Resource material › Corporate Publications › Statement of Intent 2012-15Tauāki Whakamaunga Atu
Capability to Deliver
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- Managing in a changeable operating environment
- Organisational health and capability
- Finance and asset management
Managing in a Changeable Operating Environment
We identify long-term trends and issues through environmental scanning, strategic leadership sessions and engagement with key stakeholders to underpin strategic development. The Executive Leadership Team (ELT) has collective responsibility for identifying the core capability and capacity requirements to support the Department to respond to external drivers in the short and long term. The Department’s governance committees maintain oversight of the environmental drivers in their areas of focus.
Operating environment
New Zealand faces a number of challenges and changes that will influence the way we work to meet people’s needs, including:
Global economic uncertainty
As a small trading nation, particularly reliant on the international economy and trading partners, continuing global economic uncertainty poses significant challenges for New Zealand. The public sector plays a large part in New Zealand’s economy. It is therefore essential that public services are efficient and productive to ensure public money is invested wisely and provides good value.
The challenge of providing better services for less will be an ongoing driver of the way we work and of the way the public sector is structured. We will continually review the way we operate to ensure we can adjust to reduced baselines, capitalise on opportunities to work more closely across sectors and continue delivering high-quality services to New Zealanders.
Technological advances
Advances in ICT will continue to drive changes in the way people and government interact. The growth in the availability of affordable, fast and secure ICT means that public services can meet the needs of New Zealanders in new, improved and more accessible ways.
The transformation to a digital world presents new possibilities, along with the challenge of keeping pace with public expectations and demands for the way services are delivered. Greater interconnectedness and access to information has a range of implications, including fundamental issues around privacy, integrity and sovereignty of information. We have a crucial leadership role in maximising the use of and investment in ICT across government to take advantage of technology to improve services.
Responding to disasters, risks and hazards
A number of disasters in the past three years have had a significant impact on New Zealand including the Pike River coal mine tragedy, the Canterbury earthquakes and the Rena grounding and oil spill. The earthquakes in particular have significantly altered the operating environment for public sector agencies, driving new business models to respond to different community needs.
In the longer term, global constraints on resources such as water, food and energy provide further environmental uncertainties and risks. These hazards highlight the importance of our work to build resilient communities that are able to respond quickly and recover strongly from disasters and environmental emergencies.
Demographic trends
New Zealand is an increasingly diverse society. By 2021 there will be close to five million people living in New Zealand, identifying with a wide range of ethnic groups. The Māori, Pacific and Asian populations are all projected to grow faster than the overall population over this time. These demographic changes require greater flexibility in how government interacts with and delivers services to people and communities. Changes within New Zealand’s society have implications for the Department both in terms of our workforce, and the way we provide services to customers.
Treaty of Waitangi settlements
The Government is committed to progressing historical grievance settlements and moving towards a post-settlement environment. We will continue to support settlement processes, including supporting local authorities in their engagement with iwi and advising other government agencies such as the Office for Treaty Settlements of the implications for local authorities of Treaty settlements.
We will support the resolution of historic grievances by continuing to negotiate with iwi who seek agreement with the Department as part of their settlement with the Crown.
We are committed to the articles and the principles of the Treaty of Waitangi and to ongoing engagement with Māori as Treaty partners and citizens in the post-settlement environment.
Risk assessment and management
To achieve priorities and outcomes within this operating environment we need to actively understand and manage risks in order to successfully pursue objectives and opportunities. This requires us to fully understand the nature and extent of all risks and develop appropriate responses.
Our risk management framework reflects our expanded functions and responsibilities, and extends risk identification and mitigation to all levels of the Department’s activities. The framework is consistent with the International Risk Management Standard ISO:31000:2009.
ELT is collectively responsible for the Department’s risk assessment and management. Governance committees provide oversight of risks and opportunities in their areas of focus to support ELT. The Risk and Assurance Governance Committee has a specific role supporting risk management practice and policies, and provides oversight and guidance of risk management at an organisational level.
Organisational health and capability
Strong organisational health and capability provides the foundation for us to achieve wider strategic priorities and outcomes within a changeable operating environment.
Building organisational capability and capacity
Building capability to realise the benefits of our expanded functions and improve our services to people and government is a key strategic priority over the next three years.
Consolidating our structure and developing new operating models
We will continue to consolidate our structure to unlock value across the Department. This includes:
- reviewing the way compliance services, identity information and products, and community advisory services are delivered. This will ensure systems and structures are in place to maintain the sustainability and flexibility of these functions to continue delivering high quality services.
- implementing structures and plans developed to improve the capability of people, systems and processes following reviews of a number of corporate functions during 2011/12. These structures will support greater efficiency and improvement in service delivery, increase the focus on providing strategic advice and improve transactional work.
- implementing the Corporate Infrastructure Strategy and associated three-year programme of work developed to ensure the Department’s core corporate infrastructure meets current and future needs. Early focus is on the Financial Management Information System and processes, Human Resources Information System and Document Management System.
- developing new operating models to capitalise on opportunities and integrating service delivery in areas of common capability, for example the internal partnership between Archives New Zealand and the National Library. We are also actively working with other public sector agencies, such as Inland Revenue and the Ministry of Social Development, to develop options for delivering services and functions across organisations more effectively and efficiently.
Transition of the Charities Commission’s functions
The functions of the Charities Commission will transition to the Department following the passage and commencement of the Crown Entities Reform Bill. The transition provides opportunities to better align monitoring and regulatory functions and roles, and will strengthen our capability to provide services particularly in the community and voluntary sector.
Enhancing portfolio management
We are investing in our project and programme management capability and capacity to ensure we realise the maximum benefits from capital investments. We have established an Enterprise Portfolio Management Office, based on international best practice and drawing from the lessons learned from other public sector organisations in New Zealand, to provide greater strategic alignment and oversight of our entire portfolio.
Workforce planning strategy
To support the focus on developing the right capability and capacity, we are integrating workforce planning into organisational and strategic planning processes. In the short term, better workforce planning will help ensure financial, service delivery and workforce planning is mutually aligned, achievable and sustainable. In the longer term, linking workforce strategies with the annual planning cycle will enable us to be more adaptable in shaping our workforce to changing business needs.
Performance Improvement Framework review
We will undergo an independent Performance Improvement Framework (PIF) review during 2012. The review process will deliver an independent view of our performance and we will use the results to identify priority areas for action to improve the delivery of government priorities and core functions, and improve our overall performance.
Developing leadership to meet the challenges of change
All government agencies face an ongoing period of significant change over the medium term. To respond to expectations that agencies will develop new ways of achieving efficiencies through collaboration and sharing of services across agencies, it is necessary for us to focus on strengthening leadership capability.
We are strengthening our leadership and management approach, developing good leaders through dedicated identification programmes and building specific capability. Our approach will utilise both internal and external expertise and collaborate with other public service agencies.
We will identify our people capability needs through our workforce planning process. Development opportunities will be prioritised to meet these needs.
A succession planning process will be implemented to ensure we have the depth of capability we require for key roles.
Our learning management system will increase access to development opportunities and enable the return on investment to be measured and evaluated.
Building strong organisational culture
We have recently revised our value statements to emphasise building a culture of integrity, excellence and service, and to develop a shared understanding of the strengths and expectations of staff. Developing and maintaining a strong organisational culture where staff uphold the values of the Department and what it means to be a public servant is an ongoing focus.
Our values and the way we work are stated on the inside cover.
Driving performance through staff engagement
Through improving our levels of staff engagement we will drive improved performance and better service delivery across the Department. Staff engagement is the measure of commitment employees have toward their role and their employer. Research shows that engaged employees try harder, perform better and are less likely to leave. We will focus on achieving high levels of engagement to make the Department a great workplace and ensure we are able to realise the benefits of a skilled and committed workforce.
Enabling effective Māori-related services
The Department accepts and understands our responsibilities as a Crown agency. We are committed to building capability to work effectively with hapū and iwi Māori.
We are developing a whole-of-Department strategic framework for Māori-related services. This will establish a single, cohesive approach across the organisation to policies, training and strategies, enabling the Department to more effectively discharge our responsibilities and services to Māori as Treaty partners, citizens and staff of Internal Affairs.
The strategy will also support the Department to respond effectively to Māori in a post-settlement context.
Being a good employer – equal employment opportunities
We aim to be a good employer and an employer of choice. Our organisational design provides opportunities for development and growth of staff within the organisation, and also seeks to develop skills useful in the wider public sector by developing leaders.
As a good employer we recognise the importance of promoting diversity and equal employment opportunities in the workplace. We will continue to support the Equality and Diversity: New Zealand Equal Opportunities Policy and a number of equal employment opportunity groups within the Department.
We are undertaking a review of our equal employment opportunities policy to ensure it clearly reflects our expanded functions. This review will include a focus on how the Department meets its obligations to Māori staff under the State Sector Act.
Ensuring cost-effectiveness
We seek to continuously improve the value for money of our services and actively seek to identify areas of duplication to reduce costs while enhancing service delivery. We regularly review our activities to ensure resources are directed to the highest priorities and highest impact areas to enhance overall cost-effectiveness.
Business improvement framework
We will continue our approach to business services improvement, applying methodologies such as systems thinking to develop measurable and sustainable changes to business processes and enhance the cost-effectiveness of services.
We have built our internal capability and we are implementing a business improvement framework that can adapt and apply a range of business improvement tools and interventions to meet our specific needs.
Our business improvement framework uses the following model:
Better administrative and support services (BASS)
The findings from the BASS benchmarking exercise are used to understand our performance relative to other agencies and identify areas for ongoing improvement and efficiency savings within corporate functions. We aim to be in the top quartile for corporate functions by 2016, with particular focus on Finance and Property.
To achieve this, we are implementing the Corporate Infrastructure Strategy programme of work, better finance and human resources processes, and implementing a national property strategy. We will also continue our involvement in other efficiency-related initiatives such as the Treasury-led Human Resources Quick Start Initiative and all-of-government procurement contracts.
Measuring cost-effectiveness
We monitor performance information regularly to ensure we are delivering value for money in meeting expectations of Ministers and customers. Given the diversity and complexity of the Department’s work, simple measures of cost-effectiveness are challenging. For a significant proportion of our work, such as policy advice, community development advice, and support for Executive Government, activities are sufficiently remote from the point of impact that they cannot be easily attributed or quantified.
We will use outcome and impact indicators in the Statement of Intent and performance measures in the Information Supporting the Estimates, in combination with information such as financial management data, ministerial satisfaction surveys and independent surveys and reviews of services, to analyse cost-effectiveness and efficiency. A comprehensive review of all performance measures is being undertaken in 2012. In addition we will look to the Government’s response to the Review of Expenditure on Policy Advice for guidance on measuring the cost-effectiveness of policy advice functions.
Technology capability
We have a concentration of ICT expertise within the Department. We will use these resources to ensure we have the internal technical capability to achieve outcomes. We operate a standard client-service provider model to provide ICT services to both internal and external customers. This ensures we benefit from our responsibilities to deliver all-of-government ICT services.
We have established a continuous improvement programme to ensure services continue to meet the Department’s needs. The programme constantly evaluates the efficiency, effectiveness and flexibility of people, process and technology, and implements improvement initiatives to enhance service delivery.
Given our statutory role preserving the memory of government and as home of the Government Chief Information Officer, we aim to be an exemplar in government information management.
Work is underway to improve our recordkeeping framework and consolidate the current suite of electronic document and records management systems, recognising the link between good information management systems and accountability to government, stakeholders and the public.
We are improving information management services and tools to achieve greater effectiveness and efficiency. We are also aligning our online presence with the Directions and Priorities for Government ICT including reviewing operating and governance models and rationalising websites and the technologies used to support them. This will provide greater efficiencies and cost reductions.
We also provide specialist ICT commercial capability to support both our needs and cross-government initiatives. This includes developing supply strategies, market engagement, contract management, purchasing and negotiation.
We are leading a joint initiative with the Treasury to pilot a comprehensive ICT benchmarking measurement process that will provide a more meaningful understanding of ICT performance across government. It is expected that this work will be completed in the first half of the 2012/13 year.
How we will assess progress
| To ensure we attract and recruit the best people in the most cost effective way possible we create a positive experience for applicants and managers. | We will demonstrate progress towards this by ensuring the end to end process for a decision to recruit is completed within 60 days. This period includes average 13 days for advertising, five days for successful applicants to consider signing and seven days for promulgation. |
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| While some turnover is inevitable and can create a healthy dynamic in an organisation, a low or sudden drop in the retention rate may be a product of a lack of workforce planning. | We will demonstrate progress towards a better turnover rate by reducing the current core unplanned turnover of 14 per cent (against the public sector core unplanned turnover average of 11 per cent). |
| To guide our progress towards creating a strong working environment for employees, we administer an engagement survey that asks all employees a variety of questions on their work experience. | Over the next three years we will demonstrate progress on engaging employees by increasing our percentage of engaged employees to be above State Sector comparison. |
Finance and asset management
The principles of financial accountability and strategic financial management provide the framework for financial management within the Department, and encompass a number of financial strategies through which we ensure we manage finances responsibly.
We maintain financial policies and procedures designed to ensure best practice financial management and support the strategic goals and priorities of Ministers and the Government. In addition we have been progressively strengthening our financial management capability, in line with Government’s expectations for public service departments.
To adequately support the financial and information needs of the expanded Department and its stakeholders, we are investing in improving systems, tools and processes, taking into account:
- the increasing complexity of the business and financial reporting requirements, which has compelled a focus on systems enhancements to ensure consistent, accurate and meaningful information in a timely manner
- the continuing growth in the scope and complexity of our business activities, requiring the delivery of customised solutions that are effective and financially sustainable.
Responding to the current fiscal environment
The broader economic and fiscal environment continues to strongly influence our wider operating environment. Expectations for more cost-effective public services and the need for fiscal restraint requires an ongoing commitment to managing cost pressures and using resources cost-effectively.
Over the past two years, we have delivered specific requirements to achieve savings arising from machinery of government changes and efficiency savings targets required of the Department following Budget 2011. These savings are reflected in our existing baselines.
In the medium term, the need to deliver Departmental and Ministerial priorities within reduced Crown funding, while managing future cost pressures, is a key strategic driver. The current fiscal environment requires departments to consider existing baselines as the first source of funding for meeting cost pressures, funding any new priorities, or for increasing funding to existing programmes.
Our Four-Year Budget Plan outlines the ongoing response to these drivers over the medium term, in particular by focusing on:
- realising the benefits arising from the organisation’s combined functions and reducing duplication
- consolidating our structure and systems
- delivering efficiencies across the organisation.
We will continue to seek ways to develop new operating models to capitalise on our structure, explore ongoing and sustainable savings, and work more productively and cost-effectively. We have an ongoing focus on baseline management and future savings will be allocated to initiatives that are aligned with government and strategic priorities.
Pricing strategy
We have in place an overall pricing framework for individual products and services provided in both contestable and non-contestable environments and markets. The framework encompasses best practice public sector guidelines, a set of overarching pricing principles and specific pricing strategies.
We depend on revenue from fees for close to half of our income and baselines can fluctuate as demand for products and services change.
Where services are provided on a cost recovery (fee-for-service) basis in non-contestable markets, we operate memorandum accounts to assist in managing costs and revenue, particularly where fees charged are set under regulations.
Although fees have remained static in a number of areas for a long time, we are limiting the need to increase third-party fees where possible. In recognition of the Government’s focus on cost constraint and expectations to deliver more for less, increases in fees are not factored into our budget planning, pending monitoring and reviews of cost pressures on these products.
Capital and asset management
We seek to maintain a capital base that will meet the Government’s aim of using improvements in national infrastructure to drive productivity growth within the public sector and the wider economy, and improve State sector performance.
Within the current fiscal environment, a key priority is self-funding new and replacement capital investments through balance sheet management.
Forecast capital expenditure over the next three years reflects previously approved capital initiatives, with the Department self-funding all other priority future capital investments. In addition, our capital planning acknowledges the importance of retaining an adequate level of unallocated residual funding that can be made available for emerging priorities, emergencies, or other capital contingencies.
Enhancements to asset management
We seek to ensure effective capital asset planning, investment, delivery and management. We support this with processes and procedures that provide assurance that required standards are being met, the required capability has been built and the required and credible information is readily available.
We are implementing enhancements to our asset management framework (including capital planning and investment) to align with best practice standards. This will include appropriate compliance and alignment with the Treasury-led Capital Asset Management framework. In order to realise the greatest benefits from our capital investments, these improvements will seek to ensure the alignment and integration of strategic, business and operational planning across the Department.
Key capital and asset management initiatives:
- we will complete a number of major infrastructural asset projects, including the National Library New Generation Implementation Programme, the Passports System Redevelopment Programme, and a replacement grants management system
- continuing investment in both corporate and service delivery infrastructure and ongoing investment in replenishing and refreshing the existing asset base
- progressively streamlining and enhancing corporate services and support systems. This includes investigating opportunities to integrate a range of back office functions and corporate systems with other government agencies
- developing an asset rationalisation strategy to streamline our asset base, reducing capital investment and associated operating expenditure
- developing more cost-effective accommodation options to reduce average costs of accommodation, achieve improved office space utilisation and reduce our overall footprint. This will look at opportunities for centralising and rationalising leased and owned accommodation options, and more effective asset utilisation, including opportunities for joined up common government services.
Key financial information
Appropriations
| 2011/12 $million |
2012/13 $million |
2013/14 $million |
2014/15 $million |
2015/16 $million |
|
|---|---|---|---|---|---|
| Departmental: | |||||
| Output Expenses | 369.222 | 357.808 | 354.858 | 354.834 | 354.791 |
| Capital | 68.615 | 64.460 | 41.081 | 38.863 | 39.749 |
| Total Departmental | 437.837 | 422.268 | 395.939 | 393.697 | 394.540 |
| Non-departmental: | |||||
| Output Expenses | 9.152 | 9.142 | 9.142 | 9.142 | 9.142 |
| Other Expenses | 145.762 | 53.270 | 48.649 | 47.549 | 47.549 |
| Benefits and Other Unrequited Expenses | 60.000 | 60.000 | 60.000 | 60.000 | 60.000 |
| Capital | 8.378 | 1.888 | 1.883 | 1.976 | 1.976 |
| Total Non-departmental | 223.292 | 124.300 | 119.674 | 118.667 | 118.667 |
| Total Baselines | 661.129 | 546.568 | 515.613 | 512.364 | 513.207 |
The following summarises the changes in departmental baselines:
- Output expenses – the overall decrease in funding reflects the impact of the Budget 2011 efficiency savings and the end of time limited funding for ‘Cross-Government ICT Investment Proposals’ from 2012/13, and the end of time limited funding for the Royal Commissions of Inquiry from 2013/14;
- Capital – a significant portion of capital expenditure in 2011/12 and 2012/13 reflects expenditure on: the National Library New Generation Implementation Programme; the Passport Redevelopment Programme; and the Government Digital Archive initiative. The baseline from 2013/14 reflects the Department’s ongoing asset replacement programme.
The following summarises the changes in non-departmental baselines:
- Other expenses – 2011/12 includes one off funding for ‘Emergency Expenses’ and a new appropriation for payments in respect of an indemnity for response costs relating to the Canterbury Earthquake. The decrease from 2013/14 reflects: the end of time limited funding for Commissioner’s fees for the Royal Commissions of Inquiry; lower level of funding to selected communities to improve their access to digital tools and to improve the capability in their use of digital tools; and lower funding for the maintenance of Crown-owned assets at Lake Taupo.
- Capital – the decrease from 2012/13 reflects the cessation of funding relating to the Local Government Funding Agency and the provision of a loan to the Auckland Transition Agency.
Forecast Capital Expenditure
| 2011/12 $million |
2012/13 $million |
2013/14 $million |
2014/15 $million |
2015/16 $million |
|
|---|---|---|---|---|---|
| Intangibles | 26.484 | 14.046 | 14.214 | 13.332 | |
| Property, Plant and Equipment | 47.047 | 37.976 | 27.035 | 24.649 | 26.417 |
| Total | 68.615 | 64.460 | 41.081 | 38.863 | 39.749 |
The ‘Intangibles’ category largely comprises software, much of which is proprietary to the Department. This includes passport and other identity-related systems.
The ‘Property, Plant and Equipment’ category includes expenditure on computer hardware associated with infrastructural asset projects, building developments, office fit-outs and associated furnishings, and cyclical replacement of the VIP Transport vehicle fleet.
How we will assess progress
| Capital and asset management | |
|---|---|
| The Department owns seven buildings and leases 48 buildings. Within this portfolio, there are opportunities to generate savings by more effectively managing our foot print. | We are developing a property strategy to ensure we address the property requirements of our operational needs in the most cost-efficient and effective manner. We are aiming for efficiency gains of $1.8m from the strategy over the next four years. |
| The Department currently has over 70 capital projects underway. | We will implement a Benefits Realisation Framework to allow us to measure and assess progress of programmes and projects. |
| Financial | |
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The public and government must have confidence in our financial information. We will demonstrate transparency in financial information and internal controls though an annual independent unqualified audit opinion, which means in their opinion the auditor believes the Department’s financial information is fairly presented. |
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