Budget transfer from Department for Infrastructure: Revenue to Capital: Asbestos Waste Disposal

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A decision made 21 October 2016:

Decision Reference: MD-T-2016-0093
Decision Summary Title :	Budget transfer from revenue to capital to fund the construction of an asbestos cell at La Collette		Date of Decision Summary:	19 October 2016
Decision Summary Author:	Finance Manager		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 revenue to capital to fund the construction of an asbestos cell at La Collette		Date of Written Report:	19 October 2016
Written Report Author:	Finance Manager		Written Report : Public or Exempt?	Public
Subject: The transfer of £750,000 budget in 2016 from the Department for Infrastructure (“DfI”) revenue head of expenditure to the Asbestos Waste Disposal capital head of expenditure (Q00MD11091).
Decision(s): The Minister approved the transfer of budgets in 2016 from the DFI revenue head of expenditure to the Asbestos Waste Disposal capital head of expenditure (Q00MD11091).
Reason(s) for Decision: Under International Financial Reporting Standards (IFRS) expenditure that meets the definition of capital expenditure must be capitalised. This budget transfer is the movement in budget between revenue and capital required to align the budgeting treatment of expenditure with the accounting treatment, in order to comply with IFRS. Article 18 of the Public Finances (Jersey) Law 2005 (the Law) and Finance Direction No.3.6 ‘Variations to Heads of Expenditure’ (the FD) set out the procedures for transfers between heads of expenditure. Paragraph 5.1 of the FD and Article 18(2) (c) of the Law require departments wanting to transfer funds between heads of expenditure to obtain the approval of the Minister responsible for their administration. Article 18(1) (c) of the Law requires the approval of the Minister for Treasury and Resources for any budget transfers between heads of expenditure. Paragraph 5.2 of the FD delegates non-contentious transfers between heads of expenditure up to £1,000,000 to the Treasurer of the States. Paragraph 5.3 of the FD states that, in all other instances, the approval of the Minister for Treasury and Resources must be obtained. This transfer puts in place the funding required for the construction of a new asbestos cell at La Collette.
Resource Implications: The DfI revenue head of expenditure will decrease in 2016 by £750,000, and the Asbestos Waste Disposal capital head of expenditure (Q00MD11091) will increase by £750,000.
Action required: The Finance Director to request the approval of the Treasurer of the States for this budget transfer.
Signature:		Position: Minister for Infrastructure
Date Signed:		Date of Decision (If different from Date Signed):

Budget transfer from Department for Infrastructure: Revenue to Capital: Asbestos Waste Disposal

DEPARTMENT FOR INFRASTRUCTURE

BUDGET TRANSFER FROM REVENUE TO CAPITAL TO FUND THE

CONSTRUCTION OF AN ASBESTOS CELL AT LA COLLETTE

Purpose of Report

To enable the Minister to approve the internal budget transfer totalling £750,000 in 2016 from the Department for Infrastructure (“DFI”) revenue head of expenditure to the Asbestos Waste Disposal capital head of expenditure (Q00MD11091).

Background

On 12th April 2016 the Minister for Treasury and Resources approved the carryforward of £1,500,000 from the department’s 2015 underspend, to fund the safe disposal of legacy asbestos. £750,000 of this has been identified to fund the additional Asbestos cell construction that will be required to contain both the legacy waste and any new asbestos. The original asbestos cell (Cell 30) is filling faster than anticipated and it is anticipated that it will become full during the transfer of legacy asbestos.

This increased filling rate is due to the following reasons:-

Each time asbestos is deposited in the cell it must be covered by inert graded top cover material. This top cover takes up void space and reduces the capacity of the cell.

In October 2015 the Health and Safety Inspectorate issued an update to Approved Code of Practice (ACoP) 8, Management of Exposure to Asbestos in Workplace Buildings and Structures. This ACoP in practise states that all asbestos must be double bagged. This has resulted in an increased fill rate of Cell 30 as it is presently the only licenced reception site for bagged asbestos.

The asbestos legacy transfer project is due to start in the latter part of 2016 and it is clear that that Cell 30 will not have the capacity to hold all of the legacy asbestos and the new asbestos arising.

In order to allow the legacy contract to continue and progress unimpeded a new cell adjacent to cell 30 needs to be constructed. This will enable the seamless transfer of the disposal of legacy asbestos and new asbestos arisings from cell 30 to a new cell once cell 30 is full. This new cell will also maximise the space available for future asbestos disposal.

Recommendation

That the Minister approves the transfer of £750,000 budget from the DFI revenue head of expenditure to the Asbestos Waste Disposal capital head of expenditure (Q00MD11091).

Reason for Decision

Under International Financial Reporting Standards (IFRS) expenditure that meets the definition of capital expenditure must be capitalised. This budget transfer is the movement in budget between revenue and capital required to align the budgeting treatment of expenditure with the accounting treatment, in order to comply with IFRS.

Article 18 of the Public Finances (Jersey) Law 2005 (the Law) and Finance Direction No.3.6 ‘Variations to Heads of Expenditure’ (the FD) set out the procedures for transfers between heads of expenditure. Paragraph 5.1 of the FD and Article 18(2) (c) of the Law require departments wanting to transfer funds between heads of expenditure to obtain the approval of the Minister responsible for their administration. Article 18(1) (c) of the Law requires the approval of the Minister for Treasury and Resources for any budget transfers between heads of expenditure. Paragraph 5.2 of the FD delegates non-contentious transfers between heads of expenditure up to £1,000,000 to the Treasurer of the States. Paragraph 5.3 of the FD states that, in all other instances, the approval of the Minister for Treasury and Resources must be obtained.

This transfer puts in place the funding required for the construction of a new asbestos cell at La Collette.

Resource Implications

The DFI revenue head of expenditure will decrease in 2016 by £750,000, and the Asbestos Waste Disposal capital head of expenditure (Q00MD11091) will increase by £750,000.

6. Action Required

The Finance Director to request the approval of the Treasurer of the States for this budget transfer.

Written by:	Finance Manager
Approved by:	Director of Finance