Medium Term Financial Plan 2013 – 2015 - ANNEX

STATES OF JERSEY

ANNEX TO

DRAFT MEDIUM TERM FINANCIAL PLAN 2013 - 2015

(For Information Only) Council of Ministers

I.J. Gorst   Senator   Chief Minister

B.I. Le Marquand   Senator   Home Affairs and Deputy Chief Minister P.F.C. Ozouf   Senator   Treasury and Resources

A.J.H. Maclean   Senator   Economic Development

P.J.D. Ryan   Deputy   Education, Sport and Culture

A.E. Pryke   Deputy   Health and Social Services A.K.F.Green M.B.E.   Deputy   Housing

R.C. Duhamel   Deputy   Planning and Environment F. du H. Le Gresley  Senator   Social Security K.C. Lewis   Deputy   Transport and Technical Services

J.D. Richardson   Chief Executive

L.J. Rowley  Treasurer of the States

CONTENTS  Page

Introduction  3 Annex: Summary Table A – Revenue Expenditure Allocations 2013 - 2015  4 Consolidated Operating Cost Statement  5 Major Policies/Strategies to be Debated by the States 2013 - 2015  6 Estimates of States Funded Bodies

Chief Minister  7

Grant to Overseas Aid  19

Economic Development  25

Education, Sport and Culture  34

Department of the Environment  45

Health and Social Services  55

Home Affairs  66

Housing  76

Social Security  85

Transport and Technical Services  95

Treasury and Resources (including Jersey Property Holdings)  106

Non Ministerial States Funded Bodies  120

States Assembly and its services  134

Summary Table B1 – Total States Departmental Net Expenditure 2013 – 2015  142

Central Contingency Allocations  143 Capital Programme

Summary Table D – Capital Expenditure Programme 2013 - 2015 Funding  150

Summary Table E – Capital Programme 2013 - 2015  151 States Trading Operations

Summary Table F – Summary of States Trading Operations 2013 - 2015  159 Annex: Summary Table B – Summary of States Trading Operations 2013 - 2015   160 Summary Table G – Proposed Capital Allocation to States Trading Operations  161

Economic Development

Jersey Airport  165

Jersey Harbours  174 Transport and Technical Services

Jersey Car Parking  183 Jersey Fleet Management  191

Introduction

The Council of Ministers' Strategic Plan, which was approved by the States in May 2012, has set out the priorities for Jersey over the next three years. There are seven key priorities:

1. Getting people into work;
2. Housing our community;
3. Promoting family and community values;
4. Reforming government and public services;
5. Managing population growth/immigration;
6. Reforming health and social services; and
7. Introducing sustainable long-term planning.

To achieve these aims an important change has to be put in place, namely the move to a 3-year planning framework, or Medium Term Financial Planning. For the first time the States of Jersey will be setting minimum budgets for all departments 3 years in advance and moving away from short-term decision making. This change is intended to provide flexibility, deliver efficiencies and move to longer-term thinking within a more certain financial framework that will ultimately benefit the Island.

The Medium Term Financial Plan is split into two parts:

• The formal lodged report providing the background to the financial and economic position, the revenue and capital expenditure proposals and details of the measures that are proposed to balance budgets and actively manage the balance sheet over the next three years. The report is accompanied by comprehensive appendices which include: an explanation of states income, long term capital plans, the states investment strategy and a long term tax policy.
• This detailed annex to the Medium Term Financial Plan provides information to support the main report including a summary of each department's key objectives towards delivering the seven strategic priorities and the detail of how the proposed department expenditure limits would be allocated to services.

The Medium Term Financial Plan Annex provides for the first time a three-year plan for each department including:

• an introduction from the Minister including the main priorities and growth requirements for the next three years;
• departments' key objectives and success criteria;
• a summary service analysis for the department for each of the years 2013-2015, including manpower levels and a split of gross expenditure and income across DEL (Departmental Expenditure Limits) and AME (Annually Managed Expenditure);
• a reconciliation of the changes in expenditure allocations for 2013-2015, identifying growth funding, Comprehensive Spending Review savings and further budget reductions; and
• an operating cost statement for each of the years 2013-2015.

The Medium Term Financial Plan Annex also provides:

• a summary of the major policies that will be brought to the States over the next three years;
• a summary of the States net revenue expenditure for each of the years 2013-2015; and
• a summary of the States proposed capital programme for each of the years 2013-2015.

The Chief Minister and Minister for Treasury and Resources are indebted to all departments for their co-operation in providing this information.

3

Annex: Summary Table A

Total States Net Expenditure Allocations 2013 - 2015

Depreciation 41,657.0 -  41,657.0 44,136.9 46,138.5 Net Revenue Expenditure Allocation 796,794.0 (121,366.2) 675,427.8 713,736.3 737,295.6

Consolidated Operating Cost Statement

Net Expenditure - Operating Cost Statement

2012 2013  2014  2015 Net Revenue Estimate Estimate Estimate Expenditure

£ £ £ £

Income

(6,399,100) Duties, Fees, Fines & Penalties (7,167,500) (7,365,300) (7,556,800) (104,485,700) Sales of Goods and Services (105,331,800) (108,806,300) (113,095,200) (12,000) Investment Income (12,300) (12,400) (12,700) (11,994,200) Other Income (8,854,600) (12,992,700) (13,134,400) (122,891,000) Total Income (121,366,200) (129,176,700) (133,799,100)

Expenditure

168,895,700 Social Benefit Payments 178,551,700 333,601,300 Staff Costs 343,698,100 115,331,700 Supplies and Services 119,834,140 5,771,400 Administrative Expenses 5,590,800 55,533,400 Premises and Maintenance 54,445,000 1,124,380 Other Operating Expenses 994,700 33,529,900 Grants and Subsidies Payments 38,173,960 1,020 Impairment of Receivables 113,500 4,007,500 Finance Costs 5,153,100

- Foreign Exchange (Gain)/Loss -

20,939,600 Contingency Expenses 8,582,000 738,735,900 Total Expenditure 755,137,000

615,844,900 Net Revenue Expenditure 633,770,800

40,075,000 Depreciation 41,657,000

- Impairment of Fixed Assets -

100 Asset Disposal (Gain)/Loss -

655,920,000 Net Revenue Expenditure 675,427,800

181,671,900 186,751,800 350,428,000 353,353,600

128,577,940 135,128,140 5,859,000 6,131,200 55,310,000 53,934,100 1,330,500 1,643,600 42,099,360 43,042,160 116,100 118,900 6,261,100 7,372,200

- -

27,122,200 37,480,500 798,776,100 824,956,200

669,599,400 691,157,100

44,136,900 46,138,500

- -

- -

713,736,300 737,295,600

Major Policies/Strategies to be brought forward for debate by the States 2013 to 2015*

Department Chief Minister

Department of the Environment

Economic Development Education Sport & Culture

Health & Social Services

Home Affairs

Housing

Social Security

Transport & Technical Services Treasury & Resources

Policy/Strategy

• Housing Strategy
• Population/Migration Policy
• Alcohol and Licensing Strategy
• Energy Policy
• Planning Appeals Policy
• Island Plan Policy H3: Affordable Housing
• Consolidated environmentally based policies across the States
• Incorporation of Harbours & Airport
• Sports Strategy
• Strategy on the Future of Education
• Proposals for the future of Fort Regent
• Strategies relevant to health and social care reform underpinning the White Paper (to be debated in Autumn 2012) but yet to be identified for States debate
• Channel Island Pandemic Strategy
• Regulation of Care Law - Primary Legislation and associated Regulations
• Vetting and Barring policy and legislation
• Alternative to Wheel Clamping
• E-Borders
• Sexual Offences Law
• Custodial arrangements for children
• Incorporation of the Housing Department & Establishment of a Regulator for the Social Housing Sector
• Discrimination Law
• Employment Law – Family friendly policies
• Long Term Care Benefit Law
• Import/processing waste from Guernsey
• Liquid Waste Strategy
• Streetworks Law
• Strategy for PECRS & JTSF
• 2014, 2015, 2016 Budgets
• MTFP 2016 to 2018

* Note: These are the major policy areas that are currently planned to be brought forward to the States Assembly for debate in the period 2013 to 2015. They may be subject to change/addition depending on priority changes.

Detailed Estimates of States Funded Bodies

Chief Minister

Minister's Introduction

The Chief Minister's Department is structured into two main service areas, with separate Accounting Officers:

1. Chief Executive

• Policy Unit (policy support and research for the Council of Ministers and Chief Executive, economic advice, communications, statistics, the Population Office, Emergency Planning);
• Comprehensive Spending Review Team;
• Law Draftsman's Office;
• Information Services;
• Human Resources.

2. Director of International Affairs

• All areas of external and international relations, including managing the Island's close relationship with the UK.

The prime focus of the Department during the three years from 2013 to 2015 will be to support and co-ordinate the Council of Ministers to deliver the priorities approved by the States in the Strategic Plan, to develop policy and prepare for further Public Sector Reform over the longer term.

The appointment of an Assistant Chief Minister with responsibility for External Relations will foster increased recognition of Jersey's international identity and development of the Island's beneficial relations with other countries.

The Department will continue to deliver and develop its services to the public and other States Departments in line with its twin objectives of improving quality and efficiency.

The Department critically reviewed its activities as part of the Comprehensive Spending Review (CSR). The review process identified the areas where money has been saved to meet the 10% CSR target. It also demonstrated that the Department's approved base budget has not been sufficient to undertake its core functions over the past five years. The budget has been supplemented each year by substantial non-recurring monies for specific purposes. These include activities which are or have become core functions such as staff training and responding to external threats and opportunities. Human Resources and External Relations in particular have demonstrated that they need increased recurring funding to continue basic operations and to meet the challenges which arise each year.

The Department's financial priorities for the MTFP are therefore:

• to deliver the final tranche of its overall 10% CSR savings target in 2013;
• to secure sufficient recurring resources for the Human Resources function to improve the operational support it provides to Departments and to make it ready to support the organisation through a programme of Public Sector Reform;
• to place External Relations on a sound financial footing following its development over the last 4 years from Fiscal Stimulus and other non-recurring funding. This will allow the Chief Minister and Assistant Chief Minister to plan ahead and build long term international relationships with secure funding for its programmed activities.

The bids submitted by the Department reflect these priorities. The majority of bids seek to establish  recurring  funding  for  existing  costs  which  have  been  met  from  non-recurring sources in the past. The three growth items are:

• the creation of the London Representative Office - to attract new business and foster the environment needed to protect the economy;
• Corporate Health and Safety – a new post to support Departments with Health and Safety matters;
• HR Fit for Purpose – 8 new posts are required to strengthen the HR function in support of the future programme of Public Sector Reform.

The table below shows the growth funding proposed by the Department during this MTFP period to address these priorities, together with the proposed funding source:

In 2013, the Department is planning to use under-spends carried forward from 2012 and additional income from fees arising from the Control of Housing and Work Law to fund £420,000 of existing commitments in External Relations plus £92,000 in respect of the 10% reduction in the first year of the MTFP which Ministers agreed to find from their existing resources.

CSR Restructuring funding has been allocated to fund resources required to be in place for the next three years to support the reform agenda, including continuing funding for 2 HR staff and 2 CSR staff. The additional HR team is needed to support the organisational development work associated with the reform agenda.

Looking forward, the core projects and issues for each area of the Department over the next three years are:

1. Chief Executive Policy

The  Strategic  Plan  approved  in  2012  will  drive  the  Department's  policy  programme.  In support of this, the way policy is developed and monitored will be reviewed and enhanced to ensure appropriate co-ordination and sound performance management. The results of the 2011 census are being used to inform policy development.

In this period, the Department will lead a programme of Public Sector Reform and develop wide-ranging policy and plans to modernise and prepare the organisation to meet the challenges of the future.

Migration policy and the level of net migration, once approved by the States, will be monitored with the appropriate review mechanisms. The Control of Housing and Work Law and the draft Register of Names and Addresses Law will provide the mechanism for regulating inward migration therefore systems need to be developed for their implementation.

A significant priority will be to continue to progress policy initiatives designed to address the effects of the ageing population. This will require cross-department planning and working.

An important part of our work will be to improve the transparency of government decisions and continue to increase public engagement in the development of policy. This includes co- ordinating the development of an implementation plan for the Freedom of Information legislation approved by the States in 2011 subject to resources being made available.

The provision of quality economic advice will continue to support effective management of the economy, as will the production of relevant statistics and statistical bulletins.

The Emergencies Council will continue to lead a programme of improvements to the emergency planning and management structures and processes supported by the Emergency Planning Board.

Comprehensive Spending Review

The Department will continue to lead the implementation of the Comprehensive Spending Review to deliver £65 million of savings by 2013. The overall scale of savings to be delivered will require complete commitment in achieving targets, with continuing consideration of the strategic options for reducing costs whilst maintaining high-quality core services.

The small CSR team will work closely with departments to support them to achieve their savings targets. In addition, a States-wide organisational development programme will support the drive for greater efficiency through the review of departmental structures and services to modernise the way in which the public sector delivers services to the public.

Law Drafting

The Law Draftsman's department is a vital service providing the legislative framework within which the States operates and services are provided. In 2012 and 2013, the Law Draftsman's department has taken on temporary additional resource to address urgent legislation required to deliver the CSR and support initiatives to grow the economy and protect jobs. It proposes to make one of these additional draftsmen permanent from 2014 to be able to meet the underlying demand for law drafting.

Information Services

The Information Services Department (ISD) manages corporate IT services such as the network infrastructure, PC management, data centres, and provides the framework for managing IS projects and business projects with an IS element. Core business applications are managed by ISD at a Departmental level through embedded Business Support Groups (BSGs).

The IS strategy for the period 2011 to 2013 is to streamline corporate service models in conjunction with third party suppliers. This will enable cost savings without reducing, and in some cases improving, the level of service provided. The priority for the MTFP period is to support the delivery of CSR savings and the new Strategic Plan objectives across the States where these are dependent on technology solutions.

Key activities in the MTFP period will be:

• upgrade of PC office information systems;
• consolidating existing data centres;
• streamlining the support model for corporate systems and services;
• supporting projects to improve finance and HR systems and processes;
• continuing the development of web services and more citizen services online.

Human Resources

Human Resources (HR) core purpose is to provide strategic and transactional people management support to States Departments to deliver their departmental and CSR objectives.

In order to fulfil this accountability, the function has a number of key activities to deliver in the MTFP period:

• completion and implementation of the Terms and Conditions Review;
• provide Organisational Development and Performance Management improvements;
• upgrade or replace the Human Resources Information Systems (HRIS);
• reshape HR to support the future structure of the States organisation;
• provide a Workforce Plan and Talent management process focussing on supplying successful local candidates for key roles.

In financial terms, much of HR's funding for training and organisational development has come in previous years from non-recurring sources. This MTFP seeks to provide the appropriate balance of substantive and project funding for the function by 2015.

2. External Relations

During 2011, the importance of UK and international affairs was recognised by the appointment of an Assistant Chief Minister to take the lead for External Relations.

Under these new arrangements, the Department will seek to continue to protect Jersey's unique constitution and autonomy, to promote Jersey's international identity and good reputation as a responsible country committed to the rule of law, international standards and respect for internationally recognised human and labour rights, develop Jersey's competitive position in the global economy and promote Jersey's cultural identity abroad.

Senator Ian Gorst Chief Minister

AIM:

Support and advise the Chief Minister and Council of Ministers in establishing, co- ordinating, communicating and implementing States approved policies and objectives.

Provide direction and leadership to the public service to ensure that policies and programmes are delivered in accordance with agreed priorities.

Conduct external relations to further develop Jersey's international standing and strengthen business and cultural links which benefit Islanders.

SUMMARY OF KEY OBJECTIVES AND SUCCESS CRITERIA

Chief Executive

Key Objective 1: The co-ordinated development and implementation of States policies. Success criteria:

1. A robust framework in place with clear processes defined for developing, co-ordinating and communicating policy to deliver the Strategic Plan and to achieve a balance of economic, social and environmental objectives;
2. Housing Strategy developed and agreed;
3. Co-ordinated long term (15+ years) socio/economic/environmental policy plan produced as a blueprint for the future.

Strategic Plan References:

- Vision: A safe and caring community; A strong and sustainable economy; Preparing for the future; Protecting the environment; A highly skilled workforce

- Priorities: Get people into work; Manage population growth and migration; House our community; Promote family and community values; Reform Health & Social Services; Reform government & the public sector; Sustainable long-term planning

Key Objective 2: An efficient and effective public sector fit for the purpose of delivering the Council of Ministers' strategic vision and priorities.

Success criteria:

1. Continued focus on delivering essential services through the prioritisation of budgets and manpower in accordance with strategic priorities;
2. Agreed model for reformed public sector based on service redesign, workforce modernisation and cultural change;
3. Public services matched to affordability and public expectation.

Strategic Plan References:

- Vision: Preparing for the future; A highly skilled workforce

- Priorities: Reform government & the public sector; Develop sustainable long-term planning

Key Objective 3: Decision-making improved and debate better informed through the provision of accurate and timely professional advice and information.

Success criteria:

1. States assisted to meet its objectives through the provision of sound advice;
2. Ministerial decisions supported by robust evidence;

3. All Statistics Unit releases produced independently to pre-announced release dates and statistical information made available on an impartial basis;
4. Structures in place to ensure proper governance processes and information management;
5. Successful implementation of Freedom of Information arrangements.

Strategic Plan Reference(s):

- Vision: A safe and caring community; A strong and sustainable economy; Preparing for the future

- Priorities: Get people into work; Manage population growth and migration; Promote family and community values; Develop sustainable long-term planning

Key Objective 4: Population levels that achieve a balance between economic growth and the additional demand migration places on accommodation, infrastructure and resources.

Success criteria:

1. Revised migration/population policy agreed by the States;
2. Improved mechanisms in place to control population.

Strategic Plan Reference(s):

- Vision: A safe and caring community; A strong and sustainable economy; Preparing for the future; Protecting the environment; A highly skilled workforce

- Priorities: Get people into work; Manage population growth and migration; House our community; Develop sustainable long-term planning

Key Objective 5:  Deliver £65 million Comprehensive Spending Review (CSR) savings target by the end of 2013.  

Success criteria:

1. Agreed overall savings package delivered by the end of 2013;
2. Agreed Chief Minister's Department CSR savings delivered by the end of 2013.

Strategic Plan Reference(s):

- Vision: A strong and sustainable economy; Preparing for the future

- Priorities: Reform government and the public sector; Develop sustainable long-term planning

External Relations

Key Objective 6: Jersey's international responsibilities fulfilled and beneficial relations advanced with the United Kingdom, other countries and International organisations.

Success criteria:

1. International obligations met;
2. Relevant international conventions and bi-lateral agreements are ratified/extended, recognising Jersey's autonomy and commitment to international standards;
3. Close relationship with the UK maintained and our unique constitution and autonomy protected;
4. Strengthened international relations and partnerships, supporting new and existing business and cultural links which benefit Islanders.

Strategic Plan Reference(s):  

- Vision: A safe and caring community; A strong and sustainable economy; Preparing for the future

- Priorities: Get people into work; Manage population growth and migration; Develop sustainable long-term planning

Chief Minister

Net Revenue Expenditure - Service Analysis

15

Net Revenue Expenditure - Service Analysis

Net Expenditure - Operating Cost Statement

2012 2013  2014  2015 Net Revenue Estimate Estimate Estimate Expenditure

£ £ £ £

Income

(211,900)  Duties, Fees, Fines & Penalties (994,700)  Sales of Goods and Services

- Investment Income

(5,400)  Other Income

(1,212,000)  Total Income

Expenditure

- Social Benefit Payments

13,088,500  Staff Costs

5,791,200  Supplies and Services

470,500  Administrative Expenses 393,200  Premises and Maintenance

- Other Operating Expenses

442,000  Grants and Subsidies Payments

- Impairment of Receivables

3,810,100  Finance Costs

- Foreign Exchange (Gain)/Loss

- Contingency Expenses

23,995,500  Total Expenditure

(293,400)  (301,800)  (311,700) (886,400)  (1,436,400)  (1,451,900)

- -  -

- -  -

(1,179,800)  (1,738,200)  (1,763,600)

- -  -

13,098,500  13,673,800  13,690,700 5,495,700  6,130,300  6,226,500 507,400  511,000  509,300 541,000  545,900  550,900 700  800  800 392,000  1,043,000  1,044,000

- -  -

- -  -

- -  -

- -  -

20,035,300  21,904,800  22,022,200

22,783,500  Net Revenue Expenditure 18,855,500  20,166,600  20,258,600

168,100  Depreciation 514,900  485,300  455,400

- Impairment of Fixed Assets -  -  -

- Asset Disposal (Gain)/Loss -  -  -

22,951,600  Net Revenue Expenditure 19,370,400  20,651,900  20,714,000

Net Revenue Expenditure 18,855,500  20,166,600  20,258,600 Depreciation 514,900  485,300  455,400 Net Revenue Expenditure 19,370,400  20,651,900  20,714,000

Jersey Overseas Aid

Jersey Overseas Aid Commission

The Jersey Overseas Aid Commission's grant from the States of Jersey was reviewed in 2010 when it was proposed that an increase of approximately 5% be awarded on the existing grant per annum.

The largest part of the Commission's budget is allocated to grant aid with approximately 80% allocated to the Commission's approved aid agencies submitting proposals for projects covering clean water, health, sanitation, education, agriculture, livestock and revolving credit schemes for small businesses. £1,250,000 of its grant is available for disaster and emergency relief due to ever increasing demands for both natural disasters and the emergencies arising through human conflict. The Commission will give preference to projects located in countries in Africa, Latin America or South-East Asia which is within the bottom 50 countries on the Human Development Index.  

AIM

To manage and administer the monies voted by the States of Jersey for overseas aid, so as to enable humanitarian aid to be provided to developing countries for the purpose of:

• assisting in the reduction of poverty;

• providing medical and healthcare;

• providing effective education and training;

• assisting in the emergency and disaster needs, including the subsequent restoration of facilities; and

• other purposes relating to the provision of humanitarian aid overseas, that the Commission may from time to time consider appropriate.

SUMMARY OF KEY OBJECTIVES AND SUCCESS CRITERIA

Key Objective 1: To implement fully the Jersey Overseas Aid Commission (Jersey) Law 2005

Success criteria

The Commission will pursue this by:

1. working closely with the private and voluntary sectors;
2. ensuring the consistency of policies affecting poorer countries;
3. using resources efficiently and effectively;
4. the provision of funding to large and medium sized relief projects, including that of emergency and disaster relief, implemented through internal recognised specialist aid agencies or through local charities working overseas;
5. the provision of funding for community work projects, where teams of local volunteers undertake specific aid projects.

Overseas Aid

Net Revenue Expenditure - Service Analysis

21

Overseas Aid

Net Revenue Expenditure - Service Analysis

Net Expenditure - Operating Cost Statement

2012 2013  2014  2015 Net Revenue Estimate Estimate Estimate Expenditure

£ £ £ £

Income

- Duties, Fees, Fines & Penalties

- Sales of Goods and Services

- Investment Income

- Other Income

- Total Income

Expenditure

- Social Benefit Payments

76,500  Staff Costs

18,500  Supplies and Services

22,000  Administrative Expenses

- Premises and Maintenance

- Other Operating Expenses

8,763,700  Grants and Subsidies Payments

- Impairment of Receivables

- Finance Costs

- Foreign Exchange (Gain)/Loss

- Contingency Expenses

8,880,700  Total Expenditure

- -  -

- -  -

- -  -

- -  -

- -  -

- -  -

74,700  74,700  74,700 13,040  13,040  13,040 2,300  2,300  2,300

- -  -

- -  -

9,234,060  9,700,260  10,189,760

- -  -

- -  -

- -  -

- -  -

9,324,100  9,790,300  10,279,800

8,880,700  Net Revenue Expenditure 9,324,100  9,790,300  10,279,800

- Depreciation -  -  -

- Impairment of Fixed Assets -  -  -

- Asset Disposal (Gain)/Loss -  -  -

8,880,700  Net Revenue Expenditure 9,324,100  9,790,300  10,279,800

Net Revenue Expenditure 9,324,100  9,790,300  10,279,800 Depreciation -  -  - Net Revenue Expenditure 9,324,100  9,790,300  10,279,800

Economic Development

Minister's Introduction

The Medium Term Financial Plan (MTFP) comes at a critical point in the development and evolution of our economy.

The worldwide economic crisis has lasted longer than most predicted and Jersey, as an international  finance  centre,  has  not  been  immune  to  its  effects.  The  most  devastating outcome of this has been rising unemployment which is at its highest recorded levels; if left unchecked, this will have a long-lasting and damaging effect on the social fabric of this Island. That is why one of the key priorities identified in the States Strategic Plan is to get people into work.

At a time when we are aiming to facilitate the creation of more jobs in our economy, it is vital we take a strategic view and establish what kind of jobs we wish those to be. In taking this view, it is clear that if we are to seek to generate new employment, we must do so with the aim that these jobs will contribute to the delivery of economic growth. This is not growth for the sake of growth – but growth to deliver the tax receipts necessary to avoid having to raise taxes whilst still being able to fund our public services to the standard that we expect.

The Economic Growth and Diversification Strategy (EGDS) (P55/2012), sets out how we intend  to  achieve  this.  There  are  four  priorities:  to  encourage  innovation  and  improve Jersey's international competitiveness; to grow and diversify the financial services sector, capacity and profitability; to create new businesses and employment in high value sectors; and to raise the productivity of the whole economy and reduce the reliance on inward migration.

Without the growth bids put forward in the MTFP, this strategy simply cannot be delivered. A thorough assessment of our current and future work programme illustrated that to deliver growth we would have to reduce support for tourism and agriculture to unsustainable levels. This would have a highly damaging impact to those sectors and the people who work within them as well as to Island life as a whole.

This is not acceptable; and therefore the growth in the Department's budget to invest in economic growth is absolutely vital. Whilst recognising the financial constraints we must operate under, now more than ever we need to invest in developing the economy.

Summary of Outline Business Cases for Growth

The following table sets out our MTFP bids, all of which are directly aligned to the priorities in the EGDS, which are in turn aimed at achieving sustainable economic growth and getting people into work.

2013  2014  2015 £000  £000  £000

Support for Jersey Finance Limited (JFL) and increased investment in developing finance legislation is vital if we are to enter new markets and develop new products so that we can grow and diversify our finance sector, which is and will remain absolutely critical to delivering future growth. As the industry which contributes 40% of our GVA, we cannot afford to neglect the sector which in turn funds such a substantial proportion of our public services.

Digital Jersey is one of the key components of our strategy to create new businesses in high value sectors. The e-commerce sector is set to have increasing significance on our economy and it is vital we can invest in and encourage its growth. Alongside this, strengthening our inward investment activities across all high value sectors is an essential driver in delivering diversification and creating jobs for local people.

We must accept however, that in seeking diversification into new and growing high value sectors, Jersey cannot operate in a vacuum. We need the external talent and investment as the catalyst for the creation of new jobs. As demonstrated by the successes over recent years, inward investment does create significant employment for local people – but to do this there needs to be an element of inward migration. This is good for our economy and good for Jersey.

Therefore, running in parallel to investment in growth, given the well-founded concerns of managing population growth on an island of limited resources, we must reduce our reliance on inward migration in other sectors. We should use our migration policy to encourage job creation and economic growth rather than to fill jobs which could be filled with local people. That  is  why  we  are  aligning  our future  support  for  traditional  sectors  such  as  tourism, construction and agriculture with reduced reliance on inward migration. Investment in skills is critical to fill that gap, as well as develop a workforce that can capitalise on the new and exciting opportunities inward investors provide.

Across the whole range of new and established businesses, Jersey Business will be available to help organisations achieve their full potential. As a new, independent organisation, there is an opportunity to provide a step-change in business support, which the additional funding will enable them to deliver. Furthermore, the Tourism sector gets additional support, with a stable and secure funding mechanism in the Tourism Development Fund, to help enable Jersey to compete in the global marketplace.

A further breakdown of how the growth bids will be spent is provided within this document. However, it is essential to recognise that although the individual elements of the bid are discrete, as demonstrated above they are complementary and must be implemented contemporaneously to address the strategy for jobs and a sustainable economic future.

Each initiative is being progressed as far as possible in order to impact on job creation without delay once recurring funding is agreed. I would like to take this opportunity to thank all the staff at Economic Development for the work they have done to date as well as the significant additional work that this plan for growth and jobs will require over the next three years.

Senator Alan Maclean

Minister for Economic Development

AIM

Deliver growth, improve competitiveness, diversify the local economy and create employment.

SUMMARY OF KEY OBJECTIVES AND SUCCESS CRITERIA

Key Objective 1: Encourage innovation and improve Jersey's international competitiveness. Success criteria:

(i)  Work with the Treasury and Resources Department to establish a new Innovation Fund as a Separately Constituted Fund under the Public Finances (Jersey) Law 2005 – managed by EDD with an independent Board including EDD, Treasury and Resources and Chief Ministers' Department representatives and non-Executive Directors drawn from the private sector.

Note: Success for this objective will be to have established a fund, and assessment framework, that could be used for strategic investments into innovation and new technologies that would deliver a competitive advantage for Jersey, attract additional private sector investment and create new high value businesses resulting in signification new job opportunities in a more diversified economy.

Strategic Plan References:

- Vision: A strong and sustainable economy

- Priority: Get people into work

Key Objective 2: Grow the financial services sector capacity and profitability.

Success criteria:

1. Publish a new Financial Services policy framework that allows industry, Jersey Finance Ltd, Jersey Financial Services Commission and Government to align with a set of common objectives;
2. Develop both existing (UK/EU) and new markets (BRIC);
3. Contribute to the increasing the speed of legislative development alongside the Law Officers Department and Chief Ministers Department;
4. Raise Jersey's international profile as a transparent and co-operative jurisdiction;
5. Work with the Treasury and Resources Department to improve Jersey's competitiveness in international market place through continued development of tax policy.

Note: Success for this objective will be to, within the financial services sector, improve productivity and maintain employment numbers at, or above, current levels whilst diversifying into new products, services and markets.

Strategic Plan References:  

- Vision: A strong and sustainable economy

- Priority: Get people into work

Key Objective 3: Create new businesses and employment in high value sectors. Success criteria:

1. Enhance efforts to secure high-value inward investment, exceeding previous levels of inward investment;
2. Task Jersey Business to increase the rate of high-value business start-ups and the growth of existing high value businesses;

3. Develop a "Whole of Government" approach to ensure that the education system, Social Security and benefits policies, Planning approvals process and Housing and Work Laws recognise, where appropriate, the creation of employment as a priority;
4. Maximise the potential of Gigabyte Jersey and further develop an internationally competitive telecoms offering.

Note: Success for this objective will be that by 2015, in addition to exceeding previous levels of business development and inward investment success, a minimum of 10 flagship projects will have been delivered over the next three years, leveraging significant economic and growth opportunities for Jersey or Jersey businesses.

Strategic Plan References:  

- Vision: A strong and sustainable economy

- Priority: Get people into work

Key Objective 4: Raising the productivity of the whole economy and reducing the reliance on inward migration.

Success criteria:

1. Align the education and training of the current and future workforce with the needs of employers;
2. Remove the barriers to enterprise, encourage innovation and use of new technologies;
3. Link continued support for the Tourism and Rural sectors to increased local employment and reduced reliance on inward migration.

Note: Success for this objective would be improvement in the productivity of existing business, increased number high value start-up enterprises, reduced numbers of hard to fill vacancies and skills gaps reported by employers, and increases in the percentage of locally qualified staff working in the traditional sectors.

Strategic Plan References:

- Vision: A strong and sustainable economy; a highly skilled workforce

- Priority: Get people into work; Manage population growth and migration

Key Objective 5: Continue to improve efficiency and effectiveness across the Department. Success criteria:

1. Reform the mechanisms of delivery for areas of the Department where service can be improved and efficiencies delivered through a change in organisational structure;
2. Continue to develop and improve regulatory and policy frameworks which support business whilst protecting the public's interests;
3. Continue to drive efficiencies through the use of arms-length delivery organisations.

Note: Success for this objective would be private sector led organisations delivering more of EDD services with the Department focused on developing and improving policy and regulation.

Strategic Plan References:

- Priority: Reform government and the public sector

Economic Development

Net Revenue Expenditure - Service Analysis

30

Economic Development

Net Revenue Expenditure - Service Analysis

Net Expenditure - Operating Cost Statement

2012 2013  2014  2015 Net Revenue Estimate Estimate Estimate Expenditure

£ £ £ £

Income

(685,200)  Duties, Fees, Fines & Penalties (831,200)  Sales of Goods and Services

- Investment Income

(241,600)  Other Income

(1,758,000)  Total Income

Expenditure

- Social Benefit Payments

4,119,600  Staff Costs

6,190,600  Supplies and Services

314,400  Administrative Expenses

606,000  Premises and Maintenance

177,000  Other Operating Expenses 6,246,400  Grants and Subsidies Payments

- Impairment of Receivables

2,400  Finance Costs

- Foreign Exchange (Gain)/Loss

- Contingency Expenses

17,656,400  Total Expenditure

(667,800)  (667,800)  (667,800) (967,600)  (967,600)  (967,600)

- -  -

(88,500)  (88,500)  (88,500) (1,723,900)  (1,723,900)  (1,723,900)

- -  -

3,852,400  3,896,800  3,896,800 6,288,300  6,451,500  6,491,500 251,500  251,500  251,500 389,700  389,700  389,700 60,700  390,000  700,500 9,137,100  9,803,700  9,968,700

- -  -

- -  -

- -  -

- -  -

19,979,700  21,183,200  21,698,700

15,898,400  Net Revenue Expenditure 18,255,800  19,459,300  19,974,800

3,600  Depreciation 3,200  3,200  3,200