Contingency Funding: 2018 and 2019 Pay Awards

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While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.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 14 December 2018

Decision Reference: MD-TR-2018-0147
Decision Summary Title:	Contingency Funding for 2018 and 2019 Pay Awards and Increased Employer’s Pension Contributions		Date of Decision Summary:	14th December 2018
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:	Contingency Funding for 2018 and 2019 Pay Awards and Increased Employer’s Pension Contributions		Date of Written Report:	14th December 2018
Written Report Author:	Head of Decision Support		Written Report : Public or Exempt?	Public
Subject: The allocation of £18,481,100 in 2018 and 2019 from Central Contingencies to various departments as detailed in the attached report, to cover the recurring and non-recurring costs associated with the 2018/19 Pay Award in respect of Civil Servants and Associated Groups, Teachers/Headteachers and Uniformed Services, and the pay groups who have accepted Workforce Modernisation Awards, and to fund increased employer’s pension contributions.
Decision(s): The Minister approved an allocation of £18,481,100 from the Central Contingencies to the Departments listed in the written report to fund the impact of the 2018/19 pay award in those years and to fund increased employer’s pension contributions in 2019.
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 current Contingency Allocation Policy (published as R.112/2018) sets the requirement for all allocations from contingency over £50,000 to be considered by the Investment Appraisal Board, Principal Accountable Officer and States Treasurer prior to submission to the Minister for approval. The Board has recommended these requests for approval. The requests have also been recommended for approval by the Principal Accountable Officer and States Treasurer.
Resource Implications: Central Contingencies to decrease by £6,039,400 in 2018 and £12,441,700 in 2019 and Departmental revenue heads of expenditure to increase by a total identical amount, as detailed in the table in the written report. The recurring effect of these allocations will be reflected in the Government Plan 2020-2023. 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: The Head of Decision Support to advise the Director of Financial Planning and Performance and the Finance Directors of the receiving departments that this decision is approved.
Signature:		Position: Deputy Susie Pinel Minister for Treasury and Resources
Date Signed:		Date of Decision:

Contingency Funding: 2018 and 2019 Pay Awards

States Treasury and Exchequer

Ministerial Decision Report

Contingency Funding for 2018 and 2019 Pay Awards and Increased Employer’s Pension Contributions

Purpose of Report

To enable the Minister to approve the allocation of £18,481,100 from Central Contingencies to various departments as detailed below, to cover the recurring and non-recurring costs associated with the 2018/19 Pay Award in respect of Civil Servants and Associated Groups, Teachers/Headteachers and Uniformed Services, and the Pay Groups who have accepted the Workforce Modernisation pay award (Ambulance, Family Support Workers, Residential Childcare Workers and Youth Workers) , and to fund increased employer’s pension contributions.

As the Workforce Modernisation pay award was a three year deal, the Minister will be required to approve the 2020 allocation of funding to the Workforce Modernisation Pay Groups in a separate Ministerial Decision, during the next Government Plan 2020-2023 period.

2018/19 Pay Award

Funding provisions were made in the Medium Term Financial Plan Addition in the Central Contingency (Pay Provision) for anticipated pay awards across all pay groups.

Civil Servants and Associated Groups, Teachers/Headteachers and Uniformed Services

On 21st November 2018, the States Employment Board wrote to all employees to communicate the implementation of the 2018/19 pay offers which had been made to Civil Servants and Associated Groups, Teachers/Headteachers and Uniformed Services.

This Decision allocates the following Central Contingencies funding to meet the costs of the recurring and non-recurring impact of the 2018/19 Pay Award in respect of Civil Servants and Associated Groups, Teachers/Headteachers and Uniformed Services:

A 1% consolidated and a 1.1% non-consolidated pay award for Civil Servants and Associated Groups in 2018, and
a 1% consolidated and a 1% non-consolidated pay award for Civil Servants and Associated Groups in 2019.

A 2% consolidated and a 1.1% non-consolidated pay award for Teachers/Headteachers and Uniformed Services in 2018, and
a 2% consolidated and a 1% non-consolidated pay award for Teachers/Headteachers and Uniformed Services in 2019.

Employees in all pay groups whose salary (including supplements) is greater than £100,000 are not eligible to receive the pay award, and any increases in pay are capped once an employee’s salary (including supplements) reaches £100,000.

Workforce Modernisation Groups

As part of the public sector reform programme WFM worked in partnership with public sector unions to develop a unified equality driven, affordable and sustainable new reward framework encompassing a new grade/pay structure, and new harmonised terms and conditions of service.

After many months of negotiation the final offer for Workforce Modernisation was provided to the Trades Unions on 3rd November 2017 and personal statements setting out the impact of the offer on individuals were sent out to the affected staff (c5000) on 8th November 2017. The affected Unions put the final offer to a ballot and the results on 13th February 2018 provided the following outcomes:

Rejection by Civil Servants, Nurses and Midwives, and Manual Workers.
Acceptance by Ambulance, Family Support Workers, Residential Child Care Officers and Youth Service.

It was subsequently confirmed by the Chief Executive that whilst the Workforce Modernisation offer would be formally withdrawn from those groups that had voted to reject it, the offer would be honoured for those groups that had accepted it.

Increased Employer’s Pension Contributions

The new PECRS CARE scheme was open to new starters from 1 January 2016 and from 1st January 2019, all employees (unless eligible to remain on the existing scheme) will move into the CARE scheme.

A provision was made in the MTFP for the anticipated costs of the increased employer’s pension contributions as a result of staff joining the new scheme. A sum of £2 million p.a. was set aside within the Central Pay Provision between 2019 and 2021.

Departments were asked to confirm their unfunded costs for 2019 of the increased pension contributions for all staff who were in post in November 2018. The total sum exceeded the central provision for 2019 and the shortfall will be funded from unallocated reserves.

Recommendation

The Minister is recommended to approve allocations from Central Contingencies to the following departments in 2018 and 2019 to cover the recurring and non-recurring costs associated with the 2018/19 pay award in respect of Civil Servants and Associated Groups, Teachers/Headteachers and Uniformed Services, and the Pay Groups who have accepted the Workforce Modernisation pay award (Ambulance, Family Support Workers, Residential Childcare Workers and Youth Workers) and to fund increased employer’s pension contributions:

These allocations will be transferred into the new Target Operating Model Financial structure within the work being carried out towards the 2019 Transition Report.

Reasons 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 current Contingency Allocation Policy (published as R.112/2018) sets the requirement for all allocations from contingency over £50,000 to be considered by the Investment Appraisal Board, Principal Accountable Officer and States Treasurer prior to submission to the Minister for approval. The Board has recommended these requests for approval. The requests have also been recommended for approval by the Principal Accountable Officer and States Treasurer.

5. Resource Implications

Central Contingencies to decrease by £6,039,400 in 2018 and £12,441,700 in 2019 and Departmental revenue heads of expenditure to increase by a total identical amount, as detailed in the table in the written report.

The recurring effect of these allocations will be reflected in the next Government Plan 2020-2023.

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 : 30th November 2018
Quality Assurance / Review: Director of Financial Planning and Performance	File name and path: Y:\Treasury\Sections\Financial Planning\Medium Term Financial Plan 2 Addition\2019 Transition Report\Pay\WR - Pay Award and Pensions Contibutions.doc
MD sponsor : Treasurer of the States