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Jersey Finance Limited: Grant

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.

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  • 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

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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While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.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 on 1 October 2012:

Decision Reference:  MD-TR-2012-0084

Decision Summary Title:

Budget Transfer from Central Reserves to EDD for Jersey Finance Ltd

Date of Decision Summary:

26th September 2012

Decision Summary Author:

Head of Financial Management, Accounting and Reporting

Decision Summary:

Public or Exempt?

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

N/A

Written Report

Title:

Budget Transfer from Central Reserves to EDD for Jersey Finance Ltd

Date of Written Report:

26th September 2012

Written Report Author:

Decision Support Officer

Written Report :

Public or Exempt?

Public

Subject: 

The supplementation of the current grant to JFL to enable comprehensive research to be undertaken into what is needed to safeguard the finance industry's contribution to the overall prosperity of the Island, against the background of the many challenges arising from the global financial crisis (see the accompanying Ministerial Report). The supplement is in the form of a non-recurring budget transfer in 2012 of £990,000 from Central Reserves (one off) to the Economic Development Department (EDD) revenue head of expenditure, the sum then to be forwarded to Jersey Finance Ltd (JFL) by way of an onward grant.

Decision(s): 

The Minister approved a non-recurring budget transfer in 2012 of £990,000 from Central Reserves (One off) to the EDD revenue head of expenditure.

Reason(s) for Decision:  

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:  

The Central Reserves (One off) to reduce by £990,000 and the EDD revenue head of expenditure to increase by an identical amount.  This decision does not change the total amount of expenditure approved by the States.

Action required:

Head of Financial Management, Accounting and Reporting to inform the Assistant Accountant, Financial Accounting and Control and the EDD Management Accountant that this decision has been approved.

Signature:

 

 

Position: Senator  P F C Ozouf, Minister for Treasury and Resources

               

 

Date Signed:

 

Date of Decision:

Hide report
Jersey Finance Limited: Grant

 - 1 -

Treasury and Resources

Ministerial Decision Report

 

 

Budget Transfer from Central Reserves to EDD for Jersey Finance Ltd.

 

  1. Purpose of Report

 

To enable the Minister to approve the supplementation of the current grant to JFL to enable comprehensive research to be undertaken into what is needed to safeguard the finance industry's contribution to the overall prosperity of the Island, against the background of the many challenges arising from the global financial crisis. The supplement is in the form of a non-recurring budget transfer in 2012 of £990,000 from Central Reserves (one off) to the Economic Development Department (EDD) revenue head of expenditure, the sum then to be forwarded to Jersey Finance Ltd (JFL) by way of an onward grant.

 

2.   Background

 

The finance sector is critical to Jersey’s economy and our ability to maintain the standard of public services that people expect. It has undergone significant challenges over the last four years and whilst having maintained a strong position it has still suffered significant reductions in profitability. The global economic conditions alongside the changing regulatory environment – in particular the potential implications of the Independent Commission on Banking (ICB) recommendations – put the sector at further risk unless it takes proactive action to adapt to the new global financial environment. As a result of the ICB review the Jersey Government, the finance industry and the Jersey Financial Services Commission (JFSC) need to examine the strategic impact of the proposed changes on Jersey’s banking industry in terms of structure, reputation, volume of business, market opportunities and employment.

 

Due to the ongoing impact of the global financial crisis it is imperative that research be undertaken to assess what action is required to ensure the continued competitiveness of the industry which accounts for over 40% of the Island’s national income (GVA), over 60% of States income and the employment directly of 12,000 Island residents. With the imminent appointment of a Director of Financial Services, who will have the high priority task of helping to prepare a financial services strategy, it is most timely and relevant for the fundamental changes occurring in the global business environment and their impact on the Island to be fully researched. There is a need to ascertain what the top financial institutions are presently doing and what they plan to do as a guide to the general likely future market response. As few are equipped to carry out this task, and the necessary knowledge and experience is not available within government, it is appropriate that JFL should be proposing to engage consultants, with government support, to undertake research including high level interviews with business leaders. Research into the way ahead for the Island's main income and employment generator is essential if Jersey's prosperity is to be safeguarded for the future. The research results will be of great help to Government, the regulator and industry in planning for the future.

 

Jersey Finance Limited has been investigating options to undertake a significant piece of work to respond to this, which would:

  • create transparency on the current status of Jersey as a financial centre – including a benchmark with comparable financial centres;
  • understand the political implications for the Island of changing global, European, and UK regulation and other discontinuities;
  • identify potential opportunities and strategic options that Jersey’s finance industry can pursue to maintain and improve its competitiveness;
  • obtain stakeholder agreement on preferred options and strategy to define a long term vision;
  • define and set out implementation actions;
  • place particular emphasis on any impact on employment and tax income.

 

To achieve the above objectives a further grant of £990,000 is to be provided to JFL to supplement their existing grant of £2.65 million. The Chief Minister and Council of Ministers have been consulted and support the project. The cost needs to be considered in the context of the 40% of the Island’s GVA that the finance industry provides. Three companies were approached regarding the work. Following detailed consideration of the options the Financial Services Advisory Board (comprising Ministers, representatives of Government, industry and the JFSC) have identified McKinsey as the company which is the strongest option and which would deliver the best outcomes.

 

The research, which will be completed by the end of 2012, will be commissioned and project managed by JFL with comprehensive input and oversight from Government and the JFSC. This work will ensure Jersey continues to differentiate itself in an increasingly competitive market place and, by doing so, deliver sustained real growth from the Island’s financial services sector and continued prosperity for the people of Jersey.

 

3.   Recommendation

 

The Minister is recommended to approve a non-recurring budget transfer in 2012 of £990,000 from Central Reserves (One off) to the EDD revenue head of expenditure for the purposes of commissioning a report into the strategic opportunities for Jersey as an International Finance Centre.

 

4.   Reasons for Decision

 

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. 

 

5.   Resource implications

 

Central Reserves (One off) to reduce by £990,000 and the EDD revenue head of expenditure to increase by an identical amount.  This decision does not change the total amount of expenditure approved by the States.

 

Report author : Decision Support Officer

Document date : 26th September 2012

Quality Assurance / Review : Head of Financial Management, Accounting and Reporting

File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DSs, WRs and SDs\2012-0084 - Jersey International Finance Centre - KH\WR - Jersey International Finance Centre - KH.docx

MD Sponsor : Treasurer of the States

 

 

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