TRANSPORT AND TECHNICAL SERVICES
BUDGET TRANSFERS
Purpose of the Report
The purpose of this report is to seek the Transport and Technical Services Minister’s approval to the following:
· to transfer budget, equivalent to 2% of members’ pay, to the Chief Minister’s Department in order to ring fence the funds required to enable the repayment and servicing of the Public Employees Contributory Retirement Scheme (PECRS) pre 1987 debt; and
· to request that the Chief Minister and the Minister for Treasury Resources respectively transfer £200,000 to assist with the building refurbishment of the 3rd and 6th Floor of Cyril Le Marquand House.
Background
Finance Direction No.3.6 ‘Variations to Heads of Expenditure’ sets out the procedures for the transfer of revenue funds and states that requests for transfers of revenue funds from one Department to another require the prior approval of the Minister for Treasury and Resources and the relevant ministers party to the transfer.
Discussion
Public Employees Contributory Retirement Scheme (PEC) pre 1987 debt repayment
On 27 September 2005 the States approved amendments to the PECRS to address the pre 1987 deficit of the scheme (P189/2005 and P190/2005).
A valuation at 31 December 2001 placed a value on the States’ share of the pre 1987 debt of £177.5 million.
A framework for dealing with the debt, approved by the former Policy and Resources Committee and the Committee of Management, agreed to increase the employers contribution to the scheme to 15.6% of which a repayment equivalent to 2% of members’ pay would be made over 82 years from 1 January 2002.
During the 2006 Budget process Departments’ revenue budgets included a provision to increase their PECRS contribution from 15.16% to the required 15.6%.
It has been proposed that the budget for the 2% element for repayment and servicing of the debt be transferred from all Departments’ budgets to a central HR vote held within the Chief Minister’s Department. This arrangement will lessen the burden on Departments to make monthly repayments and also insulate Departments should the costs of the repayments increase or staff numbers decrease.
Alongside this arrangement States Payroll has been adjusted such that Departments will be charged the reduced 13.6% PECRS contributions from January 2006.
Shown below is a calculation of the 2% provision applicable to the Transport and Technical Services:
| 2006 Budget PECRS | PECRS 2% Provision |
Transport and Technical Services | £1,893,600 | £242,800 |
Building Maintenance – Budget Transfer £400k
The Treasury and Resources and Chief Minister’s Office have requested that the Transport and Technical Services carry out building refurbishment on the 3rd and 6th Floor at Cyril Le Marquand House following the relocation of the Magistrates Court to its new premises and changes to the Chief Minister’s Office. Shown below is a schedule of costs for the proposed works:
| 3rd Floor £ | 6th Floor £ | Total £ |
Builders Work | 177,732 | 255,036 | 432,768 |
Windows (purchase only) | 17,000 | 17,000 | 34,000 |
Mechanical & Electrical Fees | 9,550 | 9,550 | 19,100 |
Architects Fees | 12,500 | 12,500 | 25,000 |
Blinds | 6,500 | 6,500 | 13,000 |
Contingency @ 10% | 22,328 | 30,058 | 52,386 |
Total | 245,610 | 330,644 | 576,254 |
Within Transport and Technical Services building maintenance budget for 2006 it has ‘ring-fenced’ funds amounting to £176,254 to assist with the planned building maintenance costs at Cyril Le Marquand House. It is recommended that the Chief Minister and Minister for Treasury and Resources allocated funds in support of building refurbishment and transfer funds amounting to £200,000 to the Transport and Technical Services Department from within their cash limits.
Recommendations
Public Employees Contributory Retirement Scheme (PEC) pre 1987 debt repayment
It is recommended that the Minister agrees to transfer budget amounting to £242,800 equivalent to 2% of members’ pay to a central HR vote within the Chief Minister’s Department.
Building Maintenance – Budget Transfer £400k
It is recommended that the Minister approves the budget transfers from the Chief Minister and the Minister for Treasury and Resources which amount to £200,000 respectively.
Reason (s) for Decision
Public Employees Contributory Retirement Scheme (PEC) pre 1987 debt repayment
To ring fence the funds required to enable the repayment and servicing of the Public Employees Contributory Retirement Scheme pre 1987 debt for the period through to 2083.
Budget Transfers – Cyril Le Marquand House
To enable the Chief Minister and Minister for Treasury and Resources to allocate funds in support of building refurbishment of the 3rd and 6th floor of Cyril Le Marquand House.
Action Required
To notify the Chief Minister and Minister for the Treasury and Resources Department of these decisions.
Written by: | Ellen Littlechild, Finance Director |
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Approved by: | John Richardson, Chief Officer |
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Attachment: | |