Budget transfer from Central Contingencies to various departments: 2017 Voluntary Release and Redundancy Scheme

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A decision made 5 October 2017:

Decision reference: MD-TR-2017-0125
Decision Summary Title:	Transfer of funding from Central Contingencies to various departmental budgets to recognise the costs associated with the Voluntary Release and Redundancy Scheme in 2017.		Date of Decision Summary:	5th October 2017
Decision Summary Author:	Financial Performance Reporting Manager		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Transfer of funding from Central Contingencies to various departmental budgets to recognise the costs associated with the Voluntary Release and Redundancy Scheme in 2017.		Date of Written Report:	5th October 2017
Written Report Author:	Financial Performance Reporting Manager		Written Report : Public or Exempt?	Public
Subject: Transfer of funding from Central Contingencies to various departments’ revenue heads of expenditure to recognise the costs associated with the 2017 Voluntary Release (VR) and Redundancy Scheme.
Decision(s): The Minister approved a non-recurring budget transfer in 2017 of £508,974.60 to departments from Central Contingency – Redundancy Provision for VR Applications approved and signed up to 30th September 2017.
Reason(s) for Decision: Article 17(2) of the Public Finances (Jersey) Law 2005 states that the Minister for Treasury and Resources is authorised to approve the transfer from contingency expenditure to heads of expenditure of amounts not exceeding, in total, the amount available for contingency expenditure in a financial year. International Financial Reporting Standards (IFRS) interpreted for the States of Jersey in the Jersey Financial Reporting Manual (JFReM) require termination benefits to be recognised as an expense at the point at which the entity can no longer withdraw the offer of those benefits. Accordingly, the full cost of all VRs must be recognised at the point a binding contract has been signed with the employee. The Council of Ministers approved the allocation of £2,000,000 from Central Contingencies to create a Redundancy Provision in 2015 to fund the first tranche of the scheme. The States Assembly approved a further £20,000,000 to be added to the Redundancy Provision across 2015 and 2016 to be funded by transfers from the Strategic Reserve Fund. MD-TR-2015-0141 approved funding of £4,666,119 to fund the Voluntary Release Scheme in 2015 in line with the allocation of funding approved by the States Assembly in P.72/2015 Medium Term Financial Plan 2016 – 2019 (as amended). MD-TR-2016-0058 and MD-TR-2016-0082 and MD-TR-2016-0114 and MD-TR-2017-0010 and MD-TR-2017-0087 approved funding of £3,677,954.05 to fund applications approved and signed up to 31st December 2016 and also transferred savings of £864,227 from the departments to the Redundancy Provision as result of VR approvals earlier than anticipated in 2015. It was agreed by the States Assembly as part of the MTFP Addition Debate in 2016, following an estimate of funding requirements for redundancy for the remaining years of the MTFP, to transfer £6.88 million of the Redundancy Provision to the Restructuring Provision for 2018 and 2019. This Decision funds the next tranche of VR Applications to 30th September 2017 and will leave a balance of £7.13 million in Contingency for future applications. The following transfers to departments are now required: Community and Constitutional Affairs £104,733.00 Department for Infrastructure £ 59,790.73 EDTSC £107,190.24 Education £186,427.20 Health and Social Services £ 40,537.95 Social Security £ 10,295.48 There will be further Ministerial Decisions later in the year to capture any applications signed before 31st December 2017.
Resource Implications: Various departments’ revenue heads of expenditure to increase by a total of £508,974.60 in 2017 and Central Contingency – Redundancy Provision to decrease by the same amount. This decision does not change the total amount of expenditure approved by the States for the period of the current MTFP 2016 to 2019. The transfers are detailed in the attached report.
Action required: The Head of Decision Support to notify the Finance Directors of all relevant departments that the Decision has been approved.
Signature:		Position: Senator A J H Maclean Minister for Treasury and Resources
Date Signed:		Date of Decision: