Provision of Extra Funding for Native Welfare

STATES OF JERSEY

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PROVISION OF EXTRA FUNDING FOR NATIVE WELFARE

Lodged au Greffe on 5th July 2005 by the Connétable of St. Helier

STATES GREFFE

PROPOSITION

THE STATES are asked to decide whether they are of opinion

to a g ree that the cost of native welfare for the Parishes' 2005 to 2006 financial year, in excess of that

actually spent by Parishes in their 2003 to 2004 financial year, should be met by the States, and to request the Finance and Economics Committee to take the necessary steps to remit the appropriate sums to the Parishes during that financial year, which ends on 30th April  2006.

CONNÉTABLE OF ST. HELIER

REPORT

When an unfair situation has been in existence for many years it is perhaps easy for people to grow accustomed to it; to forget the reasons that lie behind it; to resist efforts to find speedy resolution to it. This is what has happened in respect of the unequal welfare burden upon the ratepayers of different Parishes. For decades, ratepayers in urban Parishes have been required to contribute more to welfare payments than their rural counterparts. Ratepayers in St. Helier, St. Saviour and St. Clement, in particular, have been paying more towards welfare and residential costs than anyone else. They do so, not because they enjoy a higher standard of living or a better quality of life than the ratepayers of Trinity , St. Mary or St. John, for example – arguably they don't – but because States policies have concentrated housing in these Parishes.

Now that the States have, on at least two occasions (the debates on the Relationship between the States and the Parishes, P.40/2004 and P.66/2005) agreed the principle of equalising the contribution of individual Parishes towards what is an Island-wide responsibility, it would be wrong, in the view of the Comité des Connétable s, to exacerbate during the lead-in period before the agreed changes are implemented, the inequity that currently exists.

The Connétable s understanding of the original offer of interim welfare funding was that this was a cap on the actual cost of 2003/4 in exchange for the Connétable of St. Helier withdrawing his proposition P.104/2003 Meeting the cost of welfare in 2004-2005' asking the States –

"to agree that the cost of native welfare, including administration, for the Parishes' 2004 to 2005 financial year, and thereafter, should be met by the States, and to request the Finance and Economics Committee to take the necessary steps to remit the appropriate sums annually to the Parishes from the end of that financial year, which is 31st May 2005 in the case of the Parish of St. Martin and 30th April 2005 in respect of the other 11 Parishes."

As the proposed transfer of services under P.40/2004 Machinery of Government: Relationship between the Parishes and the Executive' would not be achieved until 2006, the expectation was that the interim funding would continue for 2005/6.

It is important to point out that even with the welfare cap' in place for the last financial year (2004/5), and the promise of a fairer system coming into effect in 2006 the ratepayers of the urban Parishes were still paying more than the rural Parishes last year, but at least such ratepayers could at least take comfort from the fact that the situation was not going to get any worse, thanks to the welfare cap', before it got better.

Although a welfare cap was only explicitly guaranteed for the first year, the Comité naturally expected it to be applied for the second year because of the delay in implementing the outcome of the Steering Group Review of the Relationship between the Parishes and the States which was originally intended to take effect from 2005. The Comité was offered some relief funding for welfare, but the amount would be calculated on the basis of moving the baseline from 2003/4 to 2004/5. In other words, while the Finance and Economics Committee would continue to cap welfare costs, this would be done on the basis of welfare costs for last year, rather than for the year before. If this offer were to be accepted, the Parishes would have to find an extra amount to cover welfare costs in the new financial year equal to the amount of welfare cap provided last year, as is shown in the table below:

Extra funding to be found by

Parish Parish if not capped at 2003/4 cost £ St. Brelade 15,319

St. Clement 53,634

Grouville 42,803

St. Helier 446,732

St. John 12,774

St Lawrence –

St. Martin 15,992

St. Mary 26,345

St. Ouën 63,744

St. Peter 43,378

St. Saviour 140,823

Trinity 57,430

TOTAL 918,975

Amount of the extra funding required in 2005/6 to fund native welfare payments if welfare capped at 2004/5 levels

While this may sound like a reasonable compromise in the States' current economic climate, and while it would not materially affect some Parishes, it would mean that, in the case of St. Helier and St. Saviour , for example, the unequal welfare burden was not frozen at all by virtue of the States decisions, but was increasing for a further year.  The ratepayers of St. Helier will be asked to find another £446,732 in the coming year while St. Saviour ratepayers will have to provide an extra £140,823, unless the States direct the Finance and Economics Committee to vary its decision. How can this be equitable, when they are already paying more than any other Parish's ratepayers towards what has been agreed is a common expense?  The proposition brought by the Comité des Connétable s asks that the States, having accepted the principle of equalising welfare payments in the future, should now honour the widely accepted view that welfare payments by the Parishes were being frozen at their 2003/4 levels.

Financial and manpower considerations

The President of the Finance and Economics Committee has offered to cap the Parishes' welfare costs at their actual 2004/5 levels. The increased amount for the new financial year (2005/6) can only be estimated, but 12% increase has been generally accepted as likely, as this was the increase in costs that took place between 2003/4 and 2004/5.

The  majority  of  the  increase  in  welfare  costs  expected  in  2005/6  results  from  increased  staffing  levels  in residential care homes, an increased cost which is directly influenced by States' policy in the regulation of such facilities.

If the proposition of the Comité des Connétable s is accepted the Finance and Economics Committee will have to make provision for an additional sum, similar to the total paid in welfare capping' for the last financial year

2003/4 actual welfare/residential care costs for all Parishes £6,967,002 2004/5 expected total welfare/residential care costs for all Parishes

(subject to audit) £7,876,328 Total amount payable as 'welfare capping' for 2004/5 (11 Parishes

only, there being an underspend in one parish) £918,975

2005/6  estimated  total  welfare/residential  care  costs  for  all

Parishes allowing 12% increase on 2004/5 expected costs £8,821,488

Interim funding required above 2003/4 levels £1,854,486 There are no manpower considerations.