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Budget transfer: Voluntary Release and Redundancy Scheme in 2018

A decision made 8 January 2019:

Decision reference: MD-TR-2018-0153

Decision Summary Title:

Transfer of funding from Central Contingencies to various departmental budgets to recognise the costs associated with the Voluntary Release and Redundancy Scheme in 2018

Date of Decision Summary:

31st December 2018

Decision Summary Author:

Financial Performance Reporting Manager

Decision Summary:

Public or Exempt?

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

N/A

Written Report

Title:

Transfer of funding from Central Contingencies to various departmental budgets to recognise the costs associated with the Voluntary Release and Redundancy Scheme in 2018

Date of Written Report:

31st December 2018

Written Report Author:

Financial Performance Reporting Manager

Written Report :

Public or Exempt?

Public

Subject:

Transfer of funding from Central Contingencies to various departments revenue heads of expenditure to recognise the costs associated with the 2018 Voluntary Release (VR) and Redundancy Scheme.

Decision(s):

The Minister approved a non-recurring budget transfer in 2018 of £300,541.65 to departments from Central Contingency – Redundancy Provision for VR Applications approved and signed between 1st August and December 12th 2018.

Reason(s) for Decision:

Article 17(2) of the Public Finances (Jersey) Law 2005 states that the Minister for Treasury and Resources is authorised to approve the transfer from contingency expenditure to heads of expenditure of amounts not exceeding, in total, the amount available for contingency expenditure in a financial year.

 

The current Contingency Allocation Policy (published as R.112/2018) sets the requirement for all allocations from contingency over £50,000 to be considered by the Investment Appraisal Board, Principal Accountable Officer and States Treasurer prior to submission to the Minister for approval. The Board has recommended this request for approval. The request has also been recommended for approval by the Principal Accountable Officer and States Treasurer.

 

International Financial Reporting Standards (IFRS) interpreted for the States of Jersey in the Jersey Financial Reporting Manual (JFReM) require termination benefits to be recognised as an expense at the point at which the entity can no longer withdraw the offer of those benefits. Accordingly, the full cost of all VRs must be recognised at the point a binding contract has been signed with the employee.

 

The Council of Ministers approved the allocation of £2,000,000 from Central Contingencies to create a Redundancy Provision in 2015 to fund the first tranche of the scheme. The States Assembly approved a further £20,000,000 to be added to the Redundancy Provision across 2015 and 2016 to be funded by transfers from the Strategic Reserve Fund.

 

MD-TR-2015-0141 approved funding of £4,666,119 to fund the Voluntary Release Scheme in 2015 in line with the allocation of funding approved by the States Assembly in P.72/2015 Medium Term Financial Plan 2016 – 2019 (as amended).

 

MD-TR-2016-0058, MD-TR-2016-0082, MD-TR-2016-0114, MD-TR-2017-0010 and MD-TR-2017-0087 approved funding of £3,677,954.05 to fund applications approved and signed up to 31st December 2016 and also transferred savings of £864,227 from the departments to the Redundancy Provision as result of VR approvals earlier than anticipated in 2015.

 

It was agreed by the States Assembly as part of the MTFP Addition Debate in 2016, following an estimate of funding requirements for redundancy for the remaining years of the MTFP, to transfer £6.88 million of the Redundancy Provision to the Restructuring Provision for 2018 and 2019.

 

MD-TR-2017-0125 and MD-TR-2018-0008 approved funding of £713,995.54 to fund applications approved and signed up to 31st December 2017.

 

MD-TR-2018-0088 approved funding of £234,541.02 to May and TR-2018-DD085 approved funding of £195,533.92 to August 2018 and this decision funds the next tranche of VR applications to 12th December and will leave a balance of £6.19 million in Contingency for future applications.

 

The following transfers to departments totalling £300,541.65 are now required:

 

  • CMD                                                              £  94,150.50
  • CCA                        £  16,275.55
  • HSSD                                                             £148,796.32
  • Department for Infrastructure                         £  41,319.28 

Resource Implications:

Various departments’ revenue heads of expenditure to increase by a total of £300,541.65 in 2018 and Central Contingency – Redundancy Provision to decrease by the same amount. This decision does not change the total amount of expenditure approved by the States for the period of the current MTFP 2016 to 2019. The transfers are detailed in the attached report.

Action required:

The Head of Decision Support to notify the Finance Directors of all relevant departments that the Decision has been approved.

Signature:

 

 

Position:

Deputy S J Pinel

Minister for Treasury and Resources

Date Signed:

 

Date of Decision:

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