Treasury and Exchequer
Ministerial Decision Report
ALLOCATION of Reserve Funding to HCS and CYPES for DELIVERY OF COVID-19 RESPONSE INITIATIVES in 2020
- Purpose of Report
To enable the Minister to approve the allocation of up to £6,390,111 and up to £1,100,000 from the General Reserve, in 2020, to the Health and Community Services Department (HCS) and the Department for Children, Young People, Education and Skills (CYPES) heads of expenditure respectively for the delivery of initiatives to manage and mitigate the impact of COVID-19.
- Background
Funding provisions were made in the Government Plan 2020-2023 in the General Reserve for funding needs that cannot be met from existing heads of expenditure in 2020. The Minister has increased the amount available in the General Reserve by transferring £65.3 million from the Treasury and Exchequer head of expenditure (MD-TR-2020-0035), approving an additional £99.99 million of expenditure (MD-TR-2020-0047) and making transfers of £28 million and £50 million from the Stabilisation Fund (MD-TR-2020-0055 and MD-TR-2020-0112).
COVID-19 has presented an unprecedented challenge for the Government of Jersey and has required a wide range of new initiatives across the public sector. As part of the Government’s response to the COVID-19 pandemic, HCS and CYPES have implemented the initiatives detailed below.
These initiatives form part of the first and second wave responses in 2020. At the onset of the pandemic, departments were asked to collate COVID-19 related expenditure and to request additional funding if it was not possible to reprioritise existing funding. HCS and CYPES will not be able to fully fund these COVID-19-related activities from within existing budgets and it is necessary to provide additional funding to meet the final costs incurred now that the final financial position has been concluded.
COVID-19 Initial Response and On-Going Activities – up to £5,540,267
As part of the HCS response to the COVID-19 Pandemic, senior health officials directed that the standard hospital operating model be modified in a number of ways. Core out-patient activity ceased, and staff rotors were amended to deploy staff to critical care locations or support where necessary within the department.
Additional staff were recruited and changes to rotas and out of hours arrangements agreed to ensure appropriate levels of staffing were maintained in line with relevant professional medical standards. Additional costs were also incurred in the backfill of staff absence due to COVID-19 shielding or necessary self-isolation. Staff costs decreased through the summer reflecting lower levels of COVID-19 in the Island that allowed for a phased resumption of conventional hospital activities. Staff costs increased once again as COVID-19 case numbers rose in the last weeks of 2020 and the backfill of staff in isolation was required.
The staff costs in supporting the pandemic response were £2,877,874 and this total includes costs of £102,583 related to continued pressure upon the Unscheduled Care activities funded under MD-TR-2020-0165.
Throughout the year non-staff costs, including equipment for oxygen supplies, ward consumables and respiratory aids, pharmacy supplies, freight, and other additional cleaning and staff accommodation were incurred at a cost of £2,376,922.
Early COVID-19 plans involving changes to various operations included data analytics work to support monitoring of patients within the hospital, out of hours social work for patients in the community, increased clinical waste costs, additional death certification work, an Infection Prevention and Control Officer, video laryngoscopes for incubation support, care home workers support and social care support. The combined cost of these activities in the department to prevent the spread of COVID-19 in 2020 was £285,471.
GP Contracts Additional Funding – up to £695,056
During the first wave response, the primary care model was changed to fund additional support from GP’s and GP surgery staff, as well as to cover some costs that GP surgeries incurred during the first wave. Following a detailed review of final costs of the project, and an additional amount of £695,056 is required. This is funding for additional costs associated with GP Indemnity Insurance, costs of surgery running during the pandemic first wave and a shortfall in the anticipated returns funded via the HIF.
HCS Income Deficit – up to £154,788
The second wave resurgence of COVID-19 in the last weeks of 2020 placed increased pressure upon health staff and resources, and COVID-19 related activities were prioritised. This resulted in further closure of income generating activities at the Jersey General Hospital. Income deficits as a result of this were anticipated, however at the year end the impact of the cessation of private patient treatments above those already anticipated requires an additional £154,788. This is in excess of the amount allocated under this activity listed per MD-TR-2020-0165.
COVID-19 impact and response for CYPES – up to £1,100,000
CYPES incurred additional costs throughout the year in response to the changing nature of the pandemic and the delivery of education to pupils, students and higher education. Income fell through the year where higher education programmes had to be cancelled or deferred and canteen sales and facilities hire income could not be generated. This equated to £666,000 of lost income to the department in the year.
Costs to maintain physical distancing, additional cleaning costs, nursery support and IT costs to expand learning from home were incurred. Along with the need for additional supply teaching support for vulnerable children and the children of critical workers. The total costs incurred for these activities was £2,004,000.
Due to some offsetting reductions in costs as a result of changes to education services in response to the pandemic, such as savings on premises expenses, the Department was able to financially absorb £1,570,000 of these costs leaving a net funding requirement of £1,100,000.
A table summary of the allocations is set out below:
| HCS | CYPES | Total |
Income Deficit | £154,788 | | £154,788 |
Immediate Response and On-Going Activities | £5,540,267 | | £5,540,267 |
GP Contract Additional Funding | £695,056 | | £695,056 |
COVID-19 Impact and Response for CYPES | | £1,100,000 | £1,100,000 |
TOTAL | £6,390,111 | £1,100,000 | £7,490,111 |
.
- Recommendation
The Minister is recommended to approve the allocation of up to £6,390,111 and £1,100,000 from the General Reserve to the HCS and CYPES heads of expenditure respectively in 2020 in support of the Government’s response to COVID-19.
This recommendation is made subject to written confirmation by the relevant Accountable Officers that the income underachieved and expenditure incurred are COVID-19-related.
- Reasons for Decision
Article 15(3) of the Public Finances (Jersey) Law 2019 states that the approval by the States of a government plan authorises the Minister to direct how an approved appropriation for a reserve head of expenditure in the plan may be spent (including on another head of expenditure) in the first financial year covered by the plan.
The current Policy for Allocations from the Reserve agreed by the Minister for Treasury and Resources (published as R.80/2020) sets the requirement that all proposed allocations from the General Reserve (COVID-19), once recommended for approval by the States Treasurer (taking into account comments from the Principal Accountable Office), are referred for review to either the Council of Ministers or the relevant Competent Authorities Ministers prior to submission to the Minister for approval.
The Investment Appraisal Team has recommended this request for approval and further to these reviews the Treasurer of the States, having consulted with the Principal Accountable Officer and the Council of Ministers, recommends this allocation to the Minister subject to written confirmation by the relevant Accountable Officers that the income underachieved and expenditure incurred are COVID-19-related.
5. Resource Implications
The HCS head of expenditure to increase by up to £6,390,111 in 2020 and the General Reserve to decrease by the same amount.
The CYPES head of expenditure to increase by up to £1,100,000 in 2020 and the General Reserve to decrease by the same amount.
This decision does not change the total amount of expenditure approved by the States in the Government Plan 2020-2023.
Report author: Specialist – Special Project Assurance | Document date : 20th January 2021 |
Quality Assurance / Review: Head of Financial Governance | File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2021-0008 - Reserve funding to HCS & CYPES COVID Response 2020 |
MD sponsor: Group Director, Strategic Finance |
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