Budget Transfer: Public Sector Reform: Restructuring Provision: Health and Social Services, Environment, and Housing Departments

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A decision made 11 November 2013:

Decision Reference: MD-TR-2013-0098
Decision Summary Title:	Public Sector Reform – Allocation of Restructuring Provision and Budget Transfers		Date of Decision Summary:	5 November 2013
Decision Summary Author:	Public Sector Reform Programme Manager		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Public Sector Reform - Allocation of Restructuring Provision and Budget Transfers		Date of Written Report:	5 November 2013
Written Report Author:	Public Sector Reform Programme Manager		Written Report : Public or Exempt?	Public
Subject: Approval of requests for Restructuring Provision funds in support of the Public Sector Reform Programme and transfer of budgets to the Health and Social Services, Department of the Environment and Housing Departments.
Decision(s): The Minister approved budget transfers totalling £465,000, £936,000 and £469,000 in 2013, 2014 and 2015 respectively from the Restructuring Provision to the following departments: a) £8,000, £643,000 and £469,000 in 2013, 2014 and 2015 respectively to the Health and Social Services Department; b) £32,000 and £33,000 in 2013 and 2014 respectively to the Department of the Environment; and c) £425,000 and £260,000 in 2013 and 2014 respectively to the Housing Department.
Reason(s) for Decision: The Council of Ministers has acknowledged that investment will be needed to ensure Public Sector Reform is successful. Furthermore, funds have been identified and approved in the Medium Term Financial Plan (MTFP) over the next three years and the Council of Ministers agreed these specific requests at its meeting on 16 October 2013. 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.
Resource Implications: The Restructuring Provision to decrease by £465,000, £936,000 and £469,000 in 2013, 2014 and 2015 respectively and the following departments’ revenue heads of expenditure to increase by the amounts indicated below: a) Health and Social Services Department - £8,000, £643,000 and £469,000 in 2013, 2014 and 2015 respectively; b) Department of the Environment - £32,000 and £33,000 in 2013 and 2014 respectively; and c) Housing Department - £425,000 and £260,000 in 2013 and 2014 respectively. This decision does not change the total amount of expenditure approved by the States for 2013, 2014 and 2015 in the MTFP.
Action required: Business Manager to notify the Public Sector Reform Programme Manager that this decision has been approved.
Signature:		Position: Senator P F C Ozouf, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Budget Transfer: Public Sector Reform: Restructuring Provision: Health and Social Services, Environment, and Housing Departments

Treasury and Resources

Ministerial Decision Report

PUBLIC SECTOR REFORM – ALLOCATION OF RESTRUCTURING PROVISION AND BUDGET TRANSFERS

Purpose of Report

To enable the Minister for Treasury and Resources to approve budget transfers totalling £465,000, £936,000 and £469,000 in 2013, 2014 and 2015 respectively from the Restructuring Provision to support departments in the Public Sector Reform Programme, the funding for which was agreed by the Council of Ministers on 16 October 2013.

Background

A Restructuring Provision was approved in the Medium Term Financial Plan (MTFP) 2013-15 to support the final years of the CSR process and the Public Sector Reform Programme. 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 endorsed by the Council of Ministers in 2011 as follows:

(a) that the request is approved on the understanding that it could not be funded from within a department’s current budget; and

(b) 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.

Current Financial Position

3.1 A summary showing the financial position of the Restructuring Provision over the next three years with the impact of the current requests is as follows:

3.2 Appendix A summarises the current commitments together with these requests. In addition, departments have also advised of possible future requests to support the CSR/Reform Programmes for which Business Cases will be required and progressed through the agreed governance process.

Current Requests

3.3 Four requests from departments, totalling £1,870,000 over three years, are now being put forward for consideration:

3.4 Full Business Cases for each of these requests have been submitted and challenged by the PSR Programme Office and supported by the PSR Programme Operations Board, the PSR Political Oversight Group and the Council of Ministers. Appendix B provides a short summary of each proposal as additional information.

Comments

3.5.1 If these requests are approved, a balance of £1,404,000 will remain in the Restructuring Provision at the end of 2013 not taking into account any additional requests which may be forthcoming. Furthermore, as the Reform Agenda progresses, it is inevitable that further funds will be required to support the change process over the next 18 months.

3.5.2 All these requests have progressed through a rigorous governance process including challenge from the PSR Programme Management Office, approval from the executive Programme Operations Board and subsequent endorsement from the PSR Political Oversight Group. Additional information has been requested at various stages of this process and has been provided.

3.5.3 At its meeting on 27 March 2013, the Council of Ministers acknowledged that the first phase of the PSR programme, covering the period 2013-14, represents an enabling stage which will create the environment in the organisation for more radical structural change to the way in which services are provided in the future. The investment being requested now will deliver benefits in the future – some may be cash savings, others will be cost avoidance, enhanced service quality and efficiency, better outcomes and/or staff experience. A robust Benefit Realisation process for all PSR projects is being developed to ensure all benefits are quantified up front, monitored and realised.

3.5.4 Chief Officers will be asked to confirm at year end that any funds allocated from the Restructuring Provision have been spent as planned. Any underspend on a specific proposal will be transferred back to the Provision.

4 Recommendation

The Minister, with reference to the Council of Ministers approval of this funding on 16 October 2013 in support of the Public Sector Reform Programme, is recommended to approve budget transfers totalling £465,000, £936,000 and £469,000 in 2013, 2014 and 2015 respectively from the Restructuring Provision to the following departments as indicated below:

a) £8,000, £643,000 and £469,000 in 2013, 2014 and 2015 respectively to the Health and Social Services Department;

b) £32,000 and £33,000 in 2013 and 2014 respectively to the Department of the Environment; and

c) £425,000 and £260,000 in 2013 and 2014 respectively to the Housing Department.

5 Reasons for Decision

The Council of Ministers have acknowledged that investment will be needed to ensure Public Sector Reform is successful. Furthermore, funds have been identified and approved in the MTFP over the next three years and the Council of Ministers agreed these specific requests at its meeting on 16 October 2013.

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.

6 Resource Implications

The Restructuring Provision to decrease by £465,000, £936,000 and £469,000 in 2013, 2014 and 2015 respectively and the following departments’ revenue heads of expenditure to increase by the amounts indicated below:

a) Health and Social Services Department - £8,000, £643,000 and £469,000 in 2013, 2014 and 2015 respectively;

b) Department of the Environment - £32,000 and £33,000 in 2013 and 2014 respectively; and

c) Housing Department - £425,000 and £260,000 in 2013 and 2014 respectively.

This decision does not change the total amount of expenditure approved by the States for 2013, 2014 and 2015 in the MTFP.

Report author : PSR Programme Manager	Document date : 24 October 2013
Quality Assurance: Business Manager	File name and path : L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DSs, WRs and SDs\2013-0098 - Public Sector Reform - Allocation of restructuring provision\WR - HSSD, DoE & Housing Restructuring Provision 131016.docx