Treasury and Resources
Report
2009 year end carry forwards
1. Purpose of Report
To consider the carry forward of unspent expenditure approvals from 2009 to 2010.
2. Background
The 2009 year end out-turn across all departments is an underspend of £7.6m. The organisation as a whole faces a number of significant financial pressures in 2010, including the resourcing implications of the Comprehensive Spending Review and other essential central change programme initiatives. Therefore, proposed departmental carry forwards have been limited as far as possible to allow for the creation of a corporate contingency.
3. Proposed Carry Forwards
The year end underspend is summarised by department in Appendix A. The majority of the underspend was driven by: unspent fiscal stimulus funding (i.e. part complete initiatives), unspent funds traditionally treated as capital, and planned underspends relating to projects to be progressed in 2010 (e.g. review of un-elected members). It is proposed that funds totaling £5.8m relating to such issues are approved for carry forward. This clearly results in a number of departments receiving less in carry forward approval than their 2009 underspend and a number of departmental 2010 cost pressures needing to be funded from existing 2010 cash limits. The impact of the 2010 pay award will be absorbed in 2010 by deferring expenditure to 2011 if necessary and offsetting this against the favourable pay award variance vs 2011 Business Plan assumptions.
It is proposed that the remaining balance of the total 2009 underspend is carried forward to create a corporate contingency fund.
This is summarised below.
| £ 000 |
| |
Year End Underspend against approved budget | 7,605 |
| |
Proposed Carry Forward Approvals | |
Departmental Carry Forwards | 5,812 |
Carry Forward to create a corporate contingency fund | 1,793 |
Total carry forward for approval | 7,605 |
4. Corporate Contingency
In addition to £1.8m of funds carried forward from 2009, further funding of £600,000 has been identified as having the potential to be transferred to the corporate contingency fund. This comprises some unspent capital budgets (Les Chênes (ESC) £14,000 and Seaton Place (ESC) £18,000, plus an unneeded capital risk reserve of £131,000) and an existing contingency of £370,000 originally allocated to Education, Sport and Culture in 2007 but which is unlikely to be needed for the intended purposes and is now earmarked for Jersey Heritage Trust funding. There is also an unallocated balance on the contingency fund (held in T&R) of £67,000.
Together this funding would create a corporate contingency of £2.4m. It is proposed that this be used to fund the Integrated Business Improvement Programme (BIP) and contribute towards the funding of the Jersey Heritage Trust support. Combined with the proposed carry forward this would provide ESC with funding equivalent to their year end out-turn plus £800k JHT funding in total. This proposal is summarised below.
| £ 000 |
Carry Forward to create a corporate contingency fund | 1,793 |
Other potential funding | 600 |
Total Corporate Contingency Funding | 2,393 |
Proposed Allocations | |
Contribution towards funding of IBIP | 1,577 |
Contribution towards funding of JHT support | 370 |
Total Allocations | 1,947 |
| |
Total unallocated | 446 |
5. Recommendation
It is recommended that the Minister approves the following:
· Departmental carry forwards of £5.8m, as detailed in Appendix B
· Carry forward of £1.8m to create a corporate contingency
· Transfers of unspent capital funds (Les Chênes (ESC) £14,000 and Seaton Place (ESC) £18,000 plus an unneeded capital risk reserve of £131,000) totaling £0.163m to a corporate contingency
· Transfers from the corporate contingency to fund the IBIP (£1.577m) and JHT support (£0.37m)