Budget Transfer: Unspent Capital Budgets to Central Contingencies

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A decision made on 16 October 2017:

Decision Reference: MD-T-2017-0087
Decision Summary Title :	Transfer of Unspent Capital Budgets to Central Contingencies		Date of Decision Summary:	12 October 2017
Decision Summary Author:	Finance 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 Unspent Capital Budgets to Central Contingencies		Date of Written Report:	12 October 2017
Written Report Author:	Finance Manager		Written Report : Public or Exempt?	Public
Subject: A non-recurring budget transfer of £5,245,418 from the capital heads of expenditure listed below to Central Contingencies and £1,000,000 to be returned to the Consolidated Fund from the Limes Upgrade.
Decision(s): The Minister approved a non-recurring transfer of £5,245,418 from the capital heads of expenditure listed above to Central Contingencies and £1,000,000 to be returned to the Consolidated Fund from the Limes Upgrade capital project.
Reason(s) for Decision: Article 18(1A) of the Public Finances (Jersey) Law 2005 states that all or any part of the amount appropriated by a head of expenditure may, with the approval of the Minister for Treasury and Resources, be transferred from the head of expenditure to contingency expenditure, within or after the end of the relevant financial year. Article 18(2)(c) of the Public Finances (Jersey) Law 2005 states that a transfer described in Article 18(1A) must also be approved by the Minister responsible to the States for the administration of the relevant States funded body.
Resource Implications: This decision will result in the listed capital heads of expenditure decreasing by £6,245,418 and Central Contingencies increasing by £5,245,418. This decision does not change the total amount of expenditure approved by the States for 2017 in the Medium Term Financial Plan.
Action required: The Department for Infrastructure Finance Manager to let Treasury and Resources Business Support team know that the decision has been signed.
Signature:		Position: Minister for Infrastructure
Date Signed:		Date of Decision (If different from Date Signed):

Budget Transfer: Unspent Capital Budgets to Central Contingencies

DEPARTMENT FOR INFRASTRUCTURE

TRANSFER OF UNSPENT CAPITAL BUDGETS TO CENTRAL CONTINGENCIES AND A

RETURN TO THE CONSOLIDATED FUND

Purpose of Report

To request Ministerial approval for a non-recurring budget transfer of £5,245,418 from the capital heads of expenditure listed below to Central Contingencies and £1,000,000 to be returned to the Consolidated Fund from the Limes Upgrade capital project.

Background

The outturn cost of capital projects is inherently variable with many factors such as ground conditions, local market conditions and even weather contributing to the final cost. These factors are managed through an appropriate level of project contingency which is set at the start of the project to manage risk and contain the total project costs within the approved allocation.

As a result, there can be budget remaining unspent and no longer required for the purpose it was approved once projects are complete. There are also instances where budget is allocated for a specific capital project but, as work progresses to develop the project, circumstances change in a Department’s priorities or service delivery requirements which mean the budget is no longer required for that purpose.

Given the above circumstances and the significant pressure on the capital programme over the coming years, existing capital allocations have been reviewed to identify any funds that are no longer required and could be reallocated in order to manage those pressures from within existing resources. That process, overseen by the Capital Sub Group, has identified the following list of unspent balances.

With the exception of the £1.0 million for the Limes Upgrade project, which was a conditional contribution from the Le Seelleur Trust in the Budget 2013 and must therefore be returned to the Fund, the remaining balance is proposed to be transferred to Central Contingencies.

Recommendation

That the Minister approves a non-recurring budget transfer of £5,245,418 from the capital heads of expenditure listed above to Central Contingencies and £1,000,000 to be returned to the Consolidated Fund from the Limes Upgrade capital project.

Reason for Decision

Article 18(1A) of the Public Finances (Jersey) Law 2005 states that all or any part of the amount appropriated by a head of expenditure may, with the approval of the Minister for Treasury and Resources, be transferred from the head of expenditure to contingency expenditure, within or after the end of the relevant financial year.

Article 18(2)(c) of the Public Finances (Jersey) Law 2005 states that a transfer described in paragraph (1A) must also be approved by the Minister responsible to the States for the administration of the relevant States funded body.

Resource Implications

This decision will result in the listed capital heads of expenditure decreasing by £6,245,418 and Central Contingencies increasing by £5,245,418.

This decision does not change the total amount of expenditure approved by the States for 2017 in the Medium Term Financial Plan.

6. Action Required

The Department for Infrastructure Finance Manager to let Treasury and Resources Business Support team know that the decision has been signed.

Written by:	Finance Manager
Approved by:	Director of Finance