Re-alignment of Insurance Budget: Transfer of funds to Restructuring Provision

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A decision made on 3 December 2012:

Decision Reference: MD-S-2012-0104
Decision Summary Title:	Budget Transfer to Restructuring provision as per the Ministerial Decision for the Realignment of the Departmental Insurance Budgets as Part of the CSR Programme	Date of Decision Summary:		15 November 2012
Decision Summary Author:	Director of Finance & Governance – Social Security Department	Decision Summary: Public or Exempt?		Public
Type of Report: Oral or Written?	Written	Person Giving Oral Report:		N/A
Written Report Title:	Realignment of States Departmental Budgets to Reflect Insurance and Other Procurement Savings as part of the 2012 CSR Programme	Date of Written Report:		15 November 2012
Written Report Author:	Director of Finance & Governance – Social Security Department	Written Report : Public or Exempt?		Public
Subject: Non-recurring budget transfer in 2012 of £24,330 from the Social Security Department to the Restructuring provision for the realignment of the Department’s Insurance budget in alignment with savings identified for CSR purposes.
Decision(s): The Minister approved a budget transfer of £24,330 from the Social Security Department to the Restructuring provision for the realignment of the Department’s Insurance budget in alignment with savings identified for CSR purposes.
Reason(s) for Decision: As part of the States-wide CSR initiative in 2012, it was identified, from within the States central Insurance programme at the Treasury and from other procurement projects, that significant savings were achievable from Departments.
Resource Implications: The Social Security Department’s revenue head of expenditure to decrease by £24,330 and the Restructuring provision to increase by an identical amount.
Action required: To transfer net savings of £24,330 from the Social Security Department to Restructuring provision.
Signature:			Position: Minister for Social Security
Date Signed:			Date of Decision:

Re-alignment of Insurance Budget: Transfer of funds to Restructuring Provision

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Social Security Department

Ministerial Decision Report

Realignment of states DEPARTMENTAL BUDGETS TO

REFLECT INSURANCE AND OTHER PROCUREMENT SAVINGS as part of the 2012 csr programme

Purpose of Report

To enable the Minister to approve the realignment of the Social Security Department budget for 2012 as part of the CSR programme.

Background – Insurance budgetary Savings to CSR

As part of the States Insurance re-tendering process undertaken in 2011, a review of all States of Jersey (SoJ) insurance claims history over the past five years (2007 – 2011), with the States Insurers Insurance Corporation of the Channel Islands (ICCI) was undertaken.

As part of this detailed analysis the Treasury decided to release insurance savings to CSR in 2012, coupled with a more proactive approach to improving risk management policies and procedures throughout the States.

Computation of Departmental Insurance Budgets to be released to CSR in 2012

The table below shows details of the Insurance Budgets to be released to CSR and the decrease of £22,820 relating to the Social Security Department.

	SUMMARY CSR INSURANCE SAVINGS – 2012
Internal States Departments	Opening Insurance Recharge	Closing Insurance Recharge	Inter-Departmental Recharge Adjustment	Insurance Budget Annual Increase/(Decrease)
Ministerial Departments
Chief Minister	6,998	11,738		4,800
Economic Development	12,556	4,276		(8,280)
Education, Sport and Culture	322,369	88,309		(234,060)
Department of the Environment	37,892	10,022		(27,870)
Health and Social Services	203,840	143,430		(60,410)
Home Affairs	104,933	53,613		(51,320)
Housing	373,136	70,126	(29,400)	(273,610)
Social Security	30,827	8,007		(22,820)
Transport and Technical Services	195,544	105,014		(90,530)
Treasury and Resources	47,393	119,743	29,400	42,950
Non Ministerial States Funded Bodies
Bailiff’s Chambers	9	699		690
Law Officers’ Department	89	4,659		4,570
Judicial Greffe	242	2,212		1,970
Viscount’s Department	1,196	1,636		440
Official Analyst	251	441		190
Office of the Lieutenant Governor	573	683		110
Data Protection Commission	21	211		190
Probation Department	1,327	1,537		210
Receiver General	10	10		0
States Assembly and its services	1,640	3,420		1,780

Totals	1,340,846	629,846	0	(711,000)

These insurance savings are reflected in the Medium term Financial Plan in 2013 as part of the procurement savings target. This saving needs to be reflected in 2012 budgets and returned to the CSR Restructuring Reserve in 2012.

Procurement Savings

A number of other procurement projects were delivered, evidenced and savings of £102,650 achieved in 2012. A base budget reduction for these projects has been included in 2013 within the Medium Term Financial Plan. The cost savings from these projects in 2012 need to be reflected in budgets and the saving returned to the CSR Restructuring Reserve in 2012. The table below identifies a decrease of £1,510 in respect of the Social Security Department.

SUMMARY CSR OTHER PROCUREMENT SAVINGS – 2012
Internal States Departments	Electric Meter Tariff Review	Mobile Phones	Advertising	Stationery	Other Procurement savings Budget Increase / (Decrease
Ministerial Departments
Chief Minister	0	(590)	(2,210)	(560)	(3,360)
Economic Development	(100)	(990)	(2,940)	(910)	(4,940)
Education, Sport and Culture	(14,460)	(4,710)	(6,230)	(80)	(25,480)
Department of the Environment	0	(2,990)	(5,410)	(830)	(9,230)
Health and Social Services	(7,250)	(13,770)	(2,010)	(2,680)	(25,710)
Home Affairs	(3,820)	(470)	(580)	(3,650)	(8,520)
Housing	0	(460)	(460)	(430)	(1,350)
Social Security	(190)	0	(1,320)	0	(1,510)
Transport and Technical Services	0	(10,560)	(490)	(810)	(11,860)
Treasury and Resources	(3,710)	(1,500)	(1,220)	(1,350)	(7,780)
Non Ministerial States Funded Bodies
Law Officers’ Department	0	(600)	(350)	(530)	(1,480)
Judicial Greffe	0	(360)	(190)	(320)	(870)
Viscount’s Department	0	(240)	(110)	(210)	(560)

Totals	(29,530)	(37,240)	(23,520)	(12,360)	(102,650)

Overall Savings

The overall savings from the insurance re-tender and review together with other procurement projects in 2012 have delivered savings of £813,650 which need to be removed from departmental budgets. The total Social Security Department budget transfer amounts to £24,330 (Insurance £22,820 and Procurement £1,510).

Recommendation

The Minister is recommended to approve the transfer of £24,330 from the departmental budget for year 2012 as savings contributing to the Comprehensive Spending Review Programme

Reason for Decision

As part of the States-wide CSR initiative in 2012, it was identified, that significant savings were achievable from a re-tender and review of the States insurance arrangements. Departmental insurance budgets need to be realigned to reflect these savings which have been derived from the following two factors:

An excellent insurance claims history, between 2007 and 2011, with the States Insurers.
Improved controls and monitoring of risk management within all States departments.

In addition other procurement initiatives have delivered savings in 2012 which require the realignment of budgets.

Article 2(6) of the Public Finances (Transitional Arrangements) (Jersey) Order 2011 states that all or any part of the amount appropriated by a head of expenditure may, with the approval of the Minister for Treasury and Resources, be used for the purposes of another head of expenditure.

Resource Implications

Social Security Department budget to be reduced by £24,330 as set out above.