Rural Initiative Scheme: Recapitalisation

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A decision made on 29 September 2020

Decision Reference: MD-E-2020-0042
Decision Summary Title :	Rural Initiative Scheme - Recapitalisation		Date of Decision Summary:	21/09/20
Decision Summary Author	Assistant Director Economy		Decision Summary: Public or Exempt?	Public
Type of report: Oral or Written?	Written		Person giving Oral Report:	n/a
Written Report title :	Rural Initiative Scheme recapitalisation		Date of Written Report:	21/09/20
Written Report author	Assistant Director Economy		Written Report: Public or Exempt?	Public
Subject: Rural Initiative Scheme - Recapitalisation
Decision: The Minister for Economic Development, Tourism, Sport and Culture (EDTSC), approved the transfer of £300,000 within the EDTSC Head of Expenditure from underspend to the Rural Initiative Scheme (RIS), in order to recapitalise for projects in 2020.
Reasons for Decision: Provide support for Jersey’s rural businesses to survive the Covid19 crisis and be ready to contribute to the recovery of Jersey’s economy; in terms of: maintaining Jersey’s rural infrastructure and expertise; providing a baseline level of food security; improving productivity and reducing Jersey’s reliance on inward migration of manual labour; maintaining and enhancing skilled local employment in the rural sectors; continuing stewardship of Jersey’s countryside and natural resources; providing local produce for consumption locally and for export; contributing to the wider health of the economy and community.
Resource Implications: Transfer of £300,000 within EDTSC Head of Expenditure
Action required: The Accounting Officer, Economy, to arrange the transfer of funds within the EDTSC Head of Expenditure to the Rural Initiative Scheme.
Signature:		Position: Minister for Economic Development, Tourism, Sport and Culture
Date signed:		Date of Decision (If different from Date Signed)

Rural Initiative Scheme: Recapitalisation

Written Report

Rural Initiative Scheme Re-Capitalisation

The Rural Initiative Scheme (RIS) is a grant scheme which helps Jersey’s rural sector to become more economically sustainable, improve efficiency and productivity and adapt to future challenges.

The provision of a RIS is a business development policy (BDP1) within the Rural Economy Strategy, the current version of which was approved by the States of Jersey in 2016.

Aim BDP 1

Rural Initiative Scheme (RIS)

To provide support for productivity and innovation projects in the Rural Economy and to assist with meeting the capital requirements of the Rural Support Scheme.

Policy BDP 1

Rural Initiative Scheme (RIS) (EDTSC)

The Government of Jersey will reserve RIS funding for businesses entering Tier 3 of the Rural Support Scheme (RSS) to invest in training, precision application equipment (fertiliser placement), develop alternative cropping and continue supporting productivity, diversification, energy efficiency and rural innovation.

At present, Jersey’s rural businesses need support if they are to survive the Covid19 crisis and be ready to contribute to the recovery of Jersey’s economy; in terms of:

maintaining Jersey’s rural infrastructure and expertise;
providing a baseline level of food security;
improving productivity and reducing Jersey’s reliance on inward migration of manual labour;
maintaining and enhancing skilled local employment in the rural sectors;
continuing stewardship of Jersey’s countryside and natural resources;
providing local produce for consumption locally and for export;
contributing to the wider health of the economy and community.

The RIS has been operated since 2005 and is a tried and tested support mechanism, with significant established compliance safeguards and a well-established assurance and administrative framework.

The RIS was allocated £120,000 in 2020 as part of Economy’s core departmental budget.

This report supports the transfer of underspend within the EDTSC Head of Expenditure (i.e. not a new growth request, simply a reallocation with the Head of Expenditure)) to recapitalise the RIS with an additional £300,000 for 2020.

The original RIS budget has been allocated to projects in Q1 2020. The additional funding will allow for a response to Covid-19 impacts to support businesses through the next phase and to assure resilience can be built into Jersey’s rural economy through an established mechanism - one which can deliver results in the short, medium and long term.

Grant support will be delivered through an effective public/private partnership as RIS enterprise grants are capped at a maximum value of 45% of the total project cost, with the balance being met by private businesses.

Businesses within the rural economy are mainly focused on food production and have therefore been considered as ‘essential’ under the Covid-19 measures and have continued to operate, albeit with increased costs and the loss of some markets.

Grants provided through the RIS will provide capital to help rural businesses adapt to changing circumstances brought about by Covid-19, Brexit and requirements for the industries to become more productive and environmentally sustainable.

Businesses in the rural sector can be perceived as a high investment/low return risk by banks and other lenders due to production uncertainty and volatile markets. This coupled with the current financial situation makes it harder for rural businesses to raise capital. The RIS will aim to provide funds to promote growth in the rural economy by supporting productivity, diversification, enterprise, energy efficiency and innovation.

Assistant Director Economy

21.09.20