10 April 2013
The Treasury has now confirmed the scale of budget underspends from their 2012 year end accounts. As a result of States-wide, careful management of spending these savings are being reallocated to secure further on-going efficiencies as well as meeting the cost of the priorities of jobs and boosting growth.
Of the £27.6 million departmental underspend, £22.1 million (3.7% of 2012 original departmental budget) has been authorised and returned to departments, £5.5 million will be retained centrally to meet future pressures and contingencies.
The Medium Term Financial Plan introduced thee year budgeting for the first time. In the past, when departments only had one year's certainty over their budgets, it encouraged them to spend their entire budget by the end of each year, rather than focusing on longer terms priorities.
The Treasury’s new approach to the carry forward process still requires a justification for each item but was designed to encourage longer term thinking, funding targeted to priorities and better procurement to deliver value for money.
The Treasury have reviewed all carry forward requests and evaluated them against a number of criteria, including:
- building up of departmental contingencies
- helping the delivery of future savings
- boosting the economy and jobs
- raising Jersey’s international profile to secure growth
- enabling projects to go ahead that would not be funded.
The Treasury and Resources Minister, Senator Philip Ozouf, commented “The move to three-year budgeting has meant that the carry forward process now provides departments with more certainty, flexibility and incentive to control spending, so that they can plan for future initiatives.
“I am encouraged that departments have managed to achieve this high level of underspends. Because of these efficiencies, we have exceeded our Comprehensive Spending Review targets and means we are in the better position to have additional funds for allocation to essential projects.
“All of the departments have had to justify where these carry forward funds would be most needed. The Treasurer, the Council of Ministers and I have all reviewed the requests in the context of the principles set out in our Island's Strategic Plan.
“I am hopeful that these spending authorisation recommendations will be quickly deployed so that we can improve our services, help people get back into work, promote Jersey and at the same time get more money into the economy.
“I am also pleased to report that contingencies of £28.4 million can continue to be maintained at a realistic level, but presently, with a tight revenue budget we cannot yet begin to rebuild the Stabilisation Fund."