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Budget increase and transfer for Department for Infrastructure relating to Planning Obligation Agreements

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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A decision made 30 May 2017:

Decision Reference:  MD-T-2017-0047

Decision Summary Title :

The increase of budget and subsequent transfer between Revenue and Capital Heads of Expenditure for work carried out under Planning Obligation Agreements

Date of Decision Summary:

23 May 2017

Decision Summary Author:

Finance Manager

Decision Summary:

Public or Exempt?

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

 

Written Report

Title :

The increase of budget and subsequent transfer between Revenue and Capital Heads of Expenditure for work carried out under Planning Obligation Agreements

Date of Written Report:

23 May 2017

Written Report Author:

Finance Manager

Written Report :

Public or Exempt?

Public

Subject:

The increase of budget and subsequent transfer between Department for Infrastructure (DfI) Revenue and Capital Heads of Expenditure of up to £613,191.44 for work carried out by the Department to fulfil the requirement of various Planning Obligation Agreements

Decision(s):

The Minister for Infrastructure agreed to request the Minister for Treasury and Resources to approve the following:

  1. The increase of up to £613,191.44 to the Department for Infrastructure (DfI) income and expenditure budgets during 2017.
  2. The subsequent budget transfer in 2017 of up to £595,858.10 from the DfI revenue head of expenditure; £198,720.60 to the capital head of expenditure for Road Safety Improvements (Q00MF15037), and £397,137.50 to the capital head of expenditure for Eastern Cycle Network (Q00BP10016).

Reason(s) for Decision:

Article 18(1)(a) of the Public Finances (Jersey) Law 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 transferred from a capital head of expenditure to a revenue head of expenditure, or vice versa, in order to comply with generally accepted accounting principles or an Order made under Article 32.

 

Delegation 1.2 delegates authority for non-contentious transfers between heads of expenditure with no financial limit where the transfer is solely to ensure that financial transactions are accurately reflected in the States’ Accounts in accordance with GAAP or an Order made under Article 32 of the Law.

 

Under Generally Accepted Accounting Principles (GAAP) expenditure that meets the definition of capital expenditure must be capitalised. This budget transfer is the movement in budget between capital and revenue required to align the budgeting treatment of expenditure with the accounting treatment, in order to comply with GAAP.

 

Resource Implications:

The DfI revenue head of expenditure will show an additional income budget of up to £613,191.44 and an additional expenditure budget of up to £613,191.44 during 2017. Of this expenditure budget £595,858.10 will be subsequently transferred; £198,720.60, to the capital head of expenditure for Road Safety Improvements (Q00MF15037) and £397,137.50 to the capital head of expenditure for Eastern Cycle Network (Q00BP10016).

Action required:

The Finance Director to request the Treasurer of the States to approve the budget creation and subsequent transfers from revenue to capital as referred to in the accompanying report.

Signature:

 

 

 

Position:

Minister for Infrastructure

 

Date Signed:

 

 

Date of Decision (If different from Date Signed):

 

Hide report
Budget increase and transfer for Department for Infrastructure relating to Planning Obligation Agreements

DEPARTMENT FOR INFRASTRUCTURE

 

INCREASE OF BUDGET AND SUBSEQUENT TRANSFER BETWEEN REVENUE AND

 

CAPITAL HEADS OF EXPENDITURE FOR WORK CARRIED OUT UNDER PLANNING

 

OBLIGATION AGREEMENTS

 

 

  1. Purpose of Report

 

To enable the Minister for Infrastructure to approve the following:

 

  1. The increase of up to £613,191.44 to the Department for Infrastructure (DfI) income and expenditure budgets during 2017.

 

  1. The subsequent budget transfer in 2017 of up to £595,858.10 from the DfI revenue head of expenditure; £198,720.60, to the capital head of expenditure for Road Safety Improvements (Q00MF15037) and £397,137.50 to the capital head of expenditure for Eastern Cycle Network (Q00BP10016).

 

 

  1. Background

 

The Department for Infrastructure have incurred various capital costs which fulfil the requirements set out in 11 different Planning Obligation Agreements:

 

  1. P/2006/2489 - £25,000 towards cost of three bus stops at Millennium Court, Beach Road and Grassett Park.
  2. P/2010/1116 - £51,665.38 for footpath improvement work along Princess Tower Road; and £12,000 towards the cost of two bus shelters at St Saviours School and Midland Stores.
  3. P/2006/0827 - £6,000 towards the cost of shelter stop 3289 ‘Marina Cottages’
  4. P/2011/1403 - £6,000 towards the cost of shelter stop on La Rue a Don
  5. P/2005/1998 - £6,000 towards the cost of bus shelter 2593 for southbound carriageway of Route de la Trinite
  6. P/2013/1806 - £3,000 towards £180,000 cost of cycle and pedestrian improvements along Rue de Maupertuis, St Clement.
  7. P/2015/1733 - £6,000 towards £180,000 cost of cycle and pedestrian improvements along Rue de Maupertuis, St Clement.
  8. P/2013/1712 - £21,000 towards £180,000 cost of cycle and pedestrian improvements along Rue de Maupertuis, St Clement.
  9. P/2015/0065 - £91,000 towards £180,000 cost of cycle and pedestrian improvements along Rue de Maupertuis, St Clement.
  10. P/2011/0813 - £9,000 towards £180,000 cost of cycle and pedestrian improvements along Rue de Maupertuis, St Clement.
  11. P/2005/1754 - £50,000 towards the cost of cycle and pedestrian improvements along Rue de Maupertuis, St Clements.
  12. P/2013/1614 - £10,000 towards cost of shelter stop 2924 La Route des Quennevais.
  13. P/2012/1498 - £25,000 towards the cost of shelter stop 4545 opposite Winston Churchill Park
  14. RP/2010/1116 - £24,055.22 to fund street lighting works for improved bus services
  15. RP/2010/1116 - £17,333.34 for first year cost of new bus service 20 serving the development
  16. P/2016/0137 - £33,000 towards total cost of street lighting improvements on Gorey Road
  17. P2015/0065 - £90,237.50 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
  18. P/2016/0308 - £26,900 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement
  19. P/2016/0137 - £25,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
  20. P/2014/1012 - £3,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
  21. P/2014/1040 - £2,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
  22. RP/2013/1833 - £14,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
  23. P/2014/0635 - £29,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
  24. P/2011/1403 - £10,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
  25. P/2013/1290 - £3,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
  26. P/2014/1875 - £6,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
  27. P/2012/0506 - £3,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
  28. P/2014/1578 - £5,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.

 

The payments from the planning applications will be transferred to DfI by way of additional income during 2017. 

 

This creates a mismatch between income within DfI revenue head of expenditure and expenditure within the capital head of expenditure for Road Safety Improvements (Q00MF15037) and the capital head of expenditure for Eastern Cycle Network (Q00BP10016).

 

In order to correct this mismatch and create a capital budget DfI are required to undertake the following:

 

  1. The increase of up to £613,191.44 to the Department for Infrastructure (DfI) income and expenditure budgets during 2017.
  2. The subsequent budget transfer in 2017 of up to £595,858.10 from the DfI revenue head of expenditure; £198,720.60, to the capital head of expenditure for Road Safety Improvements (Q00MF15037) and £397,137.50 to the capital head of expenditure for Eastern Cycle Network (Q00BP10016).

 

 

  1. Discussion

 

The States of Jersey implemented Generally Accepted Accounting Principles (GAAP) in 2009 and subsequently moved to IFRS accounting in 2012. IFRS accounting requires that expenditure should be accounted for as capital if it meets the IFRS accounting definition of capital expenditure, and revenue otherwise.

 

Previously, ‘capital’ budgets have represented whatever the States Assembly voted as capital. The States have already approved capital allocations for 2017 in the 2016 – 2019 MTFP Plan. These budget transfers move budgets between revenue and capital so as to align the budgeting treatment of 2017 expenditure with the IFRS accounting treatment.

 

 

  1. Recommendation

 

The Minister for DfI is recommended to approve the following:

 

  1. The increase of up to £613,191.44 to the Department for Infrastructure (DfI) income and expenditure budgets during 2017.
  2. The subsequent budget transfer in 2017 of up to £595,858.10 from the DfI revenue head of expenditure; £198,720.60 to the capital head of expenditure for Road Safety Improvements (Q00MF15037) and £397,137.50 to the capital head of expenditure for Eastern Cycle Network (Q00BP10016).

 

 

  1. Reason for Decision

 

Article 18(1)(a) of the Public Finances (Jersey) Law 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 transferred from a capital head of expenditure to a revenue head of expenditure, or vice versa, in order to comply with generally accepted accounting principles or an Order made under Article 32.

 

Delegation 1.2 delegates authority for non-contentious transfers between heads of expenditure with no financial limit where the transfer is solely to ensure that financial transactions are accurately reflected in the States’ Accounts in accordance with GAAP or an Order made under Article 32 of the Law.

 

Under Generally Accepted Accounting Principles (GAAP) expenditure that meets the definition of capital expenditure must be capitalised. This budget transfer is the movement in budget between capital and revenue required to align the budgeting treatment of expenditure with the accounting treatment, in order to comply with GAAP.

 

 

  1. Resource Implications

 

The DfI revenue head of expenditure will show an additional income budget of up to £613,191.44 and an additional expenditure budget of up to £613,191.44 during 2017. The majority of this expenditure budget will subsequently be transferred £198,720.60, to the capital head of expenditure for Road Safety Improvements (Q00MF15037) and £397,137.50 to the capital head of expenditure for Eastern Cycle Network (Q00BP10016) during 2017.

 

 

7. Action required

 

The Finance Director to request the Treasurer of the States to approve the budget creation and subsequent transfers from revenue to capital as referred to in the accompanying report.

 

 

Written by:

Finance Manager

Approved by:

Director of Finance

 

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