Transfer of Contingency Funding to various departments: 2017 Pay Award in 2018 & 2019

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A decision made 22 June 2018:

Decision Reference: MD-TR-2018-0090
Decision Summary Title:	Contingency Funding for effect of 2017 Pay Awards in 2018 and 2019		Date of Decision Summary:	20th June 2018
Decision Summary Author:	Head of Financial Performance		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Contingency Funding for effect of 2017 Pay Awards in 2018 and 2019		Date of Written Report:	20th June 2018
Written Report Author:	Head of Financial Performance		Written Report : Public or Exempt?	Public
Subject: Transfer of contingency funding from the Central Contingency (Pay Provision) to various departments as listed to cover the recurring costs associated with the 2017 pay awards and impact of Workforce Modernisation (WFM) in 2018 and 2019.
Decision(s): The Minister approved a non-recurring allocation of £4,766,784 from the Central Contingency (Pay Provision) to the Departments listed in the written report to fund the centrally funded recurring impact of the 2017 pay awards in 2018. The Minister approved a non-recurring allocation of £6,220,030 from the Central Contingency (Pay Provision) to the Departments listed in the written report to fund the centrally funded recurring impact of the 2017 pay awards in 2019.
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. The Contingency Allocation Revised Policy published by the Minister for Treasury and Resources (R.110/2017) states that requests for £100,000 or more from Contingency must be considered by the Council of Ministers following examination by the Treasurer of the States and Minister for Treasury and Resources. In lieu of consideration by the full Council of Ministers, this allocation was approved by the States Employment Board at their meeting on 2nd March 2018. The recurring impact of the initial 1% pay award across all pay groups will be managed from within existing base budgets from 2018. The recurring impact of pay awards in excess of 1% will be met from the Central Contingency (Pay Provision) for the remainder of this MTFP period.
Resource Implications: Central Contingency (Pay Provision) to decrease by £4,766,784 in 2018 and £6,220,030 in 2019 and Departmental revenue heads of expenditure to increase by a total identical amount, detailed in the table in the written report.
Action required: The Head of Decision Support to inform the Financial Performance Reporting Manager and the Department Finance Directors that this decision has been approved.
Signature:		Position: Deputy S J Pinel, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Transfer of Contengency Funding to various departments: 2017 Pay Award in 2018 & 2019

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Treasury & Resourses

Ministerial Decision Report

Contingency Funding for 2018 and 2019 impact of 2017 Pay Awards

Purpose of Report

To request approval for a non-recurring allocation of £4,766,784 in 2018 and £6,220,030 in 2019 from the Central Contingency (Pay Provision) to fund the 2018 and 2019 centrally funded element of the 2017 pay awards.

Background

Non-recurrent provisions were made in the Central Contingency (Pay Provision) for anticipated pay awards across all pay groups and the impact of the Workforce Modernisation Project (WFM) in 2017.

Workforce Modernisation

As part of the public sector reform programme WFM worked in partnership with public sector unions to develop a unified equality driven, affordable and sustainable new reward framework encompassing a new grade/pay structure, and new harmonised terms and conditions of service.

After many months of negotiation the final offer for Workforce Modernisation was provided to the Trades unions on 3rd November 2017 and personal statements setting out the impact of the offer on individuals were sent out to the affected staff (c5000) on 8th November 2017. The offer included significant pay improvements for Nursing/Midwifery and manual workers, improvements for many covering unsocial hours, standby and callout payments etc. and improvements for all staff in respect of holidays, sick pay and other terms and conditions which created a single status public servant.

The affected Unions put the final offer to a ballot and the results on 13th February 2018 provided the following outcomes:

Rejection by Civil Servants, Nurses and Midwives, and Manual Workers.
Acceptance by a number of the smaller groups comprising Ambulance, Family Support Workers, Residential Child Care Officers and Youth Service.

The way forward was discussed with Unions on 20th and 27th February 2018. In the absence of more funding and any realistic proposals from the Unions, the Chief Executive met with the Unions on 6th March 2018 and confirmed the following:

The formal withdrawal of the WFM offer from those groups that voted to reject it.
The WFM offer will be honoured for those groups that voted to accept it. Arrangements are in hand to implement the award and any backdating.
The 2% consolidated pay offer (with effect 1st January 2017) that was made to the non WFM groups for the 2017 pay review will be extended to the WFM groups that rejected the WFM offer.
Nurses and Midwives will be offered 2.5% (with effect 1st January 2017) in line with the commitments given by the States Employment Board to achieve pay comparability for this group with Allied Health Professionals.

All pay groups agreed the offers with the new pay rates being implemented via payroll between November 2017 and May 2018.

The initial 1% element across pay groups has been self-funded by departments. The Health and Social Services Department also funded the 2017 and 2018 Doctors’ pay awards from their 2017 underspends with the 2018 element carried forward in to 2018. In addition, £1,255,110 was transferred from the Department’s 2017 underspend to Central Contingencies to fund the 2019 impact of the Doctors’ pay awards.

This Decision provides Central Contingency (Pay Provision) funding to fund the recurring impact of the additional amounts comprising:

The additional 1% offered to the WFM pay groups (excluding Nurses and Midwives) with effect from 1st January 2017.
The additional 1.5% offered to Nurses and Midwives with effect from 1st January 2017.
The cost of honouring the WFM offer to those pay groups who accepted it (Ambulance, Family Support Workers, Residential Child Care Officers and Youth Service) with effect from 1st July 2017).
The 2018 and 2019 Doctor’s pay awards over 1% including the 2019 element funded from H&SSD 2017 underspends transferred to Contingencies.

Recommendation

The Minister is recommended to approve allocations from the Central Contingency (Pay Provision) to the following departments in 2018 and 2019 to cover the recurring costs associated with the 2017 pay awards and WFM:

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.

The Contingency Allocation Revised Policy published by the Minister for Treasury and Resources (R.110/2017) states that requests for £100,000 or more from Contingency must be considered by the Council of Ministers following examination by the Treasurer of the States and Minister for Treasury and Resources. In lieu of consideration by the full Council of Ministers, this allocation was approved by the States Employment Board at their meeting on 2nd March 2018.

The recurring impact of the initial 1% pay award across all pay groups will be managed from within existing base budgets from 2018. The recurring impact of pay awards in excess of 1% will be met from the Central Contingency (Pay Provision) for the remainder of this MTFP period.

Resource Implications

Central Contingency (Pay Provision) to decrease by £4,766,784 in 2018 and £6,220,030 in 2019 and Departmental revenue heads of expenditure to increase by identical amounts, as detailed in the table above.

Report author : Head of Financial Planning and Performance

Document date : 20th June 2018

Quality Assurance / Review : Director of Financial Planning and Performance

File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2018-0090 - C49 Contingency funding for 2017 pay award 2018 and 19 impact

MD sponsor : Director of Financial Planning and Performance