Budget Transfers: DVS Vehicle Registration System and Licence System

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A decision made 8 December 2017:

Decision Reference: MD-TR-2017-0148
Decision Summary Title:	Use of Income and subsequent transfers between Revenue and Capital heads of expenditure for the replacement of DVS Vehicle Registration System and Licence System		Date of Decision Summary:	7th December 2017
Decision Summary Author:	Head of Decision Support		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:
Written Report Title:	Use of Income and subsequent transfers between Revenue and Capital heads of expenditure for the replacement of DVS Vehicle Registration System and Licence System and the transfer of existing costs and budgets to DVS Systems Capital head of expenditure		Date of Written Report:	7th December 2017
Written Report Author:	Head of Decision Support		Written Report : Public or Exempt?	Public
Subject: Request for use of income and subsequent transfer between the Department for Infrastructure ("DfI") revenue head of expenditure and a new DFI capital head of expenditure for the DVS Vehicle Registration System totalling £250,000 for the replacement of the DVS vehicle registration system and licence system. The transfer of costs and budgets (£299,999) from the DFI Replacement Assets capital head of expenditure (Q00MC10012) to the DVS Systems capital head of expenditure (Q00MF18021).
Decision(s): The Minister approved: the use of additional income within DVS up to £250,000 for the purpose of funding the replacement of the DVS vehicle registration system and licence system the subsequent internal budget transfer in 2017 of up to £250,000 from the DFI revenue head of expenditure to the new DFI capital head of expenditure for the DVS Vehicle Registration System. the transfer of costs and budgets (£299,999) from the DFI Replacement Assets capital head of expenditure (Q00MC10012) to the DVS Systems capital head of expenditure (Q00MF18021).
Reason(s) for Decision: Article 19(1) of the Public Finances (Jersey) 2005 states that If, during a financial year, the Minister is satisfied that the income of a States funded body which has a revenue head of expenditure for the year is likely to exceed its estimated income taken into account in approving that head of expenditure (a) the Minister may authorize the body to withdraw from the consolidated fund during that year an amount not exceeding the likely excess of income; or Article 18(1)(c) 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 used for the purposes of another head of expenditure. Delegation 1.2 delegates authority for non-contentious transfers between heads of expenditure of up to £1,000,000 to the Treasurer of the States. This transfer puts in place funding for the replacement of the DVS vehicle registration system. A Ministerial decision, MD-T-2017-0099 was signed by the Minister for Infrastructure on 4th December 2017
Resource Implications: The DFI revenue head of expenditure will decrease by up to £250,000 and the new DFI capital head of expenditure for the DVS Vehicle Registration System will increase by an identical amount. Costs and budgets (£299,999) for the DVS VRS system within the DFI Replacement Assets capital head of expenditure (Q00MC10012) will be transferred to the DVS Systems capital head of expenditure (Q00MF18021).
Action required: Head of Decision Support to advise the Finance Director – Department for Infrastructure once this decision has been approved.
Signature:		Position: Senator A J H Maclean, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Budget Transfers: DVS Vehicle Registration System and Licence System

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Treasury and Resources

Ministerial Decision Report

USE OF INCOME AND SUBSEQUENT TRANSFERS BETWEEN REVENUE AND CAPITAL HEADS OF EXPENDITURE FOR THE REPLACEMENT OF DVS VEHICLE REGISTRATION SYSTEM AND LICENCE SYSTEM AND THE TRANSFER OF EXISTING COSTS AND BUDGETS TO DVS SYSTEMS CAPITAL HEAD OF EXPENDITURE

Purpose of Report

Request for use of income and subsequent transfer between the Department for Infrastructure ("DfI") revenue head of expenditure and a new DFI capital head of expenditure for the DVS Vehicle Registration System totalling £250,000 for the replacement of the DVS vehicle registration system and licence system. The transfer of costs and budgets (£299,999) from the DFI Replacement Assets capital head of expenditure (Q00MC10012) to the DVS Systems capital head of expenditure (Q00MF18021).

Background

The Driver & Vehicle Standards department ("DVS") provides an extensive and comprehensive range of services to all members of the Public, Educational Bodies, The Motor Industry, Enforcement Agencies, the Judiciary & States Departments.

The primary purpose of the department is to ensure that safety and technical provisions, and associated documentation for drivers and vehicles in Jersey, are improved to, and maintained at, internationally recognised standards.

As part of the Department's statutory requirements and as set out in the Motor Vehicle Registration (Jersey) Law 1993, The Inspector of Motor Traffic is required to compile and maintain a register of motor vehicles. Registration of all motor vehicles is compulsory and is essential to the department's function of regulating drivers and their vehicles.

The existing Vehicle Registration System (VRS) was installed in 2001 and is now well past its original estimated useful life, resulting in both higher costs and higher risks of system failures.

Due to the number of interactions with the driving licence system (LICAR) and in line with developments across Europe, the project scope has expanded to include replacement of the driving licence system. As part of the Department's commitment to online services, the new system will be scoped to include as many of these services as possible as well as a Mobile application. Using LEAN principles this is an excellent opportunity to streamline many services and procedures ensuring we are able to offer the best customer experience as possible whilst working as efficiently as possible. In addition, there is a need to accommodate Vehicle Operator Licencing within the VRS, a function that is not catered for within the current system.

Though identified on the DFI reptacement asset programme as needing replacement in 2016, no funding was available to be allocated from the existing Replacement Assets capital allocation, with the expectation that DVS would find additional funding as necessary to fund the replacement. In 2016 DVS was able to allocate £250,000 with an additional contribution of £50,000 made available from The Restructuring Provision. Now the full scope of the project is known the cost is expected to be in the region of £550,000.

As the cost of the project has grown, a new capital head of expenditure is being set up via the 2018 budget capital programme.

During 2017, the unusual licence plate sales, sold both via auction and over the counter and other DVS income streams, have generated .additional income of approximately £250,000 in excess of budget, which is being requested to fund the Vehicle Registration System replacement project.

As a result of the above, and to match the intended use of the funding with the accounting treatment, it will be necessary to create income and expenditure budgets of up to £250,000 in the DFI revenue head of expenditure, before transferring up to £250,000 expenditure budget in 2017 from the DFI revenue head of expenditure to DVS Systems capital head of expenditure (Q00MF18021)

Existing costs and budgets for this project will also need to be transferred into this new capital head of expenditure totalling £299,999.

3. Recommendation

The Minister is recommended to approve:

the use of additional income within DVS up to £250,000 for the purpose of funding the replacement of the DVS vehicle registration system and licence system
the subsequent internal budget transfer in 2017 of up to £250,000 from the DFI revenue head of expenditure to the new DFI capital head of expenditure for the DVS Vehicle Registration System.

3. the transfer of costs and budgets (£299,999) from the DFI Replacement Assets capital head of expenditure (000MC10012) to the DVS Systems capital head of expenditure (Q00MF18021).

4. Reason for Decision

Article 19(1) of the Public Finances (Jersey) 2005 states that If, during a financial year, the Minister is satisfied that the income of a States funded body which has a revenue head of expenditure for the year is likely to exceed its estimated income taken into account in approving that head of expenditure

(a) the Minister may authorize the body to withdraw from the consolidated fund during that year an amount not exceeding the likely excess of income; or

Article 18(1)(c) 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 used for the purposes of another head of expenditure. Delegation 1.2 delegates authority for non-contentious transfers between heads of expenditure of up to £1,000,000 to the Treasurer of the States.

This transfer puts in place funding for the replacement of the DVS vehicle registration system.

A Ministerial decision, MD-T-2017-0099 was signed by the Minister for Infrastructure on 4th December 2017

5. Resource Implications

The DFI revenue head of expenditure will decrease by up to £250,000 and the new DFI capital head of expenditure for the DVS Vehicle Registration System will increase by an identical amount. Costs and budgets (£299,999) for the DVS VRS system within the DFI Replacement Assets capital head of expenditure (Q00MC10012) will be transferred to the DVS Systems capital head of expenditure (Q00MF18021).

Report author : Head of Decision Support	Document date 7th December 2017
Quality Assurance / Review : Director of Financial Planning and Performance	File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2017-0148 - DVS Vehicle Registration System