums to be voted in the plan' and what of it can be dealt with under transfers. I would have expected there would have been sufficient flexibility within the States budgets to deal with those sorts of items by transfers between vote. I would like that clarification. I am very unhappy with this process where we are throwing around a really important ..

The Bailiff :

I am sorry, you cannot make another speech. Deputy J.H. Young:

My proposal is that Article be referred back under Standing Order 83 for this part in order to have an explanation in writing from the Minister to clarify this point before we vote on it.

The Bailiff :

I thought you just applied to intervene to ask a question, but .. Deputy J.H. Young:

The Minister gave way. I apologise if I strayed, but it is a point of order, Sir. I will withdraw that and do it after he has finished.

The Bailiff :

It is not a point of order. I think it is too late now. We are at the end of the debate. The Minister is replying and you cannot pop up and ask for reference back in the context of interruption of another speech.

Deputy J.H. Young:

Could I have an answer to the question then, Sir? Could I have an explanation as to the difference between ..

The Bailiff :

Yes, of course. Senator P.F.C. Ozouf :

Indeed, happy to do so, and Members are equipped with knowing the arguments, and I will summarise them at the end of my remarks. This is not complicated, this is really quite simple, and I was in the middle of .. and Deputy Young, in a former life, had a responsibility. He was an accounting officer within a department and I will address virement issues which he will be aware of. I would imagine as a former Chief Officer, who used virements within departments, and certainly they were used from planning when I arrived at planning, he would say that flexibility is required. Flexibility was certainly well in force when I arrived at planning a number of years ago, so I am slightly surprised that he now wants to almost curb the flexibility. I am not giving way to any other Members.

Deputy M. Tadier of St. Brelade :

I did have a point of order. It relates to the reference back, Sir. Under Standing Order 83, it does say that a States Member may propose without notice during the debate. Obviously that raises the question if the summing-up is part of the debate and I think decisions have been made in the past and the logic goes that if a Member has concerns that something has not been answered, that there is a piece of information that is missing, you cannot know that until the summing-up, because you wait for the summing-up to be given, and then if you are not satisfied with the summing-up that has been given, the information may still be lacking. I think in this case I feel the same as Deputy Young, that we need a formal response to the areas that Scrutiny have raised. They have not had a formal written response as we might otherwise expect and that is the basis for the reference back, Sir, so if I can ask that the reference back be made so that the Minister for Treasury and Resources can respond formally to the concerns that Scrutiny have, that they are still concerned about, so that we may all see that information before we make an informed decision.

The Bailiff :

Sorry, I am just reminding myself of the exact terms of the Standing Order. The Standing Order says: "A Member of the States may propose without notice during the debate on a proposition" and I think that must be right, that the debate at the moment is continuing. I am not aware of it ever having happened before and I have to say, it seems to me leaving it extremely late, but nevertheless, I think that it is during the debate. It is only in order though if there is further information or there is any ambiguity or inconsistency in information which has already been provided to the States. Now, Deputy Young, can I have clarification on what is this further information you say is listed there?

[10:15]

Deputy J.H. Young:

I would like the Minister for Treasury and Resources to clarify the difference between Article 10 allocations under this amendment and the variations in heads of expenditure under Article 12. I would like that clarified to explain on what occasions it is appropriate to use those things and I would like that in the context of a reply to the Corporate Services Scrutiny Panel's report.

The Bailiff :

Can you not, first of all, ask him to deal with that in his reply?

2. Public Finances (Amendment No. 4) (Jersey) Law 201- (P.73/2013) - reference back

1. Deputy J.H. Young:

My concern is that this is a very complex business and this really needs fine detail and so I think my request is to have that written information as a reference back and then we can all make that decision when we have the proper information. That is my reason for the proposal.

The Bailiff :

Very well. Is the proposition seconded? [Seconded] Well, then, I am going to accept it. So we now have a debate open on whether there should be a reference back but I do urge Members to be brief on this.

Senator P.F.C. Ozouf :

I would say 2 things. If Members have the proposition before them, perhaps they could look at the individual articles. Deputy Young, there is absolutely no additional information that a further report that in the context of Scrutiny. I have effectively already responded to the Scrutiny request because Members will be aware of the 2 issues that we do not agree with, which I have already addressed and communicated overnight with Members and they have seen my argument. So there is nothing further that any Scrutiny response will be over that that I have already provided. In respect of the Articles 10 and 12, 10 is simply the reintroduction of this Assembly's ability to allocate an additional amount of money within the period of the financial plan, which is not a state of emergency, which is what the States would do. That is effectively what that is. This is a provision. It is not automatic, it is not a "pot", as Senator Ferguson said. It is a provision that allows for this Assembly to make an amount available. In relation to permitted areas of Heads of Expenditure, this permits departments to, with the authorisation of the receiving Minister and the giving Minister, to move resources from one department to another subject to the Minister for Treasury and Resources agreeing. It is a transparent process which must be done by Ministerial Decision and is reported in the 6-monthly report to the States. Those are the differences and I think that there is nothing further. I think that Members know exactly what those issues are. That is the explanation of what those 2 articles are and there is nothing further that I may add by referring this back. Deputy Young said yesterday that he had not read this until yesterday. I am not criticising him but it is, I think, clear to most Members if they have been reviewing their documentation.

The Bailiff :

Does any other Member wish to speak on reference back?

2. Deputy J.A.N. Le Fondré of St. Lawrence :

I will support this because to be honest, I am highly fed up with how this whole debate has been handled from the perspective of, we are getting very late comments coming through from the Treasury and Resources Department on a report which has had a lot of time spent on it and was produced in good time at the end of the summer break. The perspective from that point of view that what we are doing at the moment, we are making decisions made upon emails we are receiving less than 24 hours before the debate. That is not a good way to make a decision. [Approbation] That is the summary and I think it will do no harm to calm it down a bit and to get some considered responses. I have to say in response to the Minister summing up that, for example, he has made reference to the Historical Child Abuse Enquiry. Now, my recollection is the H.C.A.E. was used as a compelling argument for the introduction of contingencies. So why have we gone from the argument and said we need contingencies, we have all supported that ..

The Bailiff :

You are getting on to merits. Can you just confine yourself to the need for a reference back. Deputy J.A.N. Le Fondré:

Sir, that is why I am trying to get to the point. Clarification is required and I am using this as an example. We have had an argument way back to introduce the contingencies of about, I think, £27 million. What we are now turning around and saying is that we suddenly need greater flexibility for exactly the same reason used for the contingencies to basically spend more money than that £27 million. It will be fine because it will come back to the Assembly. I think we need a greater response from Treasury on that information before one goes into voting pour or contre. If this does not go through as a reference back in the next 2 minutes.

The Bailiff :

Deputy Martin, did you wish to speak on the reference back?

3. Deputy J.A. Martin of St. Helier :

Yes, and I did want to speak just briefly, Sir, as well.

The Bailiff :

Go right ahead.

Deputy J.A. Martin:

Really it is to endorse and may be helpful to the Minister for Treasury and Resources that as he said, he was disappointed that Deputy Young had not read everything and we all know that Deputy Young has a big proposition coming up a little bit later on in this debate which has probably been an example for why we might need to have Article 10 and even possibly 12. But the Minister for Treasury and Resources again, and with all their, let us say, officer support, has been very tardy on this and again, we have been supposed to read things overnight. A lot of Members had meetings after this last night. Myself, I did not get home until 8.45 p.m. Yesterday I had hours of things to do and do. Again, up at 6.00 a.m. this morning and I have just been able to open that email because I have the luxury of a Blackberry. I am not saying the information in there may be okay to carry on this debate in 2 weeks' time and I just think the Minister for Treasury and Resources should not be banging his head. He said it is urgent. This is absolutely urgent but I do think the way this is going, it could be a reference back whereas if he decided to defer it for 2 weeks so everyone did have a chance to digest the helpful comments, maybe ask a few questions and obviously there will be some who will still not be convinced that Article 10 is needed. I am probably a bit sceptical as well. Then Article 12. Why are we even bothering? Why are we planning for anything when we can just move money around and if we spend too much we will then go over the top. But the Minister obviously is the Minister for Treasury and Resources. He knows a lot more than me but

sometimes what he does not see is the mood of the House. He really should not sometimes sit there making faces at people who are speaking behind him but listen to the whole mood of the house. [Approbation] I think this time, just to move it a couple of weeks, would not hurt. So that is really all I have to say.

The Bailiff :

Does any other Member wish to speak on reference back?

4. The Deputy of St. Ouen :

Just very briefly and to highlight again one of the comments made by our independent adviser in the report. He raises the issue that due to a lack of precision around what range of scenarios would qualify as being urgent is significant in this particular matter, unlike Article 9, which qualifies exactly what emergency and appropriate action would be taken at what point. So, with regard to that, it is absolutely right and it is an issue that the Corporate Services Scrutiny Panel raised, we need to fully understand and the States need to fully understand what qualifies as an urgent need. In fact, it would be beneficial to see that being mentioned and outlined underneath and in the context of this Article.

The Bailiff :

Does any other Member wish to speak on reference back?

5. Senator I.J. Gorst :

I appreciate that Scrutiny have done a lot of work on these amendments. They have had to do that over the summer recess and not all Members might have had the time to perhaps read it more than once, as with these amendments and therefore might feel that further information is necessary. But if I could just refer them to what the Minister for Treasury and Resources said at the start of the request for the reference back. We can sometimes try and make issues more complex than they are. I think that Scrutiny have done good work but they are in principle against the need to reintroduce what was 11(8) and that is a perfectly legitimate position to take. I do not think that we need more information to be able to make that decision today and I do not think that any further information is going to change the view of the Scrutiny Panel. They have quite clearly put forward their position and that is exactly what we asked Scrutiny to do, to review amendments, policy, legislation and come forward with an opinion and they have done that with the help of their professional adviser. From time to time, it will always be that Ministers may agree to disagree. The Minister for Treasury and Resources has largely agreed with many observations of the Corporate Services Scrutiny Panel and has largely accepted the Corporate Services Scrutiny Panel's amendments. In this particular area, he does not agree with them and we have discussed that at the Council of Ministers and the Council of Ministers supports the Minister for Treasury and Resources. The first Article, 10, which Members are asking for more information about is quite clearly, as the Minister for Treasury and Resources said, it is allowing this Assembly. It is the Council of Ministers saying that it thinks that this Assembly should not, indefinitely for a period of 3 years, tie its hands. So the power remains with this Assembly to be able to make those decisions and to deal with the information that it might require on an individual basis. It is looking back and there may be times when this Assembly wants to use the facility that Ministers are recommending and I think that is an eminently sensible position to be in. We would, of course, expect it to be in extreme circumstances but is it right to say that we do not want this Assembly to have that ability within the regulation? I think that what we are proposing now is that it is eminently sensible as a complete backstop position to have that ability within the regulation and therefore the decision is straightforward in

that respect. Of course, 12 is about transferring between Heads of .. Deputy M. Tadier :

Sir, a point of order. This is not related to the reference back. This is in the territory of the substantive debate.

The Bailiff :

I think at the moment he is explaining why there is no further information, he says, that will be forthcoming. It is a simple issue, he says.

Senator I.J. Gorst :

I am simply saying why the information is already there and the decision is about whether Members wish to give themselves that backstop position or not. I do not want to use the words, "contingency-planning", but it is the ultimate contingency to give the Assembly that ability. Some Members have suggested that what would 2 or 4 weeks be? That again is on the surface a compelling argument but of course we know that the Treasury and Resources Department are busy preparing for the budget and that is going to be announced on 8th October, so we are very quickly going to be up against that position and therefore it is right for us to deal with it today rather than defer it because I, with respect, believe that the information is there. There may be a disagreement with Scrutiny about the best way forward but I think Members do have the information to make that decision this morning.

Deputy J.A.N. Le Fondré:

Sir, can I seek a point of clarification from the previous speaker? Only briefly. The Chief Minister made reference to the amendments from Scrutiny largely being accepted. Could you clarify that? Because the only one I am aware of is the position on Treasurer of the States, which I have to say ..

[10:30]

The Bailiff :

Deputy Le Fondré, that has nothing to do with the reference back. Deputy J.A.N. Le Fondré:

It is a comment he made, Sir, in his speech.

The Bailiff :

I know he mentioned it in his speech but it has nothing to do with the reference back. Now, Senator Ferguson?

6. Senator S.C. Ferguson:

Yes, I will try and stay on the point. It would be helpful to the Assembly, if the Minister explained why the incorrect use of contingencies and increased flexibility, which he is asking for under this amendment, is in the interests of best financial management. It would help if he published a full list of the items on the contingency fund to support his arguments and to explain why the total elasticity enclosed in Article 12 is absolutely essential. These are items which must be explained to the Assembly because as far as the Corporate Services Scrutiny Panel goes, we are looking for best financial management and this is why we put forward the remarks and arguments that we did.

The Bailiff :

Does any other Member wish to speak on the reference back?

7. Connétable P.J. Rondel of St. John :

I must say, people in this Chamber have short memories. Only earlier this week I recall hearing a radio programme where the Chief Minister was praising the work that Scrutiny do and as soon as Scrutiny ask for something to happen, it is outside of his position to give the support that is required. Really, talk about talking with false tongue. This is the first occasion where there is a challenge up from members of Scrutiny and we are not giving the time that is being requested. The whole debate, as far as I was concerned, in this area of the debate is a re-run of the Health Insurance Fund and the way the money was taken out. As far as I am concerned, I would ask the Chief Minister to reconsider taking this away and giving the Scrutiny the time they require.

The Bailiff :

Does any other Member wish to speak on the reference back?

8. Deputy M. Tadier :

Sir, I will keep it brief. This is not about the Minister's right to disagree with Scrutiny. This is about proper process being followed and basic courtesy, I would suggest. Now, the Minister was quite revealing in his comment. He said: "Well, I do not need to provide the information because I have responded effectively because I sent this email last night." When did it arrive? 20.24 on Members' laptops if they happened to have it open at that time and certainly for my part - and I know for Deputy Young who has it on his tablet here - we cannot open these documents on our laptops anyway at the moment because the I.T. (Information Technology) function does not work. That is being looked at. Is it really satisfactory, I would ask rhetorically? How long did it take the Corporate Services Scrutiny Panel to research all those answers? It is only when the Minister for Treasury and Resources is effectively caught out because this has not been responded to formally. Why do we have a Scrutiny function at all if we do not have the courtesy to provide the information in a meaningful way? To say that we have the information in front of us, how many have had time to digest that information that only arrived last night? A smaller example in my own case, the reason I deferred, for example, the S.T.V. (Single Transferable Vote) and A.V (Alternative Vote) is, because I know we have had a long summer, Members may not have had a chance to read it. We have had expert advice and you have the time for the interactions. Scrutiny must be done in the open. The documents must be there. Not simply so that Members can say: "Well, we probably trust the Minister for Treasury and Resources on the balance of probability in this case." It needs to be there for all the information to be examined and we take a very dangerous step today if we continue to undermine Scrutiny in this way. We have already empowered Ministers under our system greatly, something the Machinery of Government Review talks about and if the Council of Ministers - after becoming increasingly more powerful - if we are to abdicate the responsibility from the Assembly to the Ministers and to give them more trust, the accountability mechanisms must be there and they must lie with the Scrutiny function. This is a basic courtesy. The information should be laid on the table for 2 weeks so that everybody can digest it and that any problems can be resolved in a non-rushed way. These are simple basic things that you would expect from a functioning Assembly. I ask Members to support this reference back and to support

Scrutiny.

9. Deputy G.P. Southern :

Very briefly I just draw Members attention to the complete absence of any pause whatsoever between the phrase: "I have every respect for Scrutiny but in this case we differ." The assumption is therefore: "Trust me. I know what I am doing, let me through with this."

10. Deputy E.J. Noel of St. Lawrence :

I would just like to remind Members of the point that the Chief Minister said, a reference back would not provide any additional information. This is merely a difference of opinion between the Treasury and Resources Department, the Minister for Treasury and Resources and myself and Scrutiny in this matter. It is for Members - they have the information - it is for them to decide which camp they wish to be in.

11. Deputy J.M. Maçon:

I think Members are also missing a point. When we have our responses from the Ministerial points in our report, it is also for the Scrutiny Panel to then consider what is the way forward, possibly change their stance when they receive that information and clarification. The Corporate Services Scrutiny Panel is asking for that opportunity. It is the process that this Assembly has agreed to when adopting the codes of practice. It seems rather bizarre that we can turn around and not support Scrutiny in this case because that is only fair and it is what we have agreed to do in all the processes. I do not believe that an email responding to some of the points the night before in the middle of a debate which concerns raising to the Scrutiny Panel, is going to be acceptable. Certainly I would not accept it as a chairman of a Scrutiny Panel and I do not think any other Members should accept it either. That is why I think we have to support Scrutiny and this reference back.

Senator P.F.C. Ozouf :

Sir, can I just make a point of information which is fairly important? I have already responded to Scrutiny's draft response. There is a difference of opinion. I have already responded with a full, annotated version of the comments..

The Bailiff :

You have spoken in this debate, Minister. Deputy Vallois?

12. Deputy T.A. Vallois of St. Saviour :

I was a member of the Scrutiny Panel that looked at this. I can understand other Members asking for a reference back. In my own opinion, the only thing that I feel the Minister has not answered with regards to this particular area - because Scrutiny did come up with a compromise in their report with regards to Article 12 - is that the Minister for Treasury and Resources should give due consideration to proposing an alternative approach similar to that of Standing Order 168 for the transfer of funds between Heads of Expenditure and he has not stated whether he would consider doing that. I have not heard anything around that area. In my view, I think the arguments have been relayed about the 11(8), whether to have it or not and how good the contingency system is and the views of individual Members. Can I just remind Members that Scrutiny is about evidence- based reporting? This report has been done based on evidence and working with an experienced and professional adviser. When we are in this Assembly, independent Members have their own views and the Minister for Treasury and Resources has made that point and he seems to believe I am a petulant child but I just thought I would make the point here that although the Minister is saying that he has answered, there is a compromise within this report that he has not answered. So if he was willing to answer that then I would be happy. The reference back .. there has been a lot of time being put into this, not just from the Treasury and Resources Department but from the Scrutiny point of view. All the information is open, up for Members to read and identify and make a decision, and Scrutiny have been criticised repeatedly in the past about not doing enough legislative scrutiny. This has been done line by line. This has been put across and the Minister just does not agree with what Scrutiny have put forward and it is for this Assembly to decide whether they agree with that or not. In my view, if I was to get an answer as to whether that recommendation, I would not support the reference back.

The Bailiff :

The Minister is half way through his speech at the moment so if the reference is successful, his speech will end. If the reference is unsuccessful, he will deal with whatever matters he wishes to deal with. Does any other Member wish to speak on reference back? Senator Farnham ?

13. Senator L.J. Farnham :

I just wanted to address very briefly the situation with this email. So the Minister for Treasury and Resources sent a very short email and it took me all of 4 minutes to read the email and the attachment. I really think Members are trying to use this as an excuse. The reference back will only serve as a delay. The alternative, of course, is to support the amendment. But the email was perfectly reasonable and very helpful.

The Bailiff :

Does any other Member wish to speak on the reference back? Then I invite Deputy Young to reply.

14. Deputy J.H. Young:

I do not think I am the only Member to find this debate very difficult. It is clearly a very important subject and the choice we are asked to make goes right to the heart of our financial management. We need flexibility in our finances to be able to operate but we need the rules to be clear and understandable by everybody. I think we need clear, digestible information in which to make that choice. I apologise that I have not been able to get myself fully up to speed with this information. I accept this information has been out since June but the Scrutiny report obviously came at the end of August. It is a very big subject, very fat, a lot of issues in here, and here we are debating it without a formal response that clearly sets out the information on which to make that choice. I thought I was being helpful to the States because I do not like having to vote and being put in this position where we have the Scrutiny, Ministerial divide and we have to back Scrutiny or Ministers on our guts, as it were. I do not like that. I want to do it on the basis of information because I want that decision to be reliable. Of course, this email, as Deputy Martin said, I had to spend time preparing for other matters on today's debate and I did not open this email. I have opened it this morning, I cannot open the attachment. I am sorry but I just think one evening before the debate is just not enough on a crucial point and I am a little bit disappointed that my proposal, that I am going to debate later, is brought into this whole thing. I want to see flexibility, I want to see the rules clearer, I want them explained and I think it is so complex that doing it verbally across the House like this, without a formal document, is not best. I do not want a long delay. I just want a good process to make a decision. So, I therefore make the proposition for this reference back.

The Bailiff :

Do you ask for the appel? Deputy J.H. Young: Yes, Sir.

The Bailiff :

The appel is called for then in relation to the proposition of Deputy Young that this matter be referred back. I invite Members to return to their seats and the Greffier will open the voting.

3. Draft Public Finances (Amendment No. 4) (Jersey) Law 201- (P.73/2013) The Bailiff :

Very well. We will then return to the debate and the Minister's reply.

1.3.1 Senator P.F.C. Ozouf :

I am grateful to Members for not agreeing to a reference back. I do not wish any discourtesy to Members. This is an urgent matter and I will return to the substance. I was not going to be in the Assembly in 2 weeks time and the next sitting after that is the budget statement and I am due to be in Washington for the I.M.F. (International Monetary Fund) World Bank meeting and must be immediately departing and I had already asked for this matter to be taken before the summer break. I think Members are going to be fully-equipped. I will be asking for a vote on each of the individual articles and Members who do not agree with the provisions simply can vote against it. I really do think that all Members will be perfectly equipped to know the arguments about the individual items. So I will just make a few final remarks, if I may, responding to those Members who spoke. I would just say to the Deputy of St. Ouen, no power is going to exist in relation to the variation of Article 10. No power is going to exist within the Treasury and Resources Department to do this without this Assembly's approval. I think that is absolutely vital. It is this Assembly that is going to be given the approval to ultimately vary the M.T.F.P. if it wishes. Frankly, if a Minister for Treasury and Resources is going to come forward in the next few years with an additional allocation that the Assembly does not like, then he or she is going to have to think very carefully. It is almost a vote of confidence about whether or not the Assembly has confidence in the ability of the  Minister  for  Treasury  and  Resources  to  be  running  public  finances  and  to  make proper allocations. Ultimately, of course, doing what this Assembly wishes. I think that the areas where we do agree with the panel, and I know that the Deputy Vallois wants an alternative of a standing order but we simply do not agree. The Articles - if I can go through - Article 9 is simple and I think agreed. 10: it is a matter for Members. If Members want the flexibility for this Assembly to put more money into a budget, it is a matter for Members to do it. It is not a die in the ditch for the Treasury and Resources Department on this one. Frankly, it is a matter for Members. It is a reasonable issue.

[10:45]

Article 11, Central Planning Vote: that is warmly welcomed by all parties. We all agree on that. As for the permitted variances of Heads of Expenditure, I will say in summing up, this is what I think the States Assembly wants the Council of Ministers to do. They want the Council of Ministers to work together to deal corporately and collectively with problems. From a Treasury and Resources Department point of view, before I go and allocate a contingency to a priority, I will go to Ministers and say: "Can you absorb this particular problem without us referring to contingencies before we take the step, if we get it, to go to the Assembly?" Moving Heads of Expenditure between departments is collective, collaborative, corporate working. Deputy Vallois, in a previous debate and on previous matters, simply said: "I do not want to know how you deal with it, Ministers, just get on with it." Well, this is Ministers being given the ability to get on with it. I hope he does not mind, but the Constable of St. Brelade kindly rang me this morning because he wanted some answers to some questions he had. He said: "What is the safeguard for Scrutiny? We scrutinise the budget and then you can change it, what are the safeguards around that?" That was an absolutely appropriate question and I would say that the safeguards are this: First of all, it is reported. If there is going to be a change ahead of expenditure, it is reported by way of Ministerial Decision and then it is going to be reported in the quarterly monitor and that reporting means that Scrutiny can ask questions about it. If they think the decision is wrong they can challenge it and they can bring questions. They can use the normal political process to bring .. it is the ability of being questioned, it is the ability of getting found out which stops you doing things, so that is an important safeguard and a protection. It is obviously reasonable, surely. Scrutiny panels themselves are sharing information, moving projects from one panel to the other; that is, in effect, a resources issue. I have to say that Members can treat the Treasury and Resources Department on their track record and I know that there is a C.I.P.F.A. report that has been put forward. I have to say that I am advised by the Treasurer of the States that the Treasurer of the States is on the C.I.P.F.A. Council and, as usual, with economists and lawyers, sometimes people will come to differences of opinion. The Treasurer of the States, who I think is held in very high regard - she is held in extremely high regard - and indeed the professional staff we have within the Treasury, they think that this is an appropriate issue that we should be dealing and give us the flexibility and, frankly, gives the Treasury and Resources Department the ability to have tough discussions with departments when an issue arises which we need to deal with. Consuming our own smoke is something that I think Members want us to do and this gives us the flexibility of doing so in a full reporting. I will just concede, if I may, one further thing, I do not think it is appropriate to suggest

that the Treasury is run like a chip-shop [Laughter]. I have done a few jobs in my life but chip- frying is not one of them, at least not recently. Frankly, we can raise the tone and raise the level of this debate. I will say one thing that I have had a discussion with my Assistant Minister this morning and the Treasurer of the States about reporting because one thing that is fair to say of the C.I.P.F.A. report is to say that there is a lot of flexibility to departments. We vote a proposal to give the Health and Social Services Department an amount of money, and the Education, Sport and Culture Department, and they themselves, without any reporting, can move money between primary education, secondary education, social services or elsewhere. There is no reporting. What I have discussed this morning - which gives an indication to Members, of the toughness and the approach of the ongoing improvements that we want to make - I have been discussing this morning with the Treasurer of the States an appropriate new financial standard, a new direction which will require departments themselves to report virements within their own department's Heads of Expenditure, which is a further strengthening of a reporting to meet the Connétable of St. Brelade 's issues because he is quite right to say that, yes, you vote an overall budget but then Ministers

themselves  with  their  Accounting  Officer can  move  Heads  of  Expenditure  within  their  own departments. Therefore, there is an example of the Treasury and Resources Department wanting to constantly improve the transparency of the reporting of information and, if Members do vote in favour of this, I will commit to further - we now do a quarterly monitor. That has never happened before. We never reported financial information to Members except in the annual report. We now do quarterly reporting; we now get a 6-monthly publication of a report which is just going to be done and I will commit to Members of including in that quarterly monitor a summary of all the Heads  of  Expenditure  movements  and  the  Treasury  and  Resources  Department  will  give consideration to do in-department virement reporting, something which Deputy Young will know happened extensively certainly in his department when he was Chief Officer and that perhaps reporting  will  be  an  appropriate  and  additional  safeguard.   Members  I  think  have  all  the information. I propose the articles to be taken in order and that Members, if they do not like the 11(8) provision, they can simply vote against it. I think I have answered all Members' questions and I ask for the individual articles to be taken separately.

Deputy G.P. Southern :

There is one question which I find has not been answered which is my question yesterday, and the Minister for Treasury and Resources quite rightly may well have mislaid his response to it, which was does Article 10 give this House more power to ensure that Ministers do deliver when this House votes for an issue like - and the example I chose was the Hoppa Bus which was voted by this House and yet the money was not found come the Medium-Term Financial Plan. Does it increase the power of this House to hold the Minister to account?

Senator P.F.C. Ozouf :

I do not think it holds the Minister to account; you need to have a Minister for Treasury and Resources that is going to bring forward a proposition to bring forward that. But, you know, political priorities I will not go into detail, there is flexibility. The Members are going to receive the  full  budget statement.   There  is  in-year  flexibility within a Medium-Term  Financial Plan because there is an annual allocation of growth and one of money. Article 10 is ultimately a matter of a relationship between the Council of Ministers, the Treasury and Resources Department and this Assembly to say - notwithstanding all the other flexibility that you have, contingencies, moving money between Heads of Expenditure - on an extreme occasion  you could bring forward an additional allocation. Frankly, I would be surprised if Deputy Southern was to agree with that. I do not think it is about holding Ministers to account. It is about giving this Assembly flexibility to do something and it is a matter for Members. I do not think I can add anything else.