Policy Advice: State Sector Performance

Scope of Appropriation

Policy advice on the effective and efficient use of State resources including improved decision-making and performance management systems and the efficient management of Crown assets.

Output Class Description

This class of outputs involves the provision of policy advice related to ensuring the work of the State sector represents value for money in achieving the Government's aims and objectives. This includes advice on:

• enhancing economic growth and living standards by lifting the standard and utilisation of New Zealand's collective skill base
• fiscal and financial management of all government agencies
• specific agency or entity performance, including Crown entities, Crown companies, CFIs and SOEs
• in-depth performance analysis of priority agencies or sectors, and
• the overall performance of the public management system including thematic and cross-cutting analysis, eg, CAM, State sector remuneration, Crown entity monitoring.

For all departments and Votes, Treasury advice and services included:

• management of core government Budget processes
• efficient support of good financial management and probity within agencies, and
• maintaining an informed overview to foresee significant emerging financial or performance risks.

The Treasury differentiates the level of advice and service routinely provided on, or to, different government agencies and sectors. Priority is given to agencies and sectors that offer significant gains in terms of State sector performance, fiscal management or economic performance. For these sectors and agencies, Treasury advice extends to in-depth performance analysis, including a focus on the most efficient and effective policies, regulation, administration and delivery to achieve the Government's aims and objectives. Priority sectors and agencies for 2008/09 were:

• health
• justice
• defence and security
• the benefit system
• Central Agency performance
• CFIs, and
• transport, competition and regulatory policy and management of natural resources.

Empirical and analytical research is undertaken as required to inform policy advice.

Significant Work Completed During 2008/09

• Provided advice on the direction and approach for developing the Youth Guarantee and tertiary work programmes.
• Provided modelling of the skill levels we need to increase economic growth, the likely future skills gaps and options for addressing them.
• Advice on the justice sector volumes forecast and cost of meeting capacity requests.
• The Defence Review includes consideration of the economic and fiscal context.
• Development of the Performance Improvement Actions (PIAs) programme. In particular, we delivered a series of reports and briefings for the Minister on State sector value for money. These resulted in the development of the PIA programme which was approved and implemented by the ECC. The PIA programme has resulted in specific PIAs being generated by State sector agencies, with key agencies reporting regularly to ECC as well as six-monthly and annual reporting of performance by the Treasury.
• Expectations for pay and employment conditions in the State sector set within the fiscal and economic contexts and advice to SSER was coordinated with SSC which has resulted in clearer messaging to departments on their responsibilities in negotiating within the expectations, contributed to lowered demand for capability bids in Budget 2009 and ensured that Ministers are positioned for setting high-level messages on salaries and conditions.
• Worked in collaboration with SSC and DPMC to advance the Performance Information Framework (PIF) programme to drive performance improvement across State services through the use of a single comprehensive way of looking at performance, indicators of what constitutes good performance, greater consistency in performance evaluation and identifying actions to improve that performance. This programme included the completion of a pilot project.
• Prepared reports on the financial performance of the CFIs, including advice on the appointment of directors to the boards of certain institutions.
• Through its CAM change management project, the Treasury continued to foster improvements in asset management in capital intensive agencies by, for example:
  • reating visibility over the long-term capital spending intentions of 15 capital intensive departments and Crown entities over a 10-year horizon to assist budget strategy processes
  • promulgating best practices and asset management leadership, and
  • providing a regular forum to promote the sharing of knowledge and expertise on asset management issues.

This output class belongs to a multi-output class appropriation.

Actual 2008/09 output class expenditure was $165,000 or 1% over Supplementary Estimates budgets owing to vacancies and cost savings.

The appropriation for this output class was decreased by $1,221,000 in the Supplementary Estimates largely owing to changes in forecast assumptions.