Chief Minister’s Department
Ministerial Decision Report
CAPITAL Budget transfer from HEALTH AND SOCIAL SERVICES TO CHIEF MINISTER’S DEPARTMENT for the PROVISION OF IT INFRASTRUCTURE SUPPORT
- Purpose of Report
To request a non-recurring transfer of £1,384,000 in 2016 from Health and Social Services Capital Head of Expenditure to Chief Minister’s Capital Head of Expenditure and allow Information Services to have direct control over budgets associated with the maintenance and enhancement of IT infrastructure for States departments.
- Background
Historically States IT infrastructure assets and corresponding budgets have operated under a devolved structure; departments owned the infrastructure and budgets and annual revenue costs associated with maintenance were recharged by ISD to departments. Any new capital bids were the responsibility of departments with ISD providing a supporting role.
Recent developments in IT have lead organisations to change their IT operating model and move away from the devolved structure to a centralised one. ISD have for a number of years used consolidated, shared platforms of virtualised servers and storage arrays – This has led to capital and revenue savings for departments and efficiencies within ISD through economies of scale. However, the asset ownership and budget structure of the States remains devolved and is at odds with maximising efficiency and value for money. This needs to be shifted to a centralised operating model where ISD will become responsible for bidding and holding all revenue and capital budgets for consolidated infrastructure with departments providing a supporting role in the bidding process.
The centralised operating model will apply to all new capital IT installations. However, to expedite the shift there are a number of existing assets and budgets that need to be transferred from departments to ISD.
This decision specifically concerns the transfer of Health and Social Services Equipment and minor capital and Replacement RIS/PACS IT budgets into ISD to cover costs associated with the enhancement and annual maintenance costs:
£
- Equipment and minor capital (J00MC10005) 715,040
- Replacement RIS/PACS IT assets (J00MF15026) 668,960
1,384,000
Providing ISD control over the capital budgets above will allow the drawdown of annual maintenance costs, via annual capital to revenue transfers under GAAP, and enhance the infrastructure as required for Health and Social Services elements of the remaining life of these assets without the need to recharge Health and Social Services who do not have the required revenue budget to support the recharge. It should be noted that these assets are already operating in the centralised model through the consolidated infrastructure platforms, purchased using ISD capital budgets, supporting multiple departments and significant capital and revenue savings have already been realised.
The new operating model will be facilitated through an SLA effective 1 January 2017 between Information Services and Health and Social Services. This example will be used as the basis for rolling out SLAs across other States departments.
Once the current assets have reached the end of their useful life and associated budgets become depleted ISD, in accordance with the SLA, will work with Health and Social Services to present a solution and bid to the States to secure the appropriate resource.
3. Recommendation
The Minister is recommended to approve a non-recurring transfer of £1,384,000 in 2016 from Health and Social Services Capital Head of Expenditure to Chief Minister’s Capital Head of Expenditure to allow Information Services to have direct control over budgets associated with the maintenance and enhancement of the Health and Social Services element of the virtual structure for the remaining life of the asset.
4. Reason for Decision
Article 18(1)(c) of the Public Finances (Jersey) 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 for any purpose not mentioned in sub-paragraph (a) or (b).
5. Resource Implications
The Chief Minister’s Department Computer Development capital head of expenditure (F0000C0009) to increase by £1,384,000 in 2016 and the Health and Social Services Equipment and minor capital head of expenditure (J00MC10005) to decrease by £715,040 and Replacement RIS/PACS IT assets capital head of expenditure (J00MF15026) to decrease by £668,690 in 2016. This decision does not change the total amount of expenditure approved by the States in the Medium Term Financial Plan 2016 to 2019.
Report author : Finance Director, Corporate Grp | Document date 24th November 2016 |
Quality Assurance / Review : Head of Decision Support | File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2016-0084 - PSR Budget transfer to Taxes |
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