Budget transfer from Central Contingency to Department for Infrastructure: Voluntary Release Scheme

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made 14 December 2016:

Decision reference: MD-T-2016-0110
Decision Summary Title:	Transfer of funding between Central Contingencies and the Department for Infrastructure to recognise the savings and costs associated with the Voluntary Release Scheme in 2016.		Date of Decision Summary:	12 December 2016
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 funding between Central Contingencies and the Department for Infrastructure to recognise the savings and costs associated with the Voluntary Release Scheme in 2016.		Date of Written Report:	12 December 2016
Written Report Author:	Finance Manager		Written Report : Public or Exempt?	Public
Subject: Transfer of funding between Central Contingencies and the Department for Infrastructure to recognise the 2016 costs associated with the Voluntary Release Scheme.
Decision(s): The Minister approved a non-recurring budget transfer of £910,701.81 from Central Contingency – Redundancy Provision for VR Applications approved and signed from 1st July to 31st December 2016.
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 or the insurance fund of amounts not exceeding, in total, the amount available for contingency expenditure in a financial year.
Resource Implications: DFI revenue head of expenditure to increase by a total of £910,701.81 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.
Action required: The Finance Director to notify the Head of Decision Support that the Decision has been approved.
Signature:		Position: Minister for Infrastructure
Date Signed:		Date of Decision:

Budget transfer from Central Contingency to Department for Infrastructure: Voluntary Release Scheme

DEPARTMENT FOR INFRASTRUCTURE

TRANSFER OF FUNDING BETWEEN CENTRAL CONTINGENCIES AND

THE DEPARTMENT FOR INFRASTRUCTURE TO RECOGNISE THE

COSTS ASSOCIATED WITH THE VOLUNTARY RELEASE SCHEME IN 2016

Purpose of Report

To enable the Minister to approve the non-recurring budget transfer of £910,701.81 from Central Contingencies – Redundancy to the DFI revenue head of expenditure. This is to recognise the costs associated with the Voluntary Release Scheme so far and identify the full year effect of these savings as included in the MTFP Addition for 2017 – 2019.

Background

A voluntary release (VR) programme was run in 2015 closing at the end of July and re-opened in January 2016. As at 19th November 2016 a total of 536 applications for VR had been received (329 in 2015 and 207 to date in 2016) and a total of 181 have been approved. The scheme remains open for the foreseeable future in order to support organisational change initiatives. In addition, a total of 46 employees have been made compulsory redundant to date in 2016.

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 with £4,000,000 to be transferred in 2015 and £16,000,000 in 2016. Following the completion of the 2015 VR scheme the remaining money was drawn down for funding of new applications in 2016. In total this left £17.3 million available for VR funding from January 2016.

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.

CRs and VRs agreed to be centrally funded by the redundancy decision panel for the period July to November 2016 amounts to a commitment of an additional £1.86 million. This now leaves a balance of approximately £13.7 million remaining to fund redundancy for the remainder of the MTFP period to December 2019.

To date £986,290.00 for the period 1st January to 30th June 2016 has been approved and £910,701.81 has been approved for the period 1st July to 31st December 2016, bringing the total allocation to DFI of £1,896,991.81 for 2016.

It is projected that the CR and VR payments made will generate payroll savings in excess of £1.2m on an ongoing basis, however, as certain services have been outsourced, some of this saving will be offset by the cost of external contractors. The net savings contribute to the savings targets identified in the MTFP 2016-2019 for DfI.

Recommendation

The Minister is recommended to approve a non-recurring budget transfer of £910,701.81 from Central Contingency – Redundancy Provision to DFI’s revenue head of expenditure.

Reason 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.

Resource Implications

DFI’s revenue head of expenditure to increase by a total of £910,701.81 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.

Written by:	Finance Manager
Approved by:	Director of Finance