Andium Homes Ltd: Amendment to Transfer Agreement

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A decision made on 8 January 2021

Decision Reference: MD-TR-2021-0004

Decision Summary Title:

Andium Homes Ltd – Amendment to Transfer Agreement

Date of Decision Summary:

6th January 2021

Decision Summary Author:

Director – Treasury and Investment Management

Decision Summary:

Public or Exempt?

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

N/A

Written Report

Title:

Andium Homes Ltd – Amendment to Transfer Agreement

Date of Written Report:

6th January 2021

Written Report Author:

Director – Treasury and Investment Management

Written Report:

Public or Exempt?

Public

Subject:

Andium Homes Ltd – Amendment to Transfer Agreement

Decision(s):

The Minister for Treasury and Resources is recommended to:-

approve and sign the new Addendum to the Transfer Agreement; and
approve the transfer of £814,000 from the CLS head of expenditure to the General Reserve in 2021. This amount will not be spent.

Reason(s) for Decision:

To reflect the decision made by the Minister for Children and Housing to approve a one-off deferral of the annual rent adjustment required by the States Fair Market Rent policy, a similar one-off adjustment is required to the Annual Return Amount.

This ensures that the full cost of the rental income freeze is not borne by Andium, with the adjustment being offset by the saving within Government of any accompanying increase in the income support element of rental payments.

Article 18(1)(a) of the Public Finances (Jersey) Law 2019 states that a specified amount appropriated for one head of expenditure may, with the approval of the Minister for Treasury and Resources, be used for the purposes of another head of expenditure that is set out in the government plan.

Article 18(4) of the Public Finances (Jersey) Law 2019 states that the Minister shall give the States Assembly at least 4 weeks’ notice before an amount is transferred under paragraph (1)(a).

Article 18(5) of the Public Finances (Jersey) Law 2019 states that if a direction under this Article would affect a head of expenditure that relates to the responsibilities of any Minister, that Minister must be consulted before the direction is made. The Minister for Social Security has been consulted and has agreed to the transfer.

Resource Implications:

The forecast consolidated fund balance at the end of 2021 will not be affected as the budgeted saving from income support payments is offset by an equal one-off downward adjustment in the budgeted Annual Return from Andium. The table below demonstrates the net effect of this decision and confirms that the impact on the Consolidated Fund is net nil.

Government Plan 2021-24	Effect of deferral	Revised amount for 2021

Income support saving	£ 814,000
Annual Return 2021 adjustment	-£ 814,000	£ 30,193,764.43

Net effect on Consolidated Fund	£ 0

The head of expenditure for CLS will reduce by £814,000 in 2021 and the General Reserve will increase by an identical amount. The additional amount within the General Reserve will not be spent.

Andium will not receive the anticipated uplift in rental income of approximately £1.386 million in 2021, which is partially offset by the reduction to the Annual Return Amount of £814,000. They will absorb the difference within their annual income and expenditure account.

There are no further financial or manpower implications as a result of this decision.

Action required:

The Head of Financial Governance to inform the Director of Treasury and Investment Management that this decision has been signed.

The signed Addendum to be sent to Andium Homes for signing by the Chair.

In accordance with Article 18(4) the Greffier of the States is requested to arrange for the attached report to be presented to the States at least 4 weeks before the transfer is concluded. After the expiry of 4 weeks following presentation to the States the transfer may be concluded.

Signature:

Position: Deputy Susie Pinel, Minister for Treasury and Resources

Date Signed:

Date of Decision: