Part 3: How we plan our annual work programme

Our planning process enables us to identify and prioritise work that we consider will achieve the outcomes we seek.

We carry out regular environmental scanning to identify and assess issues, risks, and opportunities in the public sector. These scans help us prepare a work programme that responds to current and emerging risks and anticipates future risks. They also help inform our decisions about where we can best use our resources to help improve scrutiny of the Government and public sector performance. Reflecting on our operating environment helps us to determine our annual work programme. A description of our current operating environment is provided later in this Part.

We have carefully considered what work to include in our work programme. The work in our work programme that we plan to do is based on information we know at present. If new information or risks come to light, we might decide to change some of our planned work.

We draw on a range of sources to assess our environmental context and help generate potential areas for review. These sources include the information our auditors and sector managers continually gather, our ongoing monitoring of risks, and our independent analysis of public sector performance and issues. We also draw on our previous work and knowledge – reports we have published (including inquiries, research reports, and the results of recent audits) and we follow-up on how public organisations have implemented our recommendations.

Our central and local government advisory groups also help us better understand the common themes and issues in their respective sectors. Our discussions with select committees and public organisations are another key source of information.

Improving outcomes for Māori is an important consideration in both planning our work programme and in how we carry it out. We are seeking to identify where we can best focus our work to influence the effectiveness of the public sector in improving outcomes for Māori.

Matters raised by members of the public and input from interest groups that we work with also inform our planning.

Because a third of the public sector’s funding and resources are allocated to the Auckland region, we are also taking a particular interest in how the public sector in that region is delivering for the diverse communities in Auckland.

How we manage risks to achieving our work programme

We recognise that there are risks to achieving our work programme, including that:

• we do not have sufficient capacity or capability to do all the work;
• some unforeseen event disrupts or delays our work;
• we do not achieve the right balance in quality, timeliness, and cost of our work; and
• we do not achieve the impacts we are aiming for.

Our planning helps to mitigate these risks. External quality review of our work helps to ensure that our work meets required standards. Our business continuity planning minimises the disruption of unforeseen events on our work. Regular review of our work programme allows us to respond and adjust it if new priorities arise.

To help ensure that we are in the best possible position to deliver our work within planned time frames, we will continue to improve our business planning. To effectively manage how we resource our work, the start and completion of our work is phased. Some work is planned to start at the beginning of the financial year and to be completed within that year. Some work is planned to start later in the financial year and to be completed in the next financial year.

Most of our work is planned to be completed within 12 months. Some work, especially larger more complex pieces of work, can take longer. Sometimes, we choose to carry out work on a particular topic for a number of years.

Appendix 2 provides a summary of our proposed work for 2021/22 and shows when we expect to start and complete our proposed work (by quarter).

Our operating environment

Despite the disruption and uncertainty from Covid-19, key indicators show that trust and confidence in the public sector remains high. The public sector is seen as generally free of corruption and enjoys strong transparency and accountability arrangements. New Zealanders have access to quality public services which, for the most part, are reliable and well managed. Our work on independently auditing the financial statements of the Government shows that our public financial management system remains strong.

Covid-19, however, has demonstrated our vulnerability to global risks and the challenging and changing environment in which we operate. Changes in technology and our environment, and increasing social and cultural diversity, mean that the public's expectations of government continue to increase.

Effects of Covid-19

The full effects of Covid-19 continue to unfold. There will be ongoing challenges facing the public sector, especially if there are further outbreaks of Covid-19 in the community. The Covid-19 vaccination programme will continue to be a critical initiative in 2021/22. How well the vaccination programme is delivered will be important to maintaining New Zealanders’ trust in public services.

Government spending during the Covid-19 response has been significant – for example, the Covid-19 Response and Recovery Fund, the Wage Subsidy Scheme, and “shovel-ready” projects form part of the $62 billion of funding available for the Government’s spending on responding to Covid-19. It is important that the Government is transparent about the Covid-19-related spending and what it has achieved with it. Quality decision-making, value for money, integrity, and effective monitoring and reporting practices are essential at all times, particularly when large expenditure is occurring quickly and in new ways.

There was uncertainty about the effects of Covid-19 on services already under pressure before the outbreak – for example, in elective surgery. How public organisations are planning their response to, and recovery from, Covid-19 and how they position themselves to be successful in a post-vaccination environment will be important. Scenario planning, “least regrets” policies, and other ways to manage risk and uncertainty will also be important.

Loss of revenue and financial stability are serious issues for some sectors more than others – for example in tourism, hospitality, transport, and education. Long-term planning of economic and other initiatives becomes even more important, especially when considering scenarios of further outbreaks or other major risk events.

Despite New Zealand’s generally successful response to mitigating the immediate effects of Covid-19, the long-term effects are yet to be fully seen.

Climate change

There are significant and increasing estimates of the cost of adapting communities and infrastructure to mitigate the risks and hazards from climate change.

The transition to a zero-carbon economy will require effective leadership, governance, and accountability arrangements. The risks, strategy, and financial impacts of this transition will need to be transparent. The level and speed of change that might occur will be a challenge for many public organisations.

The public sector’s contribution towards meeting the Government’s 2050 emissions reduction target will also involve enhanced reporting requirements for many public organisations.

Māori-Crown relations

The public sector is increasing its focus on post-Treaty settlement arrangements. It is also seeking to improve its competency in working with, and responding to, Māori. This includes policy formulation and areas such as water management and health. However, current capability in the public sector to respond in these areas is still developing.

Accountability expectations (for example, on the progress of strategies and programmes designed to improve outcomes for Māori) are increasing. Many areas of broader reform (for example, water and the Resource Management Act) are of particular interest to Māori.

The Public Service Act 2020 introduces a range of obligations for the public service to actively work with Māori. It will be important to understand how these changes are being led and implemented as the public service begins to work under the new Act.

Local government challenges

Councils continue to face change. New regulatory requirements and instruments (for example, new and updated national policy statements) have been introduced, and other areas for change are being proposed, including the “three waters” and resource management reforms. These changes could significantly affect the shape of local government. Councils are also considering the impact of climate change and what this means for the delivery of services over time.

Councils have received Covid-19-related funding – for example, “shovel-ready” funding. As with other organisations receiving Covid-19 funding, it will be important for councils to monitor the effectiveness of their spending and publicly report it. We discuss the importance of local government infrastructure investment below.

System-level changes and public service reforms

Public sector organisations continue to develop cross-agency and sector strategies and initiatives to respond to long-standing issues, such as family violence and sexual violence. Public organisations worked well together to respond to Covid-19 (and have worked well together in response to other crises) due in part to having a compelling focus.

There have been important changes to legislation, in particular the enactment of the Public Service Act. This Act enables new ways of working across the public sector. This will, in some cases, require new accountability arrangements to be defined. However, improved performance reporting at the entity, sector, and initiative level, as well as at an all-of-government level, will be important for New Zealanders to clearly see the effectiveness of government spending and performance against priorities, no matter how the public sector chooses to organise itself.

Recently announced reforms in the health sector will also bring new organisational structures and accountability arrangements.

Infrastructure investment and management

There was significant central government investment in infrastructure before, as well as part of, the Covid-19 response.

Councils are also proposing significant infrastructure investments. Demographic changes are putting increased pressure on high-growth areas, making the work that the New Zealand Infrastructure Commission, Te Waihanga is doing on infrastructure strategic planning more important.

Historical under-investment in infrastructure has attracted increased public attention in the face of highly visible asset failures and service disruptions. Public expectations for a clearer picture on asset condition, as well as plans and strategies for funding and financing infrastructure investment (in both central and local government), are rightly increasing.

Housing sector

Housing is important for social and economic well-being. Shelter is a basic human need. The lack of a stable home has been linked with poorer life outcomes and can adversely affect community cohesion.

Housing supply and affordability is a significant and complex issue. Higher house prices and rents have adverse effects on many households, particularly those on low incomes.

A well-functioning housing and urban development system requires multiple agencies from central and local government to work effectively together. Te Tūāpapa Kura Kāinga – Ministry of Housing and Urban Development has oversight over the system. Other central government agencies with significant housing functions include Kāinga Ora and the Ministry of Social Development. Positive housing and urban development outcomes also rely on public organisations involved in the planning and provision of physical and social infrastructure, such as Waka Kotahi New Zealand Transport Agency and the Ministry of Education.

Cybersecurity

Cybersecurity threats remain a critical risk to public sector delivery, integrity, and ultimately the trust the public has in the public sector. Ongoing and significant investment in cybersecurity is a feature of many public organisations. However, given the dynamic environment, risks remain.

Capability

In several sectors, a lack of workforce development is leading to capability gaps and disconnection between training and the skills needed. There are particular issues with the education workforce, the health workforce, and a number of trades.

The reform of the institutes of technology and polytechnics sector is intended to improve the vocational education system for better delivery of work-integrated skills for learners, employers, and communities.

Although strategic planning and building infrastructure will remain important, Covid-19 has helped drive new ideas for workforce planning, including flexible working and changed approaches to workforce well-being and capability.

Ethics and integrity

Our public service has a well-deserved reputation for integrity. However, fraud and integrity risks increase when a significant amount of new money enters the system with expectations of fast and pressured delivery.

Sexual harassment and bullying remain workplace issues in the public sector. Despite genuine attempts to address these issues, reviews continue to show that current efforts to reduce incidences and prevalence are not always effective.

Family violence and sexual violence

Family violence and sexual violence are widely recognised as complex problems. They persist despite the efforts of successive governments, government agencies, and numerous community organisations working with those who are either harmed by, or are perpetrators of, violence.

Inequalities

Inequalities of outcomes remains a feature of the socio-economic landscape, with Māori and Pasifika outcomes remaining consistently and significantly lower than other groups. Gender and geographical inequalities are also important areas for action.

The ongoing effects of Covid-19 risks exacerbating the disadvantages lower socio-economic groups face.

Unemployment rates remain high for sections of the population. Child poverty continues to be an adverse social issue. Children who live in poverty have significantly worse health and educational outcomes. Many people with disabilities face reduced opportunities, with poorer life outcomes compared with non-disabled people.