TRANSFER OF FUNCTIONS REGULATIONS
PURPOSE OF REPORT
This is the written report supporting the Ministerial Decisions of the Chief Minister, the Minister for Treasury and Resources and the Minister for Economic Development to transfer functions, budgets and manpower in respect of financial services into the Chief Minister’s Department.
BACKGROUND
When ministerial government was established, the Minister for Economic Development assumed responsibility for political leadership for the financial services industry which included Jersey Finance and JFSC. The Minister established MOUs in the form of partnership agreements with these organisations to ensure that financial grants were provided to these two key organisations and to provide government support to the industry in the form of supporting inward investment and providing new legislation to support growth in new sectors of the industry.
As the world economy has suffered since 2008, the position of Jersey’s finance industry has become subject to greater competition in terms of new business. In addition, as governments have looked at every possible way to gather more revenues for their own economy, jurisdictions such as Jersey have been placed under ever increasing scrutiny and pressure.
Jersey, along with other such jurisdictions, is having to realign with the rapidly changing global markets and it is having to compete heavily for business from other strong jurisdictions such as Singapore as new markets and business opportunities develop in areas such as Russia, the Middle East and Far East.
Jersey Finance with the support of the States of Jersey commissioned McKinsey to undertake a review of the island’s current standing in terms of its position in the global economy and to make recommendations on how Jersey should position itself in the extremely competitive international financial services marketplace.
One of the major issues raised by the review is the need to clarify responsibility within governments for the finance industry to enhance coordination and cooperation between government, regulator and industry participants. They see this as a critical precondition for the success of the strategy and the future of the industry.
PROPOSED STRUCTURE TO MEET THE IMPLEMENTATION OF THE FINANCIAL SERVICES SECTOR REVIEW
The Chief Minister has considered the recommendations from the review and discussed them with the Minister for Economic Development and the Minister for Treasury and Resources. The Chief Minister is of the view that overall accountability and responsibility for financial services should reside with the Chief Minister.
To achieve this, having considered the other significant elements of the Chief Minister’s workload, the proposal is that whilst formal political accountability and responsibility will always rest with the Chief Minister, the Minister for Treasury and Resources would provide support under delegation from the Chief Minister to develop a relationship with industry and take forward the implementation of the review. The Minister for Treasury and Resources will work closely with the Chief Minister and the Economic Development Minister in the development and delivery of the outcomes arising from the review. To ensure that all aspects of Financial Services oversight rest with the Chief Minister, responsibility to Anti-Money Laundering (AML) will transfer from the Minister for Treasury and Resources to the Chief Minister.
The executive functions to support this transfer to the Chief Minister’s department will require budget, staff and legislation responsibility to be transferred from the Economic Development Minister to the Chief Minister.
PROPOSED TRANSFERS
This decision will effect the transfers of the staff responsible for the maintenance of legislative responsibility for financial services and associated manpower and budgets. There are five Full Time Equivalent posts transferring from Economic Development Department to the Chief Minister’s Department these are Director for Financial Services, the Director for Finance Industry Development, the Deputy Director for Finance Industry Development, the Officer for Finance Industry Development and the Secretary for the Director of Financial Services.
The Revenue Budgets transferring are; £996,800 for 2013 which takes effect from 1st January 2013, £1,016,500 for 2014 and £1,016,500 for 2015.
TRANSFER OF FUNCTIONS REGULATIONS
The decision is designed to move the functions that relate to Financial Services from the Minister for Economic Development, and the Minister for Treasury and Resources to the Chief Minister.
RECOMMENDATION
To approve the Transfer of Functions Regulations and the Report to the Regulations and for officers to process these documents so that they can be lodged to be debated in the final sitting of this current session of the States.
3 June 2013