Budget transfers to various Departments to fund Voluntary Release Scheme in 2015

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made 11 January 2016:

Decision reference: MD-TR-2015-0141
Decision Summary Title:	Allocation of Central Contingencies – Redundancy Provision to Departments to fund the Voluntary Release Scheme in 2015.		Date of Decision Summary:	7th January 2016
Decision Summary Author:	Head of Decision Support		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Allocation of Central Contingencies – Redundancy Provision to Departments to fund the Voluntary Release Scheme in 2015.		Date of Written Report:	7th January 2016
Written Report Author:	Head of Decision Support		Written Report : Public or Exempt?	Public
Subject: Central Contingency funding allocation to various departments to fund the Voluntary Release Scheme in 2015.
Decision(s): The Minister approved a non-recurring budget transfer of £4,666,119 in 2015 from Central Contingency – Redundancy Provision to various departments’ revenue heads of expenditure, as outlined in the attached report, to fund the Voluntary Release Scheme.
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. On 16th and 17th April 2015, the Council of Ministers agreed to the request to approve non-recurring funding in 2015 totalling £5,100,000 from the Central Contingency – Redundancy Provision to various departments for the funding of the Voluntary Release Scheme. This request is to fund the Voluntary Release Scheme in 2015 in line with the allocation of funding approved by the States Assembly in P.72/2015 Medium Term Financial Plan 2016 – 2019 (as amended).
Resource Implications: Various departments’ revenue heads of expenditure, as outlined in the attached report, to increase by a total of £4,666,119 in 2015 and the Central Contingency – Redundancy Provision funding to decrease by an identical amount. This decision does not change the total amount of expenditure approved by the States for the period of the current MTFP 2013 to 2015.
Action required: The Head of Decision Support to notify the Finance Directors of all relevant departments that the Decision has been approved.
Signature:		Position: Senator A J H Maclean, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Budget transfer to various Departments to fund Voluntary Release Scheme in 2015

Treasury and Resources Department

Ministerial Decision Report

ALLOCATION OF CENTRAL CNTINGENCIES – REDUNDANCY PROVISION TO DEPARTMENTS TO FUND THE VOLUNTARY RELEASE SCHEME IN 2015.

Purpose of Report

To enable the Minister to approve the non-recurring budget transfer of £4,666,119 in 2015 from Central Contingencies – Redundancy Provision to various departments’ revenue heads of expenditure, as outlined below, to fund the Voluntary Release Scheme.

Background

The Voluntary Release (VR) Scheme provides a mechanism for employees who wish to volunteer to leave the organisation through redundancy or early retirement to receive a redundancy payment or immediate pension. The scheme has been made available to all employees in 2015.

It is anticipated that future use of such schemes would be more targeted throughout 2016 to 2019 focusing on areas where re-design of services are identified that will add value to the services provided by the public sector. This focused approach in partnership with Trade Unions should reduce the need for compulsory redundancy and facilitate the achievement of the £70,000,000 people saving targets for the period.

The Council of Ministers approved the allocation of £2,000,000 from Central Contingencies to create a Redundancy Provision in 2015 to fund the first tranche of the scheme. The States Assembly approved a further £20,000,000 to be added to the Redundancy Provision across 2015 and 2016 to be funded by transfers from the Strategic Reserve Fund with £4,000,000 to be transferred in 2015 and £16,000,000 in 2016 [1]. This provides a total of £6,000,000 available for this purpose in 2015.

International Financial Reporting Standards (IFRS) interpreted for the States of Jersey in the Jersey Financial Reporting Manual (JFReM) require termination benefits to be recognised as an expense at the point at which the entity can no longer withdraw the offer of those benefits. Accordingly, the full cost of all VRs must be recognised at the point a binding contract has been signed with the employee.

The VR scheme run in 2015 received 329 applications. Of these, 129 were considered by a central panel for approval and funding. In total 106 applications were approved and 101 employees have finally signed up to leave the organisation in 2015/6.

Number of Applications by department and year of departure

Department	2015	2016
Chief Minister's	10	2
Department of the Environment	2	4
Economic Development	2	1
Education	11	1
Health and Social Services	14	10
Home Affairs	1	1
Non-Ministerial	0	1
Social Security	5	4
Transport and Technical Services	19	5
Treasury and Resources	3	5
Totals	67	34

The total cost of all approved VR packages where the individuals have signed up to leave is £4,666,119. The recurring saving achieved as a result of releasing these employees will be in the region of £3,000,000 to £4,000,000 and more than 75 FTE making the payback period for the overall investment between 1 and 1.5 years.

The balance of £1,333,881 available for VR funding in 2015 will be carried forward in to the Redundancy Provision in Central Contingencies in 2016, to supplement the £16,000,000 to be transferred from the Strategic Reserve.

Recommendation

The Minister is recommended to approve a non-recurring budget transfer of £4,666,119 in 2015 from Central Contingency – Redundancy Provision to various departments’ revenue heads of expenditure, as outlined above, to fund the Voluntary Release Scheme.

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.

On 16th and 17th April 2015, the Council of Ministers agreed to the request to approve non-recurring funding in 2015 totalling £5,100,000 from the Central Contingency – Redundancy Provision to various departments for the funding of the Voluntary Release Scheme.

This request is to fund the Voluntary Release Scheme in 2015 in line with the allocation of funding approved by the States Assembly in P.72/2015 Medium Term Financial Plan 2016 – 2019 (as amended).

Resource Implications

Various departments’ revenue heads of expenditure, as outlined above, to increase by a total of £4,666,119 in 2015 and the Central Contingency – Redundancy Provision funding to decrease by an identical amount. This decision does not change the total amount of expenditure approved by the States for the period of the current MTFP 2013 to 2015.

Report author : Head of Decision Support	Document date: 21st December 2015.
Quality Assurance / Review : Head of Decision Support	File name and path: LDrive/Treasury/Sections/Corporate Finance/Ministerial Decisions/2015-01xx – VR Scheme
MD sponsor : Director of Treasury Operations

[1] P.72/2015 Medium Term Financial Plan 2016 – 2019 (as adopted as amended), P.75/2015 Independent Jersey Care Inquiry: amendment to Medium Term Financial Plan 2013 – 2015, P.76/2015 Strategic Reserve Fund: funding for Independent Jersey Care Inquiry and transfers from and to the Consolidated Fund.