Budget transfer from Central Contingencies to various departments: 2016 Voluntary Release and Redundancy Scheme Costs

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A decision made 20 January 2017:

Decision reference: MD-TR-2017-0010
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 2016.		Date of Decision Summary:	17th January 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 2016.		Date of Written Report:	17th January 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 2016 Voluntary Release (“VR”) and Redundancy Scheme.
Decision(s): The Minister approved a non-recurring budget transfer in 2016 of £196,077.46 to departments from Central Contingency – Redundancy Provision for VR Applications approved and signed up 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 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. On 16th and 17th April 2015, the Council of Ministers agreed to the request to approve non-recurring funding in 2015 totalling £5,100,000 from the Central Contingency – Redundancy Provision to various departments for the funding of the Voluntary Release Scheme. On 9th December 2015 the Council of Ministers agreed that approvals for funding of VR and CR would be delegated to a Central Panel comprising the Chief Executive Officer, the Treasurer of the States and the Director of Human Resources. 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 approved funding of £3,473,472.73 to fund applications approved and signed up to 19th November 2016. The transfer figure for funds from the Central Contingency fund to Departments for the period from January 2016 up to the end of November 2016 was £1.74 million. A further redundancy decision panel occurred in December 2016. Following this there are further exit agreements signed before close of 2016 therefore a further transfer is required to cover all financial commitments made. The Council of Ministers will be notified in January 2017 of additional transfer requirements. This Decision funds the next tranche of VR Applications to 31st December 2016 and will leave a balance of £13.66 million in Contingency for future applications.
Resource Implications: Various departments’ revenue heads of expenditure to increase by a total of £196,077.46 in 2016 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: