Plémont Holiday Village: grant to National Trust for Jersey (P.107/2014) – additional comments

STATES OF JERSEY

PLÉMONT HOLIDAY VILLAGE: GRANT TO NATIONAL TRUST FOR JERSEY (P.107/2014) – ADDITIONAL COMMENTS

Presented to the States on 30th June 2014 by the Minister for Treasury and Resources

STATES GREFFE

2014   Price code: B  P.107 Com.(3)

ADDITIONAL COMMENTS

These additional  comments  are  designed to inform  and  assist  States  Members  in advance of the debate on P.107/2014. They explain the approval process and the current financial position of –

1. Contingency expenditure; and
2. the Criminal Offences Confiscation Fund (COCF).

1. Contingency expenditureApproval process

The Minister for Treasury and Resources has already published the approval process as R.10/2012. To assist Members, this is reproduced below –

Introduction

The Allocation to Contingency is a fundamental part of the Medium Term Financial Plan, as it gives the States a degree of flexibility in managing its finances over a longer time period. The use of Contingency expenditure is set out in the Public Finances (Jersey) Law 2005 (Article 17).

There are a number of different ways the Allocation to Contingency can be made, as set out below –

• Amounts set as part of the Medium Term Financial Plan.
• Allocations from growth expenditure, as approved by the States as part of the annual budgeting process.
• Transfers from a head of expenditure within or after a financial year, if approved by the Minister for Treasury and Resources (and if the Minister responsible for the head of expenditure has approved the transfer).
• Allocations from revenue heads of expenditure under-spends that are not carried forward.
• Allocations  from  departmental  income  that  are  in  excess  of expectations.

There is a clear requirement to set out a policy to be considered alongside the submission of the Medium Term Financial Plan. In advance of this, it is useful to  set  out  how  the  new  policy  might  be  constructed  by  the  Minister  for Treasury and Resources.

What  types  of  expenditure  can  come  out  of  the  Allocation  to Contingency?

Contingency is set aside for unforeseen expenditure. It is proposed that 3 types of expenditure will come out of Contingency.

• Permanent  and  Non-Repayable –  expenditure  that  is  due  to  a change in circumstances or service requirements. The submissions for these  allocations  can  be  unlimited  but  cannot  exceed  the  current balance of Contingency.
• Short  Term  and  Repayable –  expenditure  that  arises  from departmental opportunities for Invest to Save' initiatives that arise outside of the Medium Term Financial Plan and which cannot be funded  within  departmental  cash  limits.  Limits  may  be  set  in the MTFP on the individual and total values of this type of expenditure.
• Variations  in  Expenditure  that  have  a  Net  Nil'  impact – expenditure that may require variation between heads of expenditure (other than the need to comply with Generally Accepted Accounting Principles). These will have no overall impact on the Contingency balance,  but  will  be  reported  publicly  as  part  of  reporting  on  all transfers to and from Contingency as required by the Law.

Proposed Allocation Process

A  Department  must present a case to the Treasurer of the States which explains –

• The nature of the expenditure and the reason it has arisen.
• Whether the expenditure is likely to recur and how future years will be funded.
• Why the expenditure cannot be absorbed within current limits – this should refer to the most recent in-year financial monitoring report, including  current  forecasts  to  out-turn  and  whether  departmental contingencies  have  been  used  or  why  other  services  can't  be reprioritised.

The role of the Treasurer of the States will be to challenge the request, ensure a solution to its ongoing funding has been considered and that due process has been followed. This will then be considered by the Minister for Treasury and Resources, and a report will be submitted to the Council of Ministers with a recommendation.

The Council of Ministers will consider the request, taking into account the Department's submission and the Treasurer of the States' and Minister for Treasury and Resources' recommendation.

Minister for Treasury and Resources approval:

• The Minister will take into account the comments of the Council of Ministers.
• The Minister for Treasury and Resources will either –

refer  unsuccessful  requests  back  to  the  originating Department; or

approve  a  "public"  Ministerial  Decision  for  successful requests.

All relevant papers will be used to support the decision, including the Council of Ministers' recommendation and the Ministerial Decision of the requesting department.

• All approved requests will be published by the Minister for Treasury and Resources and presented to the States on a 6 monthly basis.'

Current financial position

At the beginning of 2014, the Allocation of Contingency started with a balance of £4.5 million and received a carry-forward of £10.7 million from 2013. Budgets of £3.6 million have been transferred to departments, leaving an available balance of £11.6 million.

Forecast and commitments

£100,000 for Island Plan/Masterplanning was approved as part of the Medium Term Financial Plan, but has yet to be transferred to the Department of the Environment. Funding approved by the Council of Ministers, and also Ministerial Decisions from the relevant department and Treasury and Resources, amount to £7.2 million (i.e. this sum is committed to be spent). This leaves an available balance of £4.3 million

Future earmarked

Projects totalling £760,000 (to include Charities Law, Jersey Arts Centre and the Control of Housing and Work Law) have been requested and are currently in the process  of  being  prepared  to  be  presented  to  the  Council  of  Ministers  for  their approval, prior to departmental and Treasury and Resources approval. If these are approved, this leaves an available balance of £3.5 million.

Funding pressures

High priority projects totalling £1.2 million (to include Planning Appeals, Brighter Futures, Housing Incorporation costs and Mont Orgueil Gates) are currently known but have no identified funding. If these pressures are approved, this will leave an available balance of £2.3 million either to be allocated in 2014 to future requests or, if unspent, to be proposed for carrying forward to 2015.

Summary

Balance

£ million £ million

2014 Opening balance 2013 Carry-forward

In year transfers to date Forecast and commitments Future earmarked

Funding pressures

4.5  4.5

10.7  15.2 (3.6) 11.6 (7.3) 4.3 (0.8) 3.5 (1.2) 2.3

2. Criminal Offences Confiscation FundApproval process

The Criminal Offences Confiscation Fund (COCF) is established under the Proceeds of Crime (Jersey) Law 1999. The Law provides the legal framework for the criteria by which funds can be applied from the COCF.

The COCF will be applied in promoting and supporting measures that assist in –

• Discharging Jersey's obligations under asset-sharing arrangements; or
• Preventing, suppressing or otherwise dealing with criminal conduct; or
• Dealing with the consequences of criminal conduct; or
• Facilitating the enforcement of administering the COCF.

Any Department can apply to the COCF for funding. Applications from individuals, charities or any type of organisation or business must be via a sponsoring Department. The Treasury is responsible for checking that applications meet the eligibility criteria and recommending approval to the Minister for Treasury and Resources.

In March 2014 the Minister for Treasury and Resources revised and strengthened the application procedures by requiring that all applications of over £250,000 must also be taken to the Council of Ministers for consideration and approval.

In all cases the Minister for Treasury and Resources requests confirmation from the Attorney  General  that  an  application  meets  the  eligibility  criteria.  In  the  case  of P.107/2014, the Attorney General has confirmed that an application as described in the statement of the Minister for Treasury and Resources would fall within the purview of the Proceeds of Crime (Jersey) Law 1999 and that he would consider it.

Current financial position

The current balance of the COCF is £16,883,000.

Grants from the COCF totalling £3,335,000 have been agreed through the approval process  described  above,  but  not  yet  paid.  This  reduces  the  available  balance  to £13,548,000. If the States approve P.107/2014 and the Minister for Treasury and Resources' identified funding mechanism is used, the available balance would reduce to £9.973,000.

CRIMINAL OFFENCES CONFISCATION FUND GRANTS

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Statement under Standing Order 37A [Presentation of comment relating to a proposition]

The  Minister  apologises  to  the  Assembly  for  publication  of  these  supplementary comments after the usual deadline. They are presented as close as possible to the debate on P.107/2014 to ensure that States Members have the most accurate and current financial information to inform their decision.