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Applying the framework

The framework can help agencies to monitor and assess the performance of their assets, and to better understand the linkages between different dimensions of performance (eg, condition and utilisation). It needs to be supported by good-quality metrics and careful analysis informed by the operational and policy context.

The framework also provides a basis for reporting at more aggregate levels. This enables meaningful benchmarking of performance where there are reasonably like-for-like comparators (eg, land and buildings) and a ready market for similar types of assets. Standardised reporting on asset performance will help decision-makers to plan the best configuration and utilisation of the assets from the perspective of the entire portfolio.

The next Investment Statement will extend the scope for asset performance reporting based on a standard template and, where possible, consistent performance indicators across the social asset portfolio.

This Supplement draws on the experiences of three capital-intensive agencies to illustrate how asset performance information enables better asset management and delivers improved outcomes.

Ministry of Education (MOE): Building the school property portfolio asset performance information

The school property portfolio comprises 2,034 primary schools and 336 secondary schools, located on 18,000 hectares, and valued at $10.1 billion as at 1 July 2010. MOE is responsible for:

  • ensuring school property is effectively maintained and upgraded
  • purchasing land and constructing new property to meet demand, and
  • identifying and effectively disposing of surplus property.

MOE is currently reviewing its performance measures for school property as the existing measures are too low level and process focused. MOE wants a set of indicators that are more useful in assessing the quality of its management of the portfolio, its ability to react to changes in demand and how well it is able to future-proof the portfolio. The measures are a work in progress and reflect current data collection abilities and systems development. As more robust data become available, MOE will refine its key performance indicators and set more aspirational performance targets. Three main information areas are to be focused on:

Capacity - managing demand growth

Student numbers are expected to increase by 44,000 to around 800,000 school students across New Zealand by 2020. Additional capacity needs to be constructed in the right place, while preserving appropriate flexibility to accommodate future demographic shifts. MOE needs information to manage capacity at a regional level. It will also work more closely with schools to identify and rationalise surplus property.

Managing the portfolio better

Currently, MOE has limited information at an individual school level across the property portfolio, including, for example, which buildings most need updating or replacing. This is important for MOE to be able to ensure that funding is better targeted and to improve the value for money from the school property spend. MOE will address this by establishing financial benchmarks and reviewing its procurement models. The implementation of two new PPP schools in Hobsonville is expected to identify opportunities for improving existing procurement methods and asset management.

Ensuring schools are fit for purpose

The Modern Learning Environment (MLE) standard introduced in 2010 helps schools upgrade their teaching spaces to support modern educational requirements, including being broadband ready. Over the next two years, MOE will also develop clearer standards for the condition of school property so that the classroom environment is safe for all learners. This will enable better planning of life-cycle asset replacement and reduce the need for more reactive expenditure on health and safety.

Ensuring schools are fit for purpose.
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