Ministerial Response - Government Plan 2020-2023 - Corporate Services Scrutiny Panel - 9 January 2020

Findings

Comments

1

States revenue expenditure will increase from a base budget of £735 million in 2019 to

£824 million in 2020 (a 12% increase).

The Government Plan explains that £735 million was the original budget from the MTFP, the last figure approved by the Assembly and used for transparency.

The Plan also refers to additional allocations to meet emerging priorities, which give an allowable budget of £800 million – which we have advised the Panel is a more sensible comparator. The Panel is reminded that  this  expenditure  is  over  the  life  of  the Government Plan from 2020–2023. When rebased to 2019  figures,  growth  is  within  "norms"  and  is consistent with growth in previous MTFPs.

2

Combined capital and revenue spending will exceed £1 billion by 2023.

Noted. A significant part of the capital expenditure is to rectify long-term under-investment.

3

Modernising Government accounts for £76.7 million of States spending in 2020. This is larger than the allocations for improving the economy

(£65.9 million) and protecting the environment (£27.8 million).

Noted.

Findings

Comments

4

The highest allocation of new investment within the Government Plan is £25.4 million to Modernising Government. This compares to new investment of £20.7 million in Putting Children First.

An  investment  in  modernising  government  is  an investment in the capabilities to develop and deliver all government services, both existing and those being developed to deliver our Common Strategic Priorities.

This investment is principally in our people and our technology,  the  foundation  of  government  service delivery.

5

The Capital programme in the Government Plan amounts to £90 million. The Fiscal Policy Panel have welcomed the investment but say that there is a "significant risk" in delivering it.

Monitoring delivery of the capital programme will be a  key  activity  for  Treasury  and  Exchequer  during 2020.

6

There is no published IT Strategy covering all IT spending in the Government Plan.

This investment is principally in our people and our technology,  the  foundation  of  government  service delivery.

7

The IT spend in the Government Plan is based on the minimum period in which it could be delivered.

The profiles set out in the TTP are illustrative. As each individual technology programme commences, a more detailed business case process will be initiated, which,  amongst  other  things,  will  apply  a  more detailed review of investment, benefits and timescales for  delivery.  Subject  to  commercial  confidence  the output  from  this  work  will  be  made  available  for scrutiny.

8

There is no increase to the child tax allowance or additional child tax allowance in the Government Plan. These allowances have not been increased since before 2011.

Noted.

9

Duty increases are intended to promote changing behaviours around health and the environment, but it is not apparent that consideration has been given to impact on the economy or local industries such as transport and hospitality.

An analysis of the distributional impact of proposed fuel duty rises and the Climate Emergency Fund is contained  in  an  Appendix  to  the  Initial  Report  on "Tackling the Climate Emergency".

10

The food costs bonus has not been reviewed since 2014. In that time, RPI has increased by 13.8%.

The Government accepted the CSSP amendment. The increase  in  the  food  weighting  of  the  RPI  has increased by 6.6% over this period.

11

The Government plans to use hypothecated taxes more in the future, which is contrary to the advice of the Fiscal Policy Panel.

Part of the fuel duty increases are being ring-fenced for the Climate Emergency Fund. Hypothecating taxes specifically  for  climate  objectives  is  not  unusual internationally.

Findings

Comments

12

We have a number of concerns about the information provided on the Efficiencies Programme. We consider that the detail presented calls into question the deliverability of the programme.

The Efficiencies Plan sets out a programme to deliver sustained  efficiencies  of  £40 million  in  2020. Principles  provide  for  flexibility  in  the  delivery  of efficiencies in the event they cannot be delivered as planned. Departments have the flexibility to propose alternative  efficiencies  and/ or  reprofile/ reduce growth  to  ensure  a  balanced  budget.  Monthly governance oversight from Treasury and Exchequer, aligned with the budget monitoring process, will track delivery. As agreed (P.88/2019) a 6-monthly report on the impact of the efficiencies will also be issued.

13

Changes to end inequality in the personal tax system have been delayed due to possible adverse impacts on certain groups.

Very important changes to address inequality between married  men  and  women  and  those  in  civil partnerships are being addressed now – the Minister for Treasury and Resources lodged a proposition to deal with this matter on 22nd November.

14

The Chief Minister aims to develop stronger working ties between the Government and the States Greffe, although details on what this will entail are not provided.

As stated in the Government Plan, there are a number of areas in which the Government aims to improve its co-ordination and co-operation with the States Greffe.

15

The Treasury and Exchequer Department aims to increase its tax policy team to meet tax treaty commitments and improve tax transparency.

This  is  largely  the  continuation  of  funding  from Contingency  agreed  by  the  previous  Council  of Ministers.

16

The quality of information provided for additional funding for the tax policy team was poor, and not of the standard expected for a request for additional revenue totalling almost £7 million.

Business cases have inevitably become abridged as they have been developed and progressed to senior funding bodies. The calculation of resources needed to support  Jersey's  international  commitments  is identified at individual post and grade level. A good deal of the growth consolidated in the present case is already in place, following funding from Contingency by  the  last  Council  of  Ministers.  As  explained  to CSSP,  it  is  difficult  to  quantify  the  benefits  of  a particular size of international tax team: but it is quite easy  to  understand  the  consequences  of  Jersey  not meeting its international treaty commitments.

17

Revenue Jersey aims to increase its use of digital systems and services and gradually phase out face-to-face services.

The  Comptroller  in  evidence  suggested  that  Jersey was a society that highly prized face-to-face services and that they were unlikely to be ended. To some extent,  face-to-face  services  are  now  a  corporate offering fronted by CLS, so this was not entirely a decision for Revenue Jersey.

Findings

Comments

18

The business case for additional funding for commercial services lacks the expected level of detail regarding how the Chief Operating Office aims to spend the additional revenue requested.

The initial allocation of funds is required to progress work essential to the delivery of a new Commercial Services target operating model for which a business case is being prepared in conjunction with a specialist procurement/ commercial  organisation.  This  will include  the  design  of  job  descriptions,  delivery organisation, key metrics and framework for operating in  a  modern  and  commercial  way,  broadening  the scope  of  the  traditional  procurement  function  and maximising opportunities for more efficient working. For example: develop capability and capacity, develop contract  management,  income  generation,  support One-Government  priorities,  and  increase  working with our community/ customers.

19

The intended outcomes for the additional funding for tax compliance are not sufficiently clear.

The  intended  outcome  is  improved  compliance  by Islanders with their tax obligations. The Comptroller has outlined the scope of the compliance programme that  will  achieve  this.  The  specified  outputs  from successful  delivery  of  the  outcome  is  additional revenues  of  a  stipulated  amount.  The  Panel  was offered a briefing on the compliance programme on 17 September, which to date, they have not taken up.

20

The Panel has concerns about the ability to recruit to the

21 additional tax compliance posts in 2020 and therefore that the full funding allocation might not be used.

Revenue Jersey is  confident that it can staff up to baseline with ratified funding from the Government Plan. It has been difficult to fill all posts while so many were funded from Contingency and therefore time-limited.

21

The budget for Human Resources (now called People and Corporate Services) for 2020 has increased by over 100%. The rationale for this is that Human Resources has been under-resourced in the past and has been an easy target for savings.

The  total  spend,  including  base  budget  for 2020–2023 is £51.6 million, relates to around 3% of total  workforce  costs.  This  would  place  the Government  at  the  lower  end  for  percentage investment,  compared  to  good  comparable organisations. Given the low base that we are starting from, Ministers considered this as an acceptable level of spend.

The  Government  of  Jersey  employs  nearly 7,000 individuals. In 2020 the total wage bill will be £420 million. Effective people management, both at line  management  level  and  through  the  corporate centre,  affects  the  productivity,  engagement  and effectiveness of service delivery. At present, a number of  key  indicators –  along  with  reports  from  the Comptroller  and  Auditor  General  ("C&AG"), Scrutiny  and  internal  audit –  have  highlighted  the need to improve people management fundamentals to deliver the longer-term reform agenda.

Findings

Comments

The C&AG Report stated "corporate HR function has been under resourced and this needs to be addressed to help  secure  the  changes  urgently  needed.  The preparation and implementation of a comprehensive People Strategy is essential "

The report also called out the "significant weaknesses in  the  framework  for  the  oversight  of  Human Resources  (HR)  management".  This  detailed  the weaknesses in the establishment and function of SEB, JAC, and ambiguity/ gaps in the current arrangements.

The department, whilst centralised, does not currently have  key functions,  particularly in areas  where the Government  has  clearly  articulated  the  risks  and challenges  we  face,  including  recruitment  and retention, workforce planning, health and safety, and industrial  relationships.  We  have  been  reliant  on short-term  funding  and  agency  workers,  creating significant instability in the service.

However, only 20% of the additional funding relates to staffing increases in People and Corporate Services ("P&CS").

The remaining amount is related to direct investment in the workforce through learning and development opportunities,  apprenticeships,  targeted  programmes to  address  equalities  and  representation  within  the workforce,  talent  programmes,  professional development, and employee wellbeing.

In the first year, this also covers the need to recruit to significant  vacancies  and  short-term  cover  within P&CS, pump-priming investment in key basics (such as a recruitment and attraction site to improve and promote careers). We are developing our strategy for longer-term  sustainable  improvements  in  workforce management,  performance  and  cultural  changes within  the  Government.  We  have  set  out  the challenges  we  will  face  in  the  future,  including changing demographics, lack of succession planning and key skills and the impact of technology – along with an increasingly competitive market for talent and skills in the Island.

In challenging the amounts required, Ministers were mindful  of  the  below-adequate  base  budget (£4.7 million). They agreed the key functions required in  a  fit-for-purpose  service,  looked  at  the  key challenges and activities needed over the lifetime of the Government Plan, and benchmarked this against good  organisations  (as  accredited  by  Investors  in People)  about  the  levels  of  investment  in  the workforce required.

Findings

Comments

Ministers also accepted that the losses outweigh the investment in  a  poorly-managed  workforce through spend  on  attrition  and  replacements,  contingent workforce  requirements  (agency  and  interims),  low productivity,  poor  staff  engagement  and  unskilled managers – along with gaps in service to our citizens.

22

The Supply Jersey procurement system is due to be replaced once the Government's new integrated technology system has been implemented.

It is intended that the requirements for a Source to Pay solution  (replacement  for  Supply  Jersey)  will  be included in the requirements capture and specification for the Integrated Technology Solution. This will be implemented  as  part  of  the  Integrated  Technology Solution.

Supply  Jersey  Procure  to  Pay  solution  was implemented in October 2014. The current version of the software is at least 5 years old. A new version with improved functionality s available but this will require a complete upgrade.

The  GOJ  has  benefited  from  the  improved functionality that Supply Jersey has brought to the process of buying and paying for goods and services – Electronic Catalogues, E-invoicing, improved control and compliance. The GOJ is in a good position to use the  lessons  learnt  and ensure  that  the  requirements gathering  and  change  readiness  is  captured  and  is produced in the specification for the service as part of the ITS programme and procurement process.

There have been advances in source to pay software – Software as a service ("SAS") ensures that the version deployed to all customers is the most current, reduces the overhead of support, and improves resilience to the service provided, improves security and improves functionality.

23

The information provided in support of the additional funding for the One Government project is not convincing, and lacks detailed up-to-date information.

Noted.

24

The Technology Transformation Programme is planned over a

7 year period and includes spending of £42 million (Revenue) and £99 million (capital) during the next 4 years. The spending has been planned over the shortest period possible in order to release the benefits sooner.

The profiles set out in the TTP are illustrative. As each individual technology programme commences, a more detailed business case process will be initiated which,  amongst  other  things,  will  apply  a  more detailed review of investment, benefits and timescales for delivery. Subject to commercial confidence, the output  from  this  work  will  be  made  available  to Scrutiny.

Findings

Comments

25

The business case and supporting information for the "Delivering Effective Financial Management" project lacks the level of detail we would expect for a request for additional revenue of almost

£10 million.

Quality assurance of business cases by officers will be part of the new process for business cases, and will ensure the adequate information, including costs and benefits, is available for Ministers to make informed decisions.

The  stage  of  development  and  nature  of  the investment may influence the level of detail included. For example, it would be wasteful to develop a Full HMT  Green  Book  compliant  business  case  for the replacement  of  existing  assets  in  line  with  a replacement schedule.

26

The business case for £20 million (£5 million per year) of funding for replacement IT assets consisted of 7 words. This level of detail does not enable the Panel to have confidence in this business case.

A more detailed breakdown of expenditure has been provided for the Panel setting out what infrastructure is expected to need upgrading and/or replacing over the period of the Government Plan.

Similar  to  the  necessary  investment  in  the maintenance  of  physical  infrastructure  (roads,  sea- defences, etc.) this is akin to a  rolling vote in the maintenance of technology infrastructure.

27

There is no explanation or business case provided for the capital programme central risk and inflation funding of

£1 million in 2020 (£6.3 million in total over 4 years)

There are a number of estates projects with funding allocations  over  the  Government  Plan  period. Historically,  each  individual  scheme  would  have included a sum for risk in the early years and inflation in future years. These sums have been stripped out of individual schemes, to be held centrally, allowing for a lower sum of money to be held, as not all risks will materialise  and  not  all  costs  will  need  inflation. Departments will need to request funding from  the Treasury  and  Exchequer,  justifying  their  need  if  it arises.

28

We have not been provided with enough information to make an assessment of the £1 million pre- feasibility funding for the States' Office Strategy. This is in part down to delays in the Panel receiving a briefing from Ministers on the project.

As stated in Finding 22, there have been advances in source to pay software – Software as a service (SAS) ensures that the version deployed to all customers is the most current, reduces the overhead of support, and improves resilience to the service provided, improves security, and improves functionality.

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

1

To build public confidence and allow public scrutiny, the Government should publish a strategy covering all Government IT projects for the next 4 years and beyond.

CM

Neither accept nor reject

The focus for 2020 will be establishing the  foundation  projects  which  will provide  a  safe,  secure  and  up-to-date functional base from which to build or transform  services  in  future  years. During  2020  the  Government  will consider publishing a strategy that sets out how technology will support those services.

Consider in 2020

2

The Minister for Treasury and Resources should give greater consideration to children's allowances in the future and how they can be used to help families meet the rising cost of living.

Min. T&R

Accept

Government support for children (both through  the  tax  system  and  through direct support) is an integral part of the continuing agenda for the Personal Tax Review,  and  will  be  carried  out  in conjunction with the Early Years Policy Development Board.

Consider in 2020

3

The Council of Ministers should bring forward proposals in the next Government Plan to address the impact of inflation on the rising cost of essential items such as food.

CoM

Accept

The Council of Ministers has accepted the  lodged  amendment  to  the Government Plan.

Gov. Plan 2021 sub- mission July 2020

4

The Chief Minister should lodge the Efficiencies Programme for separate debate by the States Assembly and allow for a suitable period of scrutiny beforehand.

CM

Reject

This  matter  has  been  debated,  with Amendment 7  being  rejected  by  the Assembly.  P.88/2019 was  previously approved, as amended.

Before debate

5

The Minister for Treasury and Resources should aim to prioritise the changes to the personal tax system to end the existing inequalities as soon as possible.

Min. T&R

Accept

The  first  stage  of  this  reform  was lodged on 22nd November 2019, and a further  proposition  will  be  lodged before  the  debate  of  the  Government Plan in 2020.

Before Gov. Plan 2021

6

Omitted from final report

N/A

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

7

The Chief Minister should provide greater clarity as to what the new working protocols between the Government and the States Greffe will be, and how they will affect the interaction between Government departments and the States Greffe.

CM

Accept

The Government Plan provides a clear picture of the anticipated new working protocols between the Government and the  States  Greffe.  The  Plan  includes reference to working with the Greffe to:

• Establish an annual programme of briefings, improving on the notice, quality of content and participation in briefings.

• Develop  a  forward  plan  of Government business, working with the  Greffe  to  endeavour  to  make Sittings  have  a  more  balanced weighting  of  propositions,  whilst also  improving  engagement  with Scrutiny to support their work.

• Introduce  new  working  protocols between  the  Ministerial  offices, SPPP,  other  Departments  and  the Greffe.

Further  detail  will  become  available, following more in-depth discussion and planning  between  the  Government  of Jersey  and  the  States  Greffe,  around specific courses of action.

Consider in 2020

8

The Council of Ministers should aim to ensure that a house style and minimum standard of quality is met by each business case within future Government Plans.

CoM

Accept

A  key  objective  in  the  T&E Departmental  Delivery  Plan  is  to  roll out the HMT Green Book methodology in an effective and proportionate way, which will ensure that the right level of information  for  decision-making  is collated  based  on  the  size  of  the investment,  the  stage  of  development and  other  relevant  factors  such  as strategic importance.

As  this  methodology  embeds  in  the organisation,  the  consistency  of information will be enhanced. However, the level of detail may vary, and it will still be necessary to summarise in some cases – a detailed business case may run to several hundred pages.

Gov. Plan 2021 sub- mission July 2020

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

9

The Minister for Treasury and Resources should provide a clearer outline of the methodology used to calculate the figures within Treasury and Exchequer's business cases, and avoid the inclusion of guesswork at all costs, particularly in regard to cases where considerable levels of additional revenue are requested.

Min. T&R

Neither accept nor reject

All  Business  Cases  will use available information  to  inform  costs  and benefits, but there will continue to be a need to include professional judgements to  supplement  this  information.  It  is right that Officers flag where benefits are  estimated  on  the  basis  of professional  judgement,  rather  than calculated.

Consider for Gov. Plan 2021 sub- mission July 2020

10

In future Government Plans, the Council of Ministers should aim to provide greater clarity on how additional revenue requested in business cases will be used.

CoM

Accept

We will strive to continuously improve the information we provide to support decision-making.

However,  with  a  greater  focus  on outcomes  for  Islanders,  the  way  in which these outcomes will be delivered may need to be refined and developed. It  is  possible  to  estimate  the  cost  of delivering  an  outcome  based  on experience and available data, but this will be refined as options are explored and preferred solutions selected.

Consider for Gov. Plan 2021 sub- mission July 2020

11

The Minister for Treasury and Resources should report back to the Panel on a quarterly basis on progress in delivering the outcomes of the additional funding for domestic tax compliance.

Min. T&R

Reject

Reject – a good deal of the benefits will be measured retrospectively (a year in arrears). It may be possible to offer an indicative view based on certain metrics bi-annually.

–

12

The Chief Minister should clearly explain why a budget increase of over 100% for People and Corporate Services is necessary, and how Ministers assessed and challenged the business case put forward.

CM

Accept

Response stated in Finding 21.

Explained in response to

Finding 21

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

13

The Chief Minister should provide an update to the Corporate Services Panel every 6 months on the progress on delivering the additional funding into People and Corporate Services.

CM

Accept

The CM and ACM will continue to be closely involved with the investment in, and  performance  of,  the  People  and Corporate Services Function.

Consider in 2020

14

The Council of Ministers should subject each business case to a thorough review before including them within the Government Plan.

CoM

Accept

Quality Assurance of Business Cases by officers will be part of the new process for Business Cases, and will ensure the adequate  information,  including  costs and benefits, is available for Ministers to make informed decisions.

Gov. Plan 2021 sub- mission July 2020

15

The Assistant Chief Minister with responsibility for digital technology should remain alert to the potential flexibility of the timeframe of the technology transformation project, due to its scale and financial investment.

Asst. CM

Accept

The ACM will continue to be closely involved in the constructive review and challenge  of  the  Technology Transformation  Programme  strategy and delivery.

Consider in 2020

16

The Assistant Chief Minister should ensure that subsequent IT projects and their overall spend are reviewed by Officers on an annual basis for future Government Plans, with a view to re-profiling the investment over a longer period of time if deemed suitable.

Asst. CM

Accept

The ACM will continue to be closely involved in the constructive review and challenge  of  technology  strategy  and delivery.

Consider in 2020

17

The Council of Ministers should give greater emphasis in each business case as to why additional investment is required and what it will be spent on, instead of providing a statement of need.

CoM

Accept

Business Cases will set out outcomes, alongside estimated costs and benefits. The way in which these outcomes will be delivered may need to be refined and developed. It is possible to estimate the cost of delivering an outcome based on experience and available data, but this will be refined as options are explored and preferred solutions selected.

Consider for Gov. Plan 2021 sub- mission July 2020

Recommendations

To

Accept/ Reject

Comments

Target date of action/ completion

18

The Council of Ministers should ensure that each business case within future Government Plan's contains an adequate level of detail to support the funding being requested.

CoM

Accept

Accepted,  although  the  stage  of development  and  nature  of  the investment may influence the level of detail included.

For  example, it would be wasteful to develop  a  Full  HMT  Green  Book compliant  business  case  for  the replacement  of  existing  assets  in  line with a replacement schedule.

Gov. Plan 2021 sub- mission July 2020

19

The Minister for Treasury and Resources should provide a separate business case for central risk and inflation funding in future Government Plans explaining how the amounts have been calculated, in order to provide assurance to States Members and the public regarding the amounts requested.

Min. T&R

Accept

The intention is to provide greater detail in, or alongside, the next Government Plan.

Gov. Plan 2021– 2024

20

The Council of Ministers should provide greater levels of detail on pre- feasibility capital funding in future Government Plans.

CoM

Accept

The intention is to provide greater detail in, or alongside, the next Government Plan.

Gov. Plan 2021– 2024