Machinery of Government - relationship between the Parishes and the Executive

STATES OF JERSEY

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MACHINERY OF GOVERNMENT: RELATIONSHIP BETWEEN THE PARISHES AND THE EXECUTIVE

Lodged au Greffe on 22nd March 2005 by the Policy and Resources Committee

STATES GREFFE

PROPOSITION

THE STATES are asked to decide whether they are of opinion

t o r e fer to their Act dated 25th May 2004 concerning the relationship between the Parishes and the

Executive, in which, inter alia, they agreed that responsibility for meeting the costs of native' welfare (including a 10% provision for the cost of administration) and residential care, currently met by the Island's ratepayers, should be met from the general revenues of the States and –

(a ) to rescind paragraphs (a)(ii) and (iii) of their Act dated 25th May 2004 in which they agreed inter

alia that the cost of certain services currently provided by the Environment and Public Services Committee and Parish of St. Helier, including main road maintenance, parks and gardens and public conveniences, should be funded by the Island's ratepayers in exchange for native welfare;

( b ) to agree that the income raised through the Island-wide Rate, the introduction of which was

approved by the States on 25th May 2004, be transferred to the States to contribute towards the costs of welfare (including a 10% provision for the cost of administration) and residential care with effect from the introduction of this Rate on 1st May 2006, and to vary their Act accordingly;

(c ) to agree that the total annual income to be received from the Island-Wide Rate, together with the

proportions to be received from the Commercial and Domestic elements respectively, will be determined by the States following the recommendation of the Connétable s, constituted as the Supervisory Committee, as set out in paragraphs  11-15 of the report of the Policy and Resources Committee dated 21st March 2005;

(d ) to rescind paragraph  (c) of their Act dated 25th May 2004 in which they agreed that aConseil des

Connétable s be established as a body corporate with responsibility, among other things, for managing the delivery of a range of Island-wide services and the Island-wide Services Fund; and

( e) to agree that the Policy and Resources Committee should be charged to prepare the necessary

legislative changes to enable paragraphs (a)-(c) to be implemented, subject to States approval, in time for the Parishes' 2006/7 accounting year.

POLICY AND RESOURCES COMMITTEE

REPORT

1. O n 25th May2004 the States adopted a proposition of the Policy and ResourcesCommitteeonthe Machinery of Government: Relationship between the Parishes and the Executive'(P.40/2004, as amended).In taking this decision, the States' agreed to several significant changes relating to the Parishes and the States, including the future arrangementsfor the fundingofnative' welfare and residential care, as well as the transfer to the Parishesof responsibility for funding a rangeofservices currently provided by the Environment and Public ServicesCommittee. A copy of P.40/2004, as amended, is attached for information as the Appendix.
2. T h e Comité des Connétable shas since givendetailed consideration to this matter, in consultation with the Policy and ResourcesCommittee, and has decided that itno longer wishesto proceed with that part of P.40/2004 which relates to the transfer of services. TheComitédoes,nonetheless, still wish toproceed with theintroduction of anIsland-WideRate, and theStates are accordinglybeingaskedto agree to this revised approach.The basis for this revised approach, together with anaccountofprogresssinceMay 2004, is set out below.
3. F o llowing the decision of the States in May2004on P.40/2004, a Parish/States WorkingGroupwas established in early June to oversee the implementation of this decision. This officer group is chaired by the Chief Executive of the Policy and Resources Department and its membership consists of representatives from the Parishes and several States departments, including the StatesTreasury, the Public Services Department, and the Employment and SocialSecurityDepartment. The Working Group has addressed a widerange of tasks associated with the implementationof P.40, and the responsibility for carrying outthese tasks has been assigned to Parish and States representatives as appropriate, under the overall coordination of the Policy and Resources Department.
4. T h e Working Group agreed that oneof its main roles should be to considerandresolve issues arising during the implementation process and, where necessary, to refer any issuesupwards for resolution at a political level. Initially theWorkingGroupreported directly to the Policy andResourcesCommitteeand the Comité des Connétable s, but after a time it was agreed that there would be benefit in establishing a Steering Group,made up of political representatives ofboth these bodies, to provide guidance when necessary. Themembershipof the Steering Group ismade up as follows –

S e n a to r F . H . Walker , President, Policy and Resources Committee C o n n é ta b l e K .P. Vibert , Vice-Chairman, Comité des Connétable s C o n n étable D.J. Murphy

C o n n é ta b l e K .A. Le Brun

D e p u t y D . L . Crespel

C o n n é ta b l e A .S. Crowcroft

S e n a to r P . F .C . Ozouf

5. T h e Steering Group has provided a usefulforumforthediscussion of a numberofissues arising from the States' decision, including theproposals for a system of relief from CommercialRate.Inrecentweeksthe Steering Group'sdiscussions have centred onthe transfer ofservices,and in particular on the issueof whoshould exercise the functions of a highways authority intheproposednewarrangements.
6. I t w ill be recalled that, in approving P.40, the States agreed that responsibility for the fundingof a range of services currently provided by the EnvironmentandPublicServicesCommittee, including main roads routine maintenance,shouldbe transferred to the Parishes. TheAssemblyalsoconfirmed that the States should remainresponsiblefor capital investment in the Island's main road network, including underlying structural maintenance. In addition, the States agreed that the Comité des Connétable s should be reconstituted as a Conseil des Connétable s',which would be a body corporate with responsibility for managing the delivery of a range of Island-wide services, including main roads routine maintenance.
7. T h e responsibility for mainroads routine maintenance is currently exercised bytheEnvironmentand Public ServicesCommittee,and in this connection that committeemaintains a comprehensiveprogramme

of works. The Environment and Public Services Committee is also responsible for vehicle licensing, traffic

management (speed limits, signs and markings, parking etc.), licensing of public bus services, administration of taxis and cabs, authorisation of road works by utility companies, and a number of other services relating to the roads network.

8. T h e Comité des Connétable shasgiven detailed consideration to this matter, following discussionsby the Parish/States Steering Group, and has concluded that it would not be appropriate to transfer the responsibility for main roads routine maintenance to the Parishes because this would result in an unsatisfactory division of responsibilities, with neither the Parishes nor the States having complete accountability for the condition of the main roads network. TheComité has also agreed that it does not wish to proceed with the other service transfers listed in paragraph (a)(ii) ofP.40, including parksand gardens,publicconveniences,and litter bin emptying,asthese form part of the cost neutral' package of services that were goingtobefundedby the Island's ratepayers in exchange fornative' welfare and residential care. As a consequence, it is no longer proposed that the Parishes should take on the responsibility for the costsof maintaining public parks, gardensand toilets withinSt. Helier, ashadbeen proposed in paragraph (a)(iii) of P.40/2004, asamended.
9. I n relation to the roadsnetwork, it isacknowledged that there has been some duplicationof services between the Parishes and the Public Services Department, e.g. road surfacing and road cleaning. Discussions have already taken place on this subject, and the Policy andResources Committee would urge that discussions should continue between the Comitédes Connétable s and the Environmentand Public Services Committee with a view to identifying areas of duplication and reachingagreementon a way forward.
10. T u rning now to the proposals for anIsland-WideRate,asrecommendedinP.40/2004, both the Comité des Connétable s and the Policy andResources Committee would like to proceed with these proposals as they consider that this should resolve thelong-standing problem ofwhoshouldberesponsible for meeting the increasing costsof native welfare and residential care.The unfairness of the current arrangementsis well-documented, and was described insome detail in the report accompanying P.40/2004. Theburdenof providing the fundingfornative' welfare and residential care is much greater for some parishes than others, withthe ratepayers in the so-called urban' parishes ofSt. Helier, St. Saviour and St. Clemen having to meet a disproportionate share of the costs. The Policy and Resources Committee and the Comitédes Connétable s both agree that it wouldbemuch fairer for this burden tobe shared equally across the Parishes, with both commercialand domestic ratepayers contributing towards the costs of native welfareandresidentialcare.
11. It i s therefore proposed that an Island-Wide Rateshouldbe introduced to contribute towards the costs of native' welfare (including a 10% provision for the cost of administration) and residential care. As described in P.40/2004, the actual responsibilityfor meeting thesecostswouldbe transferred from the Parishes to the States. This would effectively take the elementof financial risk away from the Parishes, because the States would be responsible for meetinganyadditional expenditure inexcessof the total amountto be generatedby the Island-WideRate.
12. It i s proposed that the total amount to be raised from the Island-WideRateshouldbe set out in legislation, and shouldbe uprated annuallyin line with the Retail Price sIndex.It is currently estimated that the cost of native' welfare (including a 10% provision for the cost ofadministration)and residential care in the 12 months leading up to 1st May 2006 will be £9.6 million, and this will provide the basis for the calculation of the total amount to be raised from the Island-WideRate during the first year of operation. The figureof £9.6 million will need to be reviewed in May2006 to take account of updated financial information from the Parishes and, if necessary, revised so that it will be equivalent to theactuallevelof expenditure during the period May2005-April2006 (i.e. rather than the estimated level). It will then need to be uprated toreflect the increaseinthe Retail Price sIndex, i.e. because expenditure onwelfare will be taking placeduring the 12 months from 1stMay2006onwards. It is currently estimated, therefore, that the totalamountto the raised from Island-WideRates for theperiod2006-2007 will be in the region of £10 million.

13. It also proposed that thelevelofapportionmentbetweentheCommercialandDomesticelementsofthe Island-Wide Rateshouldbe set out in legislation and should be agreed bythe States onceevery 5 years. Therehas been discussion betweenthe Policy and ResourcesCommittee and the Comitédes Connétable s as towhether it wouldbe preferable for the level ofapportionment to be determined on an annualbasis, but it wasfelt that it would be better for this tobe done on a lessfrequent basis, as this wouldprovide ratepayers with a greater degree of certainty about their financial liabilities in the longer term. As envisaged in P.40/2004,the Connétable s,intheir role as the Supervisory Committee, would consult with industry representatives about the proposed levelofapportionmentbefore bringing forward any proposals in this respect.
14. O n ce the total amount and apportionmentof the Island-WideRate has been agreedby the States, each Parish would be notified oftheStates' decision, and of its liabilities in respect oftheCommercialand Domestic elements of the Rate.This liability would be calculated onthe basis of the number of quarters in each Parish.
15. I t is proposed that the incomegenerated from theIsland-Wide Rate should be paid into the States' General Funds. In the shortterm these monies will beearmarkedfor expenditure on native' welfare (including a 10%provision for the cost ofadministration) and residential care, i.e. from May2006until the introduction of the IncomeSupportScheme(planned for October 2006).During this interim period, expenditure by the Parishesonthese areas would be reimbursed by the States from theincome raised by the Island-Wide Rate.FollowingtheintroductionoftheIncome Support SchemeinOctober2006, the income generated from theIsland-WideRate would be used for general expenditure on welfare as part of the IncomeSupportScheme.
16. It w ill be recalled that the IncomeSupportScheme will establish a single integrated benefit,incorporating a rangeofmeans-testedbenefits including FamilyAllowance and native' welfare. The Committee is pleased to note that one of the consequencesofthemoveto a single integrated benefit is that there will no longer be a distinction betweennative' and non-native' welfare. Asnotedinthe report accompanying P.40/2004, the Committee believes this current distinction to be archaic, discriminatory and, in the 21st century, nolonger appropriate. Forthepurposesof this report, however, the Committeehas referred to both native' and non-native' welfare, given that two different authorities currently have funding responsibilities, namely the Parishesin respect ofnative' welfare and the Statesfor non-native' welfare.
17. A s envisaged in P.40/2004, it is proposed that the parishes will be responsible for the administration of the new Island-Wide Rate. From the ratepayer'sperspective,thesystemfor the paymentof rates will remain essentially the same.Heorshe will receive an annual rates assessment from the parish, and payments will be made direct to the parish authorities, as before. Each parish will continue to levy a Parish Rate,which will bedeterminedbythe Parish Assemblyand will be used solely for parochial expenditure, e.g. the costs ofparish administration (including staff), general refuse collection,honorary police, expenditureon byroads, upkeepofthe Parish Hall , etc. ThelevelofParish Rate will vary from one parish to another,dependingon the level of parochial expenditure approved by the ParishAssembly, and will be detailed in the annualratesassessment.
18. I t will be recalled that P.40/2004 recommended the establishment of a Conseil des Connétable s, comprising the 12 Connétable s,as a bodycorporate,and that oneof the main reasons given in supportof establishing the Conseil was that a corporate body wasneededinorder to carry outthe responsibilities for main roads routine maintenance,together with the other services that were planned for transfer from Public Services. Withoutthese responsibilities, there is lessof a need to establish a Conseil.
19. B o th the Comitédes Connétable s and the Policy and Resources Committee agree, nonetheless, that there would beadvantagesin establishing the Comité des Connétable son a more formal footing, partly because of the Connétable s' proposed new responsibilities in respect of theIsland-WideRate, and partly because it would help to removethe current anomalyinwhichany legislation, propositions orcomments are brought to the States bytheChairmanof the Comité, rather than by the Comité as a whole.ThePolicy and ResourcesCommitteehasaccordinglyrequested that provision should bemadeinthenew Standing Orders for matters relating to the Island-WideRate to be referred to theComité des Connétable s. In

addition, it has asked that Standing Orders should allow for the Comité des Connétable s to lodge propositions au

Greffe', and to publish comments in its own name.

20. T h ere remain 2 other areas that were addressed in P.40/2004onwhich the Committeeneedstocomment. Firstly, the Stateshaveagreed that the current responsibilities of the Economic Development Committee under the Policing of Beaches (Jersey) Regulations 1959, as amended, and the Places of Refreshment (Jersey) Law 1967, as amended, should be transferred to the Parishes together with the associated income'. Both the Policy and ResourcesCommitteeand the Comitédes Connétable sagree that they would wish to continue with this aspect of the proposals, although it is not essential that they be introduced inMay 2006 at the same time asthenewIsland-WideRate.
21. S e condly,the States have alsoagreed that the Finance and Economics Committee should be charged to undertake a review of the States land and property portfolio in order to bring recommendations to the States before the end of July 2005 regarding the States' liability to rates'. This workis already well under way, and it is understood that the Finance and Economics Committee is on target to bring recommendationstotheStatesbefore the endof July 2005.
22. In conclusion, therefore, the Policy andResources Committee and theComitédes Connétable recognise that the proposed course of action set outin this report and proposition will represent a change from the States decision of May 2004. However, these revised proposals will help to resolve one of the fundamental issuesaddressed in P.40/2004, namelytheissueofwhoshouldbe responsible for meeting the burdenofnative' welfare andresidential care. IntheCommittee'sview, it iswrong that a minority of parishes should be expected to shoulder a disproportionate share of this burden, and it should be recognised as anall-Islandresponsibilitythrough the introduction of anIsland-WideRate.

Financial and manpower implications

23. T h eseproposals will nothaveanyimpacton States manpower resources. The proposals will, however, have financial implications becauseofthe transfer from theParishes to the States of responsibility for meeting the costs of native' welfare (including a 10%provisionfor the cost of administration) and residential care.Asnoted in paragraph 12above,thetotalamount to be received from the Island-Wide Rate during the first year of operation will be equivalent to the actuallevelof expenditure on native' welfare (including a 10% provision for the cost of administration) and residential care during the 12 months leading upto 1st May2006, uprated to reflect the increasein the Retail Price s Index.Itis recognised that the costs of native welfare and residential care will increase in the future at a rate significantly above the level of inflation, as detailed in paragraphs 8-16 of the report accompanying P.40/2004, and provision will therefore need to bemadeby the States to meetthese additional costs. During the first 8 months of operation (May-December 2006),it is estimated that the States would need to provide an additional £600,000 to meettheshortfallrequired to cover the total costs of native welfare and residential care,whilstthe total additional cost to the States for the 12 months from January to December 2007 is estimatedat £1.4 million. From that time onwards the States will be facing increasesof12% per annumon the totalcost.
24. I t shouldbe pointed out that these financial implications were explained in the reportaccompanying P.40/2004, andtheCommittee is not therefore asking the States to take onany financial commitments that are additional tothosewhich were set out in P.40/2004.
25. L e gislation will be required to enablethe introduction ofanIsland-WideRate, and provision has already been made for this in the 2005 Legislation Programme as a consequenceof the States' decision on P.40/2004.

APPENDIX

Machinery of Government: Relationship between the Parishes and the Executive (P.40/2004), as amended and adopted by the States on 25th May 2004

PROPOSITION

THE STATES are asked to decide whether they are of opinion

to r e fer to their Act dated 28th September 2001 in which they agreed that the Policy and Resources

Committee, after consultation with the Comité des Connétable s, should bring forward for approval by the States  proposals  on  the  future  relationship  between  the  Parishes  and  the  other  areas  of  public administration and, in particular, concerning the provision of services, resource allocation and financing, a review of the Parish institutions, and the position of the Parish of St.  Helier; and to agree that, in line with the guiding principle that the cost to the Parishes and the States should be neutral at the date of transfer, which is aimed for May 2006 –

(a ) (i ) t h e cost of native' welfare (including a 10% provision for the cost of administration) and

residential care currently met by the Island's ratepayers should be met from the general revenues of the States;

(i i ) t h e c ost of providing the following services, currently met by the States through the cash

limit  of  the  Environment  and  Public  Services  Committee,  should  be  funded  by  the Island's ratepayers in exchange for native' welfare –

  ( A ) m a i n ro a d routine maintenance, which concerns all highway resurfacing works,

including  the  replacement  of  manhole  covers  as  required,  maintenance  and resurfacing of footways, reactive maintenance repairs (potholes, etc.), laying of anti-skid surfacing at key locations, repairs to surface water systems including gullies  on  highways  and  inspection  and  supervision  costs,  and  all  work  on cleaning (including gulley emptying), signs and markings, lighting, traffic signals and pedestrian crossings;

(B  ) p a rk s a n d g a rdens;

(C  ) p u b li c c o n v e niences;

(D  ) l it te r b i n e m  ptying;

(E  ) d i s p l a y a n d f loodlighting;

  ( F ) o t h e r s e r v ice  transfers  that  may  be  required  to  achieve  the  principle  of  cost

neutrality at the date of transfer, to be agreed following discussions between the Policy  and  Resources  Committee,  the  Environment  and  Public  Services Committee, and the Comité des Connétable s, and subject to the approval of the States.

(i ii ) t h e c ost of maintaining public parks, gardens and toilets within St. Helier should be funded

by the Island's ratepayers;

(i v ) c a p i tal investment in the infrastructure of the Island's main road network, which concerns all  restorative  maintenance,  strengthening  and  reconstruction  to  the  highway  sub-

structure, defective trench reinstatements (undertaken by the service companies in the past) and new surface water drainage systems, as well as the construction of new roads,

should be met from the general revenues of the States;

(b ) (i ) a n Island-wide Commercial Rate, to be levied by the States on the recommendation of the

Conseil des Connétable s, should be introduced, in accordance with paragraphs 30-43 and 50-54 of the Committee's report; and

(i i) a D o mestic Island-wide Services Rate, to be levied by the States on the recommendation of

the Conseil des Connétable s, should be introduced, in accordance with paragraphs 30-31 and 44-54 of the Committee's report;

(c ) a C onseil des Connétable s, comprising the 12 Parish Connétable s, should be established as a body

corporate with responsibility for, amongst other things, managing the Island-wide Services Fund into which the Commercial Rate and the Domestic Island-wide Services Rate will be paid;

( d ) t h e  current  responsibilities of the Economic Development  Committee under the  Policing  of

Beaches (Jersey) Regulations 1959, as amended, and the Places of Refreshment (Jersey) Law 1967, as amended, should be transferred to the Parishes together with the associated income;

(e ) th e Finance and Economics Committee should be charged to undertake a review of the States land

and property portfolio in order to bring recommendations to the States before the end of July 2005 regarding the States' liability to rates;

( f) t h e Policy and Resources Committee should be charged to prepare the necessary legislative

changes to enable paragraphs  (a)-(e) to be implemented, subject to States approval, in time for the Parishes' 2006/7 accounting year.