Budget Transfer: Economic Development, Tourism, Sport and Culture to Jersey Property Holdings (Jersey Archive extension)

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A decision made on 15 December 2017:

Decision Reference: MD-E-2017-0050
Decision Summary Title :	Transfer of budget from Economic Development Tourism Sport and Culture Department to Jersey Property Holdings, to meet the inflationary construction costs in constructing an extension to Jersey Archive		Date of Decision Summary:	14th December 2017
Decision Summary Author:	Deputy Chief Executive		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	Deputy Chief Executive
Written Report Title :	Transfer of budget from Economic Development, Tourism, Sport and Culture Department to Jersey Property Holdings, to meet the inflationary construction costs in constructing an extension to Jersey Archive		Date of Written Report:	14th December 2017
Written Report Author:	Deputy Chief Executive		Written Report : Public or Exempt?	Public
Subject: Transfer of budget from Economic Development Tourism Sport and Culture Department to Jersey Property Holdings to meet the inflationary construction costs in constructing an extension to Jersey Archive
Decision(s): The Minister for Economic Development Tourism Sport and Culture approved a one-off budget transfer from EDTS&C revenue head of expenditure of £360,000 in 2017, to the capital head of expenditure of Jersey Property Holdings, in order to meet inflationary costs in constructing an extension to Jersey Archive
Reason(s) for Decision: Following a procurement tender exercise carried out by Property Holdings on the Minister’s behalf, the levels of construction costs in tenders returned, significantly exceeded the capital budget agreed for the Jersey Archive extension project in 2015, as a result of inflationary increases in both materials and labour costs. As a consequence, there was a shortfall in capital funding of £360,000 in the overall project budget. In order to allow Jersey Property Holdings to accept the preferred tender price and avoid the potential of further inflationary costs through re-tendering, the EDTSC Minister approved a one-off budget transfer from EDTS&C revenue head of expenditure of £360,000 in 2017 to the capital head of expenditure of Jersey Property Holdings. Article 18(1)(c) of the Public Finances (Jersey) Law 2005 states that all or any part of the amount appropriated by a head of expenditure may, with the approval of the Minister for Treasury and Resources, be transferred from one head of expenditure to another head of expenditure for any purpose not otherwise specified. Delegation 1.2 delegates authority to agree non-contentious transfers between heads of expenditure up to £1,000,000 to the Treasurer of the States.
Resource Implications: The Jersey Property Holdings capital head of expenditure to increase by up to £360,000 in 2017 and the EDTS&C revenue head of expenditure to decrease by an identical amount.
Action required: The Minister for EDTS&C to request the approval of the Minister for Treasury and Resources for the budget transfer.
Signature: Senator L J Farnham		Position: Minister for Economic Development, Tourism, Sport and Culture
Date Signed:		Date of Decision (If different from Date Signed)

Budget Transfer: Economic Development, Tourism, Sport and Culture to Jersey Property Holdings (Jersey Archive extension)

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Economic Development, Tourism,

Sport and Culture

Ministerial Decision Report

Transfer of budget from Economic Development, Tourism, Sport and Culture Department to Jersey Property Holdings, to meet the inflationary construction costs in constructing an extension to Jersey Archive

Purpose of Report

The Minister for Economic Development Tourism Sport and Culture (EDTSC) approved a one-off budget transfer from EDTSC revenue head of expenditure of £360,000 in 2017, to the capital head of expenditure of Jersey Property Holdings, in order to meet inflationary costs in constructing an extension to Jersey Archive

Background

In 1992 the States voted (P.99/1992) to establish Jersey Archive (JA) (as part of Jersey Heritage) to provide an archive service, with premises to house the archives opening in Clarence Road in 2000.

Since 2000 the archive service has taken on considerable extra responsibility in terms of delivering a public records service on behalf of the States of Jersey, States-funded bodies, plus private, commercial or third sector organisations operating in the Island. The introduction of the Public Records, Data Protection and Freedom of Information legislation has led to significant increases in demand for storage of records over the last ten years and an increased interest from the public for access to documents related to both government process and Jersey history.

This increased demand for document storage, digital recording and the archiving of key records has led to a situation where by the end of 2019 it is forecast that space within the original strong room at Jersey Archive will be exhausted.

In spite of the impact of electronic record-keeping, it is not expected that paper records will cease to exist in the foreseeable future; consequently, there is a need to provide further storage space of an appropriate nature to hold valuable documents and to allow them to be accessed by the public upon request.

Creation of an additional strong-room of the same size as the present one, would provide more than 30 years’ future storage at current rates of deposit.

Economic Development, Tourism, Sport and Culture took on responsibility for managing the relationship with Jersey Heritage/Jersey Archive in January 2016 when the Culture portfolio was transferred from the Education Department.

Prior to taking on responsibility for Jersey Archive in late 2015 the (then) Economic Development Department commissioned and paid for a feasibility study to establish the Archives future needs in terms of storage and whether expansion at its current St Helier site was economically viable.

The Feasibility Study was presented and endorsed by the EDTSC Ministerial Team on the 22nd April 2016 and was subsequently endorsed by the JAC Records Advisory Panel, Jersey Heritage Trustees and the JAC’s project advisor (Chris Wood of the National Conservation Service).

Planning permission for the Extension was confirmed in late 2016 and in January 2017, a Project Management Group (PMG) was formed under the direction of Jersey Property Holdings, involving JPH, EDTSC and Treasury representatives. The PMG has progressed the project through a full and thorough procurement process, with completed Tenders received from three contractors and subsequently evaluated by JPH-retained advisors.

The pre-tender estimate of construction costs (August 2017) was in the region of £2.5 million and the provision for fees over £400,000

Tenders received were all over £3 million for construction costs only, not including fees

Following a full tender evaluation and considerable value engineering led by JPH, there still remains a current £360,000 short fall

Much of the increase in construction costs can be attributed to a combination of Sterling depreciation (post-Brexit), materials cost-inflation and wider labour / construction inflation driven by a buoyant Jersey construction sector, benefitting from high levels of current activity plus a strong pipeline of large and medium size private & public projects coming on-stream over the next few years.

Given the space constraints on the existing storage at the Archive, the projected build-time and the need to provide a professional records service to the Island, it is therefore important that funding to complete the capital budget be identified, in order that contracts can be signed and construction get under way.

3. Requirement

In order that Jersey Property Holdings can accept the terms of the preferred tender price, The Minister for Economic Development Tourism Sport and Culture needs to identify £360,000 of additional funding in 2017.

4. Recommendation

The Minister is recommended to approve a one-off budget transfer from EDTSC revenue head of expenditure of £360,000 in 2017, to the capital head of expenditure of Jersey Property Holdings, in order to meet inflationary costs in constructing an extension to Jersey Archive and to prevent the States of Jersey from incurring additional costs as a consequence of having to retender. The Minister for EDTSC will seek to recoup the £360,000 with a bid for funds from central contingencies.

The Minister for EDTSC is further recommended to request the approval of the Minister for Treasury and Resources for the budget transfer.