DEPARTMENT FOR INFRASTRUCTURE
INCREASE OF BUDGET AND SUBSEQUENT TRANSFER BETWEEN REVENUE AND
CAPITAL HEADS OF EXPENDITURE FOR WORK CARRIED OUT UNDER PLANNING
OBLIGATION AGREEMENTS
- Purpose of Report
To enable the Minister for Infrastructure to approve the following:
- The increase of up to £613,191.44 to the Department for Infrastructure (DfI) income and expenditure budgets during 2017.
- The subsequent budget transfer in 2017 of up to £595,858.10 from the DfI revenue head of expenditure; £198,720.60, to the capital head of expenditure for Road Safety Improvements (Q00MF15037) and £397,137.50 to the capital head of expenditure for Eastern Cycle Network (Q00BP10016).
- Background
The Department for Infrastructure have incurred various capital costs which fulfil the requirements set out in 11 different Planning Obligation Agreements:
- P/2006/2489 - £25,000 towards cost of three bus stops at Millennium Court, Beach Road and Grassett Park.
- P/2010/1116 - £51,665.38 for footpath improvement work along Princess Tower Road; and £12,000 towards the cost of two bus shelters at St Saviours School and Midland Stores.
- P/2006/0827 - £6,000 towards the cost of shelter stop 3289 ‘Marina Cottages’
- P/2011/1403 - £6,000 towards the cost of shelter stop on La Rue a Don
- P/2005/1998 - £6,000 towards the cost of bus shelter 2593 for southbound carriageway of Route de la Trinite
- P/2013/1806 - £3,000 towards £180,000 cost of cycle and pedestrian improvements along Rue de Maupertuis, St Clement.
- P/2015/1733 - £6,000 towards £180,000 cost of cycle and pedestrian improvements along Rue de Maupertuis, St Clement.
- P/2013/1712 - £21,000 towards £180,000 cost of cycle and pedestrian improvements along Rue de Maupertuis, St Clement.
- P/2015/0065 - £91,000 towards £180,000 cost of cycle and pedestrian improvements along Rue de Maupertuis, St Clement.
- P/2011/0813 - £9,000 towards £180,000 cost of cycle and pedestrian improvements along Rue de Maupertuis, St Clement.
- P/2005/1754 - £50,000 towards the cost of cycle and pedestrian improvements along Rue de Maupertuis, St Clements.
- P/2013/1614 - £10,000 towards cost of shelter stop 2924 La Route des Quennevais.
- P/2012/1498 - £25,000 towards the cost of shelter stop 4545 opposite Winston Churchill Park
- RP/2010/1116 - £24,055.22 to fund street lighting works for improved bus services
- RP/2010/1116 - £17,333.34 for first year cost of new bus service 20 serving the development
- P/2016/0137 - £33,000 towards total cost of street lighting improvements on Gorey Road
- P2015/0065 - £90,237.50 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
- P/2016/0308 - £26,900 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement
- P/2016/0137 - £25,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
- P/2014/1012 - £3,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
- P/2014/1040 - £2,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
- RP/2013/1833 - £14,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
- P/2014/0635 - £29,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
- P/2011/1403 - £10,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
- P/2013/1290 - £3,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
- P/2014/1875 - £6,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
- P/2012/0506 - £3,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
- P/2014/1578 - £5,000 towards £250,000 cost of cycle and pedestrian improvements St Clement playing field, Le Rocquier school, St Clement.
The payments from the planning applications will be transferred to DfI by way of additional income during 2017.
This creates a mismatch between income within DfI revenue head of expenditure and expenditure within the capital head of expenditure for Road Safety Improvements (Q00MF15037) and the capital head of expenditure for Eastern Cycle Network (Q00BP10016).
In order to correct this mismatch and create a capital budget DfI are required to undertake the following:
- The increase of up to £613,191.44 to the Department for Infrastructure (DfI) income and expenditure budgets during 2017.
- The subsequent budget transfer in 2017 of up to £595,858.10 from the DfI revenue head of expenditure; £198,720.60, to the capital head of expenditure for Road Safety Improvements (Q00MF15037) and £397,137.50 to the capital head of expenditure for Eastern Cycle Network (Q00BP10016).
- Discussion
The States of Jersey implemented Generally Accepted Accounting Principles (GAAP) in 2009 and subsequently moved to IFRS accounting in 2012. IFRS accounting requires that expenditure should be accounted for as capital if it meets the IFRS accounting definition of capital expenditure, and revenue otherwise.
Previously, ‘capital’ budgets have represented whatever the States Assembly voted as capital. The States have already approved capital allocations for 2017 in the 2016 – 2019 MTFP Plan. These budget transfers move budgets between revenue and capital so as to align the budgeting treatment of 2017 expenditure with the IFRS accounting treatment.
- Recommendation
The Minister for DfI is recommended to approve the following:
- The increase of up to £613,191.44 to the Department for Infrastructure (DfI) income and expenditure budgets during 2017.
- The subsequent budget transfer in 2017 of up to £595,858.10 from the DfI revenue head of expenditure; £198,720.60 to the capital head of expenditure for Road Safety Improvements (Q00MF15037) and £397,137.50 to the capital head of expenditure for Eastern Cycle Network (Q00BP10016).
- Reason for Decision
Article 18(1)(a) of the Public Finances (Jersey) Law 2005 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 transferred from a capital head of expenditure to a revenue head of expenditure, or vice versa, in order to comply with generally accepted accounting principles or an Order made under Article 32.
Delegation 1.2 delegates authority for non-contentious transfers between heads of expenditure with no financial limit where the transfer is solely to ensure that financial transactions are accurately reflected in the States’ Accounts in accordance with GAAP or an Order made under Article 32 of the Law.
Under Generally Accepted Accounting Principles (GAAP) 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 GAAP.
- Resource Implications
The DfI revenue head of expenditure will show an additional income budget of up to £613,191.44 and an additional expenditure budget of up to £613,191.44 during 2017. The majority of this expenditure budget will subsequently be transferred £198,720.60, to the capital head of expenditure for Road Safety Improvements (Q00MF15037) and £397,137.50 to the capital head of expenditure for Eastern Cycle Network (Q00BP10016) during 2017.
7. Action required
The Finance Director to request the Treasurer of the States to approve the budget creation and subsequent transfers from revenue to capital as referred to in the accompanying report.
Written by: | Finance Manager |
Approved by: | Director of Finance |