Budget transfers in respect of: a) Departments' contribution to the Public Employees Contributory Retirement Scheme (PECRS) Pre 1987 Debt Repayment; and, b) building maintenance at Cyril Le Marquand House.

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A decision made (18/05/2006) regarding Budget transfers in respect of: a) Departments' contribution to the Public Employees Contributory Retirement Scheme (PECRS) Pre 1987 Debt Repayment; b) Building maintenance at Cyril Le Marquand House.

Subject:	Budget transfers in respect of the : · Departments’ Contribution to the Public Employees Contributory Retirement Scheme (PECRS) Pre 1987 Debt Repayment ; and · Building maintenance at Cyril Le Marquand House.
Decision Reference:	MD-T-2006-0040	Exempt clause(s):
Type of Report (oral or written):	Written	Person Giving Report (if oral):		N/A
Telephone or e-mail Meeting?	N/A	Report File ref:		I:Minister:2006:Ministerial Decisions: MD 0040 Budget Transfers
Written Report Title:	Budget Transfers	Written report – Author:		Ellen Littlechild, Finance Director
Decision(s): I. To agree a budget transfer amounting to £242,800 equivalent to 2% of members’ pay to a central HR vote within the Chief Minister’s Department. II. To request that both the Chief Minister and the Minister for Treasury Resources transfer £200,000 to assist with the building refurbishment of the 3rd and 6th Floor of Cyril Le Marquand House.
Reason(s) for decision: I. To ring fence the funds required to enable the repayment and servicing of the Public Employees Contributory Retirement Scheme pre 1987 debt for the period through to 2083. II. To enable the Chief Minister and Minister for Treasury and Resources to allocate funds in support of building refurbishment of the 3rd and 6th floor of Cyril Le Marquand House.
Action required: To notify the Chief Minister and Minister for the Treasury and Resources Department of these decisions.
Signature: (Minister/ Assistant Minister)			Date of Decision: 18 May 2006

Budget transfers in respect of: a) Departments' contribution to the Public Employees Contributory Retirement Scheme (PECRS) Pre 1987 Debt Repayment; and, b) building maintenance at Cyril Le Marquand House.

TRANSPORT AND TECHNICAL SERVICES

BUDGET TRANSFERS

Purpose of the Report

The purpose of this report is to seek the Transport and Technical Services Minister’s approval to the following:

· to transfer budget, equivalent to 2% of members’ pay, to the Chief Minister’s Department in order to ring fence the funds required to enable the repayment and servicing of the Public Employees Contributory Retirement Scheme (PECRS) pre 1987 debt; and

· to request that the Chief Minister and the Minister for Treasury Resources respectively transfer £200,000 to assist with the building refurbishment of the 3rd and 6th Floor of Cyril Le Marquand House.

Background

Finance Direction No.3.6 ‘Variations to Heads of Expenditure’ sets out the procedures for the transfer of revenue funds and states that requests for transfers of revenue funds from one Department to another require the prior approval of the Minister for Treasury and Resources and the relevant ministers party to the transfer.

Discussion

Public Employees Contributory Retirement Scheme (PEC) pre 1987 debt repayment

On 27 September 2005 the States approved amendments to the PECRS to address the pre 1987 deficit of the scheme (P189/2005 and P190/2005).

A valuation at 31 December 2001 placed a value on the States’ share of the pre 1987 debt of £177.5 million.

A framework for dealing with the debt, approved by the former Policy and Resources Committee and the Committee of Management, agreed to increase the employers contribution to the scheme to 15.6% of which a repayment equivalent to 2% of members’ pay would be made over 82 years from 1 January 2002.

During the 2006 Budget process Departments’ revenue budgets included a provision to increase their PECRS contribution from 15.16% to the required 15.6%.

It has been proposed that the budget for the 2% element for repayment and servicing of the debt be transferred from all Departments’ budgets to a central HR vote held within the Chief Minister’s Department. This arrangement will lessen the burden on Departments to make monthly repayments and also insulate Departments should the costs of the repayments increase or staff numbers decrease.

Alongside this arrangement States Payroll has been adjusted such that Departments will be charged the reduced 13.6% PECRS contributions from January 2006.

Shown below is a calculation of the 2% provision applicable to the Transport and Technical Services:

	2006 Budget PECRS	PECRS 2% Provision
Transport and Technical Services	£1,893,600	£242,800

Building Maintenance – Budget Transfer £400k

The Treasury and Resources and Chief Minister’s Office have requested that the Transport and Technical Services carry out building refurbishment on the 3rd and 6th Floor at Cyril Le Marquand House following the relocation of the Magistrates Court to its new premises and changes to the Chief Minister’s Office. Shown below is a schedule of costs for the proposed works:

	3rd Floor £	6th Floor £	Total £
Builders Work	177,732	255,036	432,768
Windows (purchase only)	17,000	17,000	34,000
Mechanical & Electrical Fees	9,550	9,550	19,100
Architects Fees	12,500	12,500	25,000
Blinds	6,500	6,500	13,000
Contingency @ 10%	22,328	30,058	52,386
Total	245,610	330,644	576,254

Within Transport and Technical Services building maintenance budget for 2006 it has ‘ring-fenced’ funds amounting to £176,254 to assist with the planned building maintenance costs at Cyril Le Marquand House. It is recommended that the Chief Minister and Minister for Treasury and Resources allocated funds in support of building refurbishment and transfer funds amounting to £200,000 to the Transport and Technical Services Department from within their cash limits.

Recommendations

Public Employees Contributory Retirement Scheme (PEC) pre 1987 debt repayment

It is recommended that the Minister agrees to transfer budget amounting to £242,800 equivalent to 2% of members’ pay to a central HR vote within the Chief Minister’s Department.

Building Maintenance – Budget Transfer £400k

It is recommended that the Minister approves the budget transfers from the Chief Minister and the Minister for Treasury and Resources which amount to £200,000 respectively.

Reason (s) for Decision

Public Employees Contributory Retirement Scheme (PEC) pre 1987 debt repayment

To ring fence the funds required to enable the repayment and servicing of the Public Employees Contributory Retirement Scheme pre 1987 debt for the period through to 2083.

Budget Transfers – Cyril Le Marquand House

To enable the Chief Minister and Minister for Treasury and Resources to allocate funds in support of building refurbishment of the 3rd and 6th floor of Cyril Le Marquand House.

Action Required

To notify the Chief Minister and Minister for the Treasury and Resources Department of these decisions.

Written by:	Ellen Littlechild, Finance Director

Approved by:	John Richardson, Chief Officer

Attachment: