Pay Awards for Various Groups for 2020 and 2021 and PECRS Increases for 2021: Allocation of Reserve Funding

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A decision made on 28 May 2021

Decision Reference: MD-TR-2021-0065
Decision Summary Title:	Allocation of Reserve Funding for Various Groups for 2020 and 2021 Pay Award and 2021 PECRS increases		Date of Decision Summary:	26 May 2021
Decision Summary Author:	Strategic Finance Advisor		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 for Various Groups for 2020 and 2021 Pay Award and 2021 PECRS increases		Date of Written Report:	26 May 2021
Written Report Author:	Strategic Finance Advisor		Written Report: Public or Exempt?	Public
Subject: The allocation of up to £5,766,500 in 2021 from the “Reserve for Centrally Held Items” to the Heads of Expenditure detailed in the attached report, to cover the costs associated with the 2020 and 2021 Pay Awards in respect of specific pay groups (detailed in the attached report) and PECRS increases in 2021.
Decision(s): The Minister approved an allocation of up to £5,766,500 from the “Reserve for Centrally Held Items” to the Heads of Expenditure detailed in the written report to fund the 2020 and 2021 Pay Awards for specific pay groups (detailed in the attached report) and PECRS increases in 2021.
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 Policy for Allocations from the Reserve (published as R.60/2021) sets the requirement for all allocations from the Reserve for Centrally Held Items to be reviewed by the Investment Appraisal Team who will provide the Treasurer of the States sufficient information to allow him to reach a decision to recommend the funding. This has been reviewed by the Investment Appraisal Team and the Treasurer now recommends this to the Minister for Treasury and Resources for approval.
Resource Implications: The “Reserve for Centrally Held Items– Pay Award Inflation” to decrease by up to £3,762,800 and the “Reserve for Centrally Held Items – Pension and Social Security Increase” to decrease by up to £2,003,700 in 2021 and various heads of expenditure to increase by a total identical amount, as detailed in the table in the written report. This decision does not change the total amount of expenditure approved by the States in the Government Plan 2021-2024. These pay awards are consolidated and will therefore be included in the Government Plan 2022-2025.
Action required: The Head of Financial Governance to advise the Manager Financial Planning and the Head of Finance Business Partnering of the receiving Heads of Expenditure that this decision is approved.
Signature:		Position: Deputy Susie Pinel Minister for Treasury and Resources
Date Signed:		Date of Decision:

Pay Awards for Various Groups for 2020 and 2021 and PECRS Increases for 2021: Allocation of Reserve Funding

Treasury and Exchequer

Ministerial Decision Report

Allocation of reserves funding for 2021 pay award and PECRS CARE scheme increased Employer’s contribution in 2021

Purpose of Report

To enable the Minister to approve the allocation of up to £5,766,500 in 2021 from the “Reserve for Centrally Held Items” to various departments as detailed below, to cover the recurring costs associated with:

- The 2021 Pay Award in respect of the following Pay Groups (excluding those with salaries of £100,000 or more):

Police Officers,
Prison Officers,
Fire and Rescue Service,
Headteachers and Deputy Heads,
Manual Workers,
Energy Recovery Facility Workers,
Teachers and College Lecturers,
Teaching Assistants,
Civil Servants,
Pay Groups who accepted the Workforce Modernisation pay award (Ambulance, Family Support Workers, Residential Childcare Workers and Youth Workers),
Le Geyt,
Hospital Chaplain,
Legal Advisers,

- The 2020 Pay Award at 4.0% (following recent agreement with representatives of these groups) and 2021 Pay Award at 0.9% in respect of the following Pay Groups:

Staff grade doctors,
Senior Associate Specialists,
Hospital Consultants,

- Increased employer’s pension contributions by 0.8%.

As the Workforce Modernisation pay award was a three-year deal (2017-2019), the Minister is required to approve the 2021 allocation of funding to the Workforce Modernisation Pay Groups in this Ministerial Decision.

The following Pay Groups are still in the negotiation stage and they have been excluded from this allocation:

- Nurses and Midwives

- Junior Doctors

- Senior Leaders with Spot Salaries contracts and paid above £100,000.

Background

Funding provisions were made in the Government Plan 2021-2024 in the “Reserve for Centrally Held Items” for anticipated pay awards across all pay groups. This included the funding of the agreed pay awards for pay groups listed above in 2021.

Pay Awards

Pay awards for 2020 have been agreed or implemented with effect from 1st January 2020 with general award at 4.0% and pay awards for 2021 have been agreed or implemented with effect from 1st January 2021 with a general award at 0.9%. Both to be funded centrally for the pay groups listed above.

Increased Employer’s Pension Contributions

The new PECRS CARE scheme was open to new starters from 1 January 2016. From 1st January 2019, all employees (unless eligible to remain on the existing scheme) moved into the CARE scheme.

A provision was made in the Government Plan to be held centrally in Reserves for the anticipated costs of the 0.8% increased employer’s pension contributions as a result of staff being in the new scheme.

Recommendation

The Minister is recommended to approve allocations from the “Reserve for Centrally Held Items” to the Heads of Expenditure, as detailed in the table below, in 2021 to cover the recurring costs associated with the 2020 Pay Award, 2021 Pay Awards and PECRS CARE scheme increased Employer’s contribution in 2021.

Reasons 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 Policy for Allocations from the Reserve (published as R.60/2021) sets the requirement for all allocations from Reserve for Centrally Held Items to be reviewed by the Investment Appraisal Team who will provide the Treasurer of the States sufficient information to allow him to reach a decision to recommend the funding.

This has been reviewed by the Investment Appraisal Team and the Treasurer now recommends this to the Minister for Treasury and Resources for approval.

5. Resource Implications

The “Reserve for Centrally Held Items– Pay Award Inflation” to decrease by up to £3,762,800 and the “Reserve for Centrally Held Items – Pension and Social Security Increase” to decrease by up to £2,003,700 in 2021 and various heads of expenditure to increase by a total identical amount, as detailed in the table above.

This decision does not change the total amount of expenditure approved by the States in the Government Plan 2021-2024. These pay awards are consolidated and will therefore be included in the Government Plan 2022-2025.

Report author: Strategic Finance Advisor	Document date : 26 May 2021
Quality Assurance / Review: Group Director, Strategic Finance/ Head of Financial Governance	File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2021-0065 - Allocation of Reserve Funding for Various Groups 2021 Pay Award and 2021 PECRS increases
MD sponsor: Treasurer of the States