Budget Transfer: Guernsey Waste Income Shortfall from Central Contingency funding to Transport and Technical Services Department

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A decision made 30 November 2015:

Decision Reference: MD-TR-2015-0128
Decision Summary Title:	Allocation of funds from Central Contingency to the Transport and Technical Services Department - Guernsey waste income shortfall		Date of Decision Summary:	25th November 2015
Decision Summary Author:	Head of Decision Support		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:
Written Report Title:	Allocation of funds from Central Contingency to the Transport and Technical Services Department - Guernsey waste income shortfall		Date of Written Report:	25th November 2015
Written Report Author:	Head of Decision Support		Written Report : Public or Exempt?	Public
Subject: Request for non-recurring Central Contingency funding and budget transfer of £1,500,000 from the Provision for Central Reserves (Central Contingencies) to the Transport and Technical Services Department in relation to shortfalls against budget relating to Guernsey waste income.
Decision(s): The Minister approved the non-recurring budget transfer £1,500,000 from the Provision for Central Reserves (Central Contingencies) to the Transport and Technical Services Department in 2015 in relation to shortfalls against budget relating to Guernsey waste income.
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 or the insurance fund of amounts not exceeding, in total, the amount available for contingency expenditure in a financial year. On 25th November 2015, the Council of Ministers agreed to the request to approve non-recurring funding in 2015 totalling £1,500,000 from the Provision for Central Reserves (Central Contingencies) to the Transport and Technical Services Department in relation to shortfalls against budget relating to Guernsey waste income.
Resource Implications: The Transport and Technical Services head of expenditure to increase by £1,500,000 in 2015 and the Provision for Central Reserves (Central Contingencies) 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 2013 to 2015.
Action required: The Head of Decision Support to notify the Finance Director, Transport and Technical Services that the decision has been approved.
Signature:		Position: Senator A J H Maclean, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Budget Transfer: Guernsey Waste Income Shortfall from Central Contingency funding to Transport and Technical Services Department

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Treasury and Resources

Ministerial Decision Report

Allocation of funds from central contingency to the transport and technical services department – guernsey waste income shortfall

Purpose of Report

Request for non-recurring Central Contingency funding and budget transfer of £1,500,000 from the Provision for Central Reserves (Central Contingencies) to the Transport and Technical Services Department in relation to shortfalls against budget relating to Guernsey waste income.

Background

In the 2013-15 MTFP, the Transport and Technical Services Department’s cash limit was reduced by £1,500,000, to recognise the net anticipated effect of income from importing and treating Guernsey Waste. Guernsey is still considering the best way to deal with their municipal and bulky wastes and published its Waste Management Strategy on 29 January 2014.

As part of the fact finding exercise for this document, the States of Guernsey Public Services Department stated that the earliest that they could consider export of waste was 1st January 2016. Despite on-going discussions, export of waste is unlikely to commence until 2017 at the earliest and will require the prior approval of both Jersey and Guernsey States Assemblies, the Waste Regulators and the UK.

The States of Jersey are currently involved in the tender process for treatment of Guernsey Waste and provided that Jersey attains “preferred bidder” status will request the States to approve the importation and treatment of Waste. Whilst such an operation will as a minimum be required to cover marginal costs of processing, it is unlikely that a significant “profit” element will attainable from such a contract.

3. Contingency Funding Request

As a result of the on-going consideration by Guernsey in relation to the disposal of their municipal and bulky wastes, the budgeted net income included in 2015 is unachievable. As a result of other income pressures within the department, it is not possible to cover this shortfall in 2015 with other savings.

It was identified in 2014 that it would be extremely unlikely that the net income of £1,500,000 would be attainable in 2015 and accordingly the sum was allocated within the Central Contingency fund to be requested for release by the Transport and Technical Services Department if required.

The requested funding of £1,500,000 will be used by the Department to help address this shortfall as highlighted above.

4. Recommendation

The Minister is recommended to approve the non-recurring budget transfer £1,500,000 from the Provision for Central Reserves (Central Contingencies) to the Transport and Technical Services Department in relation to shortfalls against budget relating to Guernsey waste income.

5. 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 or the insurance fund of amounts not exceeding, in total, the amount available for contingency expenditure in a financial year.

On 25th November 2015, the Council of Ministers agreed to the request to approve non-recurring funding totalling £1,500,000 from the Provision for Central Reserves (Central Contingencies) to the Transport and Technical Services Department in relation to shortfalls against budget relating to Guernsey waste income.

6. Resource Implications

The Transport and Technical Services head of expenditure to increase by £1,500,000 in 2015 and the Provision for Central Reserves (Central Contingencies) 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 2013 to 2015.

Report author : Head of Decision Support	Document date: 25th November 2015.
Quality Assurance / Review : Head of Decision Support	File name and path: LDrive/Treasury/Sections/Corporate Finance/Ministerial Decisions/2015-01xx – GSY Waste Income allocation of Central Contingencies
MD sponsor : Director of Treasury Operations