The States of Jersey Financial Report and Accounts 2013 have been released today by the Treasury and Resources Minister.
An operating surplus of £0.5 million was recorded as States income exceeded departmental spending. In addition, Special Funds saw strong returns on their investments, with the Strategic Reserve increasing by £92 million from £651 million to £743 million, and the Social Security (Reserve) Fund by £196 million from £962 million to £1,158 million.
The Social Security Funds have been consolidated into the States Accounts for the first time in 2013, as recommended by the C&AG in her report to the States Assembly on the 2012 Accounts. This inclusion gives a more comprehensive picture of the overall position of the States’ finances, and should help the reader of the Accounts gain a fuller understanding of the States performance as a whole. The use of these funds is not affected – they continue to be ring-fenced only for the provision of pensions and other benefits under the remit of the Social Security Minister.
Treasury and Resources Minister, Senator Philip Ozouf said: “The States of Jersey finances remain in a healthy state. Underspends achieved by a number of departments mean that we have finished the year with a small operating surplus. I am particularly pleased with the performance of our Common Investment Fund. This means that our funding strategy for the new hospital is working. Our planning assumption was for a 5% return (£33 million), and we have achieved £92 million in 2013.
“Economically, 2013 continued to be a difficult year for the global economy and therefore for Jersey. However, we were able to support the local economy last year by delivering £43m of capital expenditure in important areas such as housing, infrastructure, health and education. As the global and UK economies continue to show signs of improvement this year we plan to continue to this support by ensuring that the increase in business confidence seen in Jersey translates into real economic improvements across the whole economy.”
States Income for 2013 was £636.7 million, compared with £627.7 million in 2012. This consisted of revenues gained from taxation such as personal income tax and goods and services tax (£529.3 million), duties on alcohol, cigarettes and fuel, stamp duty and the island rate (£83.3 million) and other income (£24.1 million). Total income was less than anticipated in the Budget statement, with stamp duty down by £7.2 million in the year. Income from taxation continued to be in line with the Medium Term Finance Plan at £529 million compared to £535 million.
Departments’ net revenue expenditure during 2013 was £636.2 million. Departments ended the year with a total underspend of £22.8 million against budgets. £19.9 million of these approvals have been carried forward into 2014 so that Departments can fund projects spanning multiple years and other spending pressures.
In addition, £20.7 million of the contingency amounts allocated by the States to deal with unforeseen pressures were not needed in 2013, and will be carried forward to manage spending pressures in 2014 and beyond.
The majority of the States’ investments are managed through the Common Investment Fund (CIF), which enables States Funds to pool resources and benefit from greater investment opportunities, economies of scale and improve risk management.
The strong performance of the States’ investments in the CIF in 2013 resulted in an increase of £251 million. This is a rate of return of 15.9%, 1.3% above benchmark. Equity returns for the year were exceptionally high at 26.5%, 3.6% above benchmark. The total value of investments held in the CIF stands at £2.4 billion, £2 billion of which relates to funds in the States Accounts.
The return on the Strategic Reserves investments was £92 million, increasing the balance of investments from £651 million to £743 million. The balance in the Social Security (Reserve) Fund increased from £962 million to £1,158 million due to returns of £196 million
Balance sheet management
During the year, States Departments spent £43.2 million on capital projects to develop the fixed assets base, including improvements to social housing and the Island’s infrastructure. The value of States fixed assets is now £3.3 billion.
The Treasury has also operated as an active shareholder for Jersey Post, Jersey Telecoms, Jersey Water, Jersey Electricity and the States of Jersey Development Company. Together, the four utilities contributed £11 million in dividends to the States in 2013, reducing the need for that funding to be raised by taxes.
Category: Finance & Business