Chief Ministers Department
Ministerial Decision Report
CHARITIES (JERSEY) LAW – CONTINGENCY FUNDING REQUEST
- Purpose of Report
To enable the Chief Minister to accept the transfer of £70K in 2014 of the approved allocation from the Central Contingency (one-off) to the Chief Minister’s Department (CMD) to support the initial management costs associated with the Charities (Jersey) Law in 2014.
- Background
In September 2012 the Council of Ministers (COM) considered a paper setting out a proposal for the introduction of a Charitable Purposes Law that was intended to support the Jersey Financial Services industry to develop the Charitable Trusts market in Jersey. Whilst COM were supportive of the aims of the proposal, they instructed that additional work was to be undertaken with regard to addressing the issues of charities regulation and supporting/developing the Voluntary and Community Sector. The additional work was undertaken and a further report was presented to COM on 26 June 2013.
The COM, having considered the reputational issues for the Island surrounding the registration and regulation of charities in Jersey, concluded that it would be desirable for any system developed for Jersey to be as simple and straightforward as possible, with careful consideration to be given to the definition of “charity for the purposes of the Law. It was emphasised that it was envisaged that a “one stop” system would be developed which would enable simultaneous registration also under the Non-Profit Organisations (Jersey) Law 2008, and the COM indicated that in this connection it would prefer to see the involvement of an independent Commissioner, and preferably from the outset rather than at the later stages.
The Council noted that the aims of the present proposals, and the associated timeframe, sought to –
- introduce a fit-for-purpose definition of charity and charitable purposes which supported development of the Trusts and Philanthropic market in Jersey;
- enable the phased introduction of a regulatory regime which, in the first instance, would allow public scrutiny of a register of all Jersey charities that were in receipt of tax exemptions, prior to the introduction of regulatory standards which supported public trust and confidence in charities; and
- demonstrate the commitment of the States of Jersey to supporting the development of the Island’s voluntary and community sector through a Compact and a States’ employee volunteering scheme.
It was recognised that the current proposals had three key financial implications, namely: (i) potential for increased tax revenue arising from new Charitable Trusts relocating to Jersey; (ii) potential for reduced tax revenue as a result of more organisations claiming charitable status; and (iii) management costs.
The Council of Ministers in their meeting of the 26th June 2013 discussed the proposals for a 3-phased approach to the development of a Jersey Charities and a proportionate, supportive regulatory regime for charities and it was noted that the 2014 and 2015 management costs associated with the law and regulation were not included in the Medium Term Financial Plan (MTFP) 2013-2015 and that funding would need to be provided possibly from Central Contingency.
The States Assembly approved on the 18th July 2014 P.108/2014 – Draft Charities (Jersey) Law which included the Management costs (phase 1 of the Charities Law). The proposition stated the following: - “The management costs for the Charities Law are set out below. The costs for 2014 and 2015 will be met from contingency provisions (£307,000 for 2014 and £222,000 for 2015). Management costs for 2016 onwards will need to be included in the next MFTP planning process.
At this stage, the Chief Minister wishes to accept a transfer for £70K from the 2014 approved allocation to support initial management costs associated with the implementation of the Draft Charities (Jersey) Law 201– with additional monies being transferred from that allocation at the point at which they are required. These initial management costs relate to: the Jersey Voluntary and Community Sector grant costs; initial project officer costs and register development costs.
- Recommendation
The Chief Minister is recommended to accept the non-recurring budget transfer of £76k in 2014 from Central Contingency (one-off) as approved through P108/2014 – Draft Charities (Jersey) Law to support initial management costs associated with the implementation of the Draft Charities (Jersey) Law 201-.
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.
The Council of Ministers in their meeting of the 26th June 2013 discussed the proposals for a 3-phased approach to the development of a Jersey Charities and a proportionate, supportive regulatory regime for charities and it was noted that the 2014 and 2015 management costs associated with the law and regulation were not included in the Medium Term Financial Plan (MTFP) 2013-2015 and that funding would need to be provided possibly from Central Contingency.
The States Assembly approved on the 18th July 2014 P.108/2014 – Draft Charities (Jersey) Law which included the Management costs (phase 1 of the Charities Law). The proposition stated the following: - “The management costs for the Charities Law are set out below. The costs for 2014 and 2015 will be met from contingency provisions (£307,000 for 2014 and £222,000 for 2015). Management costs for 2016 onwards will need to be included in the next MFTP planning process.
- Resource Implications
The Chief Minister’s Department’s revenue head of expenditure to increase by £70K in 2014 and the Central Contingency (one-off) to decrease by identical amounts. This decision does not change the total amount of expenditure approved by the States for the period of the current MTFP 2013 to 2015.
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