Intermediate Outcome: State Institutions Deliver Sustained Performance in Results and Capability
The Treasury worked with SSC, DPMC and the Better Public Services Advisory Group to produce the Better Public Services report. The report's recommendations now form a core plank in the Government's programme to achieve its priorities. The three Central Agencies are now working more closely together as a "Corporate Centre" for the State sector. The three agencies are working collaboratively to drive and support the Better Public Services programme goals: strengthen leadership; deliver better results; and develop a culture and practice of innovation and continuous improvement in delivering better services and value-for-money. Legislative reform to the Public Finance Act 1989, Crown Entities Act 2004 and State Sector Act 1988 in support of this programme has been agreed by Cabinet.
Managing with a longer-term time horizon
The Treasury continued its efforts to shift the State sector management system onto a much longer-term focus, at a system level and in relation to specific areas of government activity. Four-year plans have been put at the heart of the fiscal management and budget process, providing a medium-term understanding of cost pressures and the strategies required to manage them over the next few years. In the welfare sector, we worked collaboratively with MSD to commission an actuarial calculation of the long-term liability of the working-age benefit system, to make the long-term costs to the Crown more transparent and become a key part of management in the welfare system.
Measuring performance
We continued our focus on developing or enhancing tools to understand performance in the State sector. We ran the second year of the Better Administrative and Support Services (BASS) benchmarking exercise[1]; we trialled a common indicator set for policy advice; and assisted SSC in the review and updating of PIF. We have made progress in tracking and improving agency performance in regulatory impact analysis; the proportion of significant Regulatory Impact Statements meeting most or all of Cabinet's regulatory impact analysis requirements has risen from 60% in 2009/10 to 75% in 2011/12.
These measurement tools, together with Gallup, audit results and other published data sources, now enable a much better understanding of State sector performance, at an agency, sector and system level. Alongside and supporting the Better Public Services focus on delivering results, this is creating a stronger focus on performance across the sector.
Performance Improvement Framework
PIF has now been applied to 22 agencies and covers 88% of the workforce of the 33 agencies originally in scope. We will reach 99% by the end of the year.
PIF findings indicate that:
- Generally, agencies appear to perform well at defined short- to medium-term tasks, but struggle at providing advice on what their programmes are achieving, and what they could do better or differently. There is scope for much improvement in the planning, formulation and communication of organisational logic, especially in purpose, vision and strategy. The lack of good long-term strategies and flow-through within organisations tends to result in poor prioritisation decisions and impacts negatively on both agencies' sector contributions and their stakeholder engagement.
- Sustained delivery and stewardship is rare. There is scope for much improved performance in delivery and some agencies are moving in that direction. However, the gains are likely to be limited until an emphasis on continuous improvement (eg, through regulatory quality, review and improving efficiency) is built into agency systems and well supported by accountability information and driven by Ministers. Performance management is reasonably good for high-performing staff, but not for lower-performing staff.
Assisting lifting performance
As well as measuring performance, the Treasury has worked to assist in enabling or delivering improved performance across the State sector. Innovations include our work with the Ministry of Education (MOE) and Department of Corrections on New Zealand's first PPPs; facilitating HR and Finance Improvement Programmes involving 19 agencies; working with a large number of agencies on business cases; and implementing new flexible financial arrangements to support collaboration in the justice sector.
