Nurses' Pay Award: Transfer of funds from Central Contingency

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A decision made 13 September 2013:

Decision reference: MD-TR-2013-0079
Decision Summary Title:	Central Contingency Funding for Nurses’ Pay Award		Date of Decision Summary:	12 September 2013
Decision Summary Author:	Head of Decision Support		Decision Summary: Public or Exempt?		Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:		N/A
Written Report Title:	Central Contingency Funding for Nurses’ Pay Award		Date of Written Report:		12 September 2013
Written Report Author:	Assistant Accountant, Financial Planning		Written Report : Public or Exempt?		Public
Subject: Transfer of contingency funding from the Central Contingency (Pay Provision) to the Health and Social Services Department (H&SS) for costs associated with the Nurses’ Pay Award.
Decision(s): The Minister approved budget transfers of £1.24 million in 2013, and £1.6 million (recurring from 2014) from the Central Contingency (Pay Provision) to the H&SS revenue head of expenditure to fund the 2013-2015 Nurses’ Pay Award.
Reason(s) for Decision: Article 17(2) of the Public Finances (Jersey) Law 2005 states that the Minister for Treasury and Resources (T&R) is authorised 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.
Resource Implications: Central Contingency (Pay Provision) to decrease by £1.24 million in 2013, £1.6 million in 2014 and £1.6 million in 2015 and the H&SS revenue head of expenditure to increase by an identical amount. This decision does not change the total amount of expenditure approved by the States for 2013 - 2015. In order to fund this, a non-recurring budget transfer of £1.24 million is required in 2013 from Central Contingency (One-off) to Central Contingency (Pay Provision) where there is earmarked provision in addition to the Pay Provision for 2013 which is now exhausted. The equivalent adjustments of £1.6 million will be made for 2014 and 2015 to Departmental expenditure limits. The recurring transfer will be reflected in the next MTFP 2016 – 2019.
Action required: Business Manager to inform the Head of Financial Planning, the Financial Performance Reporting Manager and the Director of Finance, H&SS that this decision has been approved.
Signature:		Position: Senator P F C Ozouf, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Nurses' Pay Award: Transfer of funds from Central Contingency

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Treasury & Resourses

Ministerial Decision Report

Central Contingency Funding for NURSES’ Pay Award

Purpose of Report

To enable the Minister for Treasury and Resources (T&R) to approve additional funding of £1.24 million for 2013 (part year effect) and £1.6 million (recurring from 2014) for the Health and Social Services Department (H&SS) for a Nurses’ Pay Award.

Background

Following lengthy discussions between the States Employment Board (SEB) and the Nursing Unions, a final offer pay award was put to the ballot, and accepted, in July 2013.

The final offer provides for;-

1% consolidated award for 2012
4% consolidated award for 2013
4% consolidated award for 2014

This offer was made and accepted on the basis of agreement to progress reform of the pay structure during 2013 and 2014.This offer recognises the long-standing problem with pay parity between nurses, midwives and other health care workers, and is the first step in the redesign of nursing pay, which makes some progress towards closing the pay gap among health staff and addressing difficulties with recruiting and retaining nursing staff.

3. Funding

Further to discussions between H&SS, Treasury and SEB it is proposed that the pay award is funded as follows:

Funding required in 2013:

Pay Award Year	Estimated cost	H&SS Funding 2013		Central Funding 2013
Pay Award Year		Standard States Pay Award	MTFP terms and conditions funding	Contingency Funding
	£’000	£’000	£’000	£’000
2012 back pay [1]	120			70
2012 recurrent	550			550
2013	2,200	980	600	620
TOTAL	2,870	980	600	1,240

Funding required for 2014 & 2015:

Pay Award Year	Estimated cost	H&SS Funding 2014 & beyond		Central Funding 2014 & 2015
Pay Award Year		Standard States Pay Award	MTFP terms and conditions funding	Contingency Funding
	£’000	£’000	£’000	£’000
2012 recurrent	550			550
2013	2,200	550	600	1,050
TOTAL	2,750	550	600	1,600

The funding requirements from both H&SS and Central contingency are described in more detail in Appendix 1.

This pay award includes the relevant amounts to fund an allocation towards Family Nursing and Home Care pay awards at the same level.

The above proposals result in a request for funding from Central Contingency for £1.24 million in 2013 and £1.6 million in 2014 & 2015. This provides for the 2012 and 2013 elements of this pay award.

The 2014 pay award funding is not yet in H&SS’s base budget and will be allocated to H&SS and all States departments in a separate Ministerial Decision.

4. Conclusion

Provision was made in the MTFP in the Central Contingency (Pay Provision) for:

1% non-consolidated in 2012,
1% consolidated and 1% non-consolidated in 2013, and
4% consolidated in 2014.

The additional award has been agreed through negotiation between SEB and the nursing unions.

There are insufficient funds within H&SS to meet the additional cost of the pay award.

Central Contingency exists for urgent and unforeseen events for which a department is unable to identify alternative funding. Although the Central Contingency (Pay Provision) is exhausted for 2013, Central Contingency (One-off) has earmarked funds to meet the cost of this award in 2013, 2014 and 2015 as set out above (£1.24 million 2013, £1.6 million for 2014 & 2015). A non-recurring budget transfer of £1.24m is required in 2013 from Central Contingency (One-off) to Central Contingency (Pay Provision) and the equivalent adjustments of £1.6m will be made for 2014 and 2015 to Departmental expenditure limits.

5. Recommendation

The Minister is recommended to approve budget transfers of £1.24 million in 2013, and £1.6 million (recurring from 2014) from the Central Contingency (Pay Provision) to the H&SS revenue head of expenditure to fund the 2013-2015 Nurses’ Pay Award.

6. 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 to heads of expenditure of amounts not exceeding, in total, the amount available for contingency expenditure in a financial year.

7. Resource Implications

Central Contingency (Pay Provision) to decrease by £1.24 million in 2013, £1.6 million in 2014 and £1.6 million in 2015 and the H&SS revenue head of expenditure to increase by an identical amount. This decision does not change the total amount of expenditure approved by the States for 2013 - 2015.

In order to fund this, a non-recurring budget transfer of £1.24 million is required in 2013 from Central Contingency (One-off) to Central Contingency (Pay Provision) where there is earmarked provision in addition to the Pay Provision for 2013 which is now exhausted. The equivalent adjustments of £1.6 million will be made for 2014 and 2015 to Departmental expenditure limits.

The recurring transfer will be reflected in the next MTFP 2016 – 2019.

Report author : Assistant Accountant, Financial Planning	Document date : 5th September 2013
Quality Assurance / Review : Director of Financial Planning and Performance	File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DSs, WRs and SDs\2013-00XX - Nurses Pay Award\WR - Nurses Pay Award.docx
MD sponsor : Treasurer of the States

Appendix 1

The table below describes the funding requirements for each year of the agreed pay award and the means by which it is proposed to fund the award in each of the three years 2013, 2014 & 2015.

Pay Award Year	Amount	Notes	2013	2014	2015
Pay Award Year	£		Central contingency funding £
2012	120,000 (50,000)	This is the difference between the cost of the consolidated award and the non-consolidated award (which has already been paid). The back-pay element will be paid to staff in 2013. This is a one-off cost relating to 2012. N.B. £50,000 is already funded from within the H&SS Department cash limit. £70,000 is required from central contingency in 2013.	70,000
2012	550,000	This is the approximate recurrent cost of a 1% pay award for 2012. It is proposed that this is funded for 2013 to 2015 from Central Contingency. £550,000 is required from central contingency in 2013, 2014 & 2015.	550,000	550,000	550,000
2013	2,200,000	This is the approximate recurrent cost of a 4% pay award for 2013. H&SS recurrent funding: £550,000 of this funding has already been allocated to H&SS as part of the 2013 1% consolidated award for all employees. £600,000 has already been allocated to H&SS in the MTFP for nurses’ terms and conditions. H&SS already has £1,150,000 recurrent funding to meet the cost of the pay award. Further funding requirement: £430,000 of this funding has already been allocated to H&SS as part of the 2013 1% unconsolidated award for all employees. However this is one-off funding for 2013 only and therefore it is proposed that this is funded in 2014 & 2015 from Central Contingency. It is further proposed that the remaining £620,000 is funded from Central Contingency for all three years (2013, 2014 & 2015). £620,000 is required from central contingency in 2013 and £1,050,000 in 2014 & 2015.	620,000	1,050,000	1,050,000
2014	2,410,000	4% funded from pay provision for all States employees included in the MTFP. This funding will be allocated from the pay provision in line with pay awards for other pay groups.
		TOTAL	1,240,000	1,600,000	1,600,000

[1] 2012 back pay is the cost for 2012 of converting the non-consolidated pay award to a consolidated pay award (one-off cost). N.B. £50,000 is already funded from within the H&SS Department cash limit. The recurrent cost of the pay award is £550,000 per annum.