Budget transfers between Property Holdings Capital Heads of Expenditure to fund identified budget shortfalls in capital schemes relating to Education building projects.

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While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.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 (31/03/2008) regarding: Budget transfers between Property Holdings Capital Heads of Expenditure to fund identified budget shortfalls in capital schemes relating to Education building projects.

Decision Reference: MD-TR-2008-0022
Decision Summary Title:	ESC Capital Schemes Budget Rationalisation		Date of Decision Summary:	28/03/08
Decision Summary Author:	R. Foster - Assistant Director, Property Holdings		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	n/a
Written Report Title :	EDUCATION PROPERTY CAPITAL SCHEMES - BUDGET RATIONALISATION		Date of Written Report:	12/02/08
Written Report Author:	R. Foster - Assistant Director, Property Holdings		Written Report : Public or Exempt?	Public
Subject: Budget transfers between Property Holdings Capital Heads of Expenditure to fund identified budget shortfalls in capital schemes relating to Education building projects.
Decision(s): The Minster approved the proposed budget transfers as set out in the attached report. The Minister agreed to the proposed variation to the 2009 - 2013 draft capital programme insofar as they affect Property Holdings submissions.
Reason(s) for Decision: The proposed budget transfers are required to ensure that approved capital projects relating to Education buildings are fully funded by utilising savings achieved on Education building projects. The net effect is an overall reduction in the call on the Consolidated Fund. The approach of managing budget shortfalls from savings elsewhere is consistent with the move to a resource accounting framework. The budget transfers are supported by the Minister for Education, Sport and Culture (MD-ESC-2008-0007 refers).
Resource Implications: As set out in attached report.
Action required: Treasury to arrange for the budget transfers to be actioned.
Signature:		Position: Senator T A Le Sueur, Minister for Treasury and Resources
Date Signed: 31 March 2008		Date of Decision: 31 March 2008

Budget transfers between Property Holdings Capital Heads of Expenditure to fund identified budget shortfalls in capital schemes relating to Education building projects.

STATES TREASURY ITEM NO:

APPENDIX A

TREASURY AND RESOURCES MINISTER

Education property Capital Schemes - budget rationalisation

Purpose of Report
The Minister is asked to:
1. consider and approve capital budget transfers within Property Holdings and Education, Sport and Culture, to fund the estimated under provision in the Highlands ‘A’ block project;
2. support the proposed restructuring of the forward capital programme bids for Mont a L’Abbe (Phase 2) and Les Quennevais School;
3. support proposals of the ESC Department to seek to reprioritise the St Martins Primary School and Grainville Phase 4 projects.
4. note contingency proposals with regard to the Greenfields and Grouville School projects.

Background
The majority of property related capital works under the administration of the Education, Sport and Culture Departments were transferred to Property Holdings with effect from 1 October 2006 (MD-TR-2006-0101 refers).
Those schemes that had achieved practical completion were retained by the ESC Departments, as were the budgets for the Le Rocquier and Hautlieu developments.
Property Holdings has reviewed the status of all Education capital projects. A number of budget shortfalls have been identified and this report proposes meeting these shortfalls from savings achieved elsewhere.
The report also seeks the Minister’s approval to propose amendments to the forward capital programme 2009 - 2013 for consideration by the Corporate Management Board (CMB) on 5 March 2008 and Council of Ministers on 20 March 2008.

Comments

Highlands ‘A’ Block

In April 2005 a risk workshop identified two key financial risks;
- inability to use the Lawn Block for temporary accommodation
- Inadequate allowance for building deterioration since 1999 survey

Before submitting the final Feasibility Study in November 2005, the cost estimate was reviewed. This made some assumptions for increased degradation and highlighted the insufficient budget regarding the allowance for Temporary Accommodation.

The cost estimate produced by Gardiner and Theobald was £4,912,000 at September 2005 which included the creation of a £362,000 budget for decant accommodation. This matched the budget at that time.

The recent cost estimate produced 19 June 2007 is based upon a greater scope of work than the Feasibility Study suggested and includes a much greater sum for decant accommodation.

In addition to this, it has become apparent that a full Building Control Application is now required which could increase costs further.

This projected overspend is due to the temporary accommodation shortfall in funding, significant degradation since 1999 and some elements not accounted for with regard to new building regulations.

Table 1 below details the proposed budget transfers to meet the identified shortfall - an expanded version with comments is attached as Appendix A to this report:

Table 1 - Proposed Budget Transfers

The budgets for the Hautlieu and Le Rocquier projects remain with the Education, Sport and Culture Department, although Property Holdings is project managing the build.
The support of the Minister for Education, Sport and Culture has been sought with regard to the Hautlieu and Le Rocquier budget transfers. The accompanying Ministerial decision is subject to the approval of the Minister for Education, Sport and Culture.

Mont a L’Abbe (Phase 2) and Les Quennevais

The original capital bid for the two phased redevelopment of Mont a L’Abbe School was made by ESC in February 2003 based on design and cost information available at that time. However, the formal feasibility study (which was in the process of being prepared) was not concluded until October 2003 by which time the estimated costs for phase 2 (refurbishment and upgrade of the existing primary school) had increased.
Whilst the said feasibility study was submitted to the (then) Corporate Capital Unit in October 2003, a revised / updated capital bid was not submitted by ESC in the following February and consequently the current deficit (mis-bid) of £284,000 became apparent.
The Les Quennevais extension and refurbishment project is included in the indicative programme for 2012. The disposal of a property on the school site in 2007 (Acorn Lodge) enabled an extension to the school to provide and SEN unit to be brought forward. As a consequence, the scope of the 2012 project has reduced by an estimated £375,000.
It is, therefore, proposed that the Minister for Treasury and Resources submits an amendment to the draft 2009 - 2013 Capital Programme to reduce the Les Quennevais scheme (2012) by £375,000 and increase the budget for Mont a L’Abbe - Phase 2 (2009) by £284,000.

St Martins and Grainville Phase 4

The ESC Department has indicated to Property Holdings that it views the phased redevelopment of Grainville School as a higher priority than the remedial works scheduled for St Martin’s Primary School.
The 2009 - 2012 approved capital programme has the following sums inscribed:
- St Martins - £2.157 million in 2010
- Grainville Phase 4 - £8.808 million in 2011

The ESC proposal is to ‘swap’ the two projects - clearly there is a major difference in their funding requirements and commensurate adjustments would need to be sought elsewhere. It may be possible to mitigate some of the effect by phasing the Grainville works over two years - this requires a detailed examination of the masterplan which will not be complete in advance of CMB meeting of 5 March 2008.

At this stage only approval to propose the amendment is sought.

Greenfields and Grouville

The final account for the Greenfields project has been agreed and is awaiting final certification. There is an estimated underspend of £100,000 on this scheme. As the project was part-funded from the Criminal Offences Confiscation Fund (COCF) it is proposed that the underspend be returned to that fund.
The main Grouville school project is also complete and has an underspend of some £100,000. The scheme included a proposal to acquire part of an adjacent field (Field 263) to form a new playing field, however, the field owner is not a willing seller and negotiations are continuing.
It is proposed that the main project budget be closed and unspent funding transferred to a new business unit under the same Head of Expenditure to provide for the playing field acquisition and works should they progress.
The above proposals assume that the Council of Ministers, and subsequently the States, approves the proposed transfer of funds from the Les Quennevais project to support the Mont A L’Abbe Phase 2 project. Should this not be the case, the Minister may wish to reconsider the above proposals. For this reason, it is recommended that the underspends on both the Greenfields and Grouville projects are maintained until the States discuss the 2009 Business Plan, in September 2008.

Recommendations
That the Minster approves the proposed capital budget transfers set out in Table 1 above.
That the Minister supports the proposed amendments to the draft capital programme 2009 - 2013 for consideration by the Council of Ministers.

Reason for Decision
The alignment of underspends achieved in capital project with funding pressures elsewhere enables the capital programme for Education buildings to be delivered within the overall approved budget allocation. This approach is consistent with the developing resource accounting framework.

States Treasury Corporate Finance

28 March, 2008 for Decision Meeting 31/03/2008

Proposed Budget Transfers and Variations to 2009 - 2013 Capital Programme