Voluntary Redundancy Payments: Transfer of Funding

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A decision made on 24 December 2010 regarding the transfer of funding for voluntary redundancy payments

Decision Reference: MD-TR-2010-0189
Decision Summary Title:	Transfers of funding from Social Security Department for Voluntary Redundancy (VR) payments		Date of Decision Summary:	15th December 2010
Decision Summary Author:	Head of Decision Support		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Transfers of funding from Social Security Department for Voluntary Redundancy (VR) payments		Date of Written Report:	15th December 2010
Written Report Author:	Head of Decision Support		Written Report : Public or Exempt?	Public
Subject: Transfers of funding from Social Security Department for Voluntary Redundancy (VR) payments
Decision(s): The Minister approved the transfer of a total of £470,841 from the Social Security Department to the revenue heads of expenditure of the departments listed in the table below for the second tranche of approved VR applications: Chief Minister's Department £96,372 Education, Sport and Culture £84,846 Treasury and Resources £177,725 Home Affairs £111,898
Reason(s) for Decision: MD-TR-2010-0159, signed on 12th November 2010, approved the initial allocation of £5,760,373 (out of the £6 million approved by the States in P64/2010) from Treasury and Resources to the Chief Minister’s Department, and onwards to departments, to meet the cost of approved voluntary redundancy payments. MD-TR-2010-0186 approved further transfers to reflect: transfer back of funding where VR applications are no longer going ahead; uplift of previous transfers by 2% for agreed pay award where applicants are leaving after 31st December 2010; and transfer of the balance of approved P64/2010 funding for VRs from the Treasury and Resources contingency to the Chief Minister’s Department revenue head of expenditure – this balance amounts to £239,627. This decision approves transfers from the Social Security Department Head of Expenditure to a number of departments to complete funding for approved VR applications in 2010. Article 15(1)(a) of the Public Finances (Jersey) Law 2005 permits the Minister for Treasury and Resources to approve that a head of expenditure may be used for the purposes of another head of expenditure. This decision further implements the States’ approval of P64/2010.
Resource Implications: There will be no increase to total approved States net revenue expenditure as a result of this decision.
Action required: Head of Decision Support to inform the Head of Financial Performance Reporting that the transfers have been approved.
Signature:		Position: Senator P F C Ozouf, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Voluntary Redundancy Payments: Transfer of Funding

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Treasury and Resources

Ministerial Decision Report

Transfers of funding from Social Security Department for Voluntary Redundancy (VR) payments

Purpose of Report

To enable the Minister for Treasury and Resources to make a number of transfers of funding between the Social Security Department revenue head of expenditure and other departments for VR payments.

Background – previous transfers

In P64/2010: “Public Finances (Jersey) Law 2005: Funding Requests under Article 11(8)” the States approved funding of up to an additional £6,000,000 from the consolidated fund for the Chief Minister’s Department for a voluntary redundancy scheme. Following States approval on 7th July 2010 £6 million was withdrawn from the consolidated fund and held temporarily in a Treasury and Resources contingency fund. The States Employment Board approved an initial tranche of voluntary redundancies costing a total of £5,760,373 from this funding. This amount was transferred to CMD in MD-TR-2010-0159 for transfer, in turn, to departments to make VR payments as detailed below:

Judicial Greffe	£155,018
Education, Sport and Culture	£712,844
Lieutenant Governor's	£96,673
Resources - Information Services	£364,888
Planning and Environment	£605,774
Property Holdings	£135,081
Economic Development	£43,610
Home Affairs	£385,684
Health and Social Services	£1,761,212
Housing	£360,048
Human Resources	£179,087
Transport and Technical Services	£960,454

Total	£5,760,373

These redundancies will deliver savings of over £3 million in a full year.

MD-TR-2010-0186 approved the transfer of the balance of the States approved funding (£239,627) from the Treasury and Resources contingency fund to the Chief Minister’s Department revenue head of expenditure to comply fully with P64/2010. That decision also approved other transfers:

As a result of a number of successful VR applications not going ahead, it was necessary to transfer some of the funding approved by MD-TR-2010-0159 (see above) back to CMD. The transfers approved were from the following departments:

			£
Planning and Environment			113,734
Health and Social Services			82,188
CMD - Human Resources			70,490

Total for return			266,412

In addition, when the initial VR applications were considered, some leaving dates were unclear. Where applicants were leaving after 31st December 2010 they are entitled to receive their VR payment at the 2011 rate i.e. including the agreed 2% pay award. Some departments included this element in their original submissions, some did not. As a result the following transfers were necessary from CMD to ensure that departments are fully funded from the P64/2010 approval to meet their VR payments:

		£
	Judicial Greffe	3,100
	CMD - Information Services	2,085
	Planning and Environment	9,841
	T&R - Jersey Property Holdings	2,702
	Home Affairs	2,416
	Health and Social Services	27,668
	Transport and Technical Services	10,282

Total additional 2% allocations		58,093

Finally, the transfer was approved of the remaining balance of the States approved funding (£239,627) that was held in the Treasury and Resources contingency fund to the Chief Minister’s Department revenue head of expenditure to comply fully with P64/2010

The net effect of the above transfers is that a balance of £447,946 remains from the approved £6 million P64/2010 funding within the Chief Minister’s Department:

	£
Transfers back from depts	266,412
Transfers to Depts for 2%	-58,093
Transfer of Balance from T&R	239,627

Balance remaining in CMD	447,946

Of the above balance, the T&R Minister has been notified that £11,550 will be spent on actuarial valuations relating to VR applications. Therefore the total unallocated balance of P64/1010 funding remaining was £436,396.

Background – final transfers for 2010 approved VR applications

The Minister for Treasury and Resources has now made a decision on a second tranche of VR applications approved by the States Employment Board. The total cost of this second tranche is £907,237. Departments with VR applications approved in this tranche are as follows:

		£
Chief Minister's Department		247,488
Education, Sport and Culture		84,846
CMD - Information Services		285,280
Treasury and Resources		177,725
Home Affairs		111,898

		907,237

The Chief Minister’s and Information Services Departments’ VRs are proposed to be funded from the £436,396 balance described in paragraph 3 above. This leaves a shortfall of £96,372 required to fund the Chief Minister’s Department VRs. It is proposed to fund this, and the other departments listed in the table above, from the 2010 underspend of the Social Security Department. As at the end of October 2010 this was forecast to be £6.7 million. Transfers will therefore be as follows:

Social Security Department to:
		£
	Chief Minister's Department	96,372
	Education, Sport and Culture	84,846
	Treasury and Resources	177,725
	Home Affairs	111,898

		470,841

Recommendation

That the Minister approves the transfer of a total of £470,841 from the Social Security Department to the revenue heads of expenditure of the departments listed in the table below for the second tranche of approved VR applications:

		£
Chief Minister's Department		96,372
Education, Sport and Culture		84,846
Treasury and Resources		177,725
Home Affairs		111,898

		470,841

Reason for Decision

Article 15(1)(a) of the Public Finances (Jersey) Law 2005 permits the Minister for Treasury and Resources to approve that a head of expenditure may be used for the purposes of another head of expenditure.

Resource Implications

There is no increase to total approved States net revenue expenditure as a result of this decision.

Report author : Head of Decision Support	Document date : 15/12/10
Quality Assurance / Review : Head of Financial Performance Reporting	File name and path: l:\treasury\sections\corporate finance\ministerial decisions\dss, wrs and sds\2010-0189 - y2 vr - kh\wr - vr dec 2010 kh no. 2.doc
MD sponsor : Deputy Treasurer