Budget Transfer: Central Contingencies to Social Security Department (2016 Voluntary Release Scheme Costs)

Information about the publication of Ministerial Decisions

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.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

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
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

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While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.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 15 July 2016:

Decision reference: MD-S-2016-0047
Decision Summary Title:	Transfer of funding between Social Security Department and Central Contingencies to recognise the savings and costs associated with the Voluntary Release Scheme in 2016.		Date of Decision Summary:	13 July 2016
Decision Summary Author:	Finance Manager Social Security		Decision Summary:	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Transfer of funding between Social Security Department and Central Contingencies to recognise the savings and costs associated with the Voluntary Release Scheme in 2016.		Date of Written Report:	13 July 2016
Written Report	Finance Manager Social Security		Written Report	Public
Subject: Central Contingency funding allocation to the Social Security Department to fund the Voluntary Release Scheme in 2016.
Decision(s): The Minister agreed the amount and requested that the Minister for Treasury and Resources approve a non-recurring budget transfer of £28,684.27 in 2016 from Central Contingency – Redundancy Provision to the Social Security Department revenue head of expenditure to fund the Voluntary Release Scheme.
Reason(s) for Decision: Article 17(2) of the Public Finances (Jersey) Law 2005 states that the Minister for Treasury and Resources is authorised to approve the transfer from contingency expenditure to heads of expenditure of amounts not exceeding, in total, the amount available for contingency expenditure in a financial year. On 16 and 17 April 2015, the Council of Ministers agreed to the request to approve non-recurring funding in 2015 totalling £5,100,000 from the Central Contingency – Redundancy Provision to various departments for the funding of the Voluntary Release Scheme. MD-S-2016-0005 approved funding of £290,704.24 to fund the Voluntary Release Scheme in 2015 in line with the allocation of funding approved by the States Assembly in P.72/2015 Medium Term Financial Plan 2016 – 2019 (as amended). This Decision funds the next tranche of VR Applications to 30th June 2016.
Resource Implications: Social Security Department revenue head of expenditure to increase by a total of £28,684.27 in 2016 and the Central Contingency – Redundancy Provision funding to decrease by an identical amount. This decision does not change the total amount of expenditure approved by the States for the period of the current MTFP 2016 to 2019.
Action required: Business Manager to advise Finance Manager that this decision has been approved.
Signature:		Position: Minister
Date Signed:		Date of Decision:

Budget Transfer: Central Contingencies to Social Security Department (2016 Voluntary Release Scheme Costs)

Social Security Department

Ministerial Decision Report

Transfer of funding between Social Security Department and Central Contingencies to recognise the costs and savings associated with the Voluntary Release Scheme in 2016

Purpose of Report

To enable the Minister to agree the amount and to request that the Minister for Treasury and Resources approves a non-recurring budget transfer of £28,684.27 in 2016 from Central Contingencies – Redundancy Provision to the Social Security Department revenue head of expenditure. This is to recognise the savings and costs associated with the Voluntary Release Scheme so far and identify the full year effect of these savings are included in the MTFP Addition for 2017 – 2019.

Background

The Voluntary Release (VR) Scheme provides a mechanism for employees who wish to volunteer to leave the organisation through redundancy or early retirement to receive a redundancy payment or immediate pension. The scheme has been made available to all employees in 2015. The scheme remains open for the foreseeable future in order to support organisational change initiatives.

The Council of Ministers approved the allocation of £2 million from Central Contingencies to create a Redundancy Provision in 2015 to fund the first tranche of the scheme. The States Assembly approved a further £20 million to be added to the Redundancy Provision across 2015 and 2016 to be funded by transfers from the Strategic Reserve Fund with £4 million to be transferred in 2015 and £16 million in 2016 [1]. Following the completion of the 2015 VR scheme the remaining money was drawn down for funding of new applications in 2016. In total this left over £17 million available for VR funding from January 2016.

International Financial Reporting Standards (IFRS) interpreted for the States of Jersey in the Jersey Financial Reporting Manual (JFReM) require termination benefits to be recognised as an expense at the point at which the entity can no longer withdraw the offer of those benefits. Accordingly, the full cost of all VRs must be recognised at the point a binding contract has been signed with the employee.

Two applications were approved from the Social Security Department during the period 1 January to 30 June 2016 and these employees have signed up to leave the organisation in 2016.

The total cost of these approved VR packages for the Social Security Department is £39,795.59, of which £28,684.27 is to be centrally funded. The total recurring saving achieved as a result of releasing these employees will be £36,072.20 and 0.5 FTE.

Recommendation

The Minister is recommended to agree the amount and request that the Minister for Treasury and Resources approves a non-recurring budget transfer of £28,684.27 in 2016 from Central Contingency – Redundancy Provision to the Social Security Department revenue head of expenditure to fund the Voluntary Release Scheme.

Reason for Decision

Article 17(2) of the Public Finances (Jersey) Law 2005 states that the Minister for Treasury and Resources is authorised to approve the transfer from contingency expenditure to heads of expenditure of amounts not exceeding, in total, the amount available for contingency expenditure in a financial year.

On 16 and 17 April 2015, the Council of Ministers agreed to the request to approve non-recurring funding in 2015 totalling £5,100,000 from the Central Contingency – Redundancy Provision to various departments for the funding of the Voluntary Release Scheme.

MD-S-2016-0005 approved funding of £290,704.24 to fund the Voluntary Release Scheme in 2015 in line with the allocation of funding approved by the States Assembly in P.72/2015 Medium Term Financial Plan 2016 – 2019 (as amended).

This Decision funds the next tranche of VR Applications to 30th June 2016.

Resource Implications

Social Security Department revenue head of expenditure to increase by a total of £28,684.27 in 2016 and the Central Contingency – Redundancy Provision funding to decrease by an identical amount. This decision does not change the total amount of expenditure approved by the States for the period of the current MTFP 2016 to 2019.

Report author : Finance Manager Social Security	Document date: 13th July 2016
Quality Assurance / Review : Finance Director Social Security	File name and path: "L:\3 Political and Executive\B Soc Sec Ministers\B304 Ministerial Decisions\2016\0047 - SSD Contingency Funding for VR 2016\WR - SSD Contingency Allocation VR Scheme 2016.docx"
MD sponsor : Finance Director Social Security

[1] P.72/2015 Medium Term Financial Plan 2016 – 2019 (as adopted as amended), P.75/2015 Independent Jersey Care Inquiry: amendment to Medium Term Financial Plan 2013 – 2015, P.76/2015 Strategic Reserve Fund: funding for Independent Jersey Care Inquiry and transfers from and to the Consolidated Fund.