Treasury and Resources
Ministerial Decision Report
Contingency Funding to DEPARTMENTS for THE 1% CONSOLIDATED AND 1% NON CONSOLIDATED PAY AWARD FOR 2013
- Purpose of Report
To enable the Minister for Treasury and Resources to approve a 2013 request for contingency funding from the Central Contingency (Pay Provision) to various Departments as per the schedule at Appendix 1 for costs associated with the 1% Consolidated and 1% Non Consolidated Pay Awards for 2013. The decision also approves the funding for Departments from the Central Contingency (Pay Provision) for 2014 and 2015 for the recurring effect of the 1% Consolidated Pay Award in those years.
- Background
On 4th December 2012, the Chief Minister announced in the States that the employer would be implementing the final pay offer made initially on 12th July 2012.
The final offer provides for;-
- 2012, 1% non consolidated pay award paid as a one off lump sum, with effect 1st January 2012;
- 2013, 1% consolidated pay award plus 1% non consolidated pay award paid as a one off lump sum, with effect 1st January 2013;
- 2014, 4% consolidated pay award with effect 1st January 2014 in return for a modernisation agreement;
- A guarantee of no compulsory redundancies until the end of 2014.
In 2013, the Council of Ministers has made provision in the Medium Term Financial Plan (MTFP) for a Central Contingency (Pay Provision) for the 1% Consolidated and 1% Non Consolidated Pay Award for 2013. The implementation of the pay offer requires a transfer of funding to those departments affected by the pay offer.
Extract from Medium Term Financial Plan 2013-2015: Figure 7 page 47 (as amended)
The provision in the MTFP was estimated based on the staff costs for each department estimated in June 2012. Departments are now able to more accurately identify the costs associated with the two pay awards in 2013 based on budgeted numbers approved in the MTFP.
The 1% Non Consolidated Pay Award is £2,594,468 and represents a one-off payment in 2013 and is only calculated on basic pay. The 1% Consolidated Pay Award of £3,252,427 is recurring and is calculated on pay plus social security and pension contributions. The Consolidated Pay Award requires further funding in 2014 and future years. Provision has been made in the MTFP as part of the Central Contingency (Pay Provision) in order that this recurring cost can be funded together with a further 4% Consolidated Pay Award from January 2014 which is also proposed. This Ministerial Decision provides the approval for the recurring element of the 1% Consolidated Pay Award of £3,252,427 in 2014 and 2015.
Certain groups are not provided for in these pay awards. Prison Officers have existing agreements in place and Doctors and Consultants are tied to settlements in line with UK arrangements.
Appendix 1 provides a schedule of the required transfers from Central Contingency (Pay Provision) to individual departments’ heads of expenditure representing the cost of the 1% Consolidated £3,252,427, and 1% Non Consolidated Pay Award £2,594,468 for 2013. The total cost of the 2013 pay awards is £5,846,895.
3. Recommendation
The Minister for Treasury and Resources is recommended to approve a 2013 request for contingency funding totalling £5,846,895 from the Central Contingency (Pay Provision) to various departments as set out in Appendix 1 for costs associated with the 1% Consolidated and 1% Non Consolidated Pay Award for 2013. The Minister is also recommended to approve that £3,252,427 is transferred to departments in 2014 and 2015 for the recurring affect of the 1% Consolidated Pay Award in those years.
4. Reason for Decision
Article 17(2) of the Public Finances (Jersey) Law 2005 states that the Minister for Treasury and Resources is authorized 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.
5. Resource Implications
Departments’ revenue heads of expenditure will increase by £5,846,895 as per the schedule in the attached report and the Central Contingency (Pay Provision) will decrease by an identical amount. This decision does not change the total amount of expenditure approved by the States for 2013. In 2014 and 2015 Departments’ revenue heads of expenditure will increase by £3,252,427 for the recurring effect of the 1% Consolidated Pay Award and the Central Contingency (Pay Provision) will decrease by an identical amount in those years.
Report author : Head of Financial Planning | Document date : 23rd January 2013 |
Quality Assurance / Review : Director of Financial Planning and Performance | \\ois.gov.soj\sojdata\TRY\Treasury\Sections\Corporate Finance\Ministerial Decisions\DSs, WRs and SDs\2013-0007 - 2013 pay awards to departments\WR - Contingency Funding 2013 1% Non Consolidated 1% Consolidated.doc |
MD sponsor :Treasurer of the States |
APPENDIX 1: SCHEDULE OF COSTS TO DEPARTMENTS OF THE 1% NON CONSOLIDATED PAY AWARD AND 1% CONSOLIDATED PAY AWARD FOR 2013 TO BE FUNDED BY A TRANSFER FROM THE CENTRAL CONTINGENCY (PAY PROVISION) FOR 2013