Government Co-Funded Payroll Scheme Phase 3+: Approval of guidance

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A decision made on 30 November 2020

Decision Reference: MD-TR-2020-0148
Decision Summary Title:	Approval of the guidance for the Government Co-Funded Payroll Scheme Phase 3+		Date of Decision Summary:	30th November 2020
Decision Summary Author:	Head of Investment Appraisal		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	n/a
Written Report Title:	Approval of the guidance for the Government Co-Funded Payroll Scheme Phase 3+		Date of Written Report:	30th November 2020
Written Report Author:	Head of Investment Appraisal		Written Report : Public or Exempt?	Public
Subject: Approval of the guidance for the Government Co-Funded Payroll Scheme (CFPS) Phase 3+
Decision(s): The Minister approved the guidance for the Co-Funded Payroll Scheme Phase 3+ as summarised in the accompanying report and appended to this decision.
Reason(s) for Decision: The Minister for Treasury and Resources approved MD-TR-2020-0143, to establish the Co-Funded Payroll Scheme Phase 3+. This guidance is for the Government Co-Funded Payroll Scheme Phase 3+, for the application period 1st November 2020 to 31st December 2020. For the avoidance of doubt, this guidance replaces guidance for the CFPS Phase 3 published on gov.je in November 2020 for claims made in respect of October 2020. Article 15(3) of the Public Finances (Jersey) Law 2019 states that the approval by the States of a Government Plan authorises the Minister to direct how an approved appropriation for a reserve head of expenditure in the plan may be spent (including on another head of expenditure) in the first financial year covered by the Plan. The guidance for the Co-Funded Payroll Scheme Phase 3+ was agreed on 30 November 2020 by the Ministers for Social Security; External Relations; and Economic Development, Tourism, Sport and Culture.
Resource Implications: There are no additional resource implications arising from this decision.
Action required: The Group Director – Strategic Finance to advise the Head of Investment Appraisal when the decision has been signed. Revised guidance to be published on www.gov.je.
Signature:		Position: Deputy S J Pinel Minister for Treasury and Resources
Date Signed:		Date of decision:

Government Co-Funded Payroll Scheme Phase 3+: Approval of guidance

Treasury and Exchequer

Ministerial Decision Report

Approval of the guidance for the Government Co-Funded Payroll Scheme Phase 3+

Purpose of Report

To enable the Minister for Treasury and Resources to approve the guidance for the Government Co-Funded Payroll Scheme (CFPS) Phase 3+.

Background

The Minister for Treasury and Resources approved MD-TR-2020-0143, to establish the Co-Funded Payroll Scheme (CFPS) Phase 3+, which responds to the deteriorating economic climate by providing increased support for businesses that is linked to the level of detriment they are experiencing.

The CFPS Phase 3+ applies to claims made in respect of the period of 1st November 2020 to 31st December 2020. A further extension until March 2021 will be proposed in the Government Plan 2021-24.

The CFPS Phase 3+ guidance will be published on gov.je. It mirrors the guidance in place for the CFPS Phase 3 that was approved in MD-TR-2020-0129 with the following key changes:

Amendments to the subsidy payable under the scheme

CFPS Phase 3+ supplements the original CFPS Phase 3 by offering an alternative approach for calculating detriment.

Under the original CPFS Phase 3 the payroll subsidy available reduces over time, with support tapering as follows:

Whilst this reducing subsidy may still be appropriate for businesses that are not materially impacted by recent events that are impacting the economy, it is not satisfactory for businesses that are significantly affected.

The above is now supplemented by CFPS Phase 3+, which provides a higher level of subsidy for some businesses. Up to a maximum potential subsidy of 60%, the subsidy available will move in line with actual detriment experienced in order to adapt to changing economic circumstances.

For businesses with detriment between 20% and 50% the amount of subsidy available will be the actual percentage detriment plus 10%. The maximum subsidy will be 60% so businesses with detriment between 50% and 100% will qualify for a subsidy of 60%.

The following table provides some examples of how the revised method for calculating the subsidy works:

Detriment	Subsidy
20%	30%
23%	33%
34%	44%
50%	60%
70%	60%

CPFS Phase 3+ is intended to supplement the original CFPS Phase 3 so only applies if it offers a higher level of subsidy than could have been claimed under the original CFPS Phase 3 tapered subsidy scheme. If the original CFPS Phase 3 offers a higher subsidy then the higher amount would be paid.

The subsidy for January 2021 to March 2021 will only be available if funding for the CFPS is agreed in the Government Plan 2021-24.

Limit on maximum claim

The CPFS is intended to the support businesses that are suffering detriment that might lead them to reduce employment or wages. An additional control is added to limit the maximum total subsidy that can be paid at the level of the absolute reduction in revenue that has been experienced. This prevents an unlikely but theoretically possible scenario where the receipt of a subsidy would lead to a business experiencing a greater level of income than the prior period.

3. Recommendation

On 30 November 2020, the Ministers for Social Security, External Relations and Economic Development, Tourism, Sport and Culture approved the guidance for the CFPS Phase 3. This group recommended that the Minister for Treasury and Resources should approve the guidance for the Co-Funded Payroll Scheme Phase 3+.

4. Reason for Decision

The Minister for Treasury and Resources approved MD-TR-2020-0143, to establish the Co-Funded Payroll Scheme Phase 3+. This guidance is for the Government Co-Funded Payroll Scheme Phase 3+, for the application period 1st November 2020 to 31st December 2020. For the avoidance of doubt, this guidance replaces guidance for the CFPS Phase 3 published on gov.je in November 2020 for claims made in respect of October 2020.

Article 15(3) of the Public Finances (Jersey) Law 2019 states that the approval by the States of a Government Plan authorises the Minister to direct how an approved appropriation for a reserve head of expenditure in the plan may be spent (including on another head of expenditure) in the first financial year covered by the Plan.

The guidance for the Co-Funded Payroll Scheme Phase 3+ was agreed on 30 November 2020 by the Ministers for Social Security; External Relations; and Economic Development, Tourism, Sport and Culture.

5. Resource Implications

There are no additional resource implications arising from this decision.

Report author : Head of Investment Appraisal	Document date 30th November 2020
Quality Assurance / Review : Group Director – Strategic Finance	File name and path L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2020-0148 - CFPS Phase 3+ Guidance
MD sponsor: Treasurer of the States