Revenue Jersey: Reserve Funding

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A decision made on 30 April 2021

Decision Reference: MD-TR-2021-0052
Decision Summary Title:	Reserve Funding for Revenue Jersey		Date of Decision Summary:	29th April 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:	Reserve Funding for Revenue Jersey		Date of Written Report:	29th April 2021
Written Report Author:	Head of Investment Appraisal		Written Report: Public or Exempt?	Public
Subject: The allocation of up to £1,299,450 from the General Reserve to the Treasury and Exchequer (T&E) Head of Expenditure for Revenue Jersey.
Decision(s): The Minister approved an allocation of up to £1,299,450 from the General Reserve to the T&E Head of Expenditure for Revenue Jersey and the creation of an additional 18 FTE (Full-time Equivalent) posts within T&E.
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, presented to the States Assembly as R.60/2021, sets the requirement that all allocations from the General Reserve are recommended for approval by the Treasurer of the States, taking into account comments from the Principal Accountable Officer (PAO), prior to submission to the Minister for approval. Where a request for funding is made by Treasury and Exchequer, the Policy requires that the Principal Accountable Officer also recommends the request to the Minister. If the Minister is minded to approve a funding allocation, the draft Ministerial Decision will be circulated to the Council of Ministers five working days before a Ministerial Decision is signed and published. The Investment Appraisal Team has reviewed the business case for this request and recommended it for approval. Following this review, the Treasurer and the PAO recommend that the Minister allocates funding from the General Reserve. P.67/1999 charges the Minister for Treasury and Resources to regulate the number of persons that may be employed by the States.
Resource Implications: The T&E Head of Expenditure to increase by £1,299,450 and the General Reserve to decrease by an equivalent amount. T&E’s established headcount will increase by 18 FTE posts until the end of 2021. The business case identifies additional costs for 2022-24 of £1.8 million, which will be considered as part of the process to develop the Government Plan 2022-25. This decision does not change the total amount of expenditure approved by the States in the Government Plan 2021-24.
Action required: The Head of Financial Governance to advise the Specialist – Business Cases and the Head of Finance Business Partnering for T&E that this decision is approved.
Signature:		Position: Deputy S J Pinel, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Revenue Jersey: Reserve Funding

Treasury and Exchequer

Ministerial Decision Report

Reserve Funding for Revenue Jersey

Purpose of Report

To enable the Minister to approve the allocation of up to £1,299,450 in 2021 from the General Reserve to the Treasury and Exchequer (T&E) head of expenditure for Revenue Jersey.

Background

Developments in 2020 have placed substantial pressures on capacity within Revenue Jersey. The department is facing the following challenges that necessitate an increase in financial resource:

- Extremely high demand (£716,082) – Covid-19 and the transition to current year basis has created a significant surge in customer activity for Revenue Jersey. Contact volumes increased by 80% in 2020. As a consequence, the department struggled to maintain customer service standards for timely responses to enquires despite efforts to maximise the number of existing staff allocated to frontline customer services. Additional capacity equivalent to 13 FTE and associated facilities funding is therefore required to manage the on-going surge in customer enquiries and the associated impact on the Department’s active caseload.

- Transformation capacity (£300,000) – Revenue Jersey has undertaken substantial transformation work in recent years to modernise the Island’s taxation systems and processes. In 2020, this included an initiative to implement the Assembly’s decision to transition from prior year basis to current year basis. Resources for transformation have been allocated the in the Government Plan, but the breadth of changes required has subsequently increased. In 2021, Revenue Jersey is required to deliver changes related to the introduction of independent taxation and, as a consequence of the broadening of transformation requirements across the department, additional funding is needed in 2021 to enable that work to be completed.

- Succession planning (£233,458) – Five senior managers each with 25-40 years of service are reaching retirement age within the next 18 months. The potential for a loss of institutional memory and capability if these employees elect to retire within a short period of each other presents a material risk to Revenue Jersey’s quality of service. To ensure a smooth handover of responsibilities it is intended that replacements will be recruited to enable a 6-month period of overlap with the outgoing member of staff, which will allow for a sustained period of knowledge transfer.

- Data management requirements (£50,000)– Developments in the international taxation driven by the OECD Code Group and EU will necessitate changes to processes to permit data to be produced in order to satisfy international tax obligations. Given the technical nature of this work specialist data analysts will be recruited to support the development of the necessary processes.

An additional investment of up to £1.3 million is requested in 2021 to enable Revenue Jersey to address the issues outlined above.

Recommendation

The Minister is recommended to approve the allocation of up to £1,299,450 in 2021 from the General Reserve to the T&E Head of Expenditure to enable additional investment in Revenue Jersey.

Reason 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, presented to the States Assembly as R.60/2021, sets the requirement that all allocations from the General Reserve are recommended for approval by the Treasurer of the States, taking into account comments from the Principal Accountable Officer (PAO), prior to submission to the Minister for approval. Where a request for funding is made by Treasury and Exchequer, the Policy requires that the Principal Accountable Officer also recommends the request to the Minister.

If the Minister is minded to approve a funding allocation, the draft Ministerial Decision will be circulated to the Council of Ministers five working days before a Ministerial Decision is signed and published.

The Investment Appraisal Team has reviewed the business case for this request and recommended it for approval. Following this review, the Treasurer and the PAO recommend that the Minister allocates funding from the General Reserve.

P.67/1999 charges the Minister for Treasury and Resources to regulate the number of persons that may be employed by the States.

Resource Implications

The T&E Head of Expenditure to increase by £1,299,450 and the General Reserve to decrease by an equivalent amount.

T&E’s established headcount will increase by 18 FTE posts until the end of 2021.

The business case identifies additional costs for 2022-24 of £1.8 million, which will be considered as part of the process to develop the Government Plan 2022-25.

This decision does not change the total amount of expenditure approved by the States in the Government Plan 2021-24.

Report author: Head of Investment Appraisal	Document date: 27th April 2021
Quality Assurance / Review : Group Director, Strategic Finance and the Head of Financial Governance	File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2021-0052 - Reserve funding for Revenue Jersey
MD sponsor : Treasurer of the States