Covid-19 Related Emergency Support Scheme (CRESS)

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A decision made on 3 April 2020

Decision Reference: MD-S-2020-20
Decision Summary Title :	Covid-19 Related Emergency Support Scheme (CRESS)		Date of Decision Summary:	2 April 2020
Decision Summary Author:	Head of Policy		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	NA
Written Report Title :	Allocation of Reserve Funding to CLS in 2020 for emergency funding pressures due to the impact of COVID-19		Date of Written Report:	2 April 2020
Written Report Author:	Specialist – Business Cases		Written Report : Public or Exempt?	Public
Subject: Covid-19 Related Emergency Support Scheme (CRESS)
Decision(s): Further to MD-S-2020-19, in which the Minister for Social Security approved the Covid-19 Related Emergency Support Scheme (CRESS), the Minister approved the use of a transfer from General Reserves to provide the funding for CRESS .
Reason(s) for Decision: The Treasury and Resources Minister has made decision MD-TR-2020-0034, by which she has approved a non-recurring allocation from the General Reserve in 2020 of up to £710,000 to CLS to support the cost of CRESS. This funding supercedes the funding route previously identified.
Resource Implications: The cost of the scheme for 13 weeks is estimated at £710,000 based on 400 claimants. The funding will be provided by a non-recurring allocation from the General Reserve in 2020 of up to £710,000 to CLS. CRESS will be administered by CLS using existing resources.
Action required: Head of Finance to allocate funding transferred to CLS to support costs under Covid-19 Related Emergency Support Scheme (CRESS).
Signature:		Position: Minister for Social Security
Date Signed: 3 April 2020		Date of Decision (If different from Date Signed):

Covid-19 Related Emergency Support Scheme (CRESS)

Treasury and Exchequer

Ministerial Decision Report

ALLOCATION of Reserve Funding to CLS in 2020 for emergency funding pressures due to the impact of COVID-19

Purpose of Report

To enable the Minister to approve the allocation of up to £710,000 in 2020 from the General Reserve to Customer and Local Services (CLS) as detailed below, to cover the immediate costs associated with the effects of COVID-19 in 2020.

Background

Funding provisions were made in the Government Plan 2020-2023 in the General Reserve for funding needs that cannot be met from existing heads of expenditure in 2020.

CRESS (COVID19 Response Emergency Support Scheme) – up to £710,000

Given the significant disruption to normal business activities as a result of the COVID 19 restrictions, this project provides limited financial support to workers living in Jersey who experience a loss of employment income during this period and have not lived here long enough to qualify for income support. Two levels of support are included – a higher level of support for workers resident in Jersey since at least October 2019, and a lower level for more recent arrivals.

The support is strictly time limited and will run from 1 April 2020 to 30 June 2020. This is a non-statutory scheme.

This scheme is being launched in parallel with announcement of the Payroll Co-Funding Scheme (PCFS) Phase 2 which follows Phase 1 of that scheme and is designed to maintain workers in their existing employment. The PCFS assumptions suggest that up to 400 registered workers may be affected by employment disruption and be excluded from the PCFS.

Administration will be undertaken by existing CLS staff. No extra staff or IT resources are required to operate this scheme.

It may be necessary to renew the scheme after 30 June 2020. A separate business case will be prepared in that event.

Assuming that 400 claims will be approved in total, an initial estimate for the benefit cost of the scheme over the 13 week period is £0.71 million.

It is acknowledged that this is a modelling assumption both in terms of numbers of claimants and their family circumstances and that the costs may be more than the initial estimate. However this risk is somewhat mitigated by any increase in numbers of claimants being balanced by the likelihood of lower claimants to the PCFS scheme and a resultant reduction in estimated spend from that scheme, once established.

Recommendation

The Minister is recommended to approve the allocation of up to £710,000 from the General Reserve to the CLS head of expenditure in 2020 to cover the costs associated with the effects of COVID-19.

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.

The current Contingency Allocation Policy (published as R.23/2020) sets the requirement for all allocations from contingency to be considered by the Investment Appraisal Board, Principal Accountable Officer and States Treasurer prior to submission to the Minister for approval, however it also states that ‘Where a request is made for £100,000 or less, or where the Minister is satisfied that there is an urgent need to provide funding in the public interest, an allocation may be made by the Minister on the recommendation of the Treasurer.’ A draft business case has been received and will be fully reviewed by the Investment Appraisal Team.

The Treasurer recommends this allocation to the Minister for approval on the basis of:

initial review of a draft business case;
consideration of the proposal by the Council of Ministers; and
the imperative and urgent need to support the economy and individuals during the Covid-19 pandemic.

5. Resource Implications

The CLS head of expenditure to increase by up to £710,000 in 2020 and the General Reserve to decrease by the same amount. 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 : 2nd April 2020
Quality Assurance / Review: Group Director, Strategic Finance	File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2020-34 - Reserve funding for CRESS
MD sponsor : Treasurer of the States