Jersey Sport: establishment

STATES OF JERSEY

JERSEY SPORT: ESTABLISHMENT

Lodged au Greffe on 31st March 2017

by the Minister for Economic Development, Tourism, Sport and Culture

STATES GREFFE

2017  P.21

PROPOSITION

THE STATES are asked to decide whether they are of opinion

to refer to their Act dated 1st February 2011 in which they approved Shadow Boards and Ministerial Boards: approval by the States' (P.170/2010); and to approve the establishment of Jersey Sport as an independent, grant-funded body, by means of a purpose trust named the Jersey Sport Development Trust, holding  shares  in  Jersey  Sport  Limited,  a  company  limited  by  shares  in accordance with the attached Articles of Association'.

MINISTER FOR ECONOMIC DEVELOPMENT, TOURISM, SPORT AND CULTURE

REPORT

This report sets out the rationale for seeking the States' approval to formally establish Jersey Sport Limited as an independent grant-funded body; as well as confirming the governance and operational arrangements for the Board.

Background

In order to build on the States' 2001 Sport Strategy, a Green Paper: Sport Strategy Consultation Document' was published in the early part of 2013. Following an extensive consultation process lasting until the end of May 2013, Fit for the Future: A Five-Year Strategy for Sport and Physical Activity in Jersey 2014 – 2018' was presented to the States on 21st January 2014 (see R.9/2014) by the then Minister for Education, Sport and Culture.

The strategy set out 4 key areas reflecting the main challenges highlighted during the consultation process –

The ambition set out in R.9/2014 was to give sport a stronger voice in Jersey, as well as a new strategic direction. It specifically recommended that a new and independent co-ordinating body be created, and that the body should receive financial support from the States.

The Education, Sport and Culture Department (which then held responsibility for sport) subsequently engaged specialist sports consultancy, Knight Kavanagh Page ("KKP"), in 2015,  to  further  test  the  concept,  involving  further  consultations  with  sports organisations, government and States Members.

The KKP Report was published in May 2015. It recommended to the then Ministers for: (1) Economic Development; and (2) Education, Sport and Culture, that an independent grant-funded body be created, operating at arm's-length from government and with its own governance structure. These views were shared at separate briefings for States Members, sports bodies and the local media, where broad support was expressed.

The decision to establish a Shadow Board was taken by the Minister for Education, Sport and Culture in December 2015 (see Ministerial Decision MD-ESC-2015-0027). This decision was taken following an officer evaluation of the proposed Shadow Board structure against the terms of P.170/2010 (Shadow Boards and Ministerial Boards: approval by the States', as amended). This Shadow Board – the members of which were not  remunerated –  was  given  specific  terms  of  reference  to  validate  the  KKP recommendations and report back on the feasibility of creating the new proposed organisation.

The Shadow Board presented its findings in September 2016 in the form of the Sport Report publication. Once again, briefings for States Members and sports organisations were  arranged.  These  briefings  were  covered  by  the  local  media,  and  audience engagement at those briefings was positive. Later that same month, the Assistant Minister for Economic Development, Tourism, Sport and Culture ("EDTSC") signed a further Ministerial Decision (see MD-E-2016-0045), tasking the Shadow Board to undertake the measures necessary to establish the corporate structure of Jersey Sport Limited.

In the final quarter of 2016 the Shadow Board, acting in conjunction with the EDTSC Department, brought forward a Transition Plan for the implementation of Jersey Sport. The plan followed the requirements of P.63/2016 (Outsourcing policy: safeguards'), lodged au Greffe by Deputy G.P. Southern of St. Helier on 14th June 2016 and adopted by  the  States  on  12th July 2016.  Endorsements  were  secured  from  the  States Employment Board ("SEB") Sub-Group established in accordance with P.63/2016, the full SEB, and the Council of Ministers regarding the potential transfer of States of Jersey employees to the new body, under revised terms and conditions.

In January, the Shadow Board and officers progressed work – as instructed under MD-E-2016-0045 – to establish both a non-charitable purpose trust (the Jersey Sport Development Trust') and a company limited by shares (Jersey Sport Limited') to the point where both are now in place in shell' form, however, non-operational owing to the absence of a signed Partnership Agreement with the Department and access to funding. At this point, a re-appraisal of the Jersey Sport project was undertaken in early 2017, during which the obligations arising from the States' decision in respect of P.170/2010 were revisited.

Having considered the proposed board structure and detailed arrangements as they stood in 2015 and now in 2017, officers concluded, on balance, that formal States endorsement should be sought for the completion of the establishment of Jersey Sport Limited. This advice was accepted by the Assistant Minister for EDTSC.

Current structure of Sport Development

Sport Development became part of the EDTSC Department on 1st January 2016, on the transfer  of  Sport  and  Culture  into  what  was  then  the  Economic  Development Department. The Sport Development team reports to the Head of Sport within EDTSC, and  through  the  Chief  Executive  to  the  Assistant  Minister  for  EDTSC  with responsibility for sport.

Sport Development, based in offices at Fort Regent, is made up of 17 staff (plus seasonal staff) working across 5 areas –

• supporting clubs and associations to develop and achieve Jersey Clubmark'
• facilitating and delivering community, after-school and holiday programmes for school-aged young people
• working in schools to improve physical literacy
• delivering swimming lessons to primary-aged children
• delivering Exercise Referral Programmes.

In addition, 7 sports (badminton, cricket, football, netball, rugby, squash and table- tennis) benefit from having dedicated Development Officers, all funded to varying degrees by sport governing bodies and commercial sponsorship, plus a consistent level of contribution from EDTSC.

Current funding for sport in Jersey

Sport is funded by a combination of private and public sector support, with significant contributions made on a voluntary basis. The total quantum of sport's "budget" in the Island is unclear, as accurate data from the private sector is not available. EDTSC's budget for the Sport Division in 2017 is £3.66 million.

The budget to support Sport Development in 2017 is £1.15 million. If the transition goes ahead, a key role perceived for Jersey Sport in the future as an independent body, will be to lead the business management of sport. This will include gathering and using data to provide evidence of the benefits derived through sports programmes and initiatives to Government, commercial and private sponsors. It is proposed that Jersey Sport would also play a key role in helping sports organisations and clubs in their approach to obtaining sponsorship, and the provision of a more co-ordinated and robust approach to procurement, providing further savings to the sector.

A further £2.51 million of the EDTSC budget currently supports the provision of sport facilities. These include: Fort Regent; Les Quennevais Sports Centre and playing-fields; Springfield Sports Centre and pitch; Oakfield Sports Centre; Langford Sports Centre; Haute Vallée swimming-pool and 3G pitch; F.B. Fields and track; Grainville playing- fields  and  bowling-green;  Airport  playing-fields;  Havre  des  Pas  swimming-pool; Crabbé shooting-ranges; and a grant to Serco for the operation of the Aquasplash.

Going forward, current States of Jersey policy is that management and financing of facilities will remain separate from the proposed remit of Jersey Sport, whose role in this context will be more strategic, providing advice and feedback to Government on future needs and priorities in terms of infrastructure.

The creation of Jersey Sport will not remove or significantly reduce the need for public funding.

The Shadow Board in its Sport Report' expressed a strong belief that in the medium to long term, sport overall will remain dependent on sustained levels of grant-funded support from the States of Jersey, in order to maintain existing levels of delivery and participation. However, with ambition to achieve additional investment in order to fund new initiatives and achieve higher outcomes, it is anticipated that Jersey Sport will need to develop as an organisation capable of helping the entire sporting community to attract significantly greater funds from the private sector.

Rationale for establishing Jersey Sport

The rationale for the Jersey Sport proposal originated from the consultation paper, Fit for the Future: A Five-Year Strategy for Sport and Physical Activity in Jersey 2014 – 2018' (R.9/2014), and were set out in detail in the EDTSC Sport Report' publication of September 2016.

In summary, the strategic development of sport in Jersey is increasingly likely in future to require additional professionalism in order to meet the challenges it faces and continue to thrive. Those challenges include –

• sustaining and enriching the volunteer body essential to the organisation of many sports
• changes in the demographic profile of the Island, with the implications for the provision of health care and other associated costs
• societal changes placing pressure on people's free time, plus technological developments that are increasingly putting segments of the population at risk, notably young people, through leading increasingly sedentary lives
• increasing  levels  of  competitiveness  at  all  levels  of  sport –  not  just  elite athletes – placing extra demands on the provision of coaching expertise, travel expenses and facilities
• fiscal challenges, with the realisation that sport cannot rely solely on current levels of States funding, let alone obtain States-funded investment for new initiatives.

Jersey Sport has the opportunity to, amongst other things –

• enable Jersey to be "world class" at physical literacy
• further enhance the good reputation of sport in Jersey
• re-examine the delivery mechanisms for sport and physical activity
• map and measure the many and varied benefits of sport and physical activity to the local community and compose business cases for future investment in sport
• allow sport to refocus and ensure a wider audience is aware of its importance and value in terms of health, educational, economic and community benefits
• enable greater co-ordination and communication of the sporting events calendar
• share best practice, knowledge and insights locally and from abroad
• bring sport development under one roof to achieve efficiencies and co-ordinate resource allocation across sports
• offer strategic support to enhance the skills of the current volunteer workforce
• take a lead role in conjunction with partners such as Visit Jersey in developing Jersey as a destination of choice' for sports events, training camps and sports tourism
• access charitable and other private funding not available whilst part of the States of Jersey
• introduce an entrepreneurial approach to the business of sport in Jersey and share best practice amongst clubs and associations.

It is envisaged that the Shadow Board would move forward to a formal launch for Jersey Sport in the first half of 2017, subject to States' approval. Staffing issues would then be finalised and grant funding provided, in accordance with the plans outlined in the Medium Term Financial Plan.

The proposed new structure of Jersey Sport

The establishment of Jersey Sport will be achieved through the creation of a non- charitable Purpose Trust, holding the shares in a company limited by shares, operating as an independent, grant-funded body.

The Trust (the Jersey Sport Development Trust) has as its Purpose –

1. The  development  and  promotion  of  sport  within  Jersey  (which  without limitation includes the promotion of participation in sport both within and outside Jersey).
2. The acquisition, incorporation and funding (by capitalisation or otherwise) of a limited liability Company in Jersey.
3. To hold and continue to hold the shares of the Company referred to at 2 above.

The Purpose Trust provides a structure which would not be owned either by the States or by another third party – i.e. is truly independent – whose Purpose –

• should not be contrary to public policy (or illegal)
• cannot be for the benefit of the Trustee(s).

The purpose of the Trust will be delivered by a number of appointed Trustees, operating under the supervision of an Enforcer, whose role is to enforce the Trust in relation to its non-charitable purposes, including –

• taking legal action against a trustee who fails to apply the Trust funds for the purposes and in the manner set out in the Trust Deed
• making an application to the Court for an Order which could include the administration of the Trust and the removal and appointment of Trustees.

The Company (Jersey Sport Limited), is established under the Trust (Purpose 2), has its  own  governance  structure  (Board  and  Executive)  and  delivers  the  objectives established for it by the Trustees, primarily in relation to Purpose 1 above.

The relationship between the Minister for EDTSC and Jersey Sport will be governed by a Partnership Agreement and agreed annual business plans, which will define the respective roles and responsibilities of the Jersey Sport Board  and Executive, the Assistant Minister for EDTSC, and officers of EDTSC.

This combination of Agreement, Annual Schedules and funding arrangements provides the Department with the effective degree of control over the activities of the Company; however, via the Trust and Enforcer, EDTSC has other methods at its disposal in order to ensure that the overall purpose of the Trust is delivered.

Funding will be provided through the EDTSC budget and, within the agreed cash limits defined in the Medium Term Financial Plan, Jersey Sport would be expected to present, agree and deliver an annual business plan with associated outcomes and outputs.

Constitution of the Board

A Board will be appointed, following the Nolan Principles, for a 3-year term, with the option to extend for one further 3-year period.

The Appointments Commission has already agreed the transfer of members of the Shadow Board to the Board of the new Company – should they wish to do so – and these would be augmented by 2 new Board members, having skills or experience in the areas of finance and human resources. Recruitment for these would begin once the States has debated this Proposition and given its approval.

The Board would meet on a monthly basis and be comprised of the following members –

• A Chairman who would be independent of both Government and the industry. (This  post  would  be  suited  to a  candidate  with a  broad business experience at senior level.)
• Up to a maximum of 6 Non-Executive Directors.

The Chief Executive of Jersey Sport would attend all Board Meetings as an ex officio, non-voting attendee, in order to act as a link between the Board and the organisation.

In terms of governance, the Accounting Officer of EDTSC will be accountable under the Public Finances (Jersey) Law 2005 and Financial Directions, and to the Public Accounts Committee, for the grant to Jersey Sport.

The Comptroller and Auditor General will be able to report, should she so wish, on Jersey Sport's accounts and the following matters –

• general corporate governance arrangements
• the effectiveness of internal controls, and of the internal auditing of those controls
• whether  resources  are  being  used  economically,  efficiently  and effectively
• actions needed to bring about improvement, where improvement is needed.

Purpose and the key aims of the Board

The purpose and key aims of the Board would be –

• To define the optimum operational and governance structure, and report to the Assistant Minister for Economic Development, Tourism, Sport and  Culture  on  the  strategic  direction  of  the  organisation  and performance against business plans.
• To strengthen governance and good practice in all areas of sport/Jersey Sport operations.
• To challenge and support the Executive teams.

• To develop strategy and business operations and ensure that they are subject to rigorous independent commercial challenge in a manner which enhances governance and performance.
• To ensure the optimum performance of the sector in delivering cost- effective operational solutions for the development of sport in Jersey.
• To undertake any other appropriate roles as agreed with the Assistant Minister for Economic Development, Tourism, Sport and Culture.

Sub-Committees

It is likely that Board Sub-Committees will be formed. Their role will be to provide oversight and support for the delivery of the strategic direction so determined by the Board and approved by the Assistant Minister.

Consultation

In accordance with P.170/2010, as amended, the Economic Affairs Scrutiny Panel has been briefed on this matter, and the Privileges and Procedures Committee and Public Accounts Committee have been invited to comment on a draft of this proposition and report, along with the appended Articles of Association. The latter Committees are understood to be content for this proposition to be lodged, having been advised that the Economic Affairs Scrutiny Panel will review this proposition and present either a report or comments to the Assembly before the matter is debated.

Collective responsibility under Standing Order 21(3A)

The Council of Ministers has a single policy position on this proposition, and as such, all Ministers, and the Assistant Ministers for Economic Development, Tourism, Sport and Culture, are bound by the principle of collective responsibility to support the proposition, as outlined in the Code of Conduct and Practice for Ministers and Assistant Ministers.

Financial and manpower implications

The overall budget associated with the new organisation would be in accordance with that outlined for Jersey Sport in the Medium Term Financial Plan. Members are invited to refer to page 80 of the MTFP 2017 Addition and pages 72–75 of the MTFP Annex 2017 – 2019.

The Assistant Minister for EDTSC, in his Ministerial Decision MD-E-2016-0045, accepted  the  Shadow  Board's  Sport  Report'  recommendation  that  a  budget  of £1.15 million be set for Jersey Sport, and that this budget level be maintained until the end of 2019.

The Board will continue to serve in an honorary capacity in keeping with the ethos prevalent in the Jersey sporting sector. Limited agreed expenses of the Board members will, however, be payable. A salary will nevertheless be paid to the Chief Executive Officer ("CEO") – who is not a Board Member but will attend Board meetings – and a competitive remuneration package has been determined.

A  budget  of  £95,000  annually  will  be  required  (from  the  overall  budget  of £1.15 million), for a combination of CEO remuneration and Board expenses, the latter representing less than 5% of this total amount.

The Department, supported by States' Human Resources officers, has undertaken a full consultation process – in conjunction with Unions – with all Sports Development Team staff involved, in line with P.63/2016 (Outsourcing policy: safeguards'). If the States' approval is obtained, those staff seeking to transfer to Jersey Sport will be employed on Jersey Sport Terms and Conditions, which have been fully explained to staff by both Shadow Board Members and the Transition Director.

Following consultations with staff carried out in line with P.63/2016, early indications are that 5 members of staff are likely not to transfer to Jersey Sport were the States to approve its establishment.

These staff would have  options including voluntary redundancy, redeployment or compulsory redundancy, and would be fully supported by both EDTSC and States' Human Resources officers in seeking to decide future career options.

APPENDIX 1

Jersey Sport Shadow Board Members

Mr. Phil Austin is Chairman of the Jersey Sport Shadow Board. Mr. Austin chaired the Organising Committee of the 2015 NatWest Island Games in Jersey, and is currently the President of the Jersey Football Association. He has enjoyed a long and successful career within the Finance sector in Jersey and currently has a portfolio of Non-Executive Directorships with UK and Jersey companies.

Ms. Jean Cross is President of the Jersey Badminton Association and was the organiser of badminton at the NatWest Island Games. Ms. Cross has been involved in local sport in various capacities in the Island for many years, and has represented Jersey in badminton, athletics, squash, volleyball and tennis. In addition, she brings extensive experience in business and project management as a self-employed business consultant with experience in both the public and private sectors.

Mr. Stephen Law is immediate past-President of the Jersey Squash and Racketball Association ("JSRA"), and has represented the Island in both inter-insular and national championships. As JSRA President between 2001 and 2016, Mr. Law has extensive experience of sports  development,  managing  a  dedicated  Development  Officer  in seeking to promote the sport in schools, and securing subsequent engagement of young people at club level. He has been the proprietor of the Windmills Hotel in St. Brelade since 1992, and has built a strong background in management and tourism.

Mr. Tony Taylor has an extensive career in marketing and communications, holding a variety of senior management positions at some of the world's most respected global advertising agencies. In addition to his strong commercial, people and communications skills, Mr. Taylor has over 16 years' involvement in youth sport in Jersey, mainly as a coach with Jersey Rugby Club's Junior Academy. His work commitments have taken him all over the world on a regular basis; however, he retired earlier this year and is looking forward to spending increasing amounts of time in Jersey and playing an increased role in Island life.

APPENDIX 2