Budget transfer from Central Contingency (Pay Provision) and Restructuring Provision (Redundancy) to various departments: Pay Award 2015/2016

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[THIS DECISION HAS PARTLY BEEN RESCINDED BY MD-TR-2017-0139] A decision made 20 June 2017:

Decision Reference: MD-TR-2017-0087
Decision Summary Title:	Contingency Funding for 2015/2016 Pay Award		Date of Decision Summary:	19th June 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:	Contingency Funding for 2015/2016 Pay Award		Date of Written Report:	19th June 2017
Written Report Author:	Head of Decision Support		Written Report : Public or Exempt?	Public
Subject: Transfer of contingency funding from the Central Contingency (Pay Provision) and Restructuring Provision (Redundancy) to various departments for costs associated with the pay award for 2015 / 2016.
Decision(s): The Minister approved the following allocations from the Central Contingency (Pay Provision): A non-recurring allocation of £2,406,708 in 2016 to the Treasury and Resources Department to fund the 2016 element of the 2015 / 2016 pay award with effect from 1st January 2016. A non- recurring allocation of £2,892,789 in 2017 to departments listed in the written report for the non-consolidated payment of £500. The Minister for Treasury and Resources approved the non-recurring allocation from the Restructuring Provision (Redundancy) of £8,404 in 2017 to departments listed in the written report for the recalculation of Compulsory Redundancy settlements.
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 Policy published by the Minister for Treasury and Resources (R.10/2012) states that all requests for Allocation from Contingency will be considered by the Council of Ministers and this allocation was approved at their meetings on 8th February and 10th May 2017. The recurring impact of a 1% pay award across all pay groups has been included in departments’ base budgets from 2017 as part of the MTFP Addition (MTFP Addition Annex, ‘Reconciliation of Net Revenue Expenditure’ sections for each department).
Resource Implications: Central Contingency (Pay Provision) to decrease by £2,406,708 in 2016 and £2,892,789 in 2017 and departmental revenue heads of expenditure to increase by a total identical amount, detailed in the table in the written report. The Restructuring Provision (Redundancy) to decrease by £8,404 in 2017 and departmental revenue heads of expenditure to increase by a total identical amount, detailed in the table in the written report.
Action required: Head of Decision Support to inform the Financial Performance Reporting Manager and the department Finance Directors that this decision has been approved.
Signature:		Position: Senator A J H Maclean, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Budget transfer from Central Contingency (Pay Provision) and Restructuring Provision (Redundancy) to various departments: Pay Award 2015/2016

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Treasury & Resourses

Ministerial Decision Report

Central Contingency and restructuring provision Funding for 2015/2016 Pay Award

Purpose of Report

To request approval for a non-recurring allocation of £2,406,708 in 2016 from the Central Contingency (Pay Provision) to fund the 2016 element of the 2015 / 2016 pay award with effect from 1st January 2016 and £2,892,789 in 2017 to fund the non-consolidated payment of £500, and to request approval for a non-recurring allocation of £8,404 in 2017 from the Restructuring Provision (Redundancy) to fund the recalculation of Compulsory Redundancy settlements

Background

Non-recurrent provisions were made in the Central Contingency (Pay Provision) and Restructuring Provision for anticipated pay awards across all pay groups in 2016.

An offer of 1% for 2015/2016 with effect from 1st January 2016 plus a non-consolidated payment of £500 is being implemented by the States Employment Board. These sums form part of the pay provisions made in the Central Contingency and a one-off allocation is required to meet departments’ 2016 costs of the 1% award plus the cost of the £500 non-consolidated payment. The recurring impact of a 1% pay award across all pay groups has been included in departments’ base budgets from 2017 as part of the MTFP Addition (MTFP Addition Annex, ‘Reconciliation of Net Revenue Expenditure’ section for each department). The 2015/16 pay award was announced too late to appear in individual departments’ cash limits, so it was decided to reflect the cost of the 2016 pay award in Treasury and Resources for accounting purposes. This decision allocates the budget required.

Compulsory Redundancy packages have been recalculated using the increased final pay for employees.

Recommendation

The Minister is recommended to approve allocations from the Central Contingency (Pay Provision) and Restructuring Provision (Redundancy) to the following departments for costs associated with the 2015/2016 pay award as per the table below:

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 Policy published by the Minister for Treasury and Resources (R.10/2012) states that all requests for Allocation from Contingency will be considered by the Council of Ministers and this allocation was approved at their meetings on 8th February and 10th May 2017.

The recurring impact of a 1% pay award across all pay groups has been included in departments’ base budgets from 2017 as part of the MTFP Addition (MTFP Addition Annex, ‘Reconciliation of Net Revenue Expenditure’ section for each department).

Resource Implications

Central Contingency (Pay Provision) to decrease by £2,406,708 in 2016 and £2,892,789 in 2017 and departmental revenue heads of expenditure to increase by a total identical amount, detailed in the table above.

The Restructuring Provision (Redundancy) to decrease by £8,404 in 2017 and departmental revenue heads of expenditure to increase by a total identical amount, detailed in the table above.

Report author : Head of Decision Support

Document date : 19th June 2017

Quality Assurance / Review : Director of FPP

File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2017-0087 - Contingency funding for 2015-16 Pay Award

MD sponsor : Director of FPP