Planning ahead: Living with Covid-19 in the new normal

Assistant Auditor-General Gareth Ellis looks at what some organisations have done to manage uncertainty a year on from Aotearoa's first lockdown. Are we looking beyond the immediate and planning for the medium and longer-terms?

Covid-19 vaccine record cardIt’s been just over a year since New Zealand entered almost five weeks of lockdown. The word “unprecedented” has been used so many times since then it feels like it’s lost all meaning, but it really does sum up the past 12 months for all of us.

Working in the Office has given us a close-up view of how the public sector has responded. A major highlight was seeing how central government agencies put together a set of Financial Statements of Government that we audited, albeit a little later than usual. It took a tremendous effort from agencies and auditors alike, and it reinforces New Zealand’s reputation for world-leading financial reporting.

Like many organisations, our Office developed, implemented, and refined our own response to the various alert levels since the first lockdown. But a question to ask is: are we all looking beyond the immediate and planning for the medium and longer-terms?

As we noted in our 2020 report on the tertiary education sector, focusing on longer-term priorities is critical to guiding short-term decisions. Thinking about how Covid-19 will affect us in the years ahead can help with this. We’ve been doing some thinking about this, as have other organisations.

Are we planning ahead for living with Covid-19?

We should always be ready to respond to unexpected events. And we should also look to manage uncertainty, and reduce disruptions, by planning for specific, possible scenarios. For example, the country’s Covid-19 vaccine roll-out is under way, with the intention of having most people vaccinated by the end of 2021. (My colleague Melanie wrote about how uncertainty has affected the public sector in her recent recap of the March Leaders’ Integrity Forum.)

How will this change New Zealanders’ lives? Too much has happened to expect that life will go back to exactly how it was before the pandemic. Therefore, we need to plan for a “new normal”, while being in the unenviable position of not knowing exactly what that will look like.

Some considerations for public organisations include:

  • How can you plan ahead and manage uncertainty?
  • How can scenario planning/modelling help?
  • What are the costs associated with various scenarios?
  • What are the technical preparations needed to reduce uncertainty in the various scenarios?

Some organisations, public and private, have already started to produce some Covid-19 scenario analysis that you might find useful.

The Ministry of Business, Innovation and Employment’s National Construction Pipeline Report 2020 includes a projection of national building and construction activity through to December 2025, based on current settings. The Treasury produces regular forecasts through the Half Year Economic and Fiscal Update 2020. It also publishes its Statement on the Long-Term Fiscal Position, which considers a range of scenarios, every four years. The latest edition has been delayed by – you guessed it – Covid-19. It will be published later in 2021, and we’ll report on it as we have with previous editions.

Deloitte has published regional forecasts based on three possible Covid-19 scenarios which indicate the economic and population effects on the various regional economies.

Covid-19 has shown that the public sector can act flexibly and make agile decisions when responding to a crisis. The challenge for us, individually and collectively, is to move from the reactive to the strategic so we can reduce our exposure to future risks. Good planning now will help to better manage in the uncertain times ahead.   

Our Office is in a unique position that gives us a broad view across the whole public sector. We have a programme of work under way focused on aspects of the Government’s response to the pandemic. As well as reporting on these specific topics, we’ll draw on our other work to comment in future posts on how well the public sector is planning for the future.

Photo credit: Ministry of Health.

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