Budget Management Report for the 6 month period ended 30 June 2012

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made on 18 December 2012:

Decision Reference: MD-TR-2012-0117
Decision Summary Title:	Budget Management Report for the Six Month Period Ended 30th June 2012		Date of Decision Summary:	11 December 2012
Decision Summary Author:	Director of Financial Planning and Performance		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Budget Management Report for the Six Month Period Ended 30th June 2012		Date of Written Report:	11 December 2012
Written Report Author:	Business Manager		Written Report : Public or Exempt?	Public
Subject: Report on Budget Management disclosures for the 6 month period ended 30th June 2012.
Decision(s): The Minister approved the report detailing Budget Management disclosures for the 6 month period to 30th June 2012 and requested that it be presented to the States.
Reason(s) for Decision: The Public Finances (Jersey) Law 2005 (and the Finance Regulations approved under that Law and Financial Directions) require the Minister for Treasury and Resources to report to the States twice yearly on a number of issues relating to States Finances.
Resource Implications: There are no financial or manpower implications as a direct result of this decision.
Action required: Business Manager to request the Greffier of the States to arrange for the attached Report on Budget Management disclosures to be presented to the States at the earliest opportunity.
Signature:		Position: Senator P F C Ozouf, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Budget Management Report for the 6 month period ended 30 June 2012

TREASURY & RESOURCES MINISTER

Budget Management Report for the Period Ended 30th June 2012

The Administration of the Public Finances of Jersey

In accordance with the Public Finances (Jersey) Law 2005 (the ‘Law’) (including Regulations approved under that Law and Financial Directions) certain matters relating to budgeting and to the financial control and administration of States Trading Operations are required to be reported to the States twice yearly by the Minister for Treasury and Resources (the ‘Minister’).

This report summarises all decisions made during the 6 month period to 30th June 2012, the majority of which have been previously published. Where decisions have not previously been published, this is due to one of two reasons:

The decisions were exempted under the States of Jersey (‘SoJ’) Code of Practice on Public Access to Official Information; or
The decisions were taken by the Treasurer of the States under delegated authority from the Minister.

Reporting on Decisions

The areas of administration which are to be reported on are as follows:

The use of trading funds by States Trading Operations;
Borrowing;
Budget transfers; and
Carry forward of revenue balances from 2011.

2.1 Use of Trading Funds

The following Ministerial Decision on the use of trading funds was approved in the 6 month period ended 30th June:

MD-TR-2011-0145 – Use of Jersey Airport Trading Fund in 2012 for the height alignment of the Arrivals Building Project

2.2 Borrowing

2.2.1 Jersey Student Loan Scheme

During the 6 month period to 30th June, 32 new loans with a collective value of £47,126.18 were guaranteed by the Treasurer of the States under the Jersey Student Loan Scheme. As at 30th June 2012, the total amount loaned under the Jersey Student Loan Scheme was £1,569,924.13. Terms with the intermediaries require the States of Jersey to underwrite 100% of the value of the loans.

2.3 Budget Transfers

Article 2(6) of the Public Finances (Transitional Arrangements) (Jersey) Order 2011 states that any head of expenditure may be varied from time to time in 2012 in accordance with (a) Article 15 of the Law as it was in force before 1st January 2012 or (b) Article 18 of the Law as it is in force from 1st January 2012.

Budget transfers under Article 2(6) of the Public Finances (Transitional Arrangements) (Jersey) Order 2011 are reported on the following basis:-

Transfers between revenue heads of expenditure;
Transfers between capital heads of expenditure;
Transfers between revenue and capital heads of expenditure; and
Transfers between revenue and capital heads of expenditure where the transfer is required in order to comply with Generally Accepted Accounting Principles (GAAP)

Budget transfers between departments vary the budgets of individual departments but are net nil in total.

2.3.1 Transfers Between Revenue Heads of Expenditure

Revenue transfers during the 6 month period to 30th June 2012 are shown below:

Department		£	Funding of:-
To	From	£	Funding of:-
T&R	CMD	4,328,700	Pensions Budgets – Transfer of Service Responsibility
H&SS	T&R	88,909	Transfer of Senior Accountant Post
CMD	T&R	20,339,8501	Transfer of HR & IS budget for 2011
Home Affairs	Restructuring Provision	68,300	Restructuring – two VR applications
Probation	Judicial Greffe	225,000	Transfer of responsibility for the payment of independent guardians appointed by the Jersey Family Court Advisory Service
H&SS	Restructuring Provision	615,000	Restructuring – LEAN Training & Development and Energy Reduction Projects
Law Officer’s Department	Data Protection Registry	25,000	Repayment of Temporary Loan
T&R	Central Reserves	350,437	LVCR Legal Costs
CMD	T&R	13,000	Maintenance of Caesar GST system
CMD	Central Reserves	500,000	Freedom of Information Law Programme Board
DoE	Restructuring Provision	140,000	Restructuring – various projects
CMD		62,000
H&SS		127,000
EDD		205,000
H&SS	Central Reserves	1,758,000	Funding for Service Improvement
	Total	28,846,196

1 made up of £19,820,948 Net Revenue Expenditure and £518,902 depreciation

2.3.2 Transfers Between Capital Heads of Expenditure

Transfers between existing capital heads of expenditure during the 6 month period to 30th June are shown below:

Department		£	Funding of:-
To	From	£	Funding of:-
CMD (various)	T&R (various)	4,811,196	Transfer of HR & IS budget for 2011
TTS (various capital projects)	TTS (Infrastructure Rolling Vote)	3,700,0002	Phillips Street Shaft, Ash Waste Storage Cell, Replacement Assets
Harbours (Elizabeth Terminal Tralier Park)	Harbours (Elizabeth Terminal Phase 3 Mezzanine)	200,000	Elizabeth Terminal Trailer Park Enabling Works
T&R (Tax Transformation Programme & IT Systems)	Central Planning Vote	250,000	Taxes Transformation Programme
H&SS (Minor Capital)	H&SS (ICR and CT Scanner)	110,515	ICU Medical Supply Pendants
T&R (JPH) (A&E/Radiology)	T&R (JPH) (New Oncology Unit)	250,000	Change of scope for Oncology Relocation Project
	Total	9,321,711

2 Only £3.1m actually transferred

2.3.3 Transfers Between Revenue and Capital Heads of Expenditure

Transfers between revenue (Rev) and capital (Cap) during the 6 month period to 30th June are shown below:

Department		£	Funding of:-
To	From	£	Funding of:-
T&R Cap (ITAX Software Fixed Asset)	T&R Rev	402,029	ITAX Software
CMD Rev	Corporate Contingency	78,900	Data Security Officer
T&R Rev	Corporate Contingency	82,706	Project Alpha Legal Fees
T&R Rev	Corporate Contingency	76,000	Pensions Review Project
TTS Cap (Infrastructure)	TTS Rev	25,000	Le Dicq Pumping Station
T&R (JPH) Cap (Prison Improvement Phase 4)	Home Affairs Rev	55,000	Prison Horticulture Project
T&R (JPH) Rev	Central Planning Vote	150,000	Hospital Pre-feasibility Spatial Assessment Project
	Total	869,635

2.3.4 Transfers Between Revenue and Capital Heads of Expenditure where the transfer is required in order to comply with Generally Accepted Accounting Principles (GAAP)

The States of Jersey implemented Generally Accepted Accounting Principles (GAAP) in 2009. GAAP accounting requires that expenditure should be accounted for as capital only if it meets the GAAP accounting definition of capital expenditure, and as revenue otherwise.

GAAP transfers between revenue (Rev) and capital (Cap) during the 6 month period to 30th June are shown below:

Department		£	Funding of:-
To	From	£	Funding of:-
Home Affairs Cap (Minor Capital)	Home Affairs Rev	30,000	Jersey Customs and Immigration Service Information Technology Projects
ESC Cap (Minor Capital)	ESC Rev	83,779	Purchase of two school vehicles
T&R (JPH) Rev	T&R (JPH) Cap (Highlands A Block)	305,000	Highlands College Turner Building refurbishment
	Total	418,779

2.4 Carry Forwards (MD-TR-2012-0019 refers)

Revenue Carry Forwards

Total 2011 Year End Departmental Revenue Carry Forwards of £22,856,636 were approved by the Minister as shown below:

Department	Approved amount
	£
Chief Minister’s	886,755
Overseas Aid	4,202
EDD	957,984
ESC	3,353,660
HSS	1,028,000
Home Affairs	1,429,035
Housing	1,379,906
DoE	216,608
Soc Sec	10,482,953
TTS	1,824,841
T&R	787,753
Non-Ministerial States Funded Bodies	504,939
States Assembly	-
Total	£22,856,636

Restructuring Carry Forwards

The Minister also approved Restructuring Costs Carry Forwards of £1,697,882 as shown below:

Department	£
CMD	176,0773
H&SS	290,000
Home Affairs	24,500
DoE	64,000
TTS	25,076
T&R	406,3294
T&R Restructuring Costs	711,900
Total	£1,697,882

3 Actual amount transferred £142,677 – a reduction of £33,400

4 Actual amount transferred £439,729 – an increase of £33,400

(Balancing figure of £33,400 refers to Actuarial Review which moved from CMD to T&R during 2012)

Fiscal Stimulus Carry Forwards

In the same Ministerial Decision, the Minister also approved Fiscal Stimulus Carry Forwards of £155,593 as shown below:

Department	Fiscal Stimulus Carry Forward Request £	Reason
Economic Development	89,999	Single European Payments Area Project
Treasury and Resources	65,594	Grant for Jersey Hospice Care Project
Total	£155,593

Central Reserves / Contingency

The £2 million allocation for an AME Central Reserve was not required in 2011 but was carried forward to fund increases in Income Support costs as a result of increasing unemployment.

Of the £6.8 million allocated to DEL Central Reserves in the 2011 Business Plan, £950,000 was allocated to departments leaving £5.9 million to be carried forward to 2012 (£4,550,000 One-Off Reserve and £1,362,000 DEL Reserve as per table below).

Department	Central Reserves Carry Forward Request £	Reason
T&R – Central Reserves	2,000,000	AME Reserve for unemployment
	4,550,000	One-Off Reserve balance
	1,362,000	DEL Reserve
Total	£7,912,000

Project Alpha

The £5 million allocation from the Insurance Deductible Fund for Project Alpha has been transferred as a ring-fenced amount in Central Reserves.

Court and Case Costs Smoothing Reserve

The Court and Case Cost underspends from departments, £2,859,917, mainly non-ministerial, have been carried forward to be held in Central Reserves and earmarked in the Smoothing Reserve.

2012 Spending Pressures

A number of departments had underspends in their base cash limits which were not requested to be carried forward. This provided the opportunity for the Corporate Management Board to allocate funding for priority spending pressures identified for 2012 for which no alternative funds were available as follows:

Department	Amount £	Reason
Chief Minister’s	100,000	Assisting Developing Countries
	100,000	External expert advice on specialist technical matters related to the extension of the WTO membership
	127,000	To establish the new roles of HSS HR Director and Medical Staffing Manager as recommended by the Verita report
	91,000	Extra Law Draftsman for various Laws funded by T&R, Housing and JFSC
Economic Development	150,000	Policy and Regulation – Digital Jersey
Health and Social Services	330,000	Activity Increasese – Secure Placement
Bailiff’s Chambers	65,609	Queen’s Diamond Jubilee Celebrations
Total	£963,609