Treasury and Exchequer: Allocation of Reserve Funding for the Zero-Based Budgeting project

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A decision made on 30 July 2020

Decision reference: MD-TR-2020-0095
Decision Summary Title:	Allocation of Reserve Funding to T&E for the Zero-Based Budgeting project		Date of Decision Summary:	20th July 2020
Decision Summary Author:	Specialist – Business Cases		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Allocation of Reserve Funding to T&E for the Zero-Based Budgeting project		Date of Written Report:	20th July 2020
Written Report Author:	Specialist – Business Cases		Written Report: Public or Exempt?	Public
Subject: The allocation of up to £544,000 in 2020 from the General Reserve – Restructuring to T&E (Treasury & Exchequer) to provide funding for the Zero-Based Budgeting project as part of the Finance Transformation.
Decision(s): The Minister approved the allocation of up to £544,000 in 2020 from the General Reserve – Restructuring to T&E (Treasury & Exchequer) to provide funding for the Zero-Based Budgeting project as part of the Finance Transformation.
Reason(s) for Decision: Article 15(3) of the Public Finances (Jersey) Law 2019 states that the approval by the States of a government plan authorises the Minister to direct how an approved appropriation for a reserve head of expenditure in the plan may be spent (including on another head of expenditure) in the first financial year covered by the plan. Due to timing of receipt of the Business Case, this project has gone through the previous Procedures on Allocations from the Reserve (published as R.23/2020) which sets the requirement for all allocations from reserves to be considered by the Investment Appraisal Board, Principal Accountable Officer and States Treasurer prior to submission to the Minister for approval. As this is a Treasury & Exchequer business case, the recommendation of the PAO is required. For requests over £100,000, the Minister of Treasury & Resources will provide the One Government Political Oversight Group (OneGovPOG) with a schedule of all funding decisions she is minded to make before making a final decision, seeking that Group’s comments. If the Minister is minded to approve a funding allocation, the draft Ministerial Decision will be circulated to the Council of Ministers five working days before a Ministerial Decision is signed and published. The Investment Appraisal Board has recommended this request for approval and further to reviews the PAO recommends this allocation to the Minister for approval. OneGovPOG and the Council of Ministers have also been consulted.
Resource Implications: The General Reserve head of expenditure to decrease by up to £544,000 and the T&E head of expenditure to increase by the identical amount in 2020. This decision does not change the total amount of expenditure approved by the States in the Government Plan 2020-2023.
Action required: The Head of Financial Governance to advise the Specialist – Business Cases and the Head of Finance Business Partnering of T&E that this decision is approved.
Signature:		Position: Deputy S J Pinel Minister for Treasury and Resources
Date Signed:		Date of Decision:

Treasury and Exchequer: Allocation of Reserve Funding for the Zero-Based Budgeting project

Treasury and Exchequer

Ministerial Decision Report

Allocation of Reserve Funding to T&E for the zero-based budgeting project

Purpose of Report

To enable the Minister to approve the allocation of up to £544,000 in 2020 from the General Reserve – Restructuring to the Treasury and Exchequer (T&E) to provide funding for the Zero-Based Budgeting (ZBB) project as part of the Finance Transformation.

Background

Funding was made available in the Government Plan 2020-2023 in the General Reserve head of expenditure to be used to meet unforeseen pressures, or to provide advance funding for urgent expenditure in the public interest.

Due to timing of receipt of the Business Case, this project has gone through the previous Procedures for Allocations from the Reserve (published as R.23/2020), and as such the Investment Appraisal Board (IAB) reviews funding requests. This supports the development of best practice in project development and evaluation, enabling better prioritisation and value for money across the Government.

All funding requests require a business case that has been designed using principles of HM Treasury’s Five Case Model to ensure that a consistent approach can be applied across the Government.

The IAB is not a decision-making body. It considers evidence to support a funding request and makes a recommendation for funding to the States Treasurer before the Minister for Treasury and Resources makes a funding decision and allocation. Recommendations for funding are also circulated to the Principal Accountable Officer, One Gov Political Oversight Group (OneGovPOG), and the Council of Ministers in advance of approval by the Minister for Treasury and Resources.

Based upon the evaluation of a business case and responses to further questions, the IAB recommended funding of up to £544,000 to the T&E department to fund this phase of the ZBB project to 31st December 2020.

Funding will be used to deliver:

- A best practice approach to ZBB developed by EY and refined through engagement with finance business partners

- Training of 2/3 ZBB champions and 95% of Tier 3 and 4 finance business partners to ensure a transfer of knowledge and skills

- Creation of a rolling programme of Zero-based budgeting to cover all departments, to inform the 2022-25 Government Plan.

The project is anticipated to cost £732,000 in total in 2020 with costs of £544,000 requested from the General Reserve – Restructuring. The remaining costs include £98,000 for mobilisation to be funded from the Finance Transformation Programme, and £90,000 for internal backfill requirements to be met from the Treasury and Exchequer base budget. The project is entirely revenue in nature with no capital requirements. There are no on-going cost requirements after 2020.

The ZBB project began earlier in the year in Treasury & Exchequer but due to COVID-19 was temporarily put on hold. The project has now restarted and is currently running in Health and Community Services. ZBB is an important tool in understanding budgets, including identifying opportunities for efficiencies, and whilst finding capacity for delivery under the current climate will be challenging, the process will be valuable and is anticipated to be rolled out further across the Government. This phase of the project is intended to be delivered by 31 December 2020 and although it is not expected to give rise to cashable savings it is intended to enable service improvements and efficiencies which will feed into the Government Plan 2021-2024.

Recommendation

The Minister is recommended to approve the allocation of up to £544,000 in 2020 from the General Reserve – Restructuring to the Treasury and Exchequer (T&E) to provide funding for the Zero-Based Budgeting project as part of the Finance Transformation.

Reasons for Decision

Article 15(3) of the Public Finances (Jersey) Law 2019 states that the approval by the States of a government plan authorises the Minister to direct how an approved appropriation for a reserve head of expenditure in the plan may be spent (including on another head of expenditure) in the first financial year covered by the plan.

Due to timing of receipt of the Business Case, this project has gone through the previous Procedures on Allocations from the Reserve (published as R.23/2020) which sets the requirement for all allocations from reserves to be considered by the Investment Appraisal Board, Principal Accountable Officer and States Treasurer prior to submission to the Minister for approval. As this is a Treasury & Exchequer business case, the recommendation of the PAO is required.

For requests over £100,000, the Minister of Treasury & Resources will provide the One Government Political Oversight Group (OneGovPOG) with a schedule of all funding decisions she is minded to make before making a final decision, seeking that Group’s comments.

If the Minister is minded to approve a funding allocation, the draft Ministerial Decision will be circulated to the Council of Ministers five working days before a Ministerial Decision is signed and published.

The Investment Appraisal Board has recommended this request for approval and further to reviews the PAO recommends this allocation to the Minister for approval.

OneGovPOG and the Council of Ministers have also been consulted.

5. Resource Implications

The General Reserve head of expenditure to decrease by up to £544,000 and the T&E head of expenditure to increase by the identical amount in 2020.

This decision does not change the total amount of expenditure approved by the States in the Government Plan 2020-2023.

Report author: Specialist – Business Cases	Document date : 20th July 2020
Quality Assurance / Review: Group Director, Strategic Finance/ Head of Financial Governance	File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2020-0095 - Reserve Funding to T&E for ZBB
MD sponsor: Treasurer of the States