Part 3: Financial support in Christchurch after the February 2011 earthquake

What the project was about

3.1
In response to the 22 February 2011 Christchurch earthquake, the Government, through the Ministry of Social Development (the Ministry), created the Christchurch Earthquake Support Package to provide financial support to affected employers and employees. The Government's main concern was to remove uncertainty about jobs and businesses in Christchurch and help people to pay the bills.

3.2
The six-week package was made up of two components:

• the Earthquake Support Subsidy – a subsidy to help companies to operate while keeping their staff and pay their wages. The companies would get $3,000 gross to pay an employee for six weeks ($500 gross a week) or $1,800 gross to pay a part-time employee for six weeks ($300 a week); and
• Earthquake Job Loss Cover – a subsidy for those who were unable to contact their employer or whose employer had closed permanently. The subsidy involved a $400 in-the-hand weekly payment for six weeks for full-time employees and $240 a week in the hand for part-time employees.

3.3
Because the Government anticipated that it would receive many applications and that, potentially, it would be difficult to telephone Work and Income, people were strongly encouraged to apply online. Applicants could call a 24/7 government helpline or visit one of seven Work and Income offices in Christchurch.

3.4
Ministry staff designed and built the online Earthquake Employment Support System during a weekend, using rapid development methodologies for system development (the Kanban method and the Ruby on Rails open-source web development framework). The Ministry operated the system in partnership with the Inland Revenue Department (Inland Revenue) and Westpac and allowed employers and employees to apply for financial help by providing basic information using a secure online form.

3.5
Employees had to provide their personal details, including an email address, their cellphone number, their IRD number, and a bank account number. Employers had to provide their business IRD number, business bank account number, details of staff requiring the subsidy (employee names, date of birth and IRD numbers), and contact details, including an email address and cellphone number.

3.6
A combined team of Ministry and Inland Revenue staff looked at all the rejected applications and telephoned people where necessary. Before paying approved applicants through the bank, Inland Revenue had to match the information provided with their records. Successful applicants received an email or text telling them when the payment was made.

3.7
The system began to operate six days after the earthquake, with $53 million paid in the first week. By the end of June 2011, 20,000 employers and 50,000 employees had received a combined total of $202 million.

3.8
The total costs for developing the system were estimated to be about $250,000. Rapid development methodologies kept ongoing costs low.

Benefits

3.9
A direct benefit of the system was that it provided immediate financial support to people who lost income as a result of the earthquake.

3.10
An indirect benefit was that using online services improved efficiency. Providing online services was much cheaper than having face-to-face meetings or telephoning.

3.11
Unexpected and/or unplanned benefits included:

• better online services as a result of less bureaucracy and minimum verification;
• more people using online services;
• few rejected applications and instances of fraud;
• much lower overhead costs for following common procedures (such as specifying system requirements, preparing a business case, and meeting official guidelines); and
• having a re-usable online tool for managing difficult conditions after natural disasters.

The dynamic nature of realising benefits

3.12
As the new online system proved to be successful (measured by the number and amount of daily payments, the number of financially supported employers, and the number of employees paid), the realised benefits became more apparent.

Practices that helped achieve benefits

3.13
Senior project leaders were directly involved in designing and developing the system, and the project's "deliverable" was clear.

3.14
The Ministry's leaders strongly supported the scheme but did not officially monitor benefits realisation. Senior project leaders reported project results to the Ministry's leaders every day.

3.15
Politicians were strong supporters. This created strong pressures for senior project leaders to deliver the benefits that people expected. Every day, project leaders had to tell the Minister:

• how many employers had received payments;
• how many employees had received payments; and
• how much money had been paid out.

3.16
The reports had to be focused and accurate, as they directly affected what the Minister said to the media every day.

3.17
Strong Ministerial and departmental sponsorship of the project meant tight control decisions were made almost immediately.

3.18
Working outside "normal conditions", including having to bypass routine procedures for government information technology (IT) projects, encouraged innovation. For example, the project started with no:

• specific system requirements;
• business case;
• system for planning, monitoring, and reporting benefits; or
• official evaluation of outcomes.

3.19
This meant that the scheme's paperwork overheads cost only 10% of those of routine procedures for government IT projects.

3.20
Designing a new online application system was imperative because of the special circumstances in Christchurch, where systems were not functioning (with restricted or no access to Christchurch offices and an expected overflow of telephone calls) and the bureaucracy that those using the Ministry's application system would face (a traditional application for a benefit took about 45 minutes, whereas the new online system took a few minutes).

3.21
Teams collaborated well and were committed. Staff were co-located.

3.22
Special privacy legislation allowed the Ministry and Inland Revenue to share information. Especially important was Cabinet allowing the IRD number to be used. This unique sharing of information between organisations helped the Ministry to learn how to provide services differently.

3.23
Using rapid development methodologies (particularly the Kanban method and Ruby on Rails framework) helped to run the system more cheaply. In general, the chosen flexibility allowed the IT division to deliver the project "on the fly". Changes to the system could be made easily, although some start-up decisions needed revision. The chosen approach led to some mistakes but these did not damage the project.

3.24
Project leaders managed politicians' expectations. Politicians had wanted payments to start from day 1. However, this was not feasible. The senior project leaders were able to convince the politicians that it would take a few days before payments could start.

3.25
Westpac activated a business continuity plan so that daily payments could be made during the weekend.

Practices that affected the outcome

3.26
Because of a late political decision to have a second round of financial support, the system was adjusted and used until late June 2011. For this second round, the criteria for financial support were tightened and fewer people received payments. In the second round, applicants had to provide more information for verification and were paid less money. After minimal verification of applicants during the first round, the critical questions for the Ministry in the second round were:

• Who do we not pay after six weeks?
• How do we assess ongoing needs?

3.27
Working with fewer rules than staff were used to challenged the team.

3.28
At first, Inland Revenue staff were more focused on preventing benefit fraud than paying benefits. At times, this created tension. It took time for the co-located Ministry and Inland Revenue team to understand that their shared goal was to pay benefits.

Lessons for other projects

3.29
Enormous time and political pressures, such as reporting daily to the Minister and then the Minister reporting daily to the media, helped the team to plan, monitor, and report sharply.

3.30
Strong support from political and senior leaders was critical and led to extremely tight control, with decisions made almost immediately.

3.31
Senior project leaders effectively managed political expectations about ICT-enabled benefits realisation. Politicians did not know how long it would take to set up the main technical requirements for delivering the planned benefits.

3.32
The extreme and special circumstances allowed the Ministry to rethink its business, such as thinking about how to better provide services and the opportunities and implications of minimal verifying.

3.33
The extreme and special circumstances allowed the Ministry to reflect on the high costs that are common in routine procedures in government IT projects. They learned that documents needed for routine procedures in government IT projects quickly become old and potentially less relevant because of fast-changing technical and business conditions. They should help to predict things but can fit awkwardly with changing and/or changed business conditions.

3.34
Strong team collaboration and great team commitment were critical in realising benefits quickly.

3.35
Co-locating staff helped to overcome cultural differences between agencies that had to work together.

3.36
Using rapid development methodologies allowed flexible innovation and reduced risks and cost. Being flexible meant the project team could deliver "on the fly", with relatively easy changes to the system when needed.

3.37
Special privacy legislation has created opportunities for public entities to better share information. This has allowed innovation in providing online services.

Good practices

3.38
The good practices from this project that we refer to in the discussion in Part 9 are:

• understanding the environment and making the most of the circumstances, the:
  • impetus of limited time;
  • extreme and special circumstances; and
  • supportive special legislation or change to legislation;
• having strong support from leaders, including strong political support;
• working effectively with the right people, including end users;
• strong team collaboration and commitment; and
• using the right technological tools and rapid development methodologies.