Comprehensive Spending Review: Transfer of Funds from Restructuring Provision

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A decision made on 3 August 2012:

Decision Reference: MD-C-2012-0077
Decision Summary Title:	Comprehensive Spending Review – Transfer of £206,000 of restructuring provision to the Chief Minister’s Department		Date of Decision Summary:	23rd July 2012
Decision Summary Author:	Finance Director – Corporate Group		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Comprehensive Spending Review – Transfer of £206,000 of restructuring provision to the Chief Minister’s Department		Date of Written Report:	23rd July 2012
Written Report Author:	Finance Director- Corporate Group		Written Report : Public or Exempt?	Public
Subject: Comprehensive Spending Review (CSR) – Transfer of £62,000 in 2012 and £144,000 in 2013 from the Treasury and Resources CSR (T&R) Restructuring Provision to the Chief Minister’s Department.
Decision(s): The Chief Minister approved a non-recurring budget transfer of £62,000 in 2012 and £144,000 in 2013 from the T&R Restructuring Provision to the Chief Minister’s Department revenue head of expenditure.
Reason(s) for Decision: The States recognised the need to invest funds to achieve savings as significant as £65 million over 3 years when it approved a Restructuring Provision of £6 million and £10 million in the 2011 and 2012 budgets respectively and the draft Medium Term Financial Plan has initially earmarked £8.1 million in the 2013 Budget. The Council of Ministers approved this request at its meeting of 7 June 2012 and Treasury and Resources Minister approved the transfer in his decision of 8 June 2012 MD-TR-2012-0052. Article 2(6) of the Public Finances (Transitional Arrangements) (Jersey) Order 2011 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. The Minister of the Department receiving the budget must also formally approve the transfer.
Resource Implications: The T&R Restructuring Provision to decrease by £62,000 in 2012 and £144,000 in 2013 and the Chief Minister’s Department revenue head of expenditure to increase by an identical amount. This decision does not change the total amount of expenditure approved by the States.
Action required: Finance Director – Corporate Group and Director – Financial Planning and Performance to action the transfer.
Signature:		Position: Senator I.J. Gorst Chief Minister
Date Signed:		Date of Decision:

Comprehensive Spending Review: Transfer of Funds from Restructuring Provision

Chief Minister’s Department

Ministerial Decision Report

Comprehensive Spending Review (CSR) – Transfer of £206,000 of restructuring provision to the chief Minister’s Department for HR system replacement project management costs

Purpose of Report

The purpose of this report is to recommend to the Chief Minister that he accept the transfer £62,000 in 2012 and £144,000 in 2012 from the Comprehensive Spending Review (CSR) Restructuring Provision (Treasury and Resources) in respect of project management costs in support of the replacement of the Human Resources computer system.

Background

The HRIS System Replacement project is part of the Enterprise Systems Strategy to ensure the States has fit-for-purpose applications that can be linked by common shared information. This project has funding for the systems purchase and implementation but requires an experienced HR Systems Project Manager’s services for a two year period to ensure sufficient organisational engagement. As the project will span into 2014, there is a residual cost in that year of £40,800.

The Business Case for the complete system replacement identified savings of £140,800 from 2014 onwards but the efficiency and improved management information which will be delivered, although not cashable, will far outweigh these savings.

The Council of Ministers approved this request at its meeting of 7 June 2012 and the Treasury and Resources Minister approved the transfer from the CSR Restructuring Provision on 8 June 2012 in his Ministerial Decision MD-TR-2012-0052.

Use of the CSR Restructuring Provision

A Restructuring Provision of £10 million was approved in the 2012 Business Plan to support the CSR process and facilitate the achievement of savings throughout departments, which followed an allocation of £6 million in 2011. At its meeting on 15 December 2011, the Council of Ministers endorsed the approval process whereby bids from departments would be submitted to the CSR Programme Office, challenged by that team and the CSR Programme Board and, if supported at this stage, forwarded to the Council of Ministers for approval. Under the Public Finances Law, the actual transfer of funds from the Provision can only be actioned through a Treasury and Resources Ministerial Decision.

Two key principles regarding the allocation of funds from the Restructuring Provision were also endorsed as follows:

That the request is approved on the understanding that it could not be funded from within a department’s current budget; and
should a department have an unplanned underspend on its revenue budget at the end of the financial year, the allocation from the Restructuring Provision is taken back to the Provision as a first call on that underspend, in order to fund future investment.

Recommendation

The Chief Minister is recommended to accept a non-recurring budget transfer of £62,000 in 2012 and £144,000 in 2013 from the T&R CSR Restructuring Provision to the Chief Minister’s Department revenue head of expenditure for project management costs to replace Human Resources computer systems, in accordance with the conditions of this funding as outlined above.

Reason for Decision

Article 2(6) of the Public Finances (Transitional Arrangements) (Jersey) Order 2011 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 1.3 delegates authority for non-contentious transfers between heads of expenditure of up to £1,000,000 to the Treasurer of the States.

The Minister receiving the budget must also formally approve the transfer.

Resource Implications

The T&R CSR Restructuring Provision to decrease by £62,000 in 2012 and £144,000 in 2013 and the CMD revenue head of expenditure to increase by an identical amount. This decision does not change the total amount of expenditure approved by the States for 2012.

Report author : Finance Director – Corporate Group	Document date : 23 July 2012
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