Jersey Business Limited (JBL): Annual Grant 2019

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A decision made on 8 February 2019

Decision Reference: MD-E-2019-0007
Decision Summary Title :	Jersey Business Limited- Annual Grant 2019		Date of Decision Summary:	6th February 2019
Decision Summary Author:	Director EDTSC		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	Jersey Business Limited’s Business Plan 2019 Report 2019 Jersey Business Grant Award		Date of Written Report:	January 2019 January 2019
Written Report Author:	Jersey Business Limited (SD) Director EDTSC (WR)		Written Report : Public or Exempt?	Exempt (SD) Art 33 Public (WR)
Subject: Jersey Business Limited (JBL) - 2019 Annual Grant of (up to) £778,280.
Decision(s): The Minister approved an Annual Grant of (up to) £778,280 to fund the cost of: 1. delivering the objectives contained within JBL’s 2019 business plan, which includes a budgeted funding requirement of £790,000, £65,000 of which will be funded out of JB’s cash reserves and £725,000 of which will be funded by the grant award; and, 2. JBL taking-on certain of the Jersey Retail Association’s responsibilities £53,280
Reason(s) for Decision: Having considered JBL’s 2019 Business Plan, the report on the grant award and the Department’s Capability Assessment, the Minister has approved JBL’s 2019 Business Plan that maintains existing levels of service together with the proposal for taking on certain services previously undertaken by the Jersey Retail Association. The Minister approved up to £778,280 of the £843,280 budget requested to deliver the objectives contained within their plan. In making this decision JBL have agreed to fund the difference between the grant awarded and their funding request out of cash reserves.
Resource Implications: The 2019 Annual Grant of (up to) £778,280 has been identified from within the Department’s 2019 budget. There are no further financial or manpower implications.
Action required: The Director is instructed to arrange for the 2019 Annual Grant Schedule to be finalised and executed. Officers are further instructed to monitor delivery of the award and to take remedial action as appropriate through the course of the year.
Signature: Senator L J Farnham		Position: Minister for Economic Development, Tourism, Sport and Culture
Date Signed:		Date of Decision (If different from Date Signed)

Jersey Business Limited (JBL): Annual Grant 2019

Report regarding 2019 Grant Award to Jersey Business Limited

Funding Background

Jersey Business Limited (“JBL”) has evolved from a predominantly start-up advisory function into a multi-business advisory function with resources split broadly 50/50 between start-up’s and established businesses looking to grow. Led by a private sector board JBL has a team of 8.5 full time equivalent and has seen a steady growth in its client base year-on-year.

The work undertaken by JBL is aimed at supporting productivity improvements in the local economy. It operates from rented offices in the Parade, St Helier, opening 5 days a week offering a walk in service for early stage start-ups and managed client meetings for established businesses. JBL operates an open door policy and support any business of any size across all the sectors of the economy.

JBL was not established by an Act of the States, however it is considered an Arm’s Length Body and in order to receive funding its work must be demonstrably aligned with and contribute to States of Jersey (“SOJ”) objectives. The funding provided to JBL from the SOJ has historically been in the form of an annual grant plus top-up grants for specific projects. The relationship between the SOJ, through the Minister for Economic Development, Tourism, Sport and Culture acting through the Department for Growth, Housing and Environment (the “Department”) and JBL is recorded in a 2017-19 Partnership Agreement and Annual Schedules covering each individual year of grant award.

Conversations have taken place between senior SOJ officers (“Officers”), JBL and the Jersey Retail Association (“JRA”) to transfer certain activities, initially for 2019, to JBL. This is on the basis that the membership funding model for the JRA no longer appears viable, and that there are clear benefits and synergies from incorporating JRA’s services into JBL and that such services contribute to SOJ strategic policies and objectives.

Business Plan

JBL have presented two alternative core business plans to Officers. The first is on the basis of working within a budget of £725,000, the second working within a budget of £790,000. In order to maintain services at existing levels JBL requires the £790,000 budget that allows for increases in JBL’s input costs broadly in line with Jersey inflation / increases in cost of living.

In consideration of the proposed grant award, it is noted that JBL has sufficient working capital (cash + current assets – current liabilities) to fund the difference between the £790,000 budget request and the Department’s available funding to allocate to JBL of £725,000. JBL have agreed that they could endeavour to work to the £790,000 budget by using their retained cash reserves whilst receiving a grant of £725,000. It is noted that this may place JBL under cash flow pressures and this would need to be monitored on an ongoing basis.

In respect to the transfer of certain services from the JRA to JBL, JBL have indicated that they could undertake these services with an additional funding award of £53,280, over and above the previously discussed budgets.

Officers are supportive of this proposal subject to ongoing reviews of the outputs and value for money. £40,000 has been identified from existing budgets with the difference of £13,280 proposed to be through reallocation of Departmental funding or cost savings.

Other considerations

Through the Department’s Annual Operation and Financial Capability assessment, Officers have considered the following matters:

How the funding will help achieve States of Jersey policies and strategic objectives
Whether funding JBL is the most appropriate mode for delivering SOJ policies and strategic objectives
Consideration of JBL’s performance under existing funding arrangements, including consideration of outputs, contractual obligations, Key Performance Indicators and value for money
JBL’s structure, board composition and governance arrangements

Whilst highlighting various actions that the Department should undertake as part of its on-going consideration and monitoring of JBL throughout 2019, such considerations are broadly supportive of the continued funding of JBL.

Recommendation

The Department is satisfied with their assessment of the proposed business plans for 2019 and also broadly with JBL’s performance over the past year.

It is recommended that the Minister approves a funding award of up to £778,280 to JBL as follows:

£725,000 to fund JBL’s core budget requirement of £790,000 with the difference being funded out of JBL’s cash reserves; and,
£53,280 to fund the transfer of certain services from the JRA to JBL.

The above amounts should be paid quarterly to JBL and be subject to the ongoing performance monitoring and oversight of JBL by Officers.