2017 year end Carry forward report
28th March 2018
Agenda Item B3
CARRY FORWARD REPORT
1. Purpose of the Report
The purpose of this report is to provide a summary of, and seek the agreement to, the proposed use of unspent budget from 2017 by department and a proposal to transfer unspent contingency sums as at the end of 2017 into 2018.
2. Overview
The original Budget allocated to departments for 2017 was just over £700 million. Throughout the year departments have received further allocations, including £22 million of carry forward from 2016, £7 million for pay awards and more than £7 million from other contingency allocations such as Restructuring and Economic Productivity Growth Drawdown Provision. £7 million was also transferred to capital.
The final approved budget amounted to £730 million, £26 million of which remained unspent at the end of the 2017, including departmental income in excess of budget.
Departments were asked to provide an explanation of underspends in order to understand our outturn position. The larger variances come from, £5 million from excess income, £7 million from reduced benefit payments, £6 million from reduced staff costs and £9 million from unspent supplies and services budgets. This was then offset by premises and maintenance costs being £5 million more than budgeted.
As a result of information provided by departments in relation to commitments made and potential 2018 funding pressures, the following carry forwards of funds are proposed:
3. Carry Forwards to departments - £12,205,016
Chief Minister’s - £1,864,596
Children's Service IT System - £672,000
Business change implementation enabled by new Children's Service system (Mosaic). Procurement and mobilisation commenced in 2016, and implementation began Q2 2017.This is expected to be completed by Q3 2018.
NB. Accountability for the Children's Service has now transferred to the Chief Executive's Office (CMD) from Health and Social Services Department (HSSD). This budget was part of HSSD underspend but will need to be issued directly to CMD.
Transition Team - £535,000
The appointment of the Transition team was approved by the States Employment Board in October 2017. Costs in 2017 were met from existing cash limits and the intention was always to fund 2018 costs from unspent budgets in 2017. This funding allocation for 2018 supports that intent.
Digital Jersey Grant - £412,638
Digital Jersey Grant for 2018. This is proposed to be funded by windfall income of £412,638 from Ofcom monies in 2017 for which the Minister for Treasury and Resources in MD-TR-2017-0151 approved this income to be retained and used for this purpose.
It is recommended that the funds are approved in principle, subject to the production of a business case to be approved by the Treasurer.
Changeover of CEO - £105,000
The previous Chief Executive`s payments reflect fulfilment of the requirements of his employment contract and the voluntary redundancy payment due to him under that contract.
Data Protection - EPGDP - £97,275
This unspent money funded from the Economic Productivity and Growth Drawdown Provision is to prepare for new legislation. It is intended to bring the Office of the Information Commissioner up to speed and pay for the review of the fee model. It will also be used to develop policy and procedures.
Emerging Managers - £28,000
Emerging Managers course (CMI Level 2) was delayed by focussing resources on Workforce Modernisation but the pilot finally began in December 2017 and will continue for nine months. This has been committed to with Highlands.
Middle Management Programmes - £14,683
This is the balance required to complete the current programme which was delayed due to focus on Workforce Modernisation.
Jersey Overseas Aid - £39,972
Funding is requested to be Carried Forward to fund approved Grant funded projects.
External Relations - £233,954
Given the importance of the work undertaken by External Relations, arising principally from Brexit and the relatively small budget of the department, it is important that sufficient funds are available.
Jersey London Office - £127,000
The Jersey London Office was set up in 2014 and an annual grant is required. There is a shortfall in 2018 of £127,000 to cover permanent staff salaries, rent and other costs.
Restructure of International Agreements - £86,954
The Head of International Agreements was transferred from Financial Services to the newly formed External Relations however the corresponding staff and non-stuff budgets were not transferred therefore there is a shortfall in External Relations. The department is partially funding this in 2018 but there is still a shortfall, which will also occur in 2019.
Channel Islands Brussels Office - £20,000
The Channel Islands Brussels Office was established in 2011 and there is a budget shortfall in relation to the currency risk estimated at £20,000 per annum.
Community and Constitutional Affairs - £192,709
Safeguarding Partnership Board - Multi Agency Development Plan - £85,074
Funding for 2 year Multi Agency Development Plan agreed as part of 2015 carry forward process in 2016 however implementation has been rescheduled. The project commenced in Q3 2016 and will be completed by Q4 2018.
States of Jersey Police - HMICFRS Inspection - £80,000
The Jersey Police Authority (JPA) has invited Her Majesty’s Inspectorate of Constabularies and Fire & Rescue Services (HMICFRS, formerly known as HMIC), to carry out an external inspection of the States of Jersey Police this Autumn. This decision is endorsed by the C&AG in her report issued 22nd March 2018 in respect of the Governance of the States of Jersey Police.
Mobile Data Project - £27,635
Digital transformation of the States of Jersey Police:
Re-engineering existing police processes and developing new technology and Apps to deliver straight-through-processing, significantly reducing both operating costs and the administrative burden on police officers.
Issuing officers with mobile devices to give them remote access to information and enabling them to spend more time in the community. This enhances services to the public, officer visibility and safety, as well also delivering modest efficiencies. The total project cost is £1.45 million and it commenced in 2016 but some slippage has occurred and £27,635 is the unspent balance of funds drawn down in 2017.
Economic Development, Tourism, Sport & Culture - £181,000
Sports Travel Grants Funding - £125,000
To provide subsidy to travel costs for Clubs and Associations who meet the relevant grant criteria and have teams travelling off island to compete and gain greater international experience. Historically until 2014, grant funding of £125,000 was made available to the Sports Advisory Council for them to support Islanders competing off-Island. This budget was removed as part of the reduction in growth funding from £750,000 to £450,000 in 2017, and Council has previously agreed to replace the funding through carry forwards through the period of the Medium Term Financial Plan.
Governance support - £56,000
As a positive response to recent Internal and External Audits, which identified significant weaknesses in governance, control and assurance frameworks, the Department has taken on an additional fixed term support.
Education - £1,278,085
Schools and Colleges - Delegated Financial Management - £520,000
Historically schools and colleges have been able to carry forward up to 3% of budgets under the delegated financial management arrangement to manage the differential between the academic and financial year. The carry forward allows schools and colleges to react to demographic changes, minimise fee increases, build funds for improvement works, maintenance and one off minor capital which is generally undertaken during the school Summer holidays.
A few examples of proposed schemes are St John - replacement of furniture and develop a shady sun shelter and develop forest school, Plat Douet - purchase new Maths scheme, Trinity - access to engaging outdoor learning environment and playhouse for the new Nursery, Mont à L’Abbé – fund a pupil with intensive needs and requires 2:1 care which will avoid the pupil being off island at a greater cost, Hautlieu - changes in ‘A’ level subjects and new specifications and text books published, 15 schools’ minor capital to include carpeting, flooring and decoration.
It is recommended to approve this allocation in principle subject to consideration and approval of individual business cases by the Treasurer.
Schools and Colleges - Jersey Pupil Premium - £495,707
Pupil premium programme trialled in 2016 in selected primary and secondary schools and was rolled out across the Island but not until September 2017. The uptake was higher than expected so the carry forward will partially be used to maintain the rates as per the model even though the pupil numbers are higher, and also to provide intensive ‘catch ups’ for pupils due to the delay in implementation.
Nursery – St Lukes - £100,000
A joint project with Jersey Property Holdings (JPH) to make essential building changes to St Lukes Primary School, to include a Nursery. Phased programme started in 2017 and depending on planning, £100,000 will be spent in 2018 and the balance of the total project costing of £200,000 from within JPH budget will be completed in 2019. The carry forward will fund essential refurbishment, furniture and equipment as a result of the reconfiguration of the classrooms.
Newly Qualified Teachers (NQT) starting pay - £80,000
Carry forward will bridge the gap in timing of NQT savings which will reduce NQT pay scales to mid UK rates. Savings of £525,000 by 2019 have been targeted from NQT salaries and negotiations with the unions are ongoing.
Modern Language Review - £61,901
To continue the teachers 1 year review into modern language teaching including the feasibility of creating a bi-lingual school in the Island, as requested and agreed by CoM.
E-Rostering contribution to States Workforce Modernisation project - £20,477
Carry forward will cover the department’s contribution to the States wide e-Rostering project.
Department of the Environment - £673,727
Climate Risk Assessment Work - £450,000
The funding will be used to carry out climate risk assessments of the most vulnerable areas to coastal and pluvial flooding and to develop shoreline management plans for these areas of coastline; identify at risk areas and prepare options for consideration in strategic planning and allocation of funds in MTFP3. Project will be managed by DoE and implemented by DfI through a tender process.
Tenders and appointment of consultants will be in Q1 with forecasted spend of £450,000.
Digitally Integrated Planning Process (DiPP) Development Control and Roll Out - £125,000
As part of the States Public Sector Reform and e-Gov projects, the Department of the Environment (DOE) secured funding from Public Sector Reform to deliver a completely digital (online) planning application service during 2017. This project is a States of Jersey pilot which if successful could be the chosen platform for a States-wide strategic digital solution.
Bringing the service online will reduce the manual inputting and paper based service delivery, enabling the team to continue with this service in the future.
Water Management Plan (WMP) - £57,427
The Water Plan was agreed by the States Assembly in December 2016. The funding is required to progress the preparatory work for the Water Plan that started in 2017:
i) Continued law drafting time and external consultancy in 2017 to implement the WMOs and the Code of Good Practise (water code).
ii) To update the Pesticides (Jersey) Law 1991 and the Code of Good Practise (pesticide code).
ii) Further monitoring requirements to monitor and underpin the Plan.
iii) Develop a code of practice for domestic sewage systems.
IBL Visual Weather software development and training - £35,000
A software contract expired in 2016 and a new IBL software contract had to be agreed. The department need to carry out this work to improve efficiently in future years, and to manage their systems better, to allow them to cope with the reduction of 1.6 FTE in 2016/2017. They are committed to this spend but were unable to do this during 2017 due to the office move of the Met Service.
Water quality monitoring in St Aubin’s Bay - £3,500
Targeted and accurate monitoring is vital to ensure the correct regulation and future States capital expenditure on the replacement Waste Water Treatment Works, to assess the impact in St Aubin’s Bay of the Water Plan. The first half of the work is complete and receipted. The second half of the work will be completed by 31 March 2018 and will be paid for by the carry forward bid.
Preparation of new draft ‘Water Code’ - £2,800
The Water Code is a Code of Practice which will provide guidance to land users on how to comply with the new regulations being introduced to underpin the Water Plan.
Planned delivery was for the majority to be finished in 2016. However, workload in respect of the Water Management Plan for the project manager has meant that the output received from the supplier had not been reviewed in time for year end 2017. The supplier has already undertaken all the preparatory work (with project plan) etc. and therefore the department is committed to progressing the project and spend.
Health & Social Services - £5,819,215
Sustainable measures to replace Health Insurance Fund transfer - £5,000,000
Following the rejection of the proposed Health charge in the MTFP Addition, the associated transfers from the HIF were also withdrawn leaving a shortfall of £5 million per annum in the Health and Social Services net expenditure allocations for 2017-2019. This will address the 2018 shortfall.
Doctors Pay Award for 2017 and 2018 - £648,807
The States Employment Board has agreed pay awards for Doctors for 2017-2019, subject to agreement of funding by Council of Ministers. This allocation will fund the excess required for 2017 and 2018.
It is also proposed that additional funds of £1,255,110 transferred to contingency reserves, will be ringfenced for the purposes of the financial impact in 2019.
Primary Care Project - £170,408
Three pilot projects; COPD, Diabetes and Community Pharmacy – these projects commenced in 2017 following a rigorous process of identifying suitable schemes which are planned to be completed in 2018.
The Project was awarded £611,000 from Social Security Department’s Carry Forwards from 2015, but it was always intended that the Project would run over 2016 and 2017 and potentially 2018.
Department for Infrastructure - £372,000
Sea weed remediation - £147,000
A new surf rake and modifications to the existing one to allow for removing seaweed directly from the sea instead of off the beach. Modifications to existing (redundant) equipment to provide for dewatering the seaweed allowing it to be put to land or compost, hire of local landing equipment to allow dumping at sea, temporary additional staffing to undertake the work in the summer and support for additional research work.
New “contactless” ticket machines – Liberty Bus- £125,000
States contribution to replacement of existing ticket machines on LibertyBus fleet in order to facilitate "contactless" payment by debit and credit cards and speed up boarding times for AvanchiCard holders. Total project cost likely to be in order of £250,000, part funded by States, part by LibertyBus. They will commence procurement once funding is available. Initial works have included specification of machines, pricing and roll-out plan and procurement of new ticket machines and installation will be undertaken during 2018 with the project finished before Q3.
It is recommended to approve this in principle subject to agreement of the Business Case by the Treasurer.
Odour Control Measures - £100,000
Odour Measurement equipment and software modelling for mitigating and monitoring odours around the existing and proposed new Sewage Treatment Works (STW) at Bellozanne in accordance with the conditions on the planning approval for the STW and the States decision on P.115/2017. The Proposition called on the Minister for Treasury and Resources to make funds available once the new works were constructed, however, DfI believe that it would be more advantageous to undertake this work now in order to establish the current situation as a "control" baseline reading and to double check the source of odours. This request will also reduce the call on contingency in future years. Equipment is being specified at present and it is expected that orders could be raised as soon as funding is approved and that the procurement and installation of monitoring equipment will complete in 2018 along with commencement of initial odour monitoring.
Social Security - £300,000
Skills Development - £300,000
Planning started in 2017 when proposition P.53/2017 was approved, but income wasn’t collected until November, which delayed the spending of the money until January 2018.
There are 6 main work streams:
• Various short courses (coaching, customer service, Excel etc)
• Hospitality sector (initiatives to attract more people to the industry and upskilling staff to support recruitment, retention and increases in productivity)
• Retail sector (detailed plans to be formulated in conjunction with the industry)
• Construction sector (detailed plans to be formulated in conjunction with the industry)
• Care sector (detailed plans to be formulated in conjunction with the industry)
• Sector Body/Skills Jersey/Jersey Business funding
The plan is to spread the costs throughout the year, with the likelihood of spending 2018 income in Q3 to minimise the need for carry forward into 2019. This will be an annual ongoing initiative, in line with income collection.
Treasury and Resources - £829,457
Financial Management Improvement Programme - £130,000
Funding was previously approved budget from Restructuring Provision. This will fund the cost of the work commissioned of KPMG Financial Management to assess the maturity of the Finance Function and make recommendations for its transformation project with the initial phase, to be completed in 2018.
Supply Jersey Maintenance and License Cost - £120,000
There is an ongoing structural budget shortfall for annual maintenance costs associated with Supply Jersey, The system maintenance costs were funded in 2017 from a 2016 carry forward and need to be met in 2018 and beyond. ISD have highlighted that they are unable to fund these costs.
Supply Jersey - £111,852
Completion of the gap analysis and licence to buy training material and virtual college. This is the remainder of the original bid of £205,000 from the Restructuring Provision in 2017.
Income Tax Office BEPS - £120,000
To deal with Base Erosion and Profit Shifting rules and is the unspent balance drawn down in 2017 from Central Contingency.
Debt Management Consultant- £104,000
Contracting a HMRC debt management specialist to lead in the consolidation of the Taxes and Shared Services debt management function. This commenced in 2017 and will continue to December 2018.
Work to date has already more than paid for itself through improvements to the collection of debt.
Corporate Procurement - £100,000
Data analyst required to work with team on Supply Jersey reports to provide MI on the performance of various contracts and enable decision making. In addition procurement specialist to deal with increasing quantity of contract preparation.
Income Tax Office Modernisation - £79,335
The programme contains a set of projects including:
- The creation of a new Taxes Management Law and a new Income Tax Law,
- The Taxes Office approach to tax compliance and improve customer service,
- Development of new compliance techniques and products,
- Work with Jersey Financial Crimes Unit to create a legal gateway with the States of Jersey Police; and
- Work on Nudge activities.
This carry forward is the unspent balance drawn down in 2017 from Restructuring Provision for two projects.
Taxes Transformation Programme - £45,000
£105,600 was carried forward from 2016 to fund the multiyear Taxes Transformation Programme project. Due to other commitments and resource issues the funding was not utilised. However, following recruitment the TIEA team are ready to implement the next phase to manage the requirements outlined by the Automatic Exchange of Information (AEOI).
Travel Review - £19,270
An independent review of States Travel arrangements has been undertaken by specialist travel management consultancy Opteva from which a number of recommendations were made. This represents the balance of the review in preparation for the retender of travel management services.
States Assembly - £119,998
Voter Registration Project - £80,401
The voter registration project aims to actively promote voter registration across the whole island and, in particular, to ensure that an effective island-wide voter registration campaign is carried out in time for the next elections in 2018. Work preparing for the 2018 election has begun but the majority of the costs will occur in the first four months of 2018. The voter registration and election awareness campaign will aim to encourage greater participation in the election process both registration and voter turnout, giving practical information on where, when and how to vote, as well as information for prospective candidates, filmed hustings and candidates’ videos and the production and circulation of a full manifesto document to all Island households.
Commonwealth Youth Parliament - £22,000
States Assembly have agreed to step in at short notice and host the Commonwealth Youth Parliament in late February. This involves accommodating and feeding over 60 delegates for a week and the budget has been worked out, based on plans and on the most recent experience of hosting a conference of this sort, is £44,000. £20,000 will be contributed by the Commonwealth Parliamentary.
Webcasting - £17,597
Following on from the successful introduction of the webcasting of States Assembly meetings it has been agreed to install webcasting of public hearings. This will include the purchase and install of webcasting equipment and services. It also requires refurbishment of the Le Capelain Room to a multi-use facility.
Non Ministerial Departments - £300,303 made up of:-
Law Officers’ - £97,546
Reglant la Procedure Criminelle - £97,546
Due to slippage in work being undertaken there is an underspend of ring-fenced funds, originally £500,000 received from COCF.Further work is required to draft rules and procedures as the Criminal Justice law comes into effect.
Judicial Greffe - £90,000
Contract post - £70,000
This contract post continues to provide essential support for FOI, data management and data protection (including preparation for GDPR) functions.
Family Division database - £20,000
This essential IT project (which involves replacement of legacy systems which are no longer supported) commenced in 2017 and will be completed by May 2018.
Viscount’s Department - £52,000
Phoenix - £52,000
Due to the lengthy and complex procurement process at the start of this IT project in 2017, the go-live date has been extended into 2018 and essential project management support is required prior to implementation. In addition overtime costs for staff are required. This will allow testing of the system, as operationally it is impossible to do during normal working hours due to resource constraints. This was not included in the original project budget.
Official Analyst - £18,237
Specialist equipment - £18,237
Two specialist laboratory glassware washers are required and although ordered in 2017 are not expected to arrive until March 2018.
Office of the Lieutenant Governor - £42,520
Grounds and Premises Maintenance and Improvement - £42,520
This will supplement existing funds to maintain and make improvements to the grounds and premises at Government House.
4. Transfer to Reserves & Contingencies - £3,613,858
The amounts to be transferred to reserves or contingencies to be ring fenced include:
Waterfront Master Plan - Department of the Environment - £100,000
If the development framework is adopted in Q2 201/8 there will be a requirement to undertake future studies and development briefs which remain to be scoped and costed. It is envisaged to cost a further £100,000 and would be completed at the end of 2019.
Doctors Pay Award for 2019 - Health & Social Services Department - £1,255,110
To fund the pay award for Doctors, agreed by States Employment Board.
The States paying Rates – Department for Infrastructure - £1,700,000
The £900,000 originally allocated to Department for Infrastructure to pay Parish Rates was allocated to help cover their shortfall in income in 2018 due to the delay in introducing non-domestic liquid waste charging. Due to the States deciding that Government should pay both Parish Rates and Island Wide Rates in Budget 2018, the department now needs that funding replaced albeit reduced by the element they are collecting by means of increasing car park charges.
Health and Safety Benchmarking – Department for Infrastructure - £75,000
Following a presentation to the Executive Management Team, the Department for Infrastructure has been requested to submit a business case to embark upon a Corporate Health and Safety benchmarking and capability review.
Security Measures – Bailiff’s Chambers - £95,000
This is required towards future security costs including updating the entrance area and additional equipment which will result in additional recurring annual revenue implications. It is proposed to return this budget to contingency and ring fence until a full business case and costs have been submitted.
Office refurbishment and Health & Safety - Viscount’s - £85,000
A rolling programme has been established for office refurbishment, workstation assessments and replacement furniture. These funds will be ring-fenced subject to delivery of a business case.
Court and Case Costs - £309,748
The Court and Case Costs Contingency balance was used to help the Consolidated Fund balance in 2014. Court and Case costs are difficult to predict and historically affected Departments have felt exposed ensuring they have sufficient budgets to carry out the work whilst also not wanting to request excessive base budgets. It is proposed to transfer this sum of money centrally to be made available when needed, form what is known as the Court & Case costs smoothing reserves, held within contingencies.
The transfer is coming from the following areas:
Judicial Greffe - £63,030
Law Officers’ - £45,830
Probation and After Care Services - £45,096
Viscounts - £155,792
5. Transfer to Contingency - £10,438,674
The balance of the departmental underspends of £7,714,362 and the balance of underspends in department from Growth funding of £2,213,055 to be carried forward to Central Contingency. The underspends in departments from Restructuring Provision and ring fenced budgets within Central Contingency of £511,257 to be returned to their respective budgets held centrally.
6. Carry forward of Contingency
The balance of the provision for Central Reserves and Restructuring Provision of £58,979,893 are also to be requested for carry forward to 2018.
Balances Remaining to Draw Down
Central Reserves - £22,676,562
Redundancy Provision - £6,925,558
This is the remaining balance of the Redundancy Provision at the end of 2017, to be carried forward for settlements agreed in 2018.
Pay Provision - £2,951,745
To cover the result of any pay negotiations in 2018.
AME Provision for 2018 and 2019 - £4,000,000
The MTFP Addition proposed using underspends in Social Benefits to build a central AME contingency for 2017-2019. This is the current amount ring-fenced for 2018 and 2019. An update on the benefit forecast for 2018 is due from Social Security department by the end of March 2018.
Restructuring Provision - £11,426,344
This is the available balance available to fund projects identified from the Restructuring Provision.
Project Omega Balance - £640,945
This is the available balance to fund cost on the Historical Child Abuse redress scheme.
Child Protection - £690,246
In 2017, £1.7 million was earmarked in contingency for initiatives to support vulnerable children. This funding will be utilised to continue this work.
Court and Case Costs Smoothing Reserve - £1,538,335
Due to the uncertain nature of such expenditure, it was agreed that a smoothing reserve be created which would hold unspent balances form years where expenditure was less than base budgets and be available to be drawn from in years when expenditure was more than base budgets. This is the balance from previous years and will be added to the 2017 underspend of £309,748.
EPGDP Balance - £7,263,784
The Economic and Productivity Growth Draw-down Provision available balance as at 31st December 2017.
Independent Jersey Care Inquiry - £866,374
This is the remaining balance of the funds allocated to this piece of work.
7. Recommendation
The Council of Ministers is recommended to approve the proposals in this report for the use of underspends in 2017 and the carryforward of contingencies and to give effect to the decision by agreeing to and recommending to the Treasury & Resources Minister:
The transfer to contingency of all departmental underspends, inclusive of excess departmental income, totalling £26,275,548;
The transfer from contingency to Departments totalling £ 12,205,016, summarised in Appendix 1;
The ring-fencing within Contingency of £3,613,858, summarised in Appendix1; and
To agree the carry forward of unspent Contingency sums from 2017 to 2018, in addition to the above, and as summarised in section 6 of this report, totalling £58,979,983.
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