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Budget transfer from Infrastructure Rolling Vote to Liquid Waste Strategy

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

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  • demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision

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Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made 31 May 2016:

Decision Reference:  MD-TR-2016-0022

Decision Summary Title:

Transfer of budgets between the Infrastructure Rolling Vote and Liquid Waste Strategy capital heads of expenditure

Date of Decision Summary:

18th May 2016

Decision Summary Author:

Head of Decision Support

Decision Summary:

Public or Exempt?

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

 

Written Report

Title:

Transfer of budgets between the Infrastructure Rolling Vote and Liquid Waste Strategy capital heads of expenditure

Date of Written Report:

18th May 2016

Written Report Author:

Head of Decision Support

Written Report :

Public or Exempt?

Public

Subject:  The budget transfer of £4,500,000 in 2016 from the Department for Infrastructure Rolling Vote capital head of expenditure (Q00RL10011) to the Liquid Waste Strategy capital head of expenditure (Q00BT14022).

Decision(s): The Minister approved the budget transfer of £4,500,000 in 2016 between the Department for Infrastructure Rolling Vote capital head of expenditure (Q00RL10011) and the Liquid Waste Strategy capital head of expenditure (Q00BT14022).

Reason(s) for Decision:   Article 18(1)(c) of the Public Finances (Jersey) 2005 states that all or any part of the amount appropriated by a head of expenditure may, with the approval of the Minister for Treasury and Resources, be used for the purposes of another head of expenditure.

 

The construction of a new Sewage Treatment Works (STW) at Bellozanne is required to replace the existing plant which was built in the 1950s. Anticipated costs have been reduced from £75m to £53.594m by the deletion or reduction of certain elements of the Accommodation and Enabling Works and STW Development Phase, and their associated contingencies. In order to make up the £17m difference between the current level of funding of £36.594m and the revised estimated cost of £53.594m, the Medium Term Financial Plan 2016-2019 is proposing that the Department for Infrastructure Rolling Vote be used.

 

Resource Implications: The Department for Infrastructure Rolling Vote capital head of expenditure (Q00RL10011) 2016 allocation will decrease by £4,500,000 and the Liquid Waste Strategy capital head of expenditure (Q00BT14022) will increase by £4,500,000.

Once the transfer has taken place, the Liquid Waste Strategy capital head of expenditure (Q00BT14022) will hold a balance of £41,651,979.

Action required: Head of Decision Support to advise the Finance Manager - Department for Infrastructure once this decision has been approved.  

 

Signature:

 

 

 

 

Position: Senator A J H Maclean,

Minister for Treasury and Resources

                

 

 

 

Date Signed:

Date of Decision:

Hide report
Budget transfer from Infrastructure Rolling Vote to Liquid Waste Strategy

 - 1 -

Treasury and Resources

Ministerial Decision Report

 

 

 

TRANSFER OF BUDGETS BETWEEN THE INFRASTRUCTURE AND LIQUID WASTE STRATEGY CAPITAL HEADS OF EXPENDITURE

 

 

  1. Purpose of Report

To enable the Minister to approve the budget transfer of £4,500,000 in 2016 from the Department for Infrastructure Rolling Vote capital head of expenditure (Q00RL10011) to the Liquid Waste Strategy capital head of expenditure (Q00BT14022).

 

 

  1. Background

On June 3 2014, the States approved the 20 year Waste Water Strategy (P.39/2014) for the Island and the funding proposals set out therein.

 

A key element of the Waste Water Strategy was the construction of a new Sewage Treatment Works (STW) at Bellozanne at an estimated cost of £75m to replace the existing plant which was built in the 1950s.

 

Subsequent to the States decision (P.39/2014) in June 2014, a strategic re-assessment of funding available for Capital projects in the Island was carried out and it determined that no further funding would be made available for the new STW project from the Capital programme beyond that already allocated in 2013, 2014 and 2015.

 

This decision has now been incorporated into the Medium Term Financial Plan (MTFP) 2016–2019 (P.72/2015) which states that any further funding required for the STW project will be sourced from the Department for Infrastructure Rolling Infrastructure Vote.

 

In 2013 and 2014, a total of £10.1m was allocated to the STW project. This consisted of £4m from the Infrastructure Rolling Vote, £3.1m from the main Capital programme and £3m from the Consolidated Fund. A further investment of £25.494m was agreed in the Budget 2015 from the Currency Fund. These funds are all held under capital Vote Q00BT14022 (Liquid Waste Strategy).

 

In addition, in 2013 and 2014 a further £1m was received in a separate Vote, Q00MF13030, which is intended for Refurbishment of the existing Clinical Waste Incinerator at Bellozanne (this money did not form part of the £75m allocation but can be utilised, as moving the Clinical Waste Incinerator now forms part of the works for the STW).

 

This provides a total of £36.594m across two heads of expenditure that has currently been allocated to the STW project up to December 2015.

 

The successful contractor appointed for the early contractor involvement phase of the project, as a result of the tender process is Doosan Enpure Limited (DEL), appointed in June 2015. Given the uncertainties over funding at the time, the appointment was on the basis of a Framework Agreement which allows the overall Scope of Works to be ‘broken down’ and awarded in smaller packages at the discretion of the Department for Infrastructure if so required, depending on funding availability.

 

The original estimate of £75m for the project was based on a scope of work and anticipated accommodation together with enabling works identified as part of the Feasibility Study for the project which was completed in March 2013. It is important to note that at this stage the scope of work, and base cost of the main STW construction remains unaltered.

 

 

 

Anticipated costs have been reduced by the deletion or reduction of certain elements of the Accommodation and Enabling Works and STW Development Phase, and their associated contingencies. As a result, a revised estimate for the cost of the project has been produced in the sum of £53.594m. In order to make up the £17m difference between the current level of funding of £36.594m and the revised estimated cost of £53.594m, the MTFP states that the Department for Infrastructure Rolling Vote be used.

 

In MD-T-2015-0072 the revised funding for the new Bellozanne Sewage Treatment Works was noted and approved by the Minister for Infrastructure.  This revised funding considered transfers from the Infrastructure capital head of expenditure to the Liquid Waste Strategy capital head of expenditure in 2016-18 of £4,500,000, £4,500,000 and £7,000,000 respectively.

 

In the 2016 Budget (P.127/2015) it was noted that £4.5 million was planned to be allocated from the Infrastructure Rolling Vote to the main Sewage Treatment Works replacement project. The capital budget allocation for 2016 was debated as part of proposition P.127/2015 and the allocation to the Infrastructure Rolling Vote was £8,373,000. It is envisaged that further allocations from the Infrastructure Rolling Vote be made from the 2017 and 2018 Budget allocations of £4.5 million and £8 million respectively, pending approval of these budgets in due course.

 

 

  1.     Recommendation

The Minister for Treasury and Resources is recommended to approve the transfer of £4,500,000 from the Department for Infrastructure Rolling Vote capital head of expenditure (Q00RL10011) to the Liquid Waste Strategy capital head of expenditure (Q00BT14022).

 

 

  1.    Reason for Decision

Article 18(1)(c) of the Public Finances (Jersey) 2005 states that all or any part of the amount appropriated by a head of expenditure may, with the approval of the Minister for Treasury and Resources, be used for the purposes of another head of expenditure.

 

The construction of a new Sewage Treatment Works (STW) at Bellozanne is required to replace the existing plant which was built in the 1950’s.  Anticipated costs have been reduced from £75m to £53.594m by the deletion or reduction of certain elements of the Accommodation and Enabling Works and STW Development Phase, and their associated contingencies. In order to make up the £17m difference between the current level of funding of £36.594m and the revised estimated cost of £53.594m, the MTFP is proposing that the Department for Infrastructure Rolling Vote be used.

 

 

  1. Resource Implications

The Department for Infrastructure Rolling Vote capital head of expenditure (Q00RL10011) 2016 allocation will decrease by £4,500,000 and the Liquid Waste Strategy capital head of expenditure (Q00BT14022) will increase by £4,500,000.

Once the transfer has taken place, the Liquid Waste Strategy capital head of expenditure (Q00BT14022) will hold a balance of £41,651,979.

 

Report author : Finance Manager

Document date 18th May 2016

Quality Assurance / Review : Head of Decision Support

File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2016-0022 - Budget Transfer from Infrastructure to LWS

 

MD sponsor :

 

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