Capital grant and budget transfer: Jersey Car Parks to Road Safety Improvements

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A decision made 17 May 2016:

Decision Reference: MD-T-2016-0044
Decision Summary Title:	Transfer of road safety funding from Jersey Car Parks to the Road Safety Improvements capital head of expenditure		Date of Decision Summary:	12 May 2016
Decision Summary Author:	Finance Manager		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:
Written Report Title:	Transfer of road safety funding from Jersey Car Parks to the Road Safety Improvements capital head of expenditure		Date of Written Report:	12 May 2016
Written Report Author:	Finance Manager		Written Report : Public or Exempt?	Public
Subject: The acceptance of a capital grant from Jersey Car Parks of up to £1,000,000 in 2016, and authorisation to use the income, the creation of revenue income and expenditure budgets and the transfer of expenditure budgets from the DfI revenue head of expenditure to the DfI Road Safety Improvements capital head of expenditure (Q00MF15037).
Decision(s): The Minister approved acceptance of the capital grant in 2016, the request for use of income by DfI, the creation of revenue income and expenditure budgets and the transfer of expenditure budgets from the DfI revenue head of expenditure to the DfI Road Safety Improvements capital head of expenditure (Q00MF15037).
Reason(s) 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 capital and revenue 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. Article 19 (1)(a) of the Public Finances (Jersey) Law 2005 states that if, during a financial year, the Minister for Treasury & 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, the Minister for Treasury & Resources 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 authority for adjustments for variations of income to the Treasurer of the States in all non-contentious cases where any such additional income matches additional expenditure.
Resource Implications: The DfI revenue head of expenditure will show an additional income budget of up to £1,000,000 and an additional expenditure budget of up to £1,000,000. This expenditure budget will subsequently be transferred to the DfI Road Safety Improvements capital head of expenditure (Q00MF15037), increasing it by up to £1,000,000 in 2016.
Action required: The Finance Director to request the approval of the Treasurer of the States for these changes.
Signature:		Position: Minister for Infrastructure
Date Signed:		Date of Decision (If different from Date Signed):

Capital grant and budget transfer: Jersey Car Parks: Road Safety Improvements

DEPARTMENT FOR INFRASTRUCTURE

TRANSFER OF ROAD SAFETY FUNDING FROM JERSEY CAR PARKS TO THE ROAD

SAFETY IMPROVEMENTS CAPITAL HEAD OF EXPENDITURE

Purpose of Report

To enable the Minister to approve the following:

a) The acceptance of a capital grant from Jersey Car Parks of up to £1,000,000, and authorisation for the use of the income;

b) An increase of up to £1,000,000 to the DfI income budget and an increase of an identical amount to the DfI expenditure budget;

c) An internal budget transfer of up to £1,000,000 from the DfI revenue head of expenditure to the DfI Road Safety Improvements capital head of expenditure (Q00MF15037).

Background

The JCP Trading operation was originally established to undertake the administration, management, financing, development and maintenance of the public parking places that are within the functions of the Minister for Infrastructure. It was also intended that the trading fund was to provide funding for improvements in the Island’s traffic and transport system. The trading fund is funded by means of the charges levied for parking in public spaces, which includes on-street, surface and multi-storey car parks.

In the Medium Term Financial Plan 2016-19 (P.72-2015), the States Assembly approved the JCP proposed programme of capital budget allocations for Sustainable Transport and Road Safety Schemes of £1,000,000 in 2016, £1,250,000 in 2017, £1,500,000 in 2018 and £1,500,000 in 2019.

The capital budget allocation for 2016 was debated as part of proposition P.127-2015, and the allocation to Sustainable Transport and Road Safety Schemes was £1,000,000.

This funding has been identified to fund several sustainable transport capital schemes in 2016. As the delivery of these schemes, and the assets once created, will be managed by DfI, it is intended that the funding be made as a capital grant from JCP to DfI, who will request the use of the income, the creation of budgets, and the transfer of expenditure budgets to capital, to match the proposed accounting treatment. This will enable consistency with other schemes being delivered by DfI which achieve the same objective.

It is intended that future year allocations from JCP will continue to fund infrastructure improvements, being delivered by DfI, which support the Sustainable Transport Policy.

Recommendation

That the Minister approves:

a) The acceptance of a capital grant from Jersey Car Parks of up to £1,000,000, and authorisation for the use of the income;

b) An increase of up to £1,000,000 to the DfI income budget and an increase of an identical amount to the DfI expenditure budget;

c) An internal budget transfer of up to £1,000,000 from the DfI revenue head of expenditure to the DfI Road Safety Improvements capital head of expenditure (Q00MF15037).

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 capital and revenue 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.

Article 19 (1)(a) of the Public Finances (Jersey) Law 2005 states that if, during a financial year, the Minister for Treasury & 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, the Minister for Treasury & Resources 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 authority for adjustments for variations of income to the Treasurer of the States in all non-contentious cases where any such additional income matches additional expenditure.

Resource Implications

The DfI revenue head of expenditure will show an additional income budget of up to £1,000,000 and an additional expenditure budget of up to £1,000,000. This expenditure budget will subsequently be transferred to the DfI Road Safety Improvements capital head of expenditure (Q00MF15037), increasing it by up to £1,000,000 in 2016.

Action Required

The Finance Director to request the approval of the Treasurer of the States for these changes.

Written by:	Finance Manager
Approved by:	Director of Finance