Budget transfer of ICT strategy funding

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A decision made (12.02.07) to approve the budget transfer of ICT strategy funding from Revenue to Capital.

Subject:	Budget transfer of ICT strategy funding from Revenue to Capital
Decision Reference:	MD-ESC-2007-0009	Exempt clause(s):		n/a
Type of Report (oral or written):	Written	Person Giving Report (if oral):		n/a
Telephone or e-mail Meeting?	n/a	Report File ref:		ESC/Governance/Ministerial Government/Ministerial Reports/2007/rpt – 20070119 ICT revenue – Capital Transfers
Written Report – Title:	2006 Revenue to Capital Budget Transfer – ICT funding	Written report – Author:		J. Littlewood, Head of Finance.
Decision(s): To approve the transfer from the Education, Sport and Culture Department’s revenue budget the sum of £515,000 to ESC’s capital head of expenditure relating to the ICT strategy phase II.
Reason(s) for decision: No permanent mechanism is yet in place to fund phase II of the ICT strategy and the ESC Department has been able to identify a source of funds from within its revenue budgets to provide some of the required funding for the strategy. These funds need to be transferred to the Department’s ICT Capital budget. Financial Direction 3.6 requires that the Minister make application to the Minister for Treasury and Resources for permission to transfer budgets between revenue and capital heads of expenditure. This proposal has no additional financial or manpower implications on the States.
Action required: To transfer the revenue budgets identified in the report to vote C3314 – ICT Strategy phase II.
Signature:			Date of Decision:

Budget transfer of ICT strategy funding

Department for Education, Sport and Culture Report for Minister
Subject:	2006 Revenue to Capital Budget Transfer – ICT funding
Exempt Clause:	None	Date:	19 January 2007

Authors:	John Littlewood – Head of Finance

1. Introduction

The purpose of this report is to ask the Minister to approve a budget transfer from the ESC ICT revenue budget to the ESC ICT capital budget in order to correctly identify ICT strategy spend during 2006 and to request the Minister for Treasury and Resources to approve the transaction.

2. Background

The Minister will recall that the issue of how to fund the ICT replacement programme and phase II of the ICT strategy has been on the agenda since the first phase of the strategy commenced in 1999. As no permanent funding mechanism has yet been found for phase II of the strategy, alternative sources of funding have had to be identified.

In 2005 it was agreed that revenue and capital balances could be used to fund items from phase II of the strategy including enhancement of the existing wide area network, replacement of items bought during phase I of the strategy that were reaching obsolescence and developing new uses for the technology.

At the year end for 2005 the sum of £778,000 was transferred from the revenue budget to capital and £682,070 expenditure incurred during the year was also transferred, leaving the sum of £95,930 unspent at the year end.

A further £551,697 was transferred from completed capital projects to supplement the previous year’s revenue transfer during early 2006 and the budget for phase II of the ICT strategy stood at £1,329,697 prior to the year end.

During 2006, over £825,000 was spent on strategy projects, including £676,500 on replacement of curriculum PCs and £52,600 on teacher connectivity. It is proposed to capitalise £814,553 of this spend, with the remainder of the costs being charged to revenue.

3. 2006 Funding

No permanent funding mechanism is yet in place for the ICT strategy and for 2006 revenue funding for phase II of the strategy has been identified as follows:

ICT section budget 115,000

Schools (top-sliced) 150,000

Carry forward 2005-6 250,000

Total £515,000

In order to move this funding to the correct capital project, it is necessary to request the permission of the Minister for Treasury and Resources in accordance with Financial Direction 3.6 “Variations to Heads of Expenditure”.

Provision has also been made for a further £510,000 funding from capital once the final payments have been made on the three projects concerned. It is proposed that these transfers take place during 2007.

4. Financial Position at 31 Dec 2006

A summary of the financial position is shown below :

	Budget £	Expenditure £
Brought forward 1 Jan 2006	778,000	682,070
Capital Projects transferred 06	551,697	-
Expenditure 2006		814,553
ICT budget transfer	115,000
Schools budget transfers	150,000
Carry forward transferred ICT	135,000
Carry forward transferred S&C	115,000
Out-turn position 2006	1,844,697	1,496,623

Figures in italics indicate transfers proposed in this report.

5. Future Funding

Discussions continue with regard to the long term ICT funding arrangements for 2008 and beyond. A request will be made for additional funding in the cash limit from 2008.

Future transfers from capital budgets will be more limited as most projects now fall within the remit of the States Property Holdings department and scope for finding additional funding from within existing resources is very limited.

Current projections are that at least £500,000-£600,000 will be required each year for replacement and enhancement of the ICT facilities in schools.

6. Recommendations

It is recommended that the Minister:

(i) notes the position with regard to ICT strategy expenditure for 2006

(ii) requests the Minister for Treasury and Resources to approve the transfer of budgets totalling £515,000 from the ESC department’s revenue budget to capital in respect of the ICT strategy phase II

(iii) notes the future funding position with regard to 2008 and beyond