Statement of Intent 1 July 2005 - 30 June 2008
Part 1: Strategic framework (continued)
Review of accountabilities and structural arrangements between the New Zealand Defence Force and the Ministry of Defence
Last year's Statement of Intent contained detailed information on the implementation of the Government's decisions in March 2003 as a result of the review undertaken by Mr Don Hunn into accountabilities and structural arrangements between the Ministry of Defence and the New Zealand Defence Force. Although much of the remaining implementation is reliant on the Defence Sustainability Initiative, the Evaluation Division is undertaking an evaluation of the implementation of government decisions subsequent to that review.
Defence Capability and Resourcing Review
In January 2004, the Minister of Defence commissioned a review of the alignment of defence capability and resourcing against government policy. This was a major review of all aspects of defence capability. It focussed on the ability of the New Zealand Defence Force over the next decade to undertake the roles and tasks set out in government policy documents - most notably the June 2000 The Government's Defence Policy Framework and the May 2001 Government Defence Statement: A Modern Sustainable Defence Force Matched to New Zealand's Needs.
The Defence Capability and Resourcing Review was undertaken by a multi-agency team during 2004. That work has now been completed. The Defence Capability and Resourcing Review identified the key issues that the New Zealand Defence Force and Ministry of Defence face in delivering the capability outcomes required by the Government. It also identified options for the configuration of the New Zealand Defence Force's operations to deliver the required capability. Finally, it addressed, in broad terms, the additional resources required to achieve the desired outcomes.
The Defence Capability and Resourcing Review concluded that, notwithstanding the implementation of the Defence Long-term Development Plan, the New Zealand Defence Force's capacity and capability in some areas are below the requirements of government policy.
Development of the Ministry's policy capability
The Defence Capability and Resourcing Review identified a gap in the current capability of the Ministry of Defence. The Review recommended that the Ministry of Defence strengthen its capability to conduct policy analysis in such areas as:
- military capability development including analysis of future military and security threats
- resource allocation planning and business case analysis
- the acquisition of new and improved items of military equipment under the recently introduced Capability Management Framework
- providing purchase advice on output proposals in respect of their effect on policy.
The Government has approved an increase in Vote Defence of $0.844 million to enhance the Ministry's policy advice capability. This increase will provide funding for a mixed-discipline team of analysts led by a Director.
Defence Sustainability Initiative (DSI)
In response to the Defence Capability and Resourcing Review Report, the Government has approved a Defence Sustainability Initiative to develop the New Zealand Defence Force's military and organisational capability to a level that will ensure that the Government's defence goals are met on a sustainable basis. The DSI will provide additional operating and capital expenditure over the ten-year period from the 2005/06 financial year for the New Zealand Defence Force. After five years, a mid-term review will consider, among other things, the appropriateness of the level of funding for the remainder of the funding period.
The DSI requires the Ministry of Defence and the New Zealand Defence Force to work together to manage the risk and uncertainty attached to the long-term capability recovery programme and ensure that policy objectives are achieved.
Measuring our performance - our performance framework
Measuring performance is an important part of the managing for outcomes environment. This importance is now reflected in the Public Finance Amendment Act, which was passed in December 2004. The Act sets out new requirements for information on departmental operating intentions, including specific measures for impacts, outcomes and objectives.
Developing measurable outcomes which meet these new requirements including cost effectiveness of interventions, is a challenge for a Ministry which works in close collaboration with many other agencies in everything that it does. The Ministry will undertake development work in this area during the period. We need to be clear about the outcomes over which we have most direct influence, the primary characteristics we target, and how we and others can judge our success in any given period.
This is especially difficult for a policy oriented Ministry working collectively in a complex operating environment. Development of appropriate measures for policy and capability performance requires further formal and informal dialogue with stakeholders and other contributors to defence and security issues. One measure of our performance is New Zealand's ability to respond to calls for assistance with suitable, effective resources.
Our acquisition activities can be measured both against good practice performance standards and any achieved results through continuous audit programmes.
Our evaluation activities produce reports which can be measured for practicality and improved outcomes.
Development of a suitable performance framework is a continuous ongoing process. We believe the work that is underway, listed in the table below, will help us in meeting the requirements of the Public Finance Amendment Act.
| Division | Intention | Measure |
|---|---|---|
| Acquisition | All projects have a risk register and employ independent risk consultants to identify, monitor and mitigate risk to ensure that major procurement projects will be delivered on time and to budget. |
|
| Corporate including Finance | The Ministry's organisational health and capability to effectively manage its functions and operations in a cost effective manner. |
|
| Evaluation | Programme of evaluation activities will capture areas to which value can be added. |
|
| Policy and Planning | Reporting, analysis and reviews identify key changes in the international security environment, and offer possible policy responses. |
|
