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A decision made (27/06/2006) regarding 2007 - 2009 Cash Limits and 2005 Carry Forwards.

Subject:	2007 – 2009 Cash Limits and 2005 Carry Forwards
Decision Reference:	MD-PE-2006-74	Exempt clause(s):
Type of Report (oral or written):	Written	Person Giving Report (if oral):		N/A
Telephone or e-mail Meeting?	N/A	Report File ref:
Written Report Title:	As above.	Written report – Author:		Ellen Littlechild, Finance Director
Decision(s): I. To accept the Treasury and Resources Minister’s cash limit allocation for the Planning and Environment Department for 2007 to 2009. II. To accept the carry forward amount of £316,487 and agree that the remaining unspent balance of £872,519, is transferred to provide funding in accordance with the funding priorities agreed by the Council of Ministers. III. To note that a provision will be held against the unforeseen contingency balance of £700,000 for action due to result from the rescindment of a planning permit identified.
Reason(s) for decision: To accept the both the Department’s 2007 – 2009 cash limit and the carryforward balance as requested by the Treasury and Resources Department.
Action required: To notify the Minister for Treasury and Resources of these decisions.
Signature: (Minister/ Assistant Minister)			Date of Decision: 27 June 2006

2007 - 2009 Cash Limits and 2005 Carry Forward.

PLANNING AND ENVIRONMENT

CASH LIMIT AND CARRY FORWARD

Purpose of the Report

The purpose of this report is to ask the Minister for Planning and Environment to:

· accept the Department’s cash limit for 2007 – 2009; and

· accept the Department’s 2005 carry forward request of £316,487.

Background

Cash Limit 2007 – 2009

The Treasury and Resources Minister has agreed the cash limits for 2007 – 2009, following the consideration and comment of both the Corporate Management Board (CMB) and the Council of Ministers (CoM).

	2007	2008	2009
	£'000	£'000	£'000
Cash Limit b/fwd	5,896.9	5,720.1	5,599.8
Departmental Transfers Removal of 2% PECRS provision for pre 1987 debt Departmental Transfers	(100.6)
Service Reduction	(173.7)	(226.2)
Pay Awards	155.3	153.2	151.4
Non-staff inflation (2.5%)	(7.0)	(9.3)	(10.5)
Allocation of Efficiency Saving	(50.9)	(38.1)	(6.8)
Cash Limit for States Business Plan	5,720.1	5,599.8	5,733.9

The three-year cash limits proposed include provision for:

· The outcomes of the 2006-2008 revenue resource allocation process;

· The outcomes of the Strategic Plan review;

· Pay awards from June 2006 through to June 2009, at 2.5% per annum;

· Inflation on prices at 2.5% per annum; and

· A further revision to the allocation of efficiency savings to reflect the new Ministerial departments, changes to procurement, property and VOIP.

Department’s 2005 Carryforward

The Department submitted its 2005 Annual Financial Report and Account to the Minister for Treasury and Resources and requested that the carryforward amounting to £1,189,017, or 12.8% of its gross revenue budget, should be carried forward from 2005 to 2006 in accordance with the Financial Code of Direction No9 – Carry Forward of Revenue Balances.

The carry forward of £1,189,017, or 12.8% of Planning and Environment’s gross revenue budget, was made up of the following underspends:

Planning and Building Underspend £248,671

This underspend related to staff vacancies and a change in accounting treatment of Historic Building Grants. This was offset by a reduction in Planning and Building Fee Income.

Property Division Underspend £223,002

Incomes from Property Rental at £1.2 million were £165,000 more than budget this positive variance was as a result of higher than projected income from Cafes, Car Parks and Storage Rentals. Also contributing to this underspend was a transfer of budget from Policy and Resources in respect of Jersey Property Holdings that was not spent in 2005.

Environmental Services Underspend £583,667

The main reason for this underspend was due to the fact that the Countryside Renewal Grant Scheme was not set-up until mid 2005 and there has been a lack of confidence in the farming industry.

Meteorology Services Underspend £133,678

The underspend is due to staff vacancies and building maintenance.

Discussion

Cash Limit 2007 – 2009

The States will be asked to confirm the 2007 cash limits and 2008-2009 revenue expenditure allocations to Departments during the course of the States Business Plan debate planned for 12 September 2006.

This is the first year that the States Business Plan and Budget will be approved under the Public Finances (Jersey) Law 2005. The States Business Plan will now approve all the expenditure proposals, comprising:

· overall expenditure targets for 2007 – 2011;

· detailed revenue expenditure allocations to Departments for 2007;

· revenue expenditure allocations to Departments for 2008 and 2009,

· a capital programme for 2007 – 2011

· the operating account and capital expenditure of States Trading Operations.

The Budget 2007 will now only approve the tax and funding proposals required as a result of the expenditure decisions.

Department’s 2005 Carryforward

On the 23 March 2006 the Council of Ministers reviewed the balances of Departments carry forward and approved a carryforward of £316,487, which amounts to 3% of the Departments gross expenditure budget, to be made available for the following:

The Waterfront: £35,000

The funds will be required to carry out a consultation on the review of development framework which involves an independent reviewer of representations, and a Forum including facilitator and speaker.

All Island Cattle Disease Testing: £25,000

This testing should have been accomplished in 2005 but in the absence of a States Vet and the panic around Avian Influenza the testing did not get carried out. The consequence is that the expenditure will now fall in 2006.

Historic Building Grants: £115,000

The Department has recently changed its accounting treatment for grants so that they fall into line with the Finance Directions. Of the £115,000 these funds have all been ‘ring-fenced’ to potential applicants who must meet certain planning requirements.

Meteorology Department: £90,487

The Meteorology Department has been tasked with reducing the number of staff providing the meteorology service by five FTE’s in 2006. Although the Departments aims to make these savings its unlikely that they will all be achieved in 2006 due to the retention of cost by the Department at the end of a redeployment period. The Department requests that it carry forwards the budget amounting to £133,700 for those members of staff who have been unable to be redeployed and/or who are not prepared to take VR/VER.

Chief Executive: £51,000

This carryforward will required for the salary and recruitment costs required for the new Chief Executive.

In addition a provision will be held against the unforeseen contingence balance of £700,000 in respect of action due to result from the rescindment of a planning permit.

Recommendations

Cash Limit 2007 – 2009

It is recommended that the Minister agrees the Department’s 2007 to 2009 Cash Limits as shown below:

Year	£’000
2007	5,720.1
2008	5,599.8
2009	5,733.9

Department’s 2005 Carryforward

It is recommended that the Minister approves the carry forward amount of £316,487 and agree that the remaining unspent balance of £872,519, is transferred to provide funding in accordance with the funding priorities agreed by the Council of Ministers.

To note that a provision will be held against the unforeseen contingency balance of £700,000 for action due to result from the rescindment of a planning permit identified.

Reason (s) for Decision

To accept the both the Department’s 2007 – 2009 cash limit and the carryforward balances as detailed in the report.

Action Required

To advise the Minister for Treasury and Resources Department of the acceptance of the Department’s 2007 to 2009 Cash Limits as shown below:

Year	£’000
2007	5,720.1
2008	5,599.8
2009	5,733.9

To also inform the Treasury and Resources Minister that the carryforward balance allocated to Planning and Environment is accepted.

Written by:	Ellen Littlechild, Finance Director

Approved by:	John Richardson, Chief Officer

Attachment: