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L'înformâtion et les sèrvices publyis pouor I'Île dé Jèrri

Stabilisation Fund to Consolidated Fund: Transfer

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A decision made on 18 September 2020

Decision Reference: MD-TR-2020-0112

Decision Summary Title:

Transfer from Stabilisation Fund to Consolidated Fund

Date of Decision Summary:

18 September 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:

Transfer from Stabilisation Fund to Consolidated Fund

Date of Written Report:

18 September 2020

Written Report Author:

Head of Financial Governance

Written Report :

Public or Exempt?

Public

Subject: Transfer from Stabilisation Fund to Consolidated Fund

Decision(s): The Minister decided to transfer £50 million from the Stabilisation Fund to the Consolidated Fund and direct that it be added to the General Reserve head of expenditure to address direct and consequential impacts of Covid-19.

 

Reason(s) for Decision:

 

P.28/2020  Draft Public Finances (Amendment of Law) (Jersey) Regulations 202-, approved by the States Assembly on 24th March 2020, agreed a number of temporary modifications to the Public Finances (Jersey) Law 2019. The added modifications affect the way in which the Stabilisation Fund may be used, by allowing the Minister –

•          to transfer an amount from the Stabilisation Fund to any other fund and direct that amount to be expended directly from that fund;

•          to direct that an amount be expended directly from the Stabilisation Fund;

•          to direct that an amount be transferred to the Stabilisation Fund from any other fund;

•          to arrange for overdraft and other financing for the Stabilisation Fund;

•          to arrange that repayments of loans made from the Stabilisation Fund are credited to that Fund.

There are other added modifications, which –

•          allow the Minister to transfer up to and including £400 million from the Strategic Reserve Fund to the Stabilisation Fund;

•          remove the requirement in Article 18 that if the Minister proposes to give a direction to re-allocate a head of expenditure, the Minister gives the States at least 4 weeks’ notice;

•          increase from £10 million to £100 million the amount which may be appropriated from the Consolidated Fund by the Minister without amending the government plan;

•          increase the limit on financing that the Minister may arrange in a financial year from £3 million to £500 million and the limit on total outstanding financing from £20 million to £500 million;

•          allow the Minister to make loans from the Stabilisation Fund (instead of only from the Consolidated Fund), and increase the limit on loans that the Minister may make in a financial year from £3 million to £100 million and the limit on total outstanding loans from £20 million to £100 million;

•          increase the limit on guarantees and indemnities that the Minister may provide in a financial year from £3 million to £100 million and the limit on the total outstanding guarantees from £20 million to £100 million.

 

The amendment to P.28/2020, brought by the Corporate Services Scrutiny Panel and adopted by the Assembly, clarified that:

•          the amended powers expire on 30th September 2020; and

•          where the Minister has obtained financing, lent money or provided guarantees or indemnities under Articles 26 to 28 while Article 24(8) applied, the financing, lending or provision of guarantees or indemnities remain valid and are not included in any monetary limits set out in Articles 26 to 28 as those Articles apply after the expiry of the modifications.

 

The Minister brought these amended powers into effect through MD-TR-2020-0029 by deciding that she considered there exists an immediate threat to the health or safety of any of the inhabitants of Jersey and to the stability of the economy in Jersey.

 

The Minister, on the advice of the Treasurer, considers that there is a need to increase the available balance on the General Reserve, thus preserving as much as possible of the additional expenditure approval of £99.99 million to address the pandemic and its consequences. That balance, which remains available beyond 30th September 2020, will be used to address the economic consequences during the period to 31st December 2020.

 

The Minister has published her Covid-19 Financial Policy as R.96/2020.

 

Resource Implications: The balance of the Stabilisation Fund will decrease by £50 million. The balance of the Consolidated Fund will increase by an identical amount, with that amount being added to the General Reserve head of expenditure to address direct and consequential impacts of Covid-19. This transfer will reduce the balance on the Stabilisation Fund to nil.

 

Action required: Head of Financial Governance to ensure this decision is published on www.gov.je.

 

Signature:

 

 

Position:  Deputy S J Pinel, Minister for Treasury and Resources

Date Signed:

 

Date of Decision:

 

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