Published 10 December 2003.

Office of the Minister of State Services

Office of the Minister of Transport

Cabinet Policy Committee

GOVERNMENT TRANSPORT SECTOR REVIEW

Introduction

1 This paper seeks Cabinet's agreement to the Terms of Reference for the proposed Government Transport Sector Review and the recommended approach to communication and consultation for the Review.

Background

2 In August 2001, the Ministers of State Services and Finance established a Ministerial Advisory Group to undertake a Review of the Centre because the Government wished to maintain and strengthen the public service and wider State sector. The Advisory Group was tasked with making recommendations for a programme of change that could be implemented over several years (CAB Min (01) 24/2A refers). The Report of the Advisory Group on the Review of the Centre recommended a series of initiatives to address fragmentation and improve alignment of State sector agencies. Sector reviews are part of such initiatives.

3 In December 2002 the Minister of Transport released the New Zealand Transport Strategy (NZTS), a document which will guide government decision-making on transport.

4 In March 2003 the Government agreed (CAB Min (03) 8/3A) to a work programme that included advice on how best to achieve the necessary improvements in the transport sector . In May 2003 the Government agreed (CAB Min (03) 16/4C) to delay a review of the transport sector until the passage of the Land Transport Management Bill. In October 2003 the Cabinet Policy Committee noted (POL Min (03) 26/7 refers) that "the Minister of State Services had agreed with the Minister of Transport to delay the review of the transport sector until the passage of the Land Transport Management Bill, following which the Ministers will jointly put to the Cabinet Policy Committee terms of reference for the review of the transport sector".

Need for the Review

5 It is timely, for a number of reasons, to review the government transport sector. First, current arrangements were in place before the development of the NZTS, and there is a need to consider whether the sector is best arranged and has the capability to implement the NZTS. Second, most of the sector as currently operating has been in place for over 10 years, and a review of whether its operations, practices and structures continue to meet contemporary expectations (in particular those arising from the Review of the Centre) is prudent.

6 The Land Transport Management Act was passed on 6 November 2003. The Act changes, among other things, the objectives of Transfund New Zealand and Transit New Zealand and provides the basis for improving the alignment between regional land transport strategies, New Zealand Transport Strategy (NZTS) objectives and government funding of land transport infrastructure and services. The Act has gone some way to addressing funding policy issues within the sector but there may be other issues in the sector that need addressing.

Draft Terms of Reference and Process for the Review

7 The draft Terms of Reference (attached) set the purpose of the Review to:

(a) consider whether the government transport sector is best arranged and has the capability to implement the New Zealand Transport Strategy (NZTS) and to carry out its other requirements and obligations;

(b) consider ways to enhance the performance of the sector; and

(c) propose any necessary changes.

8 The Review is not intended to target the sector to cut cost, and the Terms of Reference also make it clear that a range of structural and non-structural solutions will be considered, and that structural changes will be recommended only where the advantages clearly outweigh the disadvantages.

9 The Review team (comprising the State Services Commission, the Treasury, Department of Prime Minister and Cabinet, and the Ministry of Transport) would provide a draft report to the Ministers by mid-April 2004. It is recommended that the Ministers of State Services and Transport announce the Review in a low-key manner following Cabinet approval on 8 December 2003.

10 It is also proposed that the affected Crown Entities, local government and key transport sector and related groups will be written to and given the opportunity to give their views of the strengths and weaknesses of the sector to the Review team.

11 There are other initiatives currently underway in the transport sector, and broader cross-government strategies and initiatives, that will be either folded into the review or will influence (or be influenced by) the Review's findings. These include the Growth and Innovation Framework, the New Zealand Transport Strategy, the review of transport accident investigation, the proposed Transport Sector Information Strategy, and forthcoming national rail policy.

Consultation

12 The State Services Commission, Department of the Prime Minister and Cabinet, the Treasury, and the Ministry of Transport have been consulted in the preparation of this paper and their views have been reflected. The Minister of Transport's Office has discussed the draft Terms of Reference for the Review with the Green Party and United Future.

Financial implications

13 There are no financial implications arising from this paper, although there may be some financial implications arising from the Review.

Human rights

14 There are no human rights implications arising from this paper.

Legislative implications

15 There are no legislative implications arising from this paper. There may, however, be a need for legislative change following the review, and appropriate timely government support will be needed, should this be the case

Regulatory impact and compliance cost statement

16 No regulatory impact and compliance cost statement is required for this paper.

Gender implications

17 No gender analysis is required due to the advice in this paper.

Publicity

18 The Ministers of State Services and Transport will jointly announce the Review in the period following Cabinet's decision on Monday 8 December 2003. The timing of this announcement will need to be integrated with other transport announcements in December (such as Auckland transport funding and governance, rail policy, and a major projects review). We propose that the announcement be low-key. Following Cabinet approval, and prior to the announcement, it is proposed that the Chairs of the transport Crown Entities be formally informed by the Minister of Transport of the Review. The Public Service Association and the staff of the affected organisations should also be informed prior to the announcement. It is proposed that media queries be directed to the offices of the Ministers of State Services and Transport, and that the Secretary for Transport and the Deputy Commissioner State Services be the contact points for other queries on the Review.

Recommendations

19 It is recommended that the Committee:

(a) note that the Cabinet Policy Committee noted that "the Minister of State Services had agreed with the Minister of Transport to delay the review of the transport sector until the passage of the Land Transport Management Bill, following which the Ministers will jointly put to the Cabinet Policy Committee terms of reference for the review of the transport sector" (POL Min (03) 26/7 refers);

(b) note that the Land Transport Management Act was passed on 6 November 2003;

(c) agree that a review of the government transport sector should start, and that the purpose of the Review is to (a) consider whether the government transport sector is best arranged and has the capability to implement the New Zealand Transport Strategy and to carry out its other requirements and obligations; (b) to consider ways to enhance the performance of the sector; and (c) to propose any necessary changes;

(d) agree that the scope of the Review comprises the Ministry of Transport and the six transport Crown entities (Civil Aviation Authority (includes the Aviation Security Service), Land Transport Safety Authority, Maritime Safety Authority, Transport Accident Investigation Commission, Transfund New Zealand and Transit New Zealand);

(e) agree to the attached draft Terms of Reference for the Review;

(f) agree to the affected Crown Entities, local government and key transport sector and related groups being given an opportunity to provide input into the review;

(g) note that that a range of options will be considered for achieving the review's purpose including the status quo, more effective and efficient joint provision of policy advice, implementation and administration, shared services (virtual administration), functional relocation and structural change, and that, consistent with the State Service Commission's general propositions for state sector reviews, structural change options will only be put forward where the advantages can be clearly shown to exceed the disadvantages;

(h) agree that the Review be announced in the period following Cabinet's decision on 8 December 2003 and that the Review team (comprising the State Services Commission, the Treasury, Department of Prime Minister and Cabinet, and the Ministry of Transport) provide a draft report to the Ministers of State Services and Transport by mid-April 2004; and

(i) note that the Review may have financial and legislative implications, and that timely government support will be required for legislative changes if any significant changes are proposed to allocation of functions or organisational structures.

Hon Trevor Mallard

Minister of State Services

Hon Paul Swain

Minister of Transport

Attachment: Government Transport Sector Review : Terms of Reference

Background

1. The government's transport sector consists of the Ministry of Transport and six Crown entities. The Ministry of Transport is the government's principal advisor on transport policy and plays a strategic co-ordination role. Three of the entities (the Civil Aviation Authority, the Land Transport Safety Authority and the Maritime Safety Authority) have policy, regulatory and supervisory functions in relation to transport safety. One (the Transport Accident Investigation Commission) carries out safety investigations into transport accidents. The other two fund land transport infrastructure and services (Transfund New Zealand) and manage the state highway system (Transit New Zealand).

2. The New Zealand Transport Strategy (NZTS) was released in December 2002. The NZTS vision is that by 2010 New Zealand will have an affordable, integrated, safe, responsive, and sustainable transport system. The strategy has objectives relating to economic development, safety and personal security, access and mobility, public health and environmental sustainability. Achieving the strategy will require a high degree of cooperation and coordination both within the sector and between sector agencies and a wide range of central and local government organisations, as well as local communities and the private sector.

3. The current structure and operating form of the government transport sector was largely established in the early to mid 1990s, although elements of it have been amended since that time. It seeks clarity of focus and efficiency through specialisation and contracting practices, places certain administrative decisions at arms length from government and relies to a significant extent on contractual arrangements (performance agreements) for accountability. There is a need to review the sector to see if it is best arranged to implement the NZTS and meet the expectations of the Review of the Centre.

Purpose

4. The purpose of the Review is to:

(a) consider whether the government transport sector is best arranged and has the capability to implement the New Zealand Transport Strategy (NZTS) and to carry out its other requirements and obligations;

(b) consider ways to enhance the performance of the sector; and

(c) propose any necessary changes.

Scope and General Propositions

5. The scope of the Review comprises the Ministry of Transport and the six transport Crown entities (Civil Aviation Authority (includes the Aviation Security Service), Land Transport Safety Authority, Maritime Safety Authority, Transport Accident Investigation Commission, Transfund New Zealand and Transit New Zealand).

6. A range of options will be considered for achieving the review's purpose including the status quo, more effective and efficient joint provision of policy advice, implementation and administration, shared services (virtual administration), functional relocation, and structural change. Consistent with the State Service Commission's general propositions for State sector reviews, structural change options will only be put forward where the advantages can be clearly shown to exceed the disadvantages.

Issues to be considered

7. The future government transport sector needs to ensure an effective contribution towards the government's overall transport objectives - as set out in the NZTS. Three key issues are:

  • The government transport sector must be responsive to government policy:
    • - Government transport organisations must be accountable to the government of the day and, where appropriate, give effect to its policies (in particular, to the NZTS)
    • - Government transport organisations must have the capability, as appropriate, to contribute towards NZTS objectives.
  • Policy development and service delivery must reflect an integrated approach, aligned with the government's objectives.
  • The government transport sector must maintain and develop collaborative working relationships with the sector, local government, business, Māori and the community.

8. To this end the Review will consider the following issues:

  • The strengths and weaknesses of current arrangements for delivering integrated policy advice and legislation
  • The strengths and weaknesses of arrangements to deliver services to the wider sector, the public and business communities
  • The effectiveness of current contracting and accountability arrangements in the sector
  • The effectiveness of collaborative arrangements both within and outside the sector in terms of policy development, services (e.g. in information management) and outcomes
  • The application of the principles underpinning the Review of the Centre to the transport sector.

Outcomes

9. The key outcomes of the Review will be recommendations on:

  • The most appropriate government transport sector arrangements for meeting the NZTS objectives and improving performance
  • Any sequencing and implementation issues associated with achieving the above.

The Review is not intended to target the sector to cut cost.

Assessment criteria

10. The following guiding principles will be used to evaluate any recommendations for change in the transport sector.

  • Integration: Transport policy must be coordinated, coherent, integrated and capable of being implemented across modes
  • Alignment: Transport policy and service delivery needs to be defined by the government, and government transport sector agencies need to implement government policy effectively
  • Effective and Efficient: The government's transport sector must be capable of providing the quality of advice, service and support necessary to develop and implement policy in a cost effective way including minimal compliance costs
  • Accountable: The government's transport organisations need to be receptive to, aligned with, and accountable for their contribution to, the government's objectives
  • Responsive: The government's transport organisations need to be flexible, collaborative, and capable of being responsive to, and understanding, changing government, sector, community, and citizen expectations and needs
  • Achievable: Any change needs to be achieved without undue cost or risks, is feasible, and will be effective
  • State Sector Consistency : any outcome should be consistent with the general criteria for the placement of functions in the State sector.

Timing

12. The Review team will provide the Ministers of State Services and Transport with a draft report by mid-April 2004.

Communication and proposed consultation

13. The offices of the Ministers of State Services and Transport will handle Media queries. The Deputy Commissioner State Services and the Secretary for Transport will be the first points of contact for queries on the Review.

14. The transport Crown Entities, local government, and key industry groups will be offered an opportunity to provide their views to the Review team through being asked to comment on the issues raised in the Terms of Reference, and any other relevant points.

Review management

15. The State Services Commission and the Ministry of Transport will jointly sponsor and manage the Review.

16. The Review team comprises officials from the Ministry of Transport, Department of Prime Minister and Cabinet, the Treasury and the State Services Commission.

Civil Aviation Authority (including the Aviation Security Service), Land Transport Safety Authority, Maritime Safety Authority, Ministry of Transport, Transport Accident Investigation Commission, Transfund New Zealand, Transit New Zealand

The Transport Accident Investigation Commission has a different and more independent function and relationship with the Minister.

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