Financial management and capital intentions

The Ministry’s fiscal environment remains constrained and increasing pressures are being driven by population changes, operational demands and inflation. To manage within our means, we need to maintain disciplined financial management, direct our spending towards our highest priorities, and continue delivering high-quality services and new expectations within our baseline.

Our Four-year Plan outlines how we intend to manage cost pressures through finding efficiencies and innovation and improving productivity, through projects such as Simplification.

The Ministry is committed to delivering positive social outcomes to all New Zealanders. Understanding the effectiveness of our expenditure helps us target our resources on our key strategic priorities.

Increasing our investment in analytics and continued analysis of our cost drivers and the effectiveness of our expenditure will help us achieve our outcomes.

A comprehensive view of current cost drivers will help with the Simplification project’s aim to simplify the way we process transactions for financial assistance.

Capital intentions

The Ministry’s asset portfolio had a book value of approximately $409.5 million as at 30 June 2015.

The Ministry has a Ten-year Capital Plan in place and each year we conduct a capital expenditure planning process. This ensures capital investment is targeted to meet business needs and assets are appropriately replenished. We assess our performance by ensuring expenditure is in accordance with the Ministry’s Ten-year Capital Plan.

Over the next four years, our significant capital investments will include the Simplification programme, the relocation of National Office, expenditure on core assets to retain functionality, and expenditure on process improvements.

Asset management

We have adopted the Treasury’s capital asset management framework. This framework supports quality information being available for decision-making, financial planning and performance monitoring purposes. We will maintain a strong focus on ensuring the effective and efficient use of our capital resources.

Property

We operate out of 260 locations nationwide including commercial offices, residences and family homes. We have plans in place to ensure our environments are safe and fit for purpose.

We continue to review our national and regional office needs to ensure all our spending provides value for money and is linked to the delivery of effective services. This includes collaborating across government, where appropriate, to ensure the most efficient use of property to deliver government services.

The Ministry’s Property Strategy is refreshed annually and aims to optimise the property portfolio by amalgamating sites and meeting regional service delivery needs across multiple sites – both Ministry sites and those of other agencies. In addition the aim is to put staff safety at the heart of all property planning, achieve flexible lease terms and implement designs that future-proof the portfolio. This includes reducing the space occupied per person from 23 sqm per person to 16 sqm per person over the next 10 years.

We manage our commercial office portfolio in accordance with the principles, guidelines and standards developed by the Property Management Centre of Expertise, ensuring a continued strategic alignment with the business. The CYF residential portfolio is managed in the same way and in close collaboration with the teams that operate the buildings, to make sure they are fit for purpose.

Forecast capital expenditure