Part 7: The future for Gateway reviews

Using Gateway reviews to support public sector projects.

In this Part we:

Limitations of Gateway reviews

We found that, although Gateway reviews do help projects, they also have some limitations.

Gateway reviews have a set approach. While they allow for some flexibility to meet the needs of individual projects, they are still very much a "one size fits all" approach. For some projects, a different approach might be more beneficial – for example, a shorter and more-focused review when a project is facing a specific challenge.

There can be a long time between successive reviews; in many cases, it has been more than two years. This might happen for a large and complex project where it does take a long time to complete each stage. It can also happen when a project has problems and is changed or delayed. In these situations, projects might benefit from an interim review.

As we discussed in Part 6, the confidential nature of Gateway reviews is not consistent with values of transparency and accountability. Some stakeholders might want more information about how a project is performing overall.

Gateway reviews provide only a limited type of assurance. They can provide a level of assurance that the project has been thoroughly and independently reviewed using an approach recognised by central government agencies. The delivery confidence rating also gives an indication of the project's likelihood of success. This gives the project sponsor some assurance that the project is on track and ready to proceed to the next stage. However, Gateway reviews are not designed to provide assurance to the Government, or to the public, that a project is being managed well and is on track to achieve its intended results.

The Treasury's intentions

The Treasury is aware of the limitations of Gateway reviews. In response, the Treasury is considering introducing new types of investment review to run instead of, or as well as, Gateway reviews. The aim is to offer a selection of review types that provide more flexibility to meet the various needs of different projects. As part of this, the Treasury is designing and will be implementing a new benefits realisation review consistent with its new focus on benefits delivery from projects. In our view, the Treasury also needs to make sure that there is a clear business need for any new reviews that it introduces.

Recommendation 2
We recommend that the Treasury ensure that the work it has under way to consider new types of investment review takes into account:
  • the limitations of Gateway reviews;
  • the specific needs of projects and programmes in New Zealand; and
  • the information and assurance needs of stakeholders such as Ministers, chief executives, boards, and the Corporate Centre.

This work is happening as part of a wider initiative for the Treasury to take the lead in the investment management system throughout the State sector. As part of this initiative, the Treasury set up an Investment Management and Asset Performance (IMAP) team. The IMAP team was formed from existing functions in the Treasury and the State Services Commission concerned with the performance of major projects, investments, and assets in the State sector. The Investment Reviews unit, which currently runs Gateway reviews, is part of the IMAP team.

The IMAP team has introduced new requirements for management of investments and assets in the State sector.4 These include the new requirements for investment planning and investor confidence ratings. These ratings of an agency's investment management environment provide an indicator of the confidence Ministers and other stakeholders have in an agency's capacity and capability to realise a promised investment result if funding were committed.

Investor confidence ratings can affect the degree of central control over each agency's investment management. One effect could be that agencies with a high rating will have less scrutiny from the Corporate Centre. For example, they might not be required to have Gateway reviews.

4: The new requirements were released as Cabinet Office Circular CO (15) 5 Investment Management and Asset Performance in the State Services.