Prison Masterplan Phase 6: Additional Funding

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A decision made on the 14 December 2017:

Decision Reference: MD-HA-2017-0099
Decision Summary Title:	Funding of Phase 6 of the Prison Masterplan – Use of Additional Income		Date of Decision Summary:	24 November 2017
Decision Summary Author:	Finance Director Community and Constitutional Affairs		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Funding of Phase 6 of the Prison Masterplan		Date of Written Report:	24 November 2017
Written Report Author:	Finance Director Community and Constitutional Affairs		Written Report : Public or Exempt?	Public
Subject: The use of additional income of £195,000 received in 2017 and a non-recurring budget transfer of £195,000 from the Community and Constitutional Affairs (CCA) revenue head of expenditure to the Prison Phase 6 Capital Head of Expenditure.
Decision(s): The Minister: agreed to seek the approval of the Treasurer to use additional income of £195,000 received in 2017; approved a non-recurring budget transfer of £195,000 from the CCA revenue head of expenditure to the Prison Phase 6 capital head of expenditure; agreed to seek the approval of the Treasurer for a non-recurring budget transfer of £195,000 from the CCA revenue head of expenditure to the Prison Phase 6 capital head of expenditure.
Reason(s) for Decision: Article 19(1) of the Public Finances (Jersey) 2005 states that If, during a financial year, the Minister is satisfied that the income of a States funded body which has a revenue head of expenditure for the year is likely to exceed its estimated income taken into account in approving that head of expenditure (a) the Minister may authorize the body to withdraw from the consolidated fund during that year an amount not exceeding the likely excess of income. Delegation 1.3 delegates to the Treasurer of the States or, in his/her absence, another person as nominated by the Treasurer, the power to approve additional income in excess of increased expenditure (i.e. additional surplus income) required to generate that income, but the excess income is more than 10% (up to a maximum of £500,000 for a States trading operation and £100,000 for all other States-funded bodies) of the estimated income notified to the States for that particular service area – this additional income should not be used to fund recurring expenditure for which no future funding is secured. Article 18(1)(c) of the Public Finances (Jersey) Law 2005 states that all or any part of the amount appropriated by a head of expenditure may, with the approval of the Minister for Treasury and Resources, be used for the purposes of another head of expenditure. Delegation 1.2 delegates authority for non-contentious transfers between heads of expenditure of up to £1,000,000 to the Treasurer of the States.
Resource Implications: The CCA revenue head of expenditure to decrease by £195,000 and the Prison Phase 6 capital head of expenditure to increase by £195,000. This decision does not change the total amount of expenditure approved by the States for 2017 in the Medium Term Financial Plan. There are no manpower implications.
Action required: Finance Director to advise the Head of Decision Support that this decision has been approved.
Signature:		Position: Minister for Home Affairs
Date Signed:		Date of Decision (if different from date signed):

Prison Masterplan Phase 6: Additional Funding

Funding of Phase 6 of the Prison Masterplan (Use of Additional Income)

Community and Constitutional Affairs

Report for Minister for Home Affairs

Subject: Funding of Phase 6 of the Prison Masterplan – Use of Additional Income

Exempt Category: Qualified Exempt, Article 35 Freedom of Information Jersey) Law 2011

Author: Finance Director Date: 24 November 2017

Introduction

The purpose of this report is to ask the Minister to:

1) seek the approval of the Treasurer to use additional income of £195,000 received in 2017;

2) approve a non-recurring budget transfer of £195,000 from the CCA revenue head of expenditure to the Prison Phase 6 Capital Head of Expenditure.

Background

Phase 6 of the Prison Masterplan consists of a new Gate House and Administration Building and was planned as an extension of the Phase 4 visits/staff facility to complete the new front face of the Prison. Funding of £7.53 million was originally allocated in the Capital Programme for 2015, which was included in the MTFP 2013-15, but the project was re-scheduled in order to balance the Capital Programme.

The project was not included in the Indicative Capital Programme included in the MTFP 2016-2019 however, the Plan did include details of other projects in addition to the Annual Capital Programme which included Phase 6 of the Prison Masterplan in 2018; subject to sufficient funds being available in the COCF. The updated project cost is £8.23 million.

The Draft Budget Statement 2018 (approved in November 2017) included the 2018 Proposed Capital Programme which includes:

Prison – Phase 6 (Gatehouse) (£8,233,000 including £6,500,000 to be transferred from the Criminal Offences Confiscation Fund in 2018, £336,000 from existing unspent capital and £195,000 from the 2017 Community and Constitutional Affairs Department revenue budget)

Income from the COCF

An application has been made to the COCF for funding of £6,500,000.

On 30 November 2017 the States endorsed the utilisation of funding of £6,500,000 from the COCF fund to contribute towards the capital costs of Phase 6 of the Prison Masterplan as part of the Budget Statement 2018.

The Minister will be seeking approval from the Minister for Treasury and Resources for the Department for CCA to use income of £6,500,000 from the COCF in 2018 in accordance with section 5.14 of Financial Direction 3.6, Variations to Heads of Expenditure.

Unspent Capital Balances

On 9 November 2017 the Minister approved a non-recurring budget transfer of £336,000 from the CCA minor capital head of expenditure to Central Contingencies (MD-HA-2017-0081).

Contribution from CCA Revenue Budget

It is anticipated that by the end of 2017 income of c£195,000 will have been received in excess of the budgeted amount; mostly due to the Jersey Customs and Immigration Service (JCIS) immigration fees, passport fees, registration fees and legalisation of document fees. The income budget for JCIS in 2017 is £2.52 million; the anticipated additional income is equal to 7.8% for that service area.

Section 5.13 of Financial Direction 3.6, Variations to Heads of Expenditure, delegates the use of additional surplus income of more than £100,000 (or 10% for that particular service area) to the Treasurer of the States.

This use of this additional income has been built into CCA reporting and year end forecasts with a view to seeking the approval of the Treasurer to retain the income in accordance with Financial Direction 3.6, Variations to Heads of Expenditure.

Recommendations

It is recommended that the Minister:

1) seeks the approval of the Treasurer to use additional income of £195,000 received in 2017;

2) approves a non-recurring budget transfer of £195,000 from the CCA revenue head of expenditure to the Prison Phase 6 capital head of expenditure;

3) seeks the approval of the Treasurer of a non-recurring budget transfer of £195,000 from the CCA revenue head of expenditure to the Prison Phase 6 capital head of expenditure.

Reason for Decision

Article 19(1) of the Public Finances (Jersey) 2005 states that If, during a financial year, the Minister (for Treasury and Resources) is satisfied that the income of a States funded body which has a revenue head of expenditure for the year is likely to exceed its estimated income taken into account in approving that head of expenditure:

(a) the Minister may authorize the body to withdraw from the consolidated fund during that year an amount not exceeding the likely excess of income.

Delegation 1.3 delegates to the Treasurer of the States or, in his/her absence, another person as nominated by the Treasurer, the power to approve additional income in excess of increased expenditure (i.e. additional surplus income) required to generate that income, but the excess income is more than 10% (up to a maximum of £500,000 for a States trading operation and £100,000 for all other States-funded bodies) of the estimated income notified to the States for that particular service area – this additional income should not be used to fund recurring expenditure for which no future funding is secured.

Article 18(1)(c) of the Public Finances (Jersey) Law 2005 states that all or any part of the amount appropriated by a head of expenditure may, with the approval of the Minister for Treasury and Resources, be used for the purposes of another head of expenditure.

Delegation 1.2 delegates authority for non-contentious transfers between heads of expenditure of up to £1,000,000 to the Treasurer of the States.

Resource Implications

The CCA revenue head of expenditure to decrease by £195,000 and the Prison Phase 6 capital head of expenditure to increase by £195,000.

This decision does not change the total amount of expenditure approved by the States for 2017 in the Medium Term Financial Plan.