Budget transfer from Social Security to Treasury and Resources to fund restructuring and additional 4 full time equivalent posts

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A decision made 1 July 2010 regarding: Budget transfer from Social Security to Treasury and Resources to fund restructuring and additional 4 full time equivalent posts.

Decision Reference: MD-TR-2010-0104
Decision Summary Title:	Budget transfer from Social Security to Treasury and Resources		Date of Decision Summary:	28 June 2010
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:	Budget transfer from Social Security to Treasury and Resources		Date of Written Report:	28 June 2010
Written Report Author:	Head of Decision Support		Written Report : Public or Exempt?	Public
Subject: Budget transfer from Social Security to Treasury and Resources and additional 4 FTEs.
Decision(s): The Minister approved: a) The transfer of £500,000 from the Social Security Department to fund additional restructuring expenditure in the Treasury to improve capabilities and to generate additional tax revenues b) An Additional 4 FTEs for the Taxes Office to recruit additional officers for investigation and collection activities. Part of this expenditure will be recurring and will be covered in 2011 within the £6 million restructuring provision included in the Annual Business Plan.
Reason(s) for Decision: Under Article 15 of the Public Finances (Jersey) Law 2005 all or any part of the amount appropriated by a head of expenditure may, with the approval of the Minister – (a) be used for the purposes of another head of expenditure. Standing Order 21 and P.67/1999 – Regulation of Public Sector Employees charges the Minister for Treasury and Resources to regulate the number of persons that may be employed by the States of Jersey.
Resource Implications: There is no overall increase to States Spending as a direct result of this decision in 2010. There will be an increase of four FTE within the Taxes Office.
Action required: Transfers to be actioned by Head of Financial Planning, Head of Decision Support to inform Human Resources of the manpower approval.
Signature:		Position: Senator P F C Ozouf, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Budget transfer from Social Security to Treasury and Resources to fund restructuring and additional 4 full time equivalent posts

Treasury and Resources Department

Ministerial Decision Report

Budget transfer from Social Security to Treasury and Resources

1. Purpose of Report

To allow the Minister to approve the transfer of £500,000 from the Social Security Department to the Treasury and Resources Department and an additional 4 FTE in the Taxes Office.

2. Background

The Minister for Treasury and Resources has identified opportunities for restructuring investment in the Treasury which will improve capabilities and generate substantial additional tax revenues. As these will form part of general revenues rather than income of the Treasury there is a need to fund this investment. The Social Security Department is predicting an underspend in 2010 and has agreed to transfer some of this to Treasury and Resources to fund the investment. Part of this expenditure will be recurring and will be covered in 2011 within the £6 million restructuring provision included in the Annual Business Plan.

3. Budget transfer and Additional Manpower

The budget transfer from Social Security to Treasury and Resources is necessary to fund additional restructuring expenditure in the Treasury in 2010 to improve capabilities and generate substantial additional tax revenues, specifically:-

Taxes Office – Additional Staff

The Taxes Office is requesting £100,000 in 2010 to recruit four additional officers for investigation and collection activities. The cost of these officers will be significantly outweighed by the additional revenue generated and write-offs saved. The estimated net additional revenue is more than £400,000 as follows:-

Post	Annual Cost	Estimated gross annual revenue increase	Estimated net annual revenue increase
GST Auditor	62,000	125,000	63,000
GST Auditor	62,000	125,000	63,000
Trading Account Investigator	62,000	250,000	188,000
Tax Collector	62,000	185,000	123,000
Total	248,000	685,000	437,000

The annual cost of the additional staff is £248,000. The Taxes Office intends to recruit 4 FTE in September 2010 and therefore require £100,000 for the remaining quarter of the year for the posts and associated recruitment costs.

Tax Review

The Treasury wishes to commission an independent review of the tax functions within Government with a view to increasing tax revenues and improving efficiencies. The review will look at the overall structure and resource allocation of all tax related functions within the States of Jersey and make recommendations on changes and improvements. Treasury and Resources is therefore requesting an additional £250,000 in order to meet the cost of the review, which is expected to be about £150,000, and also the 2010 cost of implementing the review recommendations, which is likely to be a further £100,000.

Treasury Restructure

The context for the re-structure of the Treasury and the Financial Management Change Programme was a growing concern over time in respect of the governance of the States of Jersey finances. As a result of these concerns, a specific piece of work was commissioned in 2009/10 to outline a strategy for the reform of the States-wide Finance Function, and an interim delivery team was appointed in early 2010 to produce a detailed delivery plan and to implement the necessary improvements. Interim appointments were necessary in order to bring in the relevant expertise to design and implement the considerable changes required in short timescales.

The recurring costs of the Treasury restructure have been identified as £550,000 which is included in the 2011 Business Plan as a growth item. However, a shortfall of £150,000 in relation to restructuring costs associated in 2010 has been identified mainly relating to the unbudgeted cost of the new interim directors in Treasury. Therefore the Treasury requests an additional £150,000 to fund the shortfall in relation to restructuring costs in 2010.

4. Recommendation

It is recommended that the Minister for Treasury and Resources approves the budget transfer of £500,000 from Social Security to Treasury and Resources in order to invest and restructure the Treasury and Resources Department, and approves an additional 4 FTE to recruit additional officers for investigation and collection activities in the Taxes Office.

5. Reason for Decision

Under Article 15 of the Public Finances (Jersey) Law 2005 all or any part of the amount appropriated by a head of expenditure may, with the approval of the Minister –

(a) be used for the purposes of another head of expenditure.

Standing Order 21 and P.67/1999 – Regulation of Public Sector Employees charges the Minister for Treasury and Resources to regulate the number of persons that may be employed by the States of Jersey.

6. Resource Implications

There is no overall increase to States Spending as a direct result of this decision in 2010. There will be an increase four FTE within the Taxes Office.