Economic Stimulus Plan: Allocation of funds to Economic Development Department

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A decision made on 17 June 2010 to approve a budget allocation from the Economic Stimulus Plan to the Economic Development Department for the delivery of the final workstream

Decision Reference: MD-TR-2010-0088
Decision Summary Title:	Fiscal Stimulus Budget Allocation –Economic Development Department		Date of Decision Summary:	7th June 2010
Decision Summary Author:	Interim Treasurer of the States		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Allocation of fiscal stimulus funding to the Economic Development Department for the project to support the finance industry		Date of Written Report:	7th June 2010
Written Report Author:	Acting Fiscal Stimulus Programme Manager		Written Report : Public or Exempt?	Public
Subject: Economic Stimulus Plan: budget allocation to the Economic Development Department for the delivery of the final workstream within the fiscal stimulus project to support the finance industry.
Decision(s): The Minister approved the allocation of £100,000 to the Economic Development Department which will be transferred to the department’s 2010 revenue budget. This will enable the final workstream within the fiscal stimulus project to support the finance industry through the economic downturn to proceed. The Minister further instructed the Finance Industry Support project group to report on spend of all stimulus monies, and project progress/performance, on a monthly basis in accordance with guidelines set by the Treasury, and return any unspent monies on completion of the project.
Reason(s) for Decision: A discretionary fiscal stimulus allocation from the Stabilisation Fund of £44m has already been approved. The finance industry support programme meets the key criteria for fiscal stimulus being timely, targeted and temporary and will benefit local business and individuals. The allocation of £100,000 to the project will enable the workstream to proceed alongside the other components of the project to support the finance industry through the economic downturn and help lay the foundations for future growth.
Resource Implications: No financial or resource implications other than those explained in the accompanying report.
Action required: Treasury to be informed of decision to release necessary funds to the Economic Development Department’s budget.
Signature:		Position: Senator P F C Ozouf, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Economic Stimulus Plan: Allocation of funds to Economic Development Department

Treasury and Resources

Ministerial Decision Report

Allocation of fiscal stimulus funding to the Economic Development Department for the project to support the finance industry

1. Purpose of Report

The purpose of this report is to summarise the recommendation of the FSSG to the Treasury Minister to agree green light funding in respect of EDD’s support for additional marketing and promotional activity to be undertaken by Jersey Finance Limited as part of the overall fiscal stimulus project to support the finance industry.

2. Background

The £44m fiscal stimulus fund was approved by the States to be set aside from the Stabilisation Fund (P55/2009) to stimulate the local economy during the economic downturn following advice from the Fiscal Policy Panel (the “FPP”), an independent advisory body set up to advise the Treasury and Resources Minister on the Island’s fiscal policy, and in particular the use of the Stabilization Fund.

All fiscal stimulus projects are designed to put additional money back into the economy, to add to demand and mean that the fall in output and extent of job losses will be less severe than would otherwise be the case.

This allocation of £100,000 to the overall project to support the finance industry, which has already been allocated £2,417,000 (to the Chief Minister’s department and the Economic Development department as set out in Treasury and Resources ministerial decision reference MD-TR-2010-0032), completes the funding for the delivery of the programme in 2010. This allocation of funding facilitates direct measures to assist the financial services sector, which has, and will continue to, come under increasing pressures and threats as a result of the global economic downturn. Jersey’s finance industry contributes 53% of the Island’s wealth, measured by Gross Value Added (GVA), and its 13,000+ direct employees are the most financially productive in Jersey’s economy.

3. Fiscal Stimulus Rationale

The statistics set out above demonstrate the significance of the finance industry in Jersey. As a result it has been widely agreed during the assessment process that it is simply unacceptable to do nothing. Managing the risk of adverse impacts on Jersey as a result of increased scrutiny of offshore finance centres is of huge importance to steering the Island successfully through the downturn. It is extremely important to take necessary measures to protect existing and foster new opportunities within the Finance Industry in the light of the external threats it is facing.

The project of which this final workstream forms a part is uniquely targeted at meeting the third objective of this discretionary intervention (as described in p55/2009), being the creation of new opportunities for business to help support them through the downturn and mitigating job losses across the economy as a whole. The delivery of this project complements existing fiscal stimulus activity and provides an overall programme of measures that is balanced across the overall objectives as well as across the main sectors of Jersey’s economy.

To progress the project a number of conditions were set out by the FSSG and information was subsequently submitted by the project’s owner and reviewed by the FSSG. The outcome of the review was that satisfactory information had been provided, and, in particular, detailed targeted outputs would enable continued monitoring of the achievements of the marketing and promotion workstream.

The work stream is to be undertaken by the Economic Development Department (“EDD”) indirectly through the award of a grant to Jersey Finance Limited, a non-government body which has an existing funding relationship with EDD.

4. Recommendation from the Fiscal Stimulus Steering Group

The FSSG recommends a ‘green light’ to the Treasury Minister for the additional marketing and promotion of Jersey’s finance industry, with the funding to be allocated to EDD’s 2010 revenue budget. There is no impact on manpower.

5. Reason for Decision

A discretionary fiscal stimulus allocation from the Stabilisation Fund of £44m has already been approved. The finance industry support programme, including this additional marketing and promotional activity meets the key criteria for fiscal stimulus being timely, targeted and temporary and will benefit local business and individuals. The allocation of £100,000 to the project will enable the workstream to proceed in accordance with the overall programme.

6. Resource Implications

No financial resource implications other than those explained above.

No manpower resource implications.