Pay Award and Delivery of the Vacancy Management Efficiencies Target in 2020: Allocation of Reserve Funding

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made on 22 May 2020

Decision Reference: MD-TR-2020-0058
Decision Summary Title:	Allocation of Reserve Funding for 2020 Pay Award and Delivery of the Vacancy Management Efficiencies target in 2020		Date of Decision Summary:	19th May 2020
Decision Summary Author:	Specialist – Business Cases		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Allocation of Reserve Funding for 2020 Pay Award and Delivery of the Vacancy Management Efficiencies target in 2020		Date of Written Report:	19th May 2020
Written Report Author:	Specialist – Business Cases		Written Report: Public or Exempt?	Public
Subject: The allocation of up to £15,761,800 in 2020 from the “Reserve for Centrally Held Items” to the departments detailed in the attached report, to cover the cost associated with the 2020 Pay Award in respect of all pay groups (except States Members, Doctors & Consultants and Senior managers) and to deliver the Vacancy Management efficiencies target in 2020.
Decision(s): The Minister approved an allocation of up to £15,761,800 from the “Reserve for Centrally Held Items” to the Departments listed in the written report to fund the 2020 Pay Awards for all pay groups (except States Members, Doctors & Consultants and Senior managers) in 2020.
Reason(s) for Decision: 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 current Policy for Allocations from the Reserve (published as R.23/2020) sets the requirement for all allocations from Reserve for Centrally Held Items to be reviewed by the Investment Appraisal Team who will provide the Treasurer of the States sufficient information to allow him to reach a recommendation on the use of the funding. This has been reviewed by the Investment Appraisal Team. The proposals were discussed at the Executive Leadership Team (ELT) meeting of 12th May 2020 and on that basis, the Treasurer recommends this allocation to the Minister for approval.
Resource Implications: The “Reserve for Centrally Held Items” to decrease by up to £15,761,800 in 2020 and Departmental revenue heads of expenditure to increase by a total identical amount, as detailed in the table in the written report. In 2020 the pay award allocations have been reduced in order to deliver the vacancy management efficiency. The Government Plan 2021-2024 will need to reflect the recurring nature of the additional pay award funding allocated by this decision, as well as the allocation of the vacancy management efficiency in all years of that Plan. This decision does not change the total amount of expenditure approved by the States in the Government Plan 2020-2023.
Action required: The Head of Financial Governance to advise the Head of Business Planning and the Head of Finance Business Partnering of the receiving departments that this decision is approved.
Signature:		Position: Deputy Susie Pinel Minister for Treasury and Resources
Date Signed:		Date of Decision:

Pay Award and Delivery of the Vacancy Management Efficiences target in 2020: Allocation of Reserve Funding

Treasury and Exchequer

Ministerial Decision Report

Allocation of reserves funding for 2020 pay award and delivery of vacancy management efficiencies target in 2020

Purpose of Report

To enable the Minister to approve the allocation of up to £15,761,800 in 2020 from the “Reserve for Centrally Held Items” to various departments as detailed below, to cover the recurring and non-recurring costs associated with the 2020 Pay Award in respect of Civil Servants and Associated Groups, Teachers/Headteachers and Uniformed Services, and the Pay Groups who have accepted the Workforce Modernisation pay award (Ambulance, Family Support Workers, Residential Childcare Workers and Youth Workers), and to fund increased employer’s pension and social security contributions. This decision will also deliver the Vacancy Management Efficiencies target in 2020.

As the Workforce Modernisation pay award was a three-year deal, the Minister is required to approve the 2020 allocation of funding to the Workforce Modernisation Pay Groups in this Ministerial Decision.

Background

Funding provisions were made in the Government Plan 2020-2023 in the “Reserve for Centrally Held Items” for anticipated pay awards across all pay groups. This included the funding of the agreed pay awards for all pay groups except States Members, Doctors and Consultants, and Senior managers in 2020.

Pay Awards

Pay awards for 2020 have been agreed or implemented with effect from 1st January 2020 with a general award at 4% to be funded centrally for all pay groups except States Members (no increase), Doctors and Consultants (not yet agreed), and Senior managers (reviews underway).

The awards were calculated based on September 2019 RPI + 1.3% with effect from 1 January 2020. September 2019 RPI was 2.7%. This decision allocates the impact of the 2020 awards in 2020 and on a recurring basis.

In addition, certain pay groups have also agreed pay awards over and above the 4% general pay award:

Headmasters and Deputies - have had a reformed pay structure and the impact of this over the 4% award was estimated as 2.6% which was included in the pay calculations.
Nurses and midwives - similarly, had variable additional (comparability) awards at different grade and spine points, with an advised 1.97% used in the pay calculations.
Teachers, Teaching Assistants, Fire & Prison - have been awarded gainshare increases which are to be funded from efficiencies generated within the respective areas.

Increased Employer’s Pension Contributions

The new PECRS CARE scheme was open to new starters from 1 January 2016. From 1st January 2019, all employees (unless eligible to remain on the existing scheme) moved into the CARE scheme.

A provision was made in the Government Plan for the anticipated costs of the increased employer’s pension contributions as a result of staff being in the new scheme.

Increased Employer’s Social Security Contributions

In the Government Plan, it was agreed to increase employer social security contributions above the Standard Earnings Limit (SEL) by 0.5%, and to also increase the cap of the Upper Earnings Limit (UEL) to £250,000.

Vacancy Management Efficiencies Target

When reviewing the requirements for the 2020 pay award, departments removed any awards associated with vacant posts which has contributed to the £5.6 million efficiencies target. This left a shortfall of £1.7 million which has been shared across departments using a percentage of total staff costs, after adjusting for material staff re-charging. Adopting this approach delivers the vacancy management efficiencies target for 2020. However, it should be noted that the £5.6 million efficiency will need to be included in the Government Plan 2021-2024.

Recommendation

The Minister is recommended to approve allocations from the “Reserve for Centrally Held Items” to the departments, as detailed in the table below, in 2020 to cover the recurring costs associated with the 2020 Pay Awards and to deliver the Vacancy Management Efficiencies target in 2020.

Reasons for Decision

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 current Policy for Allocations from the Reserve (published as R.23/2020) sets the requirement for all allocations from Reserve for Centrally Held Items to be reviewed by the Investment Appraisal Team who will provide the Treasurer of the States sufficient information to allow him to reach a recommendation on the use of the funding. This has been reviewed by the Investment Appraisal Team.

The proposals were discussed at ELT on 12th May 2020 and on that basis, the Treasurer recommends this allocation to the Minister for approval.

5. Resource Implications

The “Reserve for Centrally Held Items” to decrease by up to £15,761,800 in 2020 and Departmental revenue heads of expenditure to increase by a total identical amount, as detailed in the table above.

In 2020 the pay award allocations have been reduced in order to deliver the vacancy management efficiency. The Government Plan 2021-2024 will need to reflect the recurring nature of the additional pay award funding allocated by this decision, as well as the allocation of the vacancy management efficiency in all years of that Plan.

This decision does not change the total amount of expenditure approved by the States in the Government Plan 2020-2023.

Report author: Specialist – Business Cases	Document date : 19th May 2020
Quality Assurance / Review: Group Director, Strategic Finance	File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2020-0058-Reserve Funding for the 2020 Pay Award & Vacancy Management Efficiency Targets
MD sponsor: Treasurer of the States