Budget transfer from Health and Social Services to Chief Minister's Department: Computer Development

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A decision made 9 December 2016:

Decision Reference: MD-TR-2016-0105
Decision Summary Title:	Transfer of £1.38m from HSSD capital heads of expenditure Equipment, (Minor Capital & Replacement RIS /PACS IT assets) to CMD Computer Development Vote head of expenditure for Infrastructure Support		Date of Decision Summary:	6th December 2016
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:	Transfer of £1.38m from HSSD capital heads of expenditure Equipment, (Minor Capital & Replacement RIS /PACS IT assets) to CMD Computer Development Vote head of expenditure for Infrastructure Support		Date of Written Report:	6th December 2016
Written Report Author:	Head of Decision Support		Written Report : Public or Exempt?	Public
Subject: Transfer of £1.38m from HSSD capital heads of expenditure Equipment, (Minor Capital & Replacement RIS /PACS IT assets) to CMD Computer Development Vote head of expenditure for Infrastructure Support
Decision(s): The Minister approved a non-recurring budget transfer of £1,384,000 in 2016 from the Health and Social Services capital heads of expenditure (Equipment & minor capital and Replacement RIS/PACS IT assets) to the Chief Minister’s Department Computer Development capital head of expenditure for Infrastructure Support.
Reason(s) for Decision: Article 18(1)(c) of the Public Finances (Jersey) 2005 states that all or any part of the amount appropriated by a head of expenditure may, with the approval of the Minister for Treasury and Resources, be used for the purposes of another head of expenditure. This decision allows a new centralised operating model to apply to all new capital IT installations.
Resource Implications: The Chief Minister’s Department Computer Development capital head of expenditure (F0000C0009) to increase by £1,384,000 in 2016 and the Health and Social Services Equipment and minor capital head of expenditure (J00MC10005) to decrease by £715,040 and Replacement RIS/PACS IT assets capital head of expenditure (J00MF15026) to decrease by £668,690 in 2016. This decision does not change the total amount of expenditure approved by the States in the Medium Term Financial Plan 2016 to 2019.
Action required: Head of Decision Support to advise the Finance Directors of Corporate Group and Health and Social Services once this decision has been approved.
Signature:		Position: Senator A J H Maclean, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Budget transfer from Health and Social Services to Chief Minister's Department: Computer Development

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Treasury and Resources

Ministerial Decision Report

Transfer of £1.38m from HSSD capital heads of expenditure Equipment, (Minor Capital & Replacement RIS /PACS IT assets) to CMD Computer Development Vote head of expenditure for Infrastructure Support

Purpose of Report

To approve the transfer of £1.38m from HSSD capital heads of expenditure Equipment, (Minor Capital & Replacement RIS /PACS IT assets) to CMD Computer Development Vote head of expenditure for Infrastructure Support.

Background

Historically States IT infrastructure assets and corresponding budgets have operated under a devolved structure; departments owned the infrastructure and budgets and annual revenue costs associated with maintenance were recharged by ISD to departments. Any new capital bids were the responsibility of departments with ISD providing a supporting role.

Recent developments in IT have lead organisations to change their IT operating model and move away from the devolved structure to a centralised one. ISD have for a number of years used consolidated, shared platforms of virtualised servers and storage arrays – This has led to capital and revenue savings for departments and efficiencies within ISD through economies of scale. However, the asset ownership and budget structure of the States remains devolved and is at odds with maximising efficiency and value for money. This needs to be shifted to a centralised operating model where ISD will become responsible for bidding and holding all revenue and capital budgets for consolidated infrastructure with departments providing a supporting role in the bidding process.

The centralised operating model will apply to all new capital IT installations. However, to expedite the shift there are a number of existing assets and budgets that need to be transferred from departments to ISD.

This decision specifically concerns the transfer of Health and Social Services Equipment and minor capital and Replacement RIS/PACS IT budgets into ISD to cover costs associated with the enhancement and annual maintenance costs:

Equipment and minor capital (J00MC10005) 715,040
Replacement RIS/PACS IT assets (J00MF15026) 668,960

1,384,000

Providing ISD control over the capital budgets above will allow the drawdown of annual maintenance costs, via annual capital to revenue transfers under GAAP, and enhance the infrastructure as required for Health and Social Services elements of the remaining life of these assets without the need to recharge Health and Social Services who do not have the required revenue budget to support the recharge. It should be noted that these assets are already operating in the centralised model through the consolidated infrastructure platforms, purchased using ISD capital budgets, supporting multiple departments and significant capital and revenue savings have already been realised.

The new operating model will be facilitated through an SLA effective 1 January 2017 between Information Services and Health and Social Services. This example will be used as the basis for rolling out SLAs across other States departments.

Once the current assets have reached the end of their useful life and associated budgets become depleted ISD, in accordance with the SLA, will work with Health and Social Services to present a solution and bid to the States to secure the appropriate resource.

3. Recommendation

The Minister is recommended to approve the transfer of £1.38m from HSSD capital heads of expenditure Equipment, (Minor Capital & Replacement RIS /PACS IT assets) to CMD Computer Development Vote head of expenditure for Infrastructure Support.

4. Reason for Decision

Article 18(1)(c) of the Public Finances (Jersey) 2005 states that all or any part of the amount appropriated by a head of expenditure may, with the approval of the Minister for Treasury and Resources, be used for the purposes of another head of expenditure.

This decision allows a new centralised operating model to apply to all new capital IT installations.

5. Resource Implications

The Chief Minister’s Department Computer Development capital head of expenditure (F0000C0009) to increase by £1,384,000 in 2016 and the Health and Social Services Equipment and minor capital head of expenditure (J00MC10005) to decrease by £715,040 and Replacement RIS/PACS IT assets capital head of expenditure (J00MF15026) to decrease by £668,690 in 2016. This decision does not change the total amount of expenditure approved by the States in the Medium Term Financial Plan 2016 to 2019.

Report author : Head of Decision Support	Document date 4th November 2016
Quality Assurance / Review : Director of Financial Planning and Performance	File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions
MD sponsor : Head of Decision Support