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Review: Arm’s Length Bodies, Grants and Subsidies

Committee/Panel: Public Accounts Committee
Launch Date: 4 April 2025
Review Status: Gathering evidence

About

The Government of Jersey relies on delivery of services not only directly by Ministerial departments, but indirectly through other bodies. These bodies may be controlled by government, established by government to conduct a specific function, substantially funded by government and/or given a statutory power to levy charges to cover some or all of their costs. There are numerous reasons why the government may wish to establish one of these entities, not limited to, but including for regulatory, investigatory or value for money reasons. A common term used to describe such entities is ‘Arm’s Length Bodies (ALB’s).

There is an Arm’s Length Bodies Oversight Board (ALBOB) which has been established. The C&AG recommended that the terms of reference, work plan and membership of this group be reviewed in order to achieve coordination across the ALB landscape. Noting that not all ALB’s would operate with the same governance structures due to the differences in how they are established, work needed to be done to establish a revised definition of the various entities. The C&AG recommended that these entities be grouped into the following categories:

  • States owned entities (i.e. defined as entities which are wholly or partly owned by the states – 11 entities fall within this category)
  • States established delivery entities – defined as entities established by the States for the purpose of providing services to individuals and businesses. There are 6 entities that fall within this category
  • States established independent bodies and office holders – defined as entities established by the States but that are required by their nature to operate on an independent basis from Government. There are currently 20 entities who fall within this category excluding legal or quasi legal entities.
The Comptroller and Auditor General (C&AG) presented the report ‘Oversight of Arm’s Length Bodies’ in July 2024 which examined the overall arrangements for ALB’s and made recommendations about how to better improve the definition of ALB’s, improve oversight and achieve better value for money. The Government of Jersey accepted all of the recommendations albeit some only ‘in part’ and it created an action plan to deliver these changes by the end of January 2025.

Recently, the Chief Executive Officer for the Government of Jersey has made public statements about the number of organisations that were linked to government and also considered ALB’s (140 organisations were noted in total at a Chamber of Commerce lunch with 54 new bodies having been established since 2005). Comments were also made about whether the current structure allowed Government to achieve value for money.

There has also been recent media coverage in relation to the awarding of grants and subsidies by the Government of Jersey. Specific recent examples have included the Jersey Opera House and Battle of Flowers. The C&AG is due to present a report on grants and subsidies in Quarter two 2025 and, given the proximity of this matter in respect of ALB’s, the PAC has agreed that it would be beneficial to examine the processes and governance arrangements in this area in tandem with those processes in place for ALB’s. This will also involve conducting follow up on the C&AG recommendations arising from this report.

Key issues
 
  1. The PAC will want to establish the governance structures that are in place within Government in respect of States Owned Entities, States established delivery entities and States established independent bodies and office holders in respect of funding and monitoring and evaluation of their effectiveness.
 
  1. The PAC will also want to establish the governance structures that are in place within Government in respect of all bodies that are in receipt of a grant or subsidy. This will include establishing the policies and procedures in place for awarding grants and subsidies and the manner in which these grants and subsidies are monitored and evaluated to ensure their effectiveness. This will also include establishing how the Government of Jersey gains assurance over the value for money of these arrangements.
 
  1. The PAC will want to establish the progress that has been made by Government implementing the recommendations of the C&AG in relation to ALB’s and establish and evaluate the response to the C&AG report on grants and subsides in line with those.

Terms of reference

  1. To establish and assess the effectiveness of the governance arrangements between the Government of Jersey and established Arm’s Length Bodies, including but not limited to;
  • States owned entities
  • States established delivery entities
  • States established independent bodies and office holders
 
  1. To identify and assess the effectiveness of policies and procedures in place within the Government of Jersey in respect of the issuance of grants, subsidies or sponsorships to external organisations not already established as Arm’s Length Bodies.
 
  1. To determine how the Government of Jersey gains assurance over the value for money and contribution to Island Outcomes of Arm’s Length Bodies and external organisations in receipt of grants, subsidies and sponsorships.
 
  1. To gather views from Arm’s Length Bodies and external organisations in receipt of grants, subsidies and sponsorships in relation to the current policies and procedures and reporting requirements that they adhere to.
 
  1. To determine the processes used by the Government of Jersey to monitor and evaluate the effectiveness of Arm’s Lengths Bodies and external organisations in receipt of grants, subsidies or sponsorships.
 
  1. To examine the implementation of relevant PAC and Comptroller and Auditor General recommendations in respect of, but not limited to, the reports ‘Oversight of Arm’s Length Bodies’ ‘Grants and Subsidies’ by the Government of Jersey and identify any progress made in achieving implementation of those recommendations.