DEPARTMENT FOR INFRASTRUCTURE
BUDGET TRANSFER FROM REVENUE TO CAPITAL TO FUND THE
CONSTRUCTION OF AN ASBESTOS CELL AT LA COLLETTE
- Purpose of Report
To enable the Minister to approve the internal budget transfer totalling £750,000 in 2016 from the Department for Infrastructure (“DFI”) revenue head of expenditure to the Asbestos Waste Disposal capital head of expenditure (Q00MD11091).
- Background
On 12th April 2016 the Minister for Treasury and Resources approved the carryforward of £1,500,000 from the department’s 2015 underspend, to fund the safe disposal of legacy asbestos. £750,000 of this has been identified to fund the additional Asbestos cell construction that will be required to contain both the legacy waste and any new asbestos. The original asbestos cell (Cell 30) is filling faster than anticipated and it is anticipated that it will become full during the transfer of legacy asbestos.
This increased filling rate is due to the following reasons:-
- Each time asbestos is deposited in the cell it must be covered by inert graded top cover material. This top cover takes up void space and reduces the capacity of the cell.
- In October 2015 the Health and Safety Inspectorate issued an update to Approved Code of Practice (ACoP) 8, Management of Exposure to Asbestos in Workplace Buildings and Structures. This ACoP in practise states that all asbestos must be double bagged. This has resulted in an increased fill rate of Cell 30 as it is presently the only licenced reception site for bagged asbestos.
The asbestos legacy transfer project is due to start in the latter part of 2016 and it is clear that that Cell 30 will not have the capacity to hold all of the legacy asbestos and the new asbestos arising.
In order to allow the legacy contract to continue and progress unimpeded a new cell adjacent to cell 30 needs to be constructed. This will enable the seamless transfer of the disposal of legacy asbestos and new asbestos arisings from cell 30 to a new cell once cell 30 is full. This new cell will also maximise the space available for future asbestos disposal.
- Recommendation
That the Minister approves the transfer of £750,000 budget from the DFI revenue head of expenditure to the Asbestos Waste Disposal capital head of expenditure (Q00MD11091).
- Reason for Decision
Under International Financial Reporting Standards (IFRS) expenditure that meets the definition of capital expenditure must be capitalised. This budget transfer is the movement in budget between revenue and capital required to align the budgeting treatment of expenditure with the accounting treatment, in order to comply with IFRS.
Article 18 of the Public Finances (Jersey) Law 2005 (the Law) and Finance Direction No.3.6 ‘Variations to Heads of Expenditure’ (the FD) set out the procedures for transfers between heads of expenditure. Paragraph 5.1 of the FD and Article 18(2) (c) of the Law require departments wanting to transfer funds between heads of expenditure to obtain the approval of the Minister responsible for their administration. Article 18(1) (c) of the Law requires the approval of the Minister for Treasury and Resources for any budget transfers between heads of expenditure. Paragraph 5.2 of the FD delegates non-contentious transfers between heads of expenditure up to £1,000,000 to the Treasurer of the States. Paragraph 5.3 of the FD states that, in all other instances, the approval of the Minister for Treasury and Resources must be obtained.
This transfer puts in place the funding required for the construction of a new asbestos cell at La Collette.
- Resource Implications
The DFI revenue head of expenditure will decrease in 2016 by £750,000, and the Asbestos Waste Disposal capital head of expenditure (Q00MD11091) will increase by £750,000.
6. Action Required
The Finance Director to request the approval of the Treasurer of the States for this budget transfer.
Written by: | Finance Manager |
Approved by: | Director of Finance |