Jersey Finance Limited: Grant

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A decision made on 1 October 2012:

Decision Reference: MD-E-2012-0113
Decision Summary Title :	Commissioning research into the strategic opportunities for Jersey as an International Finance Centre		Date of Decision Summary:	September 2012
Decision Summary Author:	Chief Executive Officer		Decision Summary: Public or Exempt? (If exempt State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	Commissioning research into the strategic opportunities for Jersey as an International Finance Centre		Date of Written Report:	September 2012
Written Report Author:	Chief Executive Officer		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: Jersey Finance Limited – grant The supplementation of the current grant to JFL to enable comprehensive research to be undertaken into what is needed to safeguard the finance industry's contribution to the overall prosperity of the Island, against the background of the many challenges arising from the global financial crisis (see the accompanying Ministerial Report). The supplement is requested in the form a non-recurring budget transfer in 2012 of £990,000 from the Central Reserves (one off) to the Economic Development Department (EDD) revenue head of expenditure, the sum then to be forwarded to Jersey Finance Ltd (JFL) by way of an onward grant governed by the Partnership Agreement in place between JFL and EDD.
Decision(s): The Minister supported the funding request by Jersey Finance Limited for the purposes of commissioning research into the strategic opportunities for Jersey as an International Finance Centre according to the objectives set out in the accompanying documentation; and requested the Minister for Treasury and Resources to make funds available from Central Reserves for the project as agreed by the Council of Ministers.
Reason(s) for Decision: The finance sector is critical to Jersey’s economy and our ability to maintain the standard of public services that people expect. It has undergone significant challenges over the last four years and whilst having maintained a strong position it has still suffered significant reductions in profitability. The global economic conditions alongside the changing regulatory environment – in particular the potential implications of the Independent Commission on Banking (‘ICB’) recommendations – put the sector at further risk unless it takes proactive action to adapt to the new global financial environment. The Finance and External Affairs Advisory Group (FERAG) comprising of the Chief Minister, Economic Development Minister, Treasury and Resources Minister and the Assistant Chief Minister and the Financial Services Advisory Board (FSAB) comprising representatives of Government, JFSC and Industry have been investigating options to undertake significant research to determine Jersey’s response to the ICB recommendations. This research will: - Create transparency on the current status of Jersey as a financial centre – including a benchmark with comparable financial centres - Understand the political implications for the Island of changing global, European, and UK regulation and other discontinuities - Identify potential opportunities and strategic options that Jersey’s finance industry can pursue to maintain and improve its competitiveness - Obtain stakeholder agreement on preferred options and strategy to define a long term vision - Define and set out implementation actions - Place particular emphasis on any impact on employment and tax income Following a formal tender process and consideration by FERAG and FSAB, the proposal by McKinsey was considered to be the strongest option. As such, it is recommended that the funding request for this research is approved and funds be made available by the Minister for Treasury and Resources from Central Reserves.
Resource Implications: The project will cost £990,000. The cost will be met from Central Reserves, as agreed by the Council of Ministers.
Action required: To request that the Treasury and Resources Minister transfers the necessary funding from Central Reserves as agreed by the Council of Ministers to the Economic Development Department to enable the project to be commissioned.
Signature: Senator AJH Maclean		Position: Economic Development Minister
Date Signed:		Date of Decision (If different from Date Signed):