Estimates of appropriations

Vote State Services - Finance and Government Administration Sector - Estimates 2016/2017

APPROPRIATION MINISTER(S): Minister of State Services (M66)

APPROPRIATION ADMINISTRATOR: State Services Commission

RESPONSIBLE MINISTER FOR STATE SERVICES COMMISSION: Minister of State Services

Overview of the Vote#

The Minister of State Services is responsible for appropriations in Vote State Services for the 2016/17 financial year covering the following:

  • a total of $27.197 million for Policy Advice and Management of the Public Management System
  • a total of $13.900 million for the remuneration and related employment costs of chief executives employed by the State Services Commission
  • a total of $240,000 for payments associated with New Zealand's membership of the Open Government Partnership
  • a total of $245,000 for departmental capital expenditure, and
  • a total of $7,000 for the settlement of legal liabilities in relation to disestablished government departments and other Crown settlements.

Details of these appropriations are set out in Parts 2-4.

Details of Appropriations and Capital Injections#

Annual and Permanent Appropriations#

  2015/16 2016/17
Titles and Scopes of Appropriations by Appropriation Type Final
Budgeted
$000
Estimated
Actual
$000
Budget
$000

Departmental Capital Expenditure

     

State Services Commission - Capital Expenditure PLA (M66)

This appropriation is limited to the purchase or development of assets by and for the use of the State Services Commission, as authorised by section 24(1) of the Public Finance Act 1989.
200 200 245

Total Departmental Capital Expenditure

200 200 245

Non-Departmental Other Expenses

     

Open Government Partnership (M66)

This appropriation is limited to payments associated with New Zealand's membership of the Open Government Partnership.
298 298 240

Remuneration and Related Employment Costs of Chief Executives (M66)

This appropriation is limited to the remuneration and costs relating to the employment of chief executives employed by the State Services Commissioner.
13,942 13,942 13,900

Settlement of Legal Liabilities (M66)

The settlement of legal liabilities incurred by now-disestablished government departments and other Crown settlements.
7 - 7

Total Non-Departmental Other Expenses

14,247 14,240 14,147

Multi-Category Expenses and Capital Expenditure

     

Policy Advice and Management of the Public Management System MCA (M66)

The single overarching purpose of this appropriation is to support decision making by Ministers on Government policy matters and leading the Public Management System.
28,789 27,999 27,197
Departmental Output Expenses
     
Management of the Public Management System
This category is limited to ensuring the Public Management System has the design, capability and performance to deliver public services.
23,527 22,887 21,665
Public Management System Policy Advice
This category is limited to the provision of advice (including second opinion advice and contributions to policy advice led by other agencies) to support decision-making by Ministers on government policy matters relating to the Public Management System.
5,262 5,112 5,532

Government Inquiries into Matters MCA (M66)

The overarching purpose of this appropriation is for the payment of costs associated with the operation of Government Inquiries into Matters.
479 479 -
Departmental Output Expenses
     
Secretariat and Other Costs Associated with Government Inquiries into Matters
This category is limited to secretariat and other costs associated with Government Inquiries into Matters.
349 349 -
Non-Departmental Other Expenses
     
Panel Costs Associated with Government Inquiries into Matters
This category is limited to panel costs associated with Government Inquiries into Matters.
130 130 -

Total Multi-Category Expenses and Capital Expenditure

29,268 28,478 27,197

Total Annual and Permanent Appropriations

43,715 42,918 41,589

Capital Injection Authorisations#

  2015/16 2016/17
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
State Services Commission - Capital Injection (M66) - - -

Supporting Information#

Part 1 - Vote as a Whole#

1.1 - New Policy Initiatives

Policy Initiative Appropriation 2015/16
Final Budgeted
$000
2016/17
Budget
$000
2017/18
Estimated
$000
2018/19
Estimated
$000
2019/20
Estimated
$000
Share of Costs for Budget 2015 Whole-of-Government Initiatives Policy Advice and Management of the Public Management System MCA (59) (58) (42) (32) (32)
Open Government Partnership Membership Open Government Partnership 240 240 240 240 240
Total Initiatives   181 182 198 208 208

Summary of Financial Activity#

  2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
  Actual
$000
Actual
$000
Actual
$000
Actual
$000
Final Budgeted
$000
Estimated
Actual
$000
Departmental
Transactions
Budget
$000
Non-
Departmental
Transactions
Budget
$000
Total
Budget
$000
Estimated
$000
Estimated
$000
Estimated
$000

Appropriations

                       
Output Expenses - - - - - - - - - - - -
Benefits or Related Expenses - - - - - - N/A - - - - -
Borrowing Expenses - - - - - - - - - - - -
Other Expenses 206,775 12,083 11,585 12,256 14,247 14,240 - 14,147 14,147 14,147 14,147 14,147
Capital Expenditure 2,725 68 - 79 200 200 245 - 245 100 1,900 100
Intelligence and Security Department Expenses and Capital Expenditure - - - - - - - N/A - - - -
Multi-Category Expenses and Capital Expenditure (MCA)                        
Output Expenses 29,932 26,538 27,524 28,148 29,138 28,348 27,197 - 27,197 26,463 25,398 25,398
Other Expenses - - - 161 130 130 - - - - - -
Capital Expenditure - - - - - - N/A - - - - -

Total Appropriations

239,432 38,689 39,109 40,644 43,715 42,918 27,442 14,147 41,589 40,710 41,445 39,645

Crown Revenue and Capital Receipts

                       
Tax Revenue - - - - - - N/A - - - - -
Non-Tax Revenue 11,734 11,847 11,719 12,294 13,043 13,043 N/A 13,241 13,241 13,691 13,691 13,691
Capital Receipts - - - - - - N/A - - - - -

Total Crown Revenue and Capital Receipts

11,734 11,847 11,719 12,294 13,043 13,043 N/A 13,241 13,241 13,691 13,691 13,691

Note - where restructuring of the vote has occurred then, to the extent practicable, prior years information has been restated as if the restructuring had occurred before the beginning of the period covered. In this instance Total Appropriations for the Budgeted and Estimated Actual year may not equal Total Appropriations in the Details of Appropriations and Capital Injections.

Adjustments to the Summary of Financial Activity Table Due to Vote Restructuring#

There have been no restructuring adjustments to prior year information in the Summary of Financial Activity table.

A trend analysis of the State Services Commission's appropriations from 2011/12 to 2019/20 shows some significant changes, which are detailed below.

Other Expenses

Other expenses appropriations from 2010/11 to 2011/12 included employer contributions for KiwiSaver and the State Sector Retirement Savings Scheme for State sector agencies. From 2012/13 onwards, State sector agencies were asked to meet these employer contributions from their baselines (ie, they were not provided for centrally any more).

The appropriation in outyears reflects the level of anticipated chief executives' remuneration and other related employment costs, assuming a full complement of chief executives employed each financial year. The remuneration is based on staggered increases on appointment, reappointment or midterm reviews at a similar level to that provided for in the wider State sector; and provides for full earn-back payments and restricted exceptional performance payments. The appropriation was reduced in 2012/13 to reflect a more reasonable level, and no adjustments to the appropriation have been made since then.

Other expenses increase from 2014/15 to reflect a fiscally neutral transfer from Vote Foreign Affairs and Trade to fund New Zealand's membership fees for the Open Government Partnership.

Capital Expenditure

Capital expenditure increased in 2011/12 for an accommodation fit-out when the State Services Commission moved premises. Capital expenditure from 2012/13 is for the purchase of replacement furniture and fittings and any leasehold improvements for the State Services Commission. Capital expenditure is expected to be lower in outyears for minor furniture replacements. The lease for the Reserve Bank expires in 2017/18. It is anticipated that a higher level of capital expenditure will be required for replacement fit-out in 2018/19 in line with the current Wellington Accommodation Project strategy proposed across agencies.

Multi-Category Expenses and Capital Expenditure (MCA)

The decrease from 2011/12 to 2012/13 is due to a change in accommodation and associated sublease arrangements. The increase in 2013/14 is due to extra funding approved for the establishment of the Centre of Excellence in Continuous Improvement and a number of expense transfers from the previous financial year, partially offset by the transfer of Gateway and Major Project Monitoring to the Central Agencies Single Portfolio Performance Management function in the Treasury. There was an increase in 2014/15 for the inquiry into the escape of Phillip Smith while on release from Springhill Prison.

The decrease in 2016/17 and outyears is due to efficiency savings and also reflects a decision to bring forward funding from future years to 2015/16 to fund the introduction of initiatives to lift system performance.

Part 2 - Details of Departmental Appropriations#

2.3 - Departmental Capital Expenditure and Capital Injections#

State Services Commission - Capital Expenditure PLA (M66)

Scope of Appropriation

This appropriation is limited to the purchase or development of assets by and for the use of the State Services Commission, as authorised by section 24(1) of the Public Finance Act 1989.

Capital Expenditure

  2015/16 2016/17
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Forests/Agricultural - - -
Land - - -
Property, Plant and Equipment 22 22 245
Intangibles 178 178 -
Other - - -

Total Appropriation

200 200 245

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the renewal and replacement of life-expired assets in support of the delivery of the State Services Commission's services.

How Performance will be Assessed and End of Year Reporting Requirements

Expenditure is expected to be minimal and will be in accordance with the State Services Commission's capital asset management policy.

End of Year Performance Reporting

Performance information for this appropriation will be reported by the State Services Commission in its 2016/17 Annual Report.

Reasons for Change in Appropriation

The increase in this appropriation for 2016/17 is due to planned asset replacements for property, plant and equipment, and new fit-out in the Auckland Policy Office. In 2015/16 the State Services Commission invested in the Talent Management and Information System (recognised as Intangibles).

Capital Injections and Movements in Departmental Net Assets

State Services Commission
Details of Net Asset Schedule 2015/16
Estimated Actual
$000
2016/17
Projected
$000
Explanation of Projected Movements in 2016/17
Opening Balance 5,251 5,116  
Capital Injections - -  
Capital Withdrawals (135) (2,703) Transfer in 2016/17 for accumulated depreciation reserves to provide for replacement of information technology assets which have transferred to the Treasury Central Agencies Shared Services.
Surplus to be Retained (Deficit Incurred) - -  
Other Movements - -  

Closing Balance

5,116 2,413  

Part 3 - Details of Non-Departmental Appropriations#

3.4 - Non-Departmental Other Expenses#

Open Government Partnership (M66)

Scope of Appropriation

This appropriation is limited to payments associated with New Zealand's membership of the Open Government Partnership.

Expenses

  2015/16 2016/17
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 298 298 240

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve supporting the delivery of New Zealand's Open Government Partnership commitments.

How Performance will be Assessed and End of Year Reporting Requirements

An exemption was granted under s.15D(2)(b)(ii) of the Public Finance Act, as additional performance reporting was unlikely to be informative. This appropriation is limited to payments associated with New Zealand's membership to the Open Government Partnership.

Current and Past Policy Initiatives

Policy Initiative Year of
First
Impact
2015/16
Final Budgeted
$000
2016/17
Budget
$000
2017/18
Estimated
$000
2018/19
Estimated
$000
2019/20
Estimated
$000
Open Government Partnership Contribution 2014/15 240 240 240 240 240

Reasons for Change in Appropriation

The decrease in this appropriation for 2016/17 reflects that 2015/16 appropriation was increased to provide for exchange rate fluctuations and 2016/17 is still based on the original baseline funding transferred from the Ministry of Foreign Affairs and Trade. Fluctuations in foreign exchange rates are managed through forward currency contracts and it is expected that the appropriation for 2016/17 may need to be increased during the year.

Scope of Appropriation#

This appropriation is limited to the remuneration and costs relating to the employment of chief executives employed by the State Services Commissioner.

Expenses#

  2015/16 2016/17
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 13,942 13,942 13,900

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve meeting remuneration and other employment costs for chief executives employed by the State Services Commissioner, who leads the Public Service.

How Performance will be Assessed and End of Year Reporting Requirements#

An exemption was granted under s.15D(2)(b)(ii) of the Public Finance Act, as additional performance information is unlikely to be informative because this appropriation is solely for the remuneration and costs relating to the employment of chief executives employed by the State Services Commissioner.

Reasons for Change in Appropriation#

The decrease in this appropriation for 2016/17 is due to the reflection of anticipated remuneration levels for a full complement of chief executives. The remuneration is based on staggered increases on appointment, reappointment or midterm reviews at a similar level to that provided for in the wider State sector; and provides for full earn-back payments and restricted exceptional performance payments.

Scope of Appropriation#

The settlement of legal liabilities incurred by now-disestablished government departments and other Crown settlements.

Expenses#

  2015/16 2016/17
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 7 - 7

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the settlement of potential legal liabilities incurred by disestablished government departments and other Crown settlements.

How Performance will be Assessed and End of Year Reporting Requirements#

An exemption was granted under s.15D(2)(b)(iii) of the PFA, as the amount of this annual appropriation for a non-departmental other expense is less than $5 million.

Part 4 - Details of Multi-Category Expenses and Capital Expenditure#

Multi-Category Expenses and Capital Expenditure#

Policy Advice and Management of the Public Management System (M66)

Overarching Purpose Statement

The single overarching purpose of this appropriation is to support decision making by Ministers on Government policy matters and leading the Public Management System.

Scope of Appropriation

Departmental Output Expenses
Management of the Public Management System
This category is limited to ensuring the Public Management System has the design, capability and performance to deliver public services.
Public Management System Policy Advice
This category is limited to the provision of advice (including second opinion advice and contributions to policy advice led by other agencies) to support decision-making by Ministers on government policy matters relating to the Public Management System.

Expenses, Revenue and Capital Expenditure

  2015/16 2016/17
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000

Total Appropriation

28,789 27,999 27,197

Departmental Output Expenses

     
Management of the Public Management System 23,527 22,887 21,665
Public Management System Policy Advice 5,262 5,112 5,532

Funding for Departmental Output Expenses

     

Revenue from the Crown

25,196 24,406 24,277
Management of the Public Management System 20,089 19,449 18,745
Public Management System Policy Advice 5,107 4,957 5,532

Revenue from Others

3,593 3,593 2,920
Management of the Public Management System 3,438 3,438 2,920
Public Management System Policy Advice 155 155 -

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve a higher performing State sector through delivery of policy advice and management of the public management system by ensuring that the State Services is collectively responsible and works together, learning what works best and using it to improve performance for customers and having the people, institutions and approach to respond effectively to the needs of New Zealanders today and in the future.

How Performance will be Assessed for this Appropriation

  2015/16 2016/17
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Percentage of results on track to achieve their targets

New measure New measure 80%

Respondents in the Kiwis Count survey agree or strongly agree that, based on their last service experience, they could trust public servants to do what is right

New measure New measure 80%

The Labour Cost Index indicates that Central Government wage growth does not exceed private sector wage growth

New measure New measure Less than or equal to private sector

Overall Kiwis Count service quality score

New measure New measure 75 points

What is Intended to be Achieved with each Category and How Performance will be Assessed

  2015/16 2016/17
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Departmental Output Expenses

     

Management of the Public Management System

     

This category is intended to achieve that the Public Management System has the design capability, and performance to deliver public services

     

Stakeholders are satisfied that the State Services Commission's oversight role of State sector employment relations achieves solutions within Government expectations and provides for effective management of risk within and across agencies

Average score of 3.6 out of 5 Average score of 3.6 out of 5 Average score of 3.6 out of 5, or better

Deployment of senior leaders through Career Boards

12 17 12

Career Board cohort have been assessed using a standard framework and have agreed development objectives

90% 90% 90%

Stakeholders agree that New Zealand's Public Service chief executives are effective leaders of the Public Service

Average score of 4 out of 5 Average score of 4 out of 5 Average score of 4 out of 5, or better

Public Service chief executives who have been in the role for one year or more meet or exceed the State Services Commissioner's performance expectations

95% 95% 95%

Stakeholders agree that agencies are working together more effectively than two years ago to deliver results

Average score of 4 out of 5 Average score of 4 out of 5 Average score of 4 out of 5, or better

Chief executives agree that Performance Improvement Framework reviews have led to changes that improve agency performance

Average score of 4 out of 5 Average score of 4 out of 5 Average score of 4 out of 5, or better

Chief executives surveyed within three months of the Performance Improvement Framework review respond that they gained valuable insights

100% 100% 100%

The State Services Commission's 'Better Every Day' continuous improvement engagements result in agencies reporting customer or performance benefits

100% 100% 100%

Stakeholders agree that tier two and tier three capability in the New Zealand Public Service is fit-for-purpose

Average score of 3.3 out of 5 Average score of 3.3 out of 5 Average score of 3.3 out of 5, or better

Public Management System Policy Advice

     

This category is intended to achieve providing advice (including second opinion advice and contributions to policy advice led by other agencies) to support decision-making by Ministers on Government policy matters relating to the Public Management System

     

Technical quality of policy advice papers assessed by a survey with a methodical robustness of 90%

70% 70% 70%

Minister of State Services has satisfaction with policy advice

70% 77% 80%

The total cost per hour of producing outputs

$170 $160 $160

End of Year Performance Reporting

Performance information for this appropriation will be reported by the State Services Commission in its 2016/17 Annual Report.

Current and Past Policy Initiatives

Policy Initiative Year of
First
Impact
2015/16
Final Budgeted
$000
2016/17
Budget
$000
2017/18
Estimated
$000
2018/19
Estimated
$000
2019/20
Estimated
$000
Efficiency Savings 2012/13 (137) (137) (137) (137) (137)
Development and Facilitation of Continuous Improvement Across the State Sector 2014/15 960 280 (20) (920) -
Share of Costs for Budget 2015 Whole-of-Government Initiatives 2015/16 (59) (58) (42) (32) (32)

Reasons for Change in the Appropriation

The decrease in this appropriation for 2016/17 is primarily due to lower levels of funding required for the Leadership Capability Deployment and Development Programme, and the impact of timing on funding for the policy initiative Development and Facilitation of Continuous Improvement Across the State Sector.