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Preliminary questions when considering a structural form

"So you’re thinking about establishing an autonomous agency…"
  • What is the primary function of the entity (policy advice, purchaser, regulatory/compliance, service delivery, or the provision of goods and services that could be provided on a commercial basis)? If it is clearly a policy entity, then it will be more appropriately located in the core government sector; if clearly commercial, then a state enterprise will be the preferred option.
  • Does the government need to continue to provide this service or product? What alternative arrangements – such as contracting out to the private sector – might achieve similar results?
  • Why might this product or service be provided more efficiently via an alternative organisational form?
  • Are there any significant impediments to reform, such as political obstacles or capability limitations within the organisations orchestrating the reform or within the agency being reformed?
  • Are there issues regarding the regulatory environment that need to be addressed, e.g., competition issues?

Advisory work recommending the creation of an agency should provide:

  • A clear statement of the problems being addressed by the reform and the critical success factors;
  • Analysis to support a conclusion that net gains outweigh the costs, including the costs of change;
  • A feasible policy framework that addresses critical matters such as how the formal relationships between the minister, the organisation, and the monitors will be established and managed; how assets will be valued; managerial and financial freedoms and accountabilities; etc. (the advisory work should indicate that the devolution of responsibility is consistent with the accountability requirements);
  • A realistic, multi-year financial plan that is clear about sources of revenue and the rights of the parties to use those revenues;
  • Advice on the alignment of the public interest with managers’ incentives and formal requirements such as the legal role and function of the agency;
  • Evidence that staffing and employment changes do not establish a dangerous precedent for the government in terms of pay levels, redundancy payments etc;
  • A realistic and detailed implementation plan covering risk assessments and recommendations regarding the management processes that need to be put in place during the stages of implementation;
  • An evaluation framework for the reform, including information to undertake benchmarking and assess changes.

Overall, ministers must be able to satisfy themselves that, as a result of the change, government services or products will be provided in a way which enhances service delivery, and that this improvement will likely be apparent to the public who are affected.

This "checklist" was prepared by Graham Scott.

Southern Cross International Ltd.
11th Floor Axon House
1-3 Willeston Street
PO Box 5265 Lambton Quay
Wellington
NEW ZEALAND

telephone: 64-4-473-6090

"So you’re thinking about establishing an autonomous agency…"

Preliminary questions when considering a structural form:

  • What is the primary function of the entity (policy advice, purchaser, regulatory/compliance, service delivery, or the provision of goods and services that could be provided on a commercial basis)? If it is clearly a policy entity, then it will be more appropriately located in the core government sector; if clearly commercial, then a state enterprise will be the preferred option.
  • Does the government need to continue to provide this service or product? What alternative arrangements – such as contracting out to the private sector – might achieve similar results?
  • Why might this product or service be provided more efficiently via an alternative organisational form?
  • Are there any significant impediments to reform, such as political obstacles or capability limitations within the organisations orchestrating the reform or within the agency being reformed?
  • Are there issues regarding the regulatory environment that need to be addressed, e.g., competition issues?

Advisory work recommending the creation of an agency should provide:

  • A clear statement of the problems being addressed by the reform and the critical success factors;
  • Analysis to support a conclusion that net gains outweigh the costs, including the costs of change;
  • A feasible policy framework that addresses critical matters such as how the formal relationships between the minister, the organisation, and the monitors will be established and managed; how assets will be valued; managerial and financial freedoms and accountabilities; etc. (the advisory work should indicate that the devolution of responsibility is consistent with the accountability requirements);
  • A realistic, multi-year financial plan that is clear about sources of revenue and the rights of the parties to use those revenues;
  • Advice on the alignment of the public interest with managers’ incentives and formal requirements such as the legal role and function of the agency;
  • Evidence that staffing and employment changes do not establish a dangerous precedent for the government in terms of pay levels, redundancy payments etc;
  • A realistic and detailed implementation plan covering risk assessments and recommendations regarding the management processes that need to be put in place during the stages of implementation;
  • An evaluation framework for the reform, including information to undertake benchmarking and assess changes.

Overall, ministers must be able to satisfy themselves that, as a result of the change, government services or products will be provided in a way which enhances service delivery, and that this improvement will likely be apparent to the public who are affected.

This "checklist" was prepared by Graham Scott.

Southern Cross International Ltd.
11th Floor Axon House
1-3 Willeston Street
PO Box 5265 Lambton Quay
Wellington
NEW ZEALAND

telephone: 64-4-473-6090

 




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