Transfers between heads of expenditure

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A decision made on 25 September 2020

Decision Reference: MD-TR-2020-0118
Decision Summary Title:	Transfers between heads of expenditure		Date of Decision Summary:	14th September 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:	Transfers between heads of expenditure		Date of Written Report:	14th September 2020
Written Report Author:	Specialist – Business Cases		Written Report: Public or Exempt?	Public
Subject: Transfers between heads of expenditure
Decision(s): The Minister approved the non-recurring: transfer of up to £8.2 million from various project heads of expenditure to the General Reserve in 2020 to assist with funding COVID-19 pressures; transfer of £600,000 in 2020 from the Grainville Phase 5 head of expenditure to the Les Quennevais Replacement School head of expenditure; and transfer of up to £2 million various heads of expenditure to the Reserve for Centrally Held Items, to be held for Planning Obligation Agreements.
Reason(s) for Decision: Article 18(1)(a) of the Public Finances (Jersey) Law 2019 states that a specified amount appropriated for one head of expenditure may, with the approval of the Minister for Treasury and Resources, be used for the purposes of another head of expenditure that is set out in the government plan. Article 18(5) of the Public Finances (Jersey) Law 2019 states that if a direction under this Article would affect a head of expenditure that relates to the responsibilities of any Minister, that Minister must be consulted before the direction is made. The Ministers have been consulted. P.28/2020 Draft Public Finances (Amendment of Law) (Jersey) Regulations 202-, approved by the States Assembly on 24th March 2020, temporarily removed the requirement for the Minister to give the States at least 4 weeks’ notice of the day on which the Minister proposes to give a direction under Article 18.
Resource Implications: Transfers and allocations as detailed in the tables in the attached report. This decision does not change the total amount of expenditure approved by the States in the Government Plan for 2020-23.
Action required: The Head of Financial Governance to notify the Specialist – Business Cases once the decision has been signed.
Signature:		Position: Deputy Susie Pinel Minister for Treasury and Resources
Date Signed:		Date of Decision:

Transfers between heads of expenditure

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Treasury and Exchequer

Ministerial Decision Report

Transfers between heads of expenditure

Purpose of Report

To enable the Minister to approve the non-recurring:

transfer of up to £8.2 million from various project heads of expenditure to the General Reserve in 2020 to assist with funding COVID-19 pressures;
transfer of £600,000 in 2020 from the Grainville Phase 5 head of expenditure to the Les Quennevais Replacement School head of expenditure; and
transfer of up to £2 million various heads of expenditure to the Reserve for Centrally Held Items, to be held for Planning Obligation Agreements.

Background

A report titled “Capital Programme Re-start” was presented to the Executive Leadership Team on 23rd June 2020. The purpose was to review and to release some funding from the capital programme to allocate towards expenditure pressures elsewhere.

i. Allocation to General Reserves

Twelve projects have been identified with remaining budget either now not required or reprofiled/reprioritised in order to achieve cash savings and it is proposed that the below is allocated to the General Reserves to assist with potential funding pressures due to the impact of COVID-19.

ii. Allocations for Les Quennevais Replacement School

Les Quennevais Replacement School project has seen increased costs for Mechanical and Electrical Equipment including uprated fire suppression equipment. To meet this shortfall, a budget transfer can be made from Grainville Phase 5 project which is being delivered for less than the anticipated project cost.

iii. Allocations from capital Heads of Expenditure to a Smoothing Reserve

Planning Obligation Agreements (POA) payments are historically held within the associated capital head of expenditure and funds are transferred when required to meet the obligation. Rather than continuing with this practice, it is proposed that a similar mechanism to that for court and case costs is used where the amounts are held in a central reserve.

This year the balance of unspent POA held within Growth, Housing and Environment is estimated at up to £2 million and it is proposed that this is allocated to the Reserve for Centrally Held Items (POA), mirroring the court and case costs smoothing reserve, as a ring-fenced sum of money that can only be used for POAs. This proposal is being made to align with the Public Finances (Jersey) Law 2019. The balance of POA held by GHE as at August 2020 is £1.7 million with further amounts anticipated during 2020.

3. Recommendation

The Minister is recommended to approve the non-recurring:

transfer of up to £8.2 million from various project heads of expenditure to the General Reserve in 2020 to assist with funding COVID-19 pressures;
transfer of £600,000 in 2020 from the Grainville Phase 5 head of expenditure to the Les Quennevais Replacement School head of expenditure; and
transfer of up to £2 million various heads of expenditure to the Reserve for Centrally Held Items, to be held for Planning Obligation Agreements.

4. Reason for Decision

Article 18(1)(a) of the Public Finances (Jersey) Law 2019 states that a specified amount appropriated for one head of expenditure may, with the approval of the Minister for Treasury and Resources, be used for the purposes of another head of expenditure that is set out in the government plan.

Article 18(5) of the Public Finances (Jersey) Law 2019 states that if a direction under this Article would affect a head of expenditure that relates to the responsibilities of any Minister, that Minister must be consulted before the direction is made. The Ministers have been consulted.

P.28/2020 Draft Public Finances (Amendment of Law) (Jersey) Regulations 202-, approved by the States Assembly on 24th March 2020, temporarily removed the requirement for the Minister to give the States at least 4 weeks’ notice of the day on which the Minister proposes to give a direction under Article 18.

5. Resource Implications

Transfers and allocations as detailed in the tables above.

This decision does not change the total amount of expenditure approved by the States in the Government Plan for 2020-23.

Report author: Specialist – Business Cases	Document date: 14th September 2020
Quality Assurance / Review: Group Director, Strategic Finance	File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2020-00118 - Transfer between heads of expenditure
MD sponsor: Treasurer of the States