Monitoring HNZC

12. HNZC's role is to give effect to the Crown's social objectives by providing housing, and services related to housing, in a business-like manner. It provides rental accommodation to people whose circumstances mean that other forms of tenure are not affordable, adequate, suitable, accessible or sustainable. Its main functions are asset management and tenant management. This Government has asked HNZC to focus on these core functions and target people with the greatest housing need for the duration of their need.

13. We are developing our annual monitoring plan for HNZC and TRC. To assist with this we have sought external expertise to ensure that our monitoring approach is consistent with best practice. We aim to provide you with a monitoring plan in March. The Minister of Finance is looking for more active monitoring of HNZC which would see us working in partnership with the entity in order to support decision making of Ministers and the Board. Getting greater clarity about the 3-5 year strategic direction for the entity is a priority.

14. At this stage the more 'active' approach is likely to involve a greater focus on:

• a monitoring relationship that draws on a sound understanding of Ministers' concerns and government objectives
• a sound understanding of HNZC's business
• an approach that centres around the Board, as it has accountability for the conduct and performance of the entity
• robust management of the performance management cycle, better enabling Ministers to influence and input, and have an informed view of progress
• practical advice on what levers Ministers can employ to improve and maintain agency performance
• drawing off private sector expertise to enhance the monitoring operation and carry out specific tasks
• being engaged in oversight of the entity's balance sheet and capital management in the context of an effective wider Crown balance sheet management strategy, and
• ensuring top quality Boards are selected, developed and retained.

15. We are still in the process of getting a detailed understanding of HNZC's business and its performance. Our initial view is that HNZC is a reasonable performer in its core roles. There are, however, a number of areas where the Government will be working with HNZC to improve performance, including:

• determining the appropriate level of return for HNZC and its future sustainability given its commercial and social objectives
• management of its redevelopment projects, such as Northern Glenn Innes, which will be an increasing feature of HNZC's operations as it increases the speed of reconfiguration of its portfolio, and
• increasing efficiency and effectiveness in terms of asset utilisation and tenant allocation.

16. A list of upcoming deliverables is attached as Appendix 1. Notable upcoming deliverables are our work with HNZC to revise its key performance indicators to ensure that they are informative and useful for improving HNZC's performance in the ways that matter most. [2]

More detail on SHRP is included below.