Economic Stimulus Plan: Budget allocation to Economic Development Department to deliver Jersey Tourism marketing campaign

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A decision made 22 June 2010 regarding: Economic Stimulus Plan: Budget allocation to Economic Development Department to deliver Jersey Tourism marketing campaign.

Decision Reference: MD-TR-2010-0103
Decision Summary Title:	Fiscal Stimulus Budget Allocation –Economic Development Department		Date of Decision Summary:	15th June 2010
Decision Summary Author:	Interim Treasurer of the States		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Fiscal stimulus funding to the Economic Development Department for additional marketing activity to support Jersey’s tourism industry		Date of Written Report:	15th June 2010
Written Report Author:	Acting Fiscal Stimulus Programme Manager		Written Report : Public or Exempt?	Public
Subject: Economic Stimulus Plan: budget allocation to the Economic Development Department to deliver Jersey Tourism marketing campaign.
Decision(s): The Minister approved the allocation of £500,000 to the Economic Development department (“EDD”) which will be transferred to the department’s 2010 revenue budget to deliver the additional multi-media marketing campaign. The fiscal stimulus funding is conditional on a contribution of £50,000 from the Jersey Hospitality Association (the “JHA”), the industry body representing the tourism sector in Jersey. The Minister further instructed the Chief Officer of EDD to report on spend of all stimulus monies, and project progress/performance, on a monthly basis in accordance with guidelines set by the Treasury, as well as complete a detailed post project implementation review, capturing the investment return for the incremental spend on the campaign, by November 2010. EDD must also return any unspent monies on completion of the project.
Reason(s) for Decision: A discretionary fiscal stimulus allocation from the Stabilisation Fund of £44m has already been approved. This additional campaign to support Jersey’s tourism industry meets the key criteria for fiscal stimulus being timely, targeted and temporary and will benefit local business and individuals operating and working in the sector. The allocation of £500,000 to the project will enable the campaign to be launched immediately, helping to support the industry through the 2010 season and raising the brand awareness of Jersey in the UK market.
Resource Implications: No financial or resource implications other than those explained in the accompanying report.
Action required: Treasury to be informed of decision to release necessary funds to the Economic Development Department’s budget.
Signature:		Position: Senator P F C Ozouf, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Economic Stimulus Plan: Budget allocation to Economic Development Department to deliver Jersey Tourism marketing campaign

Treasury and Resources

Ministerial Decision Report

Allocation of fiscal stimulus funding to the Economic Development Department for additional marketing activity to support jersey’s tourism industry

1. Purpose of Report

The purpose of this report is to summarise the recommendation of the FSSG to the Treasury Minister, and the decision of the Minister for Treasury and Resources in respect of green light funding for the Economic Development department (“EDD”) to deliver an additional multi media marketing campaign to leverage the existing campaign being run by Jersey Tourism, designed to specifically target the UK market.

2. Background

The £44m fiscal stimulus fund was approved by the States to be set aside from the Stabilisation Fund (2009/P55) to stimulate the local economy during the economic downturn following advice from the Fiscal Policy Panel (the “FPP”), an independent advisory body set up to advise the Treasury and Resources Minister on the Island’s fiscal policy, and in particular the use of the Stabilisation Fund.

All fiscal stimulus projects are designed to put additional money back into the economy, to add to demand and mean that the fall in output and extent of job losses will be less severe than would otherwise be the case.

Funding for the project will provide support to Jersey’s tourism industry which is expected, based on recently collated statistics, to suffer in the 2010 season as a result of a reduced number of visitors. Businesses in this sector operate in a highly competitive global market and it has become increasingly difficult to maintain market share in recent years. In addition to this the pressures and threats as a result of the global economic downturn have placed additional strain on the industry, which in 2009 generated expenditure in the island of £223m.

In 2009 an additional campaign was delivered without support from fiscal stimulus funding, as Jersey Tourism were able to identify alternative sources of funding within EDD’s existing expenditure budget, the Tourism Development Fund and from industry, via a contribution from the Jersey Hospitality Association (the “JHA”). However, in 2010, it has not been possible to identify any existing resource from EDD (or any other States funds) to undertake the extra activity, which it is considered critical to deliver now based on the expected 2010 outturn for visitor numbers and on island spend. However, it is noted that the JHA are willing to make a contribution to this additional campaign in 2010.

The volume of business for Jersey’s hotels, restaurants and bars, whilst also benefiting from spend unrelated to staying leisure visitors, is dependent on the number of visitors to the island. Based on 2009 reported statistics, these businesses employed 4,500 people in total, which is around 8% of Jersey’s workforce.

3. Fiscal Stimulus Rationale

The statistics set out above demonstrate the significance of the tourism industry in Jersey EDD reports that actions taken last year to increase marketing activity contributed to the conversion of a forecast decline of 10%-20% into a final outturn only 3.8% lower than in the previous year. Without the provision of additional funds Jersey Tourism will be unable to expand its existing campaign and will not reach any of its target market through television advertisements (for which there is insufficient funding without fiscal stimulus monies) which are considered to be critical in generating enquiries and booking, as well as supporting brand awareness of Jersey generally.

As with a number of other fiscal stimulus projects it has been concluded during the bid and evaluation process that it is unacceptable to do nothing. Managing the risk of adverse impacts on Jersey’s visitor economy is important for the protection of jobs and businesses.

The delivery of this additional marketing campaign complements existing fiscal stimulus activity and provides an overall programme of measures that is balanced across the main sectors of Jersey’s economy.

4. Recommendation from the Fiscal Stimulus Steering Group

The FSSG recommended a ‘green light’ to the Treasury Minister for the additional marketing campaign to be delivered by Jersey Tourism (part of EDD), with the funding to be allocated to EDD’s 2010 revenue budget being a maximum of £250,000, conditional on the matching of fiscal stimulus funding pound for pound by the JHA, and with the priority being the television advertising campaign.

There is no impact on manpower.

5. Decision of the Minister for Treasury and Resources

The Minister accepted the FSSG's recommendation in principle, however he also recognised that there were limitations on the amount of funding that the JHA feel able to commit to the campaign at this time. The Minister accepted the advice of EDD that a spend of at least £500,000 is required to deliver a campaign that will attract the necessary volume of impact. As a result the Minister is willing to accept less than a pound for pound matching contribution from the JHA and agreed to a £50,000 sum being provided by the JHA to supplement the fiscal stimulus funding of £500,000.

The Minister approved the allocation of £500,000 to the Economic Development department (“EDD”) which will be transferred to the department’s 2010 revenue budget to deliver the additional multi-media marketing campaign. The fiscal stimulus funding is conditional on a contribution of £50,000 from the Jersey Hospitality Association (the “JHA”), the industry body representing the tourism sector in Jersey.

6. Reason for Decision

A discretionary fiscal stimulus allocation from the Stabilisation Fund of £44m has already been approved. Support for tourism meets the key criteria for fiscal stimulus being timely, targeted and temporary and will benefit local business and individuals. The allocation of £500,000 to the project will enable the campaign to be launched immediately, helping to support the industry through the 2010 season and raising the brand awareness of Jersey in the UK market.

7. Resource Implications

No financial resource implications other than those explained above.

No manpower resource implications.