Budget Transfer from Central Contingency: Pay Award 2013

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A decision made on 30 January 2013:

Decision Reference: MD-TR-2013-0007
Decision Summary Title:	Contingency Funding for 2013 1% Non Consolidated Pay Award and 1% Consolidated Pay Award		Date of Decision Summary:	22 January 2013
Decision Summary Author:	Head of Financial Planning		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 2013 1% Non Consolidated Pay Award and 1% Consolidated Pay Award		Date of Written Report:	22 January 2013
Written Report Author:	Head of Financial Planning		Written Report : Public or Exempt?	Public
Subject: Pay Awards 2013 ,2014 and 2015 - Transfer of contingency funding
Decision(s): The Minister for Treasury and Resources approved a 2013 request for contingency funding totalling £5,846,895 from the Central Contingency (Pay Provision) to various departments for costs associated with the one off 1% Non Consolidated Pay Award £2,594,468 and the recurring 1% Consolidated Pay Award £3,252,427 for 2013 as per the schedule in the attached report. The approval includes the sum of £120,880 for the one-off 1% Non Consolidated Pay Award and £137,380 for the 1% Consolidated Pay Award for 2013 in respect of the Treasury and Resources Department head of expenditure. The Minister further approved the future funding of £3,252,427 to be transferred to departments in 2014 and 2015 for the recurring effect of the 1% Consolidated Pay Award in those years.
Reason(s) for Decision: Article 17(2) of the Public Finances (Jersey) Law 2005 states that the Minister for Treasury and Resources is authorized 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 SEB have offered a 1% Non Consolidated Pay Award and 1% Consolidated Pay Award for 2013 for which contingency funding is held in the States of Jersey Central Contingency (Pay Provision). In order to make the payments associated with this award it is necessary to have the budget transferred to the various departments’ heads of expenditure.
Resource Implications: Departments’ revenue heads of expenditure will increase by £5,846,895 as per the schedule in the attached report and the Central Contingency (Pay Provision) will decrease by an identical amount. This decision does not change the total amount of expenditure approved by the States for 2013. In 2014 and 2015 departments’ revenue heads of expenditure will increase by £3,252,427 for the recurring effect of the 1% Consolidated Pay Award and the Central Contingency (Pay Provision) will decrease by an identical amount in those years.
Action required: Head of Financial Planning to notify Assistant Accountant, Financial Accounting and Control and Finance Manager, Financial Planning and Performance that this decision has been approved.
Signature:		Position: Senator P F C Ozouf, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Budget Transfer from Central Contingency: Pay Award 2013

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Treasury and Resources

Ministerial Decision Report

Contingency Funding to DEPARTMENTS for THE 1% CONSOLIDATED AND 1% NON CONSOLIDATED PAY AWARD FOR 2013

Purpose of Report

To enable the Minister for Treasury and Resources to approve a 2013 request for contingency funding from the Central Contingency (Pay Provision) to various Departments as per the schedule at Appendix 1 for costs associated with the 1% Consolidated and 1% Non Consolidated Pay Awards for 2013. The decision also approves the funding for Departments from the Central Contingency (Pay Provision) for 2014 and 2015 for the recurring effect of the 1% Consolidated Pay Award in those years.

Background

On 4th December 2012, the Chief Minister announced in the States that the employer would be implementing the final pay offer made initially on 12th July 2012.

The final offer provides for;-

2012, 1% non consolidated pay award paid as a one off lump sum, with effect 1st January 2012;
2013, 1% consolidated pay award plus 1% non consolidated pay award paid as a one off lump sum, with effect 1st January 2013;
2014, 4% consolidated pay award with effect 1st January 2014 in return for a modernisation agreement;
A guarantee of no compulsory redundancies until the end of 2014.

In 2013, the Council of Ministers has made provision in the Medium Term Financial Plan (MTFP) for a Central Contingency (Pay Provision) for the 1% Consolidated and 1% Non Consolidated Pay Award for 2013. The implementation of the pay offer requires a transfer of funding to those departments affected by the pay offer.

Extract from Medium Term Financial Plan 2013-2015: Figure 7 page 47 (as amended)

The provision in the MTFP was estimated based on the staff costs for each department estimated in June 2012. Departments are now able to more accurately identify the costs associated with the two pay awards in 2013 based on budgeted numbers approved in the MTFP.

The 1% Non Consolidated Pay Award is £2,594,468 and represents a one-off payment in 2013 and is only calculated on basic pay. The 1% Consolidated Pay Award of £3,252,427 is recurring and is calculated on pay plus social security and pension contributions. The Consolidated Pay Award requires further funding in 2014 and future years. Provision has been made in the MTFP as part of the Central Contingency (Pay Provision) in order that this recurring cost can be funded together with a further 4% Consolidated Pay Award from January 2014 which is also proposed. This Ministerial Decision provides the approval for the recurring element of the 1% Consolidated Pay Award of £3,252,427 in 2014 and 2015.

Certain groups are not provided for in these pay awards. Prison Officers have existing agreements in place and Doctors and Consultants are tied to settlements in line with UK arrangements.

Appendix 1 provides a schedule of the required transfers from Central Contingency (Pay Provision) to individual departments’ heads of expenditure representing the cost of the 1% Consolidated £3,252,427, and 1% Non Consolidated Pay Award £2,594,468 for 2013. The total cost of the 2013 pay awards is £5,846,895.

3. Recommendation

The Minister for Treasury and Resources is recommended to approve a 2013 request for contingency funding totalling £5,846,895 from the Central Contingency (Pay Provision) to various departments as set out in Appendix 1 for costs associated with the 1% Consolidated and 1% Non Consolidated Pay Award for 2013. The Minister is also recommended to approve that £3,252,427 is transferred to departments in 2014 and 2015 for the recurring affect of the 1% Consolidated Pay Award in those years.

4. Reason for Decision

Article 17(2) of the Public Finances (Jersey) Law 2005 states that the Minister for Treasury and Resources is authorized 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.

5. Resource Implications

Departments’ revenue heads of expenditure will increase by £5,846,895 as per the schedule in the attached report and the Central Contingency (Pay Provision) will decrease by an identical amount. This decision does not change the total amount of expenditure approved by the States for 2013. In 2014 and 2015 Departments’ revenue heads of expenditure will increase by £3,252,427 for the recurring effect of the 1% Consolidated Pay Award and the Central Contingency (Pay Provision) will decrease by an identical amount in those years.

Report author : Head of Financial Planning	Document date : 23rd January 2013
Quality Assurance / Review : Director of Financial Planning and Performance	\\ois.gov.soj\sojdata\TRY\Treasury\Sections\Corporate Finance\Ministerial Decisions\DSs, WRs and SDs\2013-0007 - 2013 pay awards to departments\WR - Contingency Funding 2013 1% Non Consolidated 1% Consolidated.doc
MD sponsor :Treasurer of the States

APPENDIX 1: SCHEDULE OF COSTS TO DEPARTMENTS OF THE 1% NON CONSOLIDATED PAY AWARD AND 1% CONSOLIDATED PAY AWARD FOR 2013 TO BE FUNDED BY A TRANSFER FROM THE CENTRAL CONTINGENCY (PAY PROVISION) FOR 2013