Co-Funded Payroll Scheme: Phase 4

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A decision made on 29 January 2021

Decision Reference: MD-TR-2021-0011
Decision Summary Title:	Co-Funded Payroll Scheme Phase 4		Date of Decision Summary:	29th January 2021
Decision Summary Author:	Head of Investment Appraisal		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	n/a
Written Report Title:	Co-Funded Payroll Scheme Phase 4		Date of Written Report:	29th January 2021
Written Report Author:	Head of Investment Appraisal		Written Report: Public or Exempt?	Public
Subject: Approval an amendment to the Co-Funded Payroll Scheme (CFPS) Phase 4 and scheme guidance.
Decision(s): The Minister decided to approve: - The scheme guidance for the CFPS Phase 4 as appended to the written report; and - The allocation of up to £27.6 million from the Covid-19 Reserve within the General Reserve to the Covid-19 Response Head of Expenditure to establish the CFPS Phase 4, which will take effect from 1st January 2021 as set out in the attached report and agreed the scheme guidance. The Minister further decided to: - agree that the Treasurer of the States can authorise drawdowns, up to the £27.6 million approved funding, and transfer to the Covid-19 Response Head of Expenditure The Minister noted the intention for the Comptroller of Revenue to issue a direction using powers given to him under Article 41(1) of the GST Law 2007 (as amended).
Reason(s) for Decision: Article 15(3) of the Public Finances (Jersey) Law 2019 states that the approval by the States of a Government Plan authorises the Minister to direct how an approved appropriation for a reserve head of expenditure in the plan may be spent (including on another head of expenditure) in the first financial year covered by the plan. The current Policy for Allocations from the Reserve agreed by the Minister for Treasury and Resources on Friday 17th July 2020 sets the requirement for all allocations from the General Reserve (Covid-19) once approved by the States Treasurer to be referred for review to either the Council of Ministers or the relevant Competent Authorities Ministers and to seek comments from the Principal Accountable Officer (PAO) prior to submission to the Minister for approval. However, it also states that ‘Where a request is made for £100,000 or less, or where the Minister is satisfied that there is an urgent need to provide funding in the public interest, an allocation may be made by the Minister on the recommendation of the Treasurer.’ The revisions to the CFPS and adoption of CFPS Phase 4 was agreed by the Competent Authorities Ministers and the Ministers responsible for the CFPS on 20th January 2021. Given the approval of the amendment by the Competent Authorities Ministers and Ministers responsible for the CFPS, the Minister is satisfied that there is an urgent need to provide funding in the public interest and that threats posed to the economy warrant the higher than normally acceptable risks inherent in this enhancement of the CFPS, including the inevitable dilution of the Scheme’s efficiency. Accordingly, the Minister has instructed officers to implement the changes approved by Ministers on 20th January 2021. In light of the above and the likely estimated costs, the Treasurer recommends the Covid-19 Reserve within the General Reserve as the most appropriate source of funding. The Minister for Treasury and Resources approved MD-TR-2020-0049, to establish the Co-Funded Payroll Scheme Phase 2, MD-TR-2020-0063 and MD-TR-2020-0100 to extend the scheme until 31st August and 31st December 2020 respectively. In MD-TR-2020-0100 and MD-TR-2020-0168, the Minister indicated an intention for extend the Scheme into 2021 subject to approval by the States Assembly of the Government Plan 2021-24. The Minister noted the intention for the Comptroller of Revenue to issue direction using powers given to him under Article 41(1) of the GST Law 2007 (as amended). Additional costs incurred in 2021 will be met in the first instance from the £40 million Covid-19 Reserve available within the General Reserve.
Resource Implications: The additional costs arising from this decision are forecast to be up to £11.7 million in 2021 under the central scenario. Costs may be higher or lower depending the strength of the Island’s economic recovery. The Covid-19 Response Head of Expenditure makes available £11.3 million for this purpose in 2021. This budget was based on the original CFPS Phase 3 that tapered the level of support available under the Scheme between September 2020 to March 2021. Following TR-2020-0168 a higher level of support is now available than was budgeted for in the Government Plan 2021-24. The additional cost in 2021 associated with that decision and the decision to extend public health measures is estimated to be £27.2 million under the central scenario. Costs may be higher or lower depending the strength of the Island’s economic recovery. The total funding requirement for 2021 under the central scenario is £38.9m, being £27.2 million arising from TR-2020-0168 and £11.7 million arising from this decision. This results in an additional requirement from the Reserve of £27.6 million after taking into account the £11.3 million budget already available for the Scheme in 2021. The Covid-19 Reserve within the General Reserve will decrease by £27.6 million and the Covid-19 Response Head of Expenditure will increase by a corresponding amount. It may be necessary to increase the allocation of funding to the CFPS depending on the Island’s economic recovery.
Action required: Head of Financial Governance to ensure this decision is published on www.gov.je and notify the Head of Finance Business Partnering for Customer and Local Services.
Signature:		Position: Deputy S J Pinel, Minister for Treasury and Resources
Date Signed:		Date of Decision: