Fisheries Support Scheme: Allocation of Reserve Funding

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A decision made on 5 June 2020

Decision reference: MD-TR-2020-0069
Decision Summary Title:	Allocation of Reserve Funding to OCE for the Fisheries Support Scheme		Date of Decision Summary:	3rd June 2020
Decision Summary Author:	Head of Investment Appraisal		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 OCE for the Fisheries Support Scheme		Date of Written Report:	3rd June 2020
Written Report Author:	Head of Investment Appraisal		Written Report : Public or Exempt?	Public
Subject: The allocation of up to £233,400 in 2020 from the General Reserve to OCE (Office of the Chief Executive) for the Fisheries Support Scheme
Decision(s): The Minister approved the allocation of up to £233,400 in 2020 from the General Reserve to OCE (Office of the Chief Executive) for the Fisheries Support Scheme in June and July subject to the points raised by the Treasurer in his recommendation.
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. 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 business case has been received and reviewed by the Investment Appraisal Team. Further to this review, the Treasurer recommends this allocation to the Minister for approval on the basis of an allocation of £233,400 subject to: - Funds being distributed monthly - Appropriate governance and scheme conditions being implemented by OCE including a mechanism for targeting support such as a detriment declaration or other assessment of financial need - A review being conducted by OCE before the end of July to determine whether any further support is required beyond July and what form it should take. The Minister for Economic Development, Tourism, Sport and Culture and the Minister for the Environment have approved the Scheme.
Resource Implications: The General Reserve head of expenditure to decrease by up to £233,400 and the OCE head of expenditure to increase by the identical amount in 2020.
Action required: The Head of Financial Governance to advise the Head of Investment Appraisal and the Head of Finance Business Partnering of OCE that this decision is approved.
Signature:		Position: Deputy S J Pinel Minister for Treasury and Resources
Date Signed:		Date of Decision:

Fisheries Support Scheme: Allocation of Reserve Funding

Treasury and Exchequer

Ministerial Decision Report

Allocation of Reserve Funding to OCE in 2020 for the fisheries support scheme

Purpose of Report

To enable the Minister to approve the allocation of up to £233,400 in 2020 from the General Reserve to the Office of the Chief Executive (OCE) to establish the Fisheries Support Scheme.

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. The Minister has increased the amount available in the General Reserve by transferring £65.3 million for the Treasury and Exchequer head of expenditure (MD-TR-2020-0035); approving an additional £99.99 million of expenditure (MD-TR-2020-0047) and approving the transfer of £28 million from the Stabilisation Fund, with associated authority to spend from the General Reserve (MD-TR-2020-0055).

The Island’s fishing fleet has been significantly impacted by the economic consequences of Covid-19. The closure of hotels and restaurants in Jersey and in European markets required to manage the virus has substantially reduced demand for fish. This collapse in demand brought about by Covid-19 is compounded by poor winter weather and Brexit uncertainty that had already affected fishing businesses prior to the pandemic and reduced the industry’s ability to manage further disruption. As a consequence, despite the fact that fishing can continue under the public health guidelines, the survival of the Island’s fishing fleet is considered to be at risk.

In recognition of the pressures facing the fishing industry, many other European jurisdictions including the French authorities, UK Government and devolved administrations have put in place tailored support for fisheries in addition to other Covid-19 economic support measures that are available.

The Fisheries Support Scheme will seek to meet the needs of the local fishing fleet by providing grants linked to the size of a fishing vessel. The aims of the Scheme are to:

- Ensure the survival of Jersey’s fishing fleet

- Provide a level playing field with vessels receiving support in other jurisdictions

The Scheme will run for an initial two months to allow detailed policy work to determine the longer-term requirements of the fishing industry to be completed. Following the outcome of that work, the scheme may be extended, replaced by an alternative solution or brought to a close.

Payments to an any one vessel will be capped at £10,000 permitting individual vessels to receive support in line with the table below:

Length	June	July	Total
0-5.9m	£600	£600	£1,200
6-7.9m	£800	£800	£1,600
8-9.9m	£2,100	£2,100	£4,200
10-11.9m	£4,200	£4,200	£8,400
12-14.9m	£7,800	£2,200	£10,000
15-23.9m	£10,000	£0	£10,000

This grant funding formula mirrors that applied in England by the UK Government and is in line with the EU Temporary Framework for State Aid.

Recommendation

The Minister is recommended to approve the allocation of up to £233,400 in 2020 from the General Reserve to OCE for the Fisheries Support Scheme.

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 business case has been received and reviewed by the Investment Appraisal Team.

Further to this review, the Treasurer recommends this allocation to the Minister for approval on the basis of an allocation of £233,400 subject to:

- Funds being distributed monthly

- Appropriate governance and scheme conditions being implemented by OCE including a mechanism for targeting support such as a detriment declaration or other assessment of financial need

- A review being conducted by OCE before the end of July to determine whether any further support is required beyond July and what form it should take.

The Minister for Economic Development, Tourism, Sport and Culture and the Minister for the Environment have approved the Scheme.

5. Resource Implications

The General Reserve head of expenditure to decrease by £233,400 and the OCE head of expenditure to increase by an identical amount in 2020.

Report author : Head of Investment Appraisal	Document date : 3 June 2020
Quality Assurance / Review: Group Director, Strategic Finance	File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2020-0069 - Fisheries Support Scheme\WR Reserve funding for fisheries support scheme.doc
MD sponsor : Treasurer of the States