Treasury and Exchequer
Ministerial Decision Report
Reserve Funding for various Covid-19 PRESSURES IN 2021
- Purpose of Report
To enable the Minister to approve the allocation in 2021 of up to £6,791,000 from the General Reserve (Covid) to the Covid-19 Response head of expenditure as detailed in the table below.
- Background
Business cases for the following have been submitted and reviewed by the Investment Appraisal team. All departments have endeavoured to manage these pressures within their existing cash limits during 2021 but with the unknown pressures and events of the pandemic this has not always been possible. The following list is of business cases that have been submitted as these can’t be funded from existing budgets and include an additional amount to allow for any unforeseen variations before the end of the financial year.
Children, Young People, Education and Skills (CYPES) – Covid Pressures – up to £2,171,000
CYPES has incurred additional operational costs of c.£1.83 million and suffered loss of income of c.£0.34 million due to the different ways of working required to comply with the changing Covid-19 guidance and ensure the safe provision of services for children and young people over the course of the year.
Schools and colleges resumed for the Spring term in January 2021, as the Island transitioned out of the Lockdown announced in December 2020. However, many activities did not resume fully as restrictions remained in place on the maximum number of people at indoor gatherings, soft plays, and children’s activity groups until mid-March 2021. The income sources that have been affected throughout 2021 are: breakfast and after-school clubs, canteen sales, facilities hire, Highlands College courses, Youth Service (hiring out Crabbe) and the Jersey Music Service. Without this regular income the department has had to adapt.
Furthermore, due to the effects of the pandemic, various additional expenses arose. These additional costs were to cover for staff either sick or in isolation, cleaning costs, additional IT equipment, integrating a new working from home system, costs of materials for signs and social distancing, and the movement of children from private to public schools. For the department to continue to ‘Put Children First’ and deliver on both safeguarding, education statutory and policy obligations these unforeseen additional costs arose which the department has sought to absorb within their departmental budget during the year, however it is now clear that additional budget will be required to meet these costs.
Identified Covid-19 operational pressures | Forecast Position (to 31st Dec 2021) |
Description | £ |
| | |
Loss of Income | |
| Loss of facilities hire income | 82,950 |
| Loss of Music Service income | 7,000 |
| Loss of canteen sales | 30,000 |
| Loss of breakfast club and after school activities | 37,260 |
| Loss of Youth Service income | 52,356 |
| Loss of Highlands course fees | 133,000 |
Total Income loss | 342,566 |
One-off Costs | |
| Staff-related costs | 593,949 |
| Additional IT and communications equipment | 135,851 |
| Cleaning products (inc. hand sanitiser) | 117,231 |
| Cleaning services | 523,360 |
| Infrastructure costs (inc. physical adaptations to buildings and signage ) | 176,991 |
| Additional utility costs | 47,182 |
| Other incidental costs | 76,873 |
Total expenditure | 1,671,437 |
Contingency | 156,997 |
Total request (income + expenditure) | 2,171,000 |
Bailiff’s Chambers – Court Services Covid Pressure – up to £250,000
Covid-19 restrictions have contributed to the reduced departmental income in 2021 as a result of a reduced number of private events and requirement of permits issued by the Bailiff, including the nominal fees associated with processing the applications. The restrictions were bought in because of Covid-19 and trying to stop the spread. There was a lack of certainty regarding the timing of future events as the spread of Covid was, and still is, unpredictable.
To keep members safe and abide by Government guidelines the current court building could not accommodate the required number of individuals for a Jury trial when factoring in the requirements for safe distancing and measures to mitigate against the transfer of Covid-19. A temporary courtroom was, therefore, created at the Royal Jersey Agricultural and Horticultural Society grounds. This venue was required to accommodate the needs of all parties attending a court hearing. By providing this facility the Court Service (and Government) has provided both reassurance to the public for attending Jury Trials and consistent delivery of Justice throughout the reaches of the pandemic.
The department has made efforts to absorb these additional costs within their departmental budget during the year, however this is now not achievable.
Strategic Policy, Planning and Performance (SPPP) – Test and Trace – up to £3,500,000
The Covid-19 Testing and Tracing Programme for Q4 2021 builds on from the previous business cases from 2021 which amounted to £30 million. A further request was made for an additional £15 million, however the Minister issued a letter of comfort on 9th April 2021 and agreed that this would be ring-fenced in Reserves and allocated once the department had demonstrated the requirement. The additional funding request is due to several factors resulting from the effects of Covid-19:
- Delay of Hospital PCR Lab opening
- Increased PCR testing to original forecast
- Staff and other costs underspends
The hospital PCR lab was intended to open on 1 September 2021. However, due to the delay with the supplier the lab was not up and running to full capacity until the last week of November. These delays resulted in costs being significantly higher than forecasted.
Despite changes of policy during the summer period including the ceasing of mandatory PCR testing at borders for the vaccinated, a drop in PCR test processing did not materialise as additional testing within the community occurred, which was not forecast in the earlier projections.
These additional costs were as a result of the pandemic and enabled SPPP to continue providing an adapted high-level service to the Island community throughout and it was anticipated that the costs could be met from existing allocations. Due to the delays the costs have increased and can now not be absorbed.
Justice and Home Affairs (JHA) - Covid Pressures – up to £220,000
The main reason for the request in funding is due to extra pressures from the Covid-19 pandemic on the blue light service and other public services which cannot be met by the department due to funding pressures in other areas. The department has made efforts to absorb these additional costs within their departmental budget during the year, however this is now not achievable.
Ambulance Services - £141,000
As a result of the pandemic the need for the ambulance service has increased throughout the year. Many of the staff are patient-facing and isolation requirements have impacted on the operations and have required cover. Arranged cover has come at an additional cost to the department but was vital in order to continue providing a high-level service and not cause delays. Other additional costs along with extra staff have been:
- Extra cleaning
- Equipment hires (rental of Ambulance welfare units which include seats, canteen with sink and table, hot and cold water)
Prison Services - £45,000
Additional IT hardware and software were acquired to support remote prisoner interactions. During 2021, overtime has been incurred to provide cover for those officers in isolation or unwell. There was also a requirement earlier in the year to accommodate officers in a hotel as they could not isolate safely at home.
Fire and Rescue Services - £15,500
To restore operations across all areas of activity, a recovery plan was implemented. Part of the recovery plan was to overlay the 2020 syllabus of education intervention with school children onto the 2021 framework. This meant doubling the workload ensuring children and young people were prioritised as well as covering the cost of staff in isolation and overtime worked.
Jersey Customs and Immigration Services (JCIS) - £3,500
JCIS was a key stakeholder in setting up the initial trial at Jersey airport to test inbound passengers for Covid-19. Officers also assisted with home visits to ensure compliance with the isolation regime in place. During 2021, additional cleaning was needed to ensure the safety of staff that have been unable to work from home.
Infrastructure Housing and Environment (IHE) - Covid Pressures – up to £650,000
Funding to cover costs already incurred in providing several essential services to the public of Jersey. These costs could not be fully absorbed within the department due to increased activity needed to respond to the Covid-19 on the Island as well as income shortfall experienced by the department.
Property Costs - £437,293
The Government of Jersey has a substantial property portfolio and to keep these properties operational and safe for colleagues, an enhanced cleaning regime was put in place. The additional touchpoint cleaning was required in all the below Government offices as per the following costs:
Government Office | Cost of additional pandemic cleaning £ |
Bellozanne offices | 30,505 |
Beresford House | 1,500 |
Broad Street | 115,919 |
Jubilee Wharf | 60,656 |
La Collette | 15,665 |
Magistrate Court | 47,656 |
Maritime House | 58,016 |
Mourier House | 31,160 |
Royal Court | 33,439 |
Green waste sites | 15,633 |
Sanitizer supply | 2,768 |
Total | 412,917 |
In addition, to the above cleaning costs there was a requirement for security enforcement at the markets which came at an additional cost of £20,000, along with other property costs totaling £4,376.
Operation and transport – £187,528
IHE operates the infrastructure of the Island including waste disposal, roads, drainage, sewage treatment works, pumping stations and emptying septic tanks. These services are critical to keep the Island safe and operational. Therefore, it is essential for these services to be maintained throughout the pandemic. Staff absences due to Covid-19, either through the requirement to self-isolate; sickness and additional tasks (such as signage) have resulted in an increase in both overtime and temporary staff to ensure that these services can be maintained. Where possible, staff have been diverted from other areas to reduce this impact but there still remains a shortfall of £24,380.
Other additional costs that have been incurred due to the pandemic are increases to cleaning and delivery costs through the provision of an enhanced cleaning regime, face masks and sanitisers for all public facing areas. A major part of the costs that have contributed to the pressure of £163,148 include:
- Additional cleaning and transport costs due to Covid-19 restrictions to ensure the continued operation of the Energy Recovery Facility;
- Additional bags required for the clinical waste incinerator due to the additional volume for Covid-19;
- Additional cleaning for the playing fields facilities; and
- Additional lunchtime cleaning of offices and provision of supplies for front line workers and visitors.
Whilst the department has seen other income impacts from Covid-19 throughout the course of the year, in general, measures have been taken to recover the position (through reductions in expenditure) and no request is being made for coverage of these as they can be met from within the baseline budget. The items above cannot be offset by departmental underspends, or reduction in expenditure without impacting on resource levels, further harming income generation activities in future years.
- Recommendation
The Minister is recommended to approve the allocation in 2021 of up to £6,791,000 from the General Reserve (Covid-19 contingency) to the Covid-19 Response head of expenditure, as detailed in the table above.
- 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 for all allocations from the General Reserve (Covid-19 contingency) once recommended for approval by the Treasurer of the States, 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.
This has been circulated to the Council of Ministers in accordance with the requirements of the policy.
The Investment Appraisal Team has reviewed the business case for this request and recommended it for approval. Following this review, the Treasurer, taking into account comments from the PAO, recommends that the Minister allocates funding from the General Reserve.
The Treasurer of the States, under delegation from the Principal Accountable Officer, will appoint the Directors General for:
- Children, Young People, Education and Skills,
- Strategic Policy, Planning and Performance,
- Infrastructure, Housing and Environment and
- Justice and Home Affairs
and the Chief Officer, Bailiff’s Chambers as the Accountable Officers for the allocations to the Covid-19 Response Head of Expenditure as detailed in the table above.
- Resource Implications
The Covid-19 Response head of expenditure to increase by up to £6,791,000 and the General Reserve (Covid-19 contingency) to decrease by an identical amount as detailed in the table above.
This decision does not change the total amount of expenditure approved by the States in the Government Plan 2021-24.
Report author: Specialist – Business Cases | Document date: 15th December 2021 |
Quality Assurance / Review: Group Director, Strategic Finance and the Head of Financial Governance | File name and path: Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2021-0149 - Reserve funding CV19 projects |
MD sponsor: Treasurer of the States |
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