Insurance fund transfer to Transport and Technical Services: Sea defences storm damage

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While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.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 15 January 2015:

Decision Reference: MD-TR-2014-0152
Decision Summary Title:	Extreme storm damage to sea defences – Ex gratia payment of an uninsured event		Date of Decision Summary:	14th January 2015
Decision Summary Author:	Interim Treasurer of the States		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Extreme storm damage to sea defences - Ex-gratia payment of an uninsured event		Date of Written Report:	14th January 2015
Written Report Author:	Senior Management Insurance Accountant		Written Report : Public or Exempt?	Public
Subject: Ex-gratia settlement from the Insurance Fund to the Transport and Technical Services Department (TTS) in respect of extraordinary costs resulting from extreme storm damage to sea defences.
Decision(s): The Minister for Treasury and Resources has, due to these exceptional circumstances, authorised the Interim Treasurer of the States, without the intention of creating a precedent, to release funding in the sum of £503,546 from the Insurance Fund to TTS, in respect of extraordinary costs resulting from extreme storm damage to sea defences.
Reason(s) for Decision: The Minister for Treasury and Resources authorises the Interim Treasurer of the States to make available from the Insurance Fund a maximum of £503,546 to reimburse costs incurred by TTS in relation to extreme storm damage to sea defences.
Resource Implications: The Insurance Fund will make available a maximum of £503,546 to TTS in respect of extraordinary costs resulting from extreme storm damage to sea defences.
Action required: The interim Treasurer of the States is to authorise payment of £503,546 from the Insurance Fund to reimburse costs incurred by TTS in relation to extreme storm damage to sea defences.
Signature:		Position: Senator A J H Maclean, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Insurance fund transfer to Transport and Technical Services: Sea defences storm damage - uninsured event

Treasury and Resources

Ministerial/Treasurer’s Decision Report

Extreme storm damage to sea defences – ex-gratia payment of an uninsured event

Purpose of Report

The purpose of this report is to authorise the interim Treasurer of the States to withdraw from the Insurance Fund the sum of £503,546 and make an ex-gratia payment to reimburse the Department of Transport and Technical Services (TTS) in respect of costs incurred as a result of extreme storm damage to sea defences during the first quarter 2014.

Background

The period January – March 2014 saw three storms of high intensity, which resulted in a significant amount of damage to coastal defences and installations. Although no catastrophic failures occurred, after each storm, TTS Civil Works surveyed the island’s sea defences and identified that the damage caused required urgent remedial works to be undertaken in order to restore the integrity of the costal defences affected.

These extraordinary remedial works resulted in significant changes to the planned maintenance and capital programme of TTS for the year 2014 as the additional works identified were not high on the risk register and not scheduled for maintenance anytime within the next few years.

Main Content / Subject matter

The total cost of repairing the storm damage was in excess of £1,000,000, of which around £500,000 has already been met by changes to the 2014 coastal protection programme, as well as re-prioritising planned maintenance work.

Additional costs in the sum of £503,546, exclusively relating to external civil engineering works, make up the balance of expenditure incurred. These external costs were specifically identified in respect of two of the larger pieces of remedial work required as follows:

Le Bourg – remedial works to seawall……………… £438,910
St Aubin’s - damage to slipway ……………………... £64,636

This extreme storm damage event was beyond the normal weather patterns anticipated and so was also beyond any reasonable budgetary expectation to manage costs within departmental revenue and capital budgets already set.

Also the island’s coastal sea defences are not covered by the current States of Jersey insurance programme, as insurers view such events as inevitable with the passage of time, and the States of Jersey would therefore incur exorbitant annual premiums which could not be justified under the current programme.

Therefore it was deemed that this uninsured event would require funding assistance from the Insurance Fund to meet extraordinary costs which could not be absorbed within existing departmental budgets, on the understanding that such action would also mitigate the risk of a similar event reoccurring in the near future.

Recommendation

Due to the extreme storm weather experienced early in year 2014, it was recommended that the Minister for Treasury and Resources authorise the interim Treasurer of the States, without the intention of creating a precedent, to release funding in the sum of £503,546 from the Insurance Fund to TTS in order to meet the costs of said external civil engineering works.

Reason for Decision

The Minister for Treasury and Resources authorises the Interim Treasurer of the States to make available from the Insurance Fund a maximum of £503,546 to reimburse costs incurred by TTS in relation to extreme storm damage to sea defences.

Resource Implications

The Insurance Fund will make available a maximum of £503,546 to TTS in respect of extraordinary costs resulting from extreme storm damage to sea defences.

Report author : Senior Management Insurance Accountant	Document date : 14/01/2015
Quality Assurance / Review : Head of Treasury and Investment Management	File name and path: \\ois.gov.soj\sojdata\TRY\Treasury\Sections\Corporate Finance\Ministerial Decisions\DSs, WRs and SDs\2014-0152 - Extreme storm damage to sea defences - Ex-gratia payment\WR - Funding for storm damage to sea defences.doc

Page 1 of 2