Co-Funded Payroll Scheme Phase 2: Extension

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A decision made on 1 June 2020

Decision Reference: MD-TR-2020-0063
Decision Summary Title:	Extension of Co-Funded Payroll Scheme Phase 2		Date of Decision Summary:	1st 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:	Extension of Co-Funded Payroll Scheme Phase 2		Date of Written Report:	1st June 2020
Written Report Author:	Head of Investment Appraisal		Written Report : Public or Exempt?	Public
Subject: Approval of extension to Co-Funded Payroll Scheme Phase 2
Decision(s): The Minister approved the extension of the Co-Funded Payroll Scheme Phase 2 until 31 August 2020.
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.’ The extension of the scheme was proposed to the Council of Ministers and approved on 1 June 2020. Following approval of the extension by the Council of Ministers, the Minister is satisfied that there is an urgent need to provide funding in the public interest. A business case has been developed and appraised by the Investment Appraisal Team. On the basis of the above, the Treasurer recommends to the Minister, the extension of the Scheme for up to two months, subject to monthly review of the Scheme.
Resource Implications: The extension of the Scheme is forecast to be met within the initial allocation of £138m made in MD-TR-2020-0049 so there are no additional resource implications arising from this decision.
Action required: Head of Financial Governance to ensure this decision is published on www.gov.je and notify the Head of Finance Business Partnering – CLS.
Signature:		Position: Deputy S J Pinel, Minister for Treasury and Resources
Date Signed: 1st June 2020		Date of Decision: 1st June 2020

Co-Funded Payroll Scheme Phase 2: Extension

Treasury and Exchequer

Ministerial Decision Report

Extension of Co-Funded Payroll Scheme Phase 2

Purpose of Report

To enable the Minister to consider the recommendation to approve the extension of the Co-Funded Payroll Scheme Phase 2 until 31 August 2020.

Background

On 24 April, the Minister approved MD-TR-2020-0049, which established the Co-Funded Payroll Scheme Phase 2 and allocated £138m from the General Reserve to Customer and Local Services to deliver the Scheme.

The key aims of the scheme are as follows:

Support Islanders’ livelihoods, by ensuring employment and allowing workers continue to benefit from a reasonable level of income to avoid hardship during the crisis and preserve demand to support an economic recovery once social distancing and Stay at Home restrictions are lifted.
To maintain, as far as possible, existing employment relationships so that businesses are able to retain trained and experienced staff. As far as possible, employees should be kept in employment that is as similar as practicable to the situation they were in pre-COVID-19.
Along with other economic support measures being taken by the Government, to allow businesses and self-employed individuals a greater chance to remain solvent during COVID-19. This should also allow for businesses to resume normal business activity where appropriate as soon as possible post COVID-19, once restrictions are eased.
Ultimately the scheme aims to accelerate the recovery of the economy post COVID-19 by ensuring that businesses and employment income can restart quickly once restrictions are eased.
To support Charities and their work in the community during COVID-19, and their paid employees.

The original business case and guidance for the Scheme indicated that the £138m funding allocation would be used to support costs from 1 April to 30 June, but that there would be a likely need to extend the Scheme if public health measures put in place to help save lives and manage the Covid-19 outbreak remained in place beyond June. An extension to the Scheme is judged to be necessary as businesses and livelihoods will likely continue to be impacted even as the Island progresses through the Safe Exit Framework.

Due to the conservative assumptions applied in setting the initial budget for the original three month scheme, it is currently forecast that this two month extension will be funded from the £138m already allocated.

Whilst the extension will be until 31 August 2020, the Government will continue to keep the Scheme under close review and, no later than 31 July, intends to make a decision about how the Scheme will be phased out after August.

Governance arrangements for the extended Scheme will mirror those put in place for April, May and June. It is currently envisaged that the Scheme guidance, which sets out the conditions of the Scheme, will remain substantially the same as that implemented for May, though this will be confirmed during June.

The Scheme was proposed to the Council of Ministers and approved on 1 June 2020.

Recommendation

The Minister is recommended to approve the extension of the Co-Funded Payroll Scheme Phase 2 until 31 August 2020.

Reason 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.’

The extension of the scheme was proposed to the Council of Ministers and approved on 1 June 2020.

Following approval of the extension by the Council of Ministers, the Minister is satisfied that there is an urgent need to provide funding in the public interest.

A business case has been developed and appraised by the Investment Appraisal Team. On the basis of the above, the Treasurer recommends to the Minister, the extension of the Scheme for up to two months, subject to monthly review of the scheme.

Resource Implications

The extension of the Scheme is forecast to be met within the initial allocation of £138m made in MD-TR-2020-0049 so there are no additional resource implications arising from this decision.

Report author : Head of Investment Appraisal	Document date : 01 June 2020
Quality Assurance / Review : Head of Financial Governance	File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2020-0063 - Reserve funding for CFPS phase 2 £138m
MD sponsor : Treasurer of the States