Allocation of Reserve Funding to Health and Community Services in 2020 for GP costs due to the impact of COVID-19

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A decision made 8 April 2020:

Decision reference: MD-TR-2020-0040
Decision Summary Title:	Allocation of Reserve Funding to HCS in 2020 for GP costs due to the impact of COVID-19		Date of Decision Summary:	8th April 2020
Decision Summary Author:	Head of Financial Governance		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 to HCS in 2020 for GP costs due to the impact of COVID-19		Date of Written Report:	8th April 2020
Written Report Author:	Head of Financial Governance		Written Report : Public or Exempt?	Exempt (Article 33)
Subject: The allocation of up to £5.3 million in 2020 from the General Reserve to HCS (Health and Community Services) as detailed in the attached report, for GP costs due to the impact of COVID-19; use of additional income of up to £2.9 million by HCS in 2020; and use of additional income of up to £5.3 million by the General Reserve in 2020 should the States Assembly approve a proposed transfer from the Health Insurance Fund to the Consolidated Fund.
Decision(s): The Minister approved: a non-recurring allocation from the General Reserve in 2020 of up to £5.3 million to HCS, as detailed in the attached report, for GP costs due to the impact of COVID-19; and use of additional income of £2.9 million by HCS in 2020; and use of additional income of up to £5.3 million by the General Reserve in 2020 should the States Assembly approve a proposed transfer from the Health Insurance Fund to the Consolidated Fund.
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 Contingency Allocation Policy (published as R.23/2020) sets the requirement for all allocations from contingency to be considered by the Investment Appraisal Board, Principal Accountable Officer and States Treasurer prior to submission to the Minister for approval, however it also states that ‘Where a request is made for £100,000 or less, or where the Minister is satisfied that there is an urgent need to provide funding in the public interest, an allocation may be made by the Minister on the recommendation of the Treasurer.’ A business case for the new GP contract has been received and reviewed by the Investment Appraisal Team. Further to this review, the Treasurer recommends this allocation to the Minister for approval. Proposals were considered by the Emergency Council and Competent Authority Ministers at their meetings of 25th March 2020. For the Primary Care Optimisation Contract the Treasurer recommends the funding of up to £920,000 on the basis that the proposal was agreed by the Emergency Council at its meeting of 12th March 2020. It was proposed to have been funded from the Health Insurance Fund. Article 21 of the Public Finances (Jersey) Law 2019 states: 21 Power to allocate excess income (1) This Article applies if – (a) an approved government plan includes, under Article 9(8), the estimated income that will be earned by, or be attributable to, a States body or by an area of operation of a States body during the first financial year covered by the plan; and (b) income in excess of that estimate is earned by, or attributable to, the States body or area of operation during that financial year. (2) Despite the approved government plan, the Minister may direct that the excess income referred to in paragraph (1)(b) be allocated to a head of expenditure set out in the plan. (3) The amount subject to the Minister’s direction may be withdrawn from the Consolidated Fund and spent on that head of expenditure in the first financial year covered by the approved government plan, as if the amount had been appropriated for that head of expenditure.
Resource Implications: The HCS head of expenditure to increase by up to £8.2 million in 2020, with the General Reserve to decrease by up to £5.3 million and additional income of up to £2.9 million to be received by HCS and approved for expenditure. Should the States Assembly approve a proposed transfer from the Health Insurance Fund to the Consolidated Fund then the General Reserve will receive additional income to the value of that transfer, meaning that there is no net effect on the balance of the General Reserve. This decision does not change the total amount of net expenditure approved by the States in the Government Plan 2020-2023.
Action required: The Head of Financial Governance to advise the Specialist – Business Cases and the Head of Finance Business Partnering of HCS that this decision is approved.
Signature:		Position: Deputy S J Pinel Minister for Treasury and Resources
Date Signed:		Date of Decision: