Public Accounts Committee - Approved Panel Minutes - 10 March 2008

PM/JD/072 94

PUBLIC ACCOUNTS COMMITTEE (29th Meeting)

10th March 2008

PART A

All members were present, with the exception of Connétable T.J. du Feu, Deputy A. Breckon and Messrs. A. Grimes and M. Magee, from whom apologies had been received.

Deputy S.C. Ferguson, Chairman Senator L. Norman

Connétable D.J. Murphy

Deputy J.G. Reed R. Bignell C. Evans

Advocate A. Ohlsson

In attendance -

C. Swinson, C.B.E., Comptroller and Auditor General

P. Monamy, Clerk to the Public Accounts Committee

Note: The Minutes of this meeting comprise Part A only.

Minutes. A1. The Minutes of the Meetings held on 10th December 2007 (Part A only), 14th

January 2008 (Part A and Part B) and 18th February 2008 (Part A only); and the Notes  of  the  meeting  held  on  11th  February  2008,  having  been  previously circulated, were taken as read and were confirmed.

Matters arising. A2. The Committee noted the following matters arising from its previous Minutes

and Notes of Meetings -

1. Away Day' proposed (Minute No. A4 of 26th November 2007)- The  Committee  noted  that  follow-up  work  on  reports  and recommendations  was  under  way,  with  responses  awaited  from  a number of departments. The Chairman and Deputy Reed reported that they had received a briefing from the Director of Property Holdings in advance of a formal response;
2. States Spending Review: public hearing on 11th February 2008 - Chief Executive of the States and Treasurer of the States (Note No. 3  of  11th  February  2008)- The  Committee  noted  that  the Chairman  had  been  in  discussion  with  the  Scrutiny  Office,  States Greffe regarding the allocation of an officer to produce reports for and to generally service the needs of the Public Accounts Committee. Whereas a Scrutiny Officer had been temporarily allocated to deal with the transcript of the above-mentioned public hearing and to prepare a report  on  issues  arising  therefrom,  discussions  were  continuing regarding a permanent arrangement;
3. "Jersey Enterprise Board: proposed establishment" (P.194/2007): Amendment  (Minute  No. A1  of  18th  February  2008)- The Committee was advised by Deputy Reed that the Director of Property Holdings  had,  through  his  recent  briefing,  confirmed  that  a

considerable sum of money would be required to bring all property owned by

the States up to a reasonable standard. It was noted that the budget transfers  envisaged  under  the  arrangements  leading  to  the establishment of the Property Holdings Department had not yet been completed. The Connétable of Grouville commented that the Scrutiny Sub-Panel - of  which  he  was  a  member - presently  examining  the proposal to establish Jersey Enterprise Board remained unclear as to the remit of the proposed entity. It was questioned whether all property held  by  the  States  was  to  be  transferred  to  the  new  organisation; whether  it  was  also  intended  that  it  would  engage  in  property management; and whether its activities were to include an element of property  trading.  The  Comptroller  and  Auditor  General  (C&AG) suggested  that  it  was  apparent  that  there  was  to  be  no  change  in principle to the perceived operation of Jersey Property Holdings, with Jersey Enterprise Board being the vehicle by which certain surplus property  within  the  States  portfolio  could  be  disposed  of.  It  was evident  that  decisions  would  be  necessary  to  determine  which properties were to be moved to the auspices of the new company and the Committee recalled that its Amendment to P.194/2007 sought to bring the company and its subsidiaries within the C&AG's remit, so as to give assurance to the public that there would be an independent oversight of Jersey Enterprise Board and its activities.

States Spending A3. The Committee, with reference to its Item 3 of the Notes of the meeting held Review: on 11th February 2008, received an edited transcript of the public hearing which transcript of had  taken  place  on  11th  February  2008  involving  the  Chief  Executive,  Chief public hearing on Minister's Department and the Treasurer of the States, on issues arising from the 11th February States' Spending Review.

2008 -

Chief Executive Members of the Committee were asked to convey any comments on the transcript of the States and to  Mr.  N.  Fox,  Scrutiny  Officer  who  had  been  temporarily  allocated  to  the Treasurer of the Committee.

States.

512/1(16)

States Spending A4. The  Committee,  with  reference  to  its  Minute  No. A2  of  this  meeting, Review: draft recognised that it was to have been presented with a draft report on issues arising report arising from the public hearing which had taken place on 11th February 2008 involving the from Public Chief Executive, Chief Minister's Department and the Treasurer of the States, in hearing on 11th relation to issues arising from the States' Spending Review.

February 2008 -

Chief Executive However, it was noted that this had not proved to be possible and it was agreed that of the States and the  report  should  be  circulated  to  Committee  members  as  soon  as  it  became Treasurer of the available.

States.

512/1(16)

Comptroller and A5. The Committee received an oral report from the Comptroller and Auditor Auditor General: General (C&AG) regarding the under-mentioned work currently in hand and noted report. that -

512/1(8)

1. reports  on  the  States' 2  principal  pension  schemes  for  States' employees - the Public Employees Contributory Retirement Scheme (PECRS) and the Teachers' Superannuation Fund (TSF) - had been completed and were being prepared for printing. A further report on the "Liabilities" of the 2 schemes was in discussion with the Head of Employee Relations, Chief Minister's Department and, following a meeting scheduled for 17th March 2008, it was envisaged that all 3

reports would be published. A report was also in the course of preparation on

the governance of the 2 schemes, and also on their respective status (whether, for example, they should be constituted as 2 separate schemes, with independent trustees). The Committee noted the difference in approach which had been adopted in the management of the 2 pension schemes, including details of the relative deficits and the manner in which they had been addressed over the years and, in particular, most recently. It was noted with interest that the reforms which had been undertaken to the PECRS from 1987 onwards were only now being made to comparable schemes in the United Kingdom. It was recognised that unfavourable comparison by some observers of PECRS with United Kingdom schemes often failed to take into account the significant membership of personnel from the Island's uniformed services, the costs in respect of which could be substantially higher (i.e. arising from their earlier age of retirement). The Committee noted that relatively recent reforms to the TSF would place it on a similar basis of operation to PECRS, although it was indicated that the effects would not become apparent for some time. Advocate A.  Ohlsson declared a conflict of interest in relation to the work undertaken by his firm, Carey Olsen, as advisors to PECRS;

2. regarding the report issued on the 2 Confiscation Funds (the Drug Trafficking Confiscation Fund and the Criminal Offences Confiscation Fund), it was noted that following confirmation from H.M. Attorney General that other jurisdictions generally did not consider that confiscated funds should be held separately from general funds, the way was clear for the 2 above-mentioned Funds to be considered as general revenue of the States. In this event, it was envisaged that in future a provision would be made by the States from which Court and Case Costs' expenditure could be met;
3. regarding the ongoing major Police enquiry involving allegation of child abuse perpetrated historically at the former children's home at Haut de la Garenne, St. Martin , the Committee recognised that the Chief Minister had indicated to the States that the Council of Ministers had "confirmed that all necessary resources will be made available to ensure the most comprehensive inquiry possible and to support any prosecutions that lead from it." The C&AG reported that it was likely that the costs of the enquiry would be met from the balance available in the relevant Confiscation Fund, whereas in other jurisdictions such expenditure might be dealt with by means of a supplementary vote to an appropriate contingency budget. However, it was recognised that this option was not presently available to the Island following the firmer spending controls which had been introduced in the lead-up to the establishment of Ministerial government. The Committee noted that in was intended that a separate report to be prepared at the end of the ongoing Jersey Spending Review' would address the issue of overall spending controls;
4. Departmental Reports were to be prepared, as follows -

1. following reviews of areas of responsibility under the remit of Home Affairs, reports were to be issued in respect of the Fire and Rescue Service, H.M. Customs and Excise, the States of Jersey Police and H.M. Prison La Moye;
2. publication of a report on the review of the Education, Sport and Culture Department was imminent;
3. a report on the review of the Law Officers' Department, with particular emphasis on a request for additional staff, was presently underway;
4. reports would be prepared in due course on the Health and

Social Services Department and the Planning and Environment

Department;

5. a set of papers would be prepared on certain cross-cutting issues, including -

1. property;
2. pensions;
3. outsourcing; and
4. joint activities with Guernsey.