About us
Organisational health and capability
New Zealanders expect the Corporation to strive for excellence, delivering exceptional customer service and providing value for money. The Corporation has started a programme of change to achieve its vision and outcomes, and to drive performance excellence.
This encompasses a more innovative and broader focus on housing solutions, working closely with communities and other agencies to deliver housing services, and placing customer needs at the heart of those services.
Operational efficiency and flexibility is required to manage the risk of undue pressure on frontline staff from an increase in applicants and in the waiting list.
Increasing value for money
A more focused, efficient and productive state sector will support New Zealand's economic recovery. The Corporation will continue to become more efficient and effective and deliver more from existing resources so that every taxpayer's dollar is well spent.
The Corporation has already identified savings of $22.6 million in 2008/09 and $22.4 million in 2009/10 as part of a line by line review of its appropriated expenditure. In addition to the savings available from appropriations, the Corporation has identified a further $18.25 million before tax from its internal budget in 2008/09.
The Corporation will undertake in-depth value for money reviews and maintain tight budget control. This will help to ensure any internal surpluses identified during the year can be either reallocated to high priority needs or included in the payment of a dividend to the Crown. The Corporation is placing an ongoing focus on areas of discretionary spending including active management of vacancies, and reducing travel.
Value for money is an ongoing and permanent focus as the Corporation improves how it delivers services to New Zealanders. The Corporation will continue to reassess its services, products and policy initiatives against the Government's objectives. It will set tight, realistic budgets, manage within those budgets, and improve its ability to measure and report on performance. The Corporation will:
- identify savings, efficiency gains and asset utilisation improvements
- review its programmes and activities so that they are run in the most efficient way compared to alternative delivery methods and deliver measurable results
- review current practice around tenant behaviour
- exercise restraint in staffing in line with Government policy to cap the size of core government administration, so that priority is given to frontline services.
In addition, the Corporation will work with the Department of Building and Housing and the Treasury in:
- reviewing the Corporation's balance sheet structure
- ensuring efficient use of the state housing asset
- developing appropriate efficiency and effectiveness indicators.
The Corporation will deliver a gross operating profit, as a percentage of total assets, equivalent to a minimum of 0.53 percent in 2009/10. It will also focus on increasing value for money in operations and improving the quality of the portfolio.
The Corporation will examine ways of improving the return on the Government's investment in state housing and will develop appropriate performance measures. The Corporation will include the results of this work within the 2010/11 Statement of Intent. Further detail will focus on the operating surplus and also other commercial and social returns to the Crown from the Corporation's management of state housing assets.
Performance excellence
The Corporation has chosen 'performance excellence' as its continuous improvement framework. The framework is based on the New Zealand Business Excellence Foundation model, which is aligned to and calibrated with the proven Baldrige Criteria. The Corporation will use performance excellence to develop excellence in strategy, business practices and stakeholder-related performance, and to benchmark itself against world best practice.
The results of an initial baseline assessment of the Corporation's performance undertaken in 2008/09 will be used to establish priorities for improvement in 2009/10.
People
An organisational development strategy has been developed that focuses on building the required people capabilities to support the Corporation as a high performance organisation.
The strategy focuses on three areas - fostering the right culture, building leadership capabilities and developing skills to enable new ways of working, and to continually improve what we do. The strategy seeks to achieve three outcomes:
- an organisational culture that supports high performance, and community- and customer-centric ways of working
- staff with the right skills in the right place at the right time
- staff who are highly engaged, feel valued and are committed to the vision.
To achieve these outcomes, the Corporation has identified three key strategies with priorities for 2009/10.
Build leadership
- develop and enhance leadership and expertise
- continue to implement an employee engagement programme to improve results
Develop skills
- develop and implement a learning and development framework to support staff in their roles
- implement workforce planning so the organisation's people capability is aligned to its business objectives
Foster a supportive culture
- align the Corporation's core values and organisational culture to support new ways of working and for the delivery of innovative approaches to the Corporation's customers
- review and align performance management and remuneration systems.
Measures are being identified and will be implemented over the next year to monitor progress against the three strategies. The Corporation is considering a series of measures around people capacity, capability and engagement.
The Corporation will monitor its frontline and overall staff numbers against the 31 December 2008 target agreed with the Government.
Increased organisational performance correlates with the level of employee engagement. In 2008, the Corporation undertook the Gallup Q12TM Employee Engagement Survey, which resulted in a baseline measure. An improvement target of 5 percent over the 2008 grand mean score has been set for 2009, along with a measure that action planning is undertaken. A longer-term target is that by 2012, the Corporation will be positioned at or above the 75th percentile of New Zealand state sector organisations.
The Corporation is defining a range of people-related benchmark metrics to measure capability. These metrics will be based on a mix of specific surveys and traditional human resources metrics, and will include monitoring of unplanned turnover, vacancy management, unplanned absenteeism, learning and development investment, entry and exit surveys, job satisfaction and performance management. These measures will result in benchmarks being established.
Health, safety and security
The Corporation is committed to achieving excellence in health, safety and security performance. The health, safety and security of staff, contractors and customers are of utmost importance and will not be compromised.
The Corporation is dedicated to working towards an accident-free workplace. In order to achieve this goal, the hazards present in our work environment must be identified and effectively managed. This is best achieved through a systematic approach that supports the Corporation's safety culture and business activities.
The Corporation has adopted a Health, Safety and Security Management System Framework that is aligned to national and international standards. This framework is central to achieving excellence and continuous improvement in health, safety and security performance.
The pursuit of continuous improvement through best practice includes the remodelling of office premises and the adoption of technology to better manage security risk where it is most needed.
Underpinning physical security upgrades is a national security training programme so that all frontline staff are aware of and equipped to manage the day-to-day challenges they face.
Information systems and technology
The Corporation's computer systems are past their expected lifespan. They are overdue for replacement and require redevelopment and potentially a complete rebuild. Other business systems and processes also pose risks.
The current tenancy and asset management system is outdated. It needs to be replaced before service delivery is compromised and to provide better performance. Other risks include inconsistent information, inefficient and ad hoc manual processes, and reduced reporting capacity on Corporation activities. The Corporation is acting to reduce the risk that current business processes and computer systems will constrain a more customerfocused, flexible and effective delivery approach.
A business case is being developed, within current budget limits, and will be agreed in 2009. Requests for proposals for an integrated technology solution have been sought, and the Corporation is currently in the second phase of the tender process and business diagnostic. A core part of this programme of change, the Enterprise Transformation Programme, is under way. It will identify and implement necessary changes to business processes and seek the integrated software to support this change.
Improvements to documents and records management are also planned to assist with compliance with the Public Records Act 2005, as well as business intelligence capability and customer service. Following a successful pilot, Corporation-wide implementation will start in the 2009/10 financial year.
Other improvements, including an enterprise data warehouse, will deliver better customer service, increased support for frontline staff, improved business information, increased responsiveness to customers' changing needs, and reduced costs and risk.
Risk management
The Corporation has adopted a 'risk smart' culture that includes the early identification and analysis of risks to inform planning decisions. Part of the Corporation's planning and risk reporting approach is to provide for early warning of potential adverse outcomes.
A consistent approach for assessing the likelihood and consequences of risk events occurring has been developed. The Corporation's processes for achieving its risk management culture include the Board's risk management policy, the documented degree of risk the Board will tolerate in pursuit of delivering the strategic priorities, and a 3-year risk management work plan.
The Corporation identified and prioritised the key risks relative to the delivery of the strategic priorities outlined earlier. A further key risk mitigation strategy adopted by the Corporation was the development of a risk-based, 3-year internal audit plan by the Board's Assurance Committee. The following table outlines these risks.
The Corporation's key risks
| Risk | Management Strategies |
| Gap in the Corporation's ability to deliver owing to the Government's and the Board's expectations expanding beyond funding levels |
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Service failure caused by the Corporation's inability to meet increasing service demand owing to:
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| Houses may be unhealthy for tenants, which may result in unacceptable health issues. This risk includes the capacity of the asset improvement programme to keep ahead of the worsening condition of the housing stock |
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| Failure to revitalise communities with high concentrations of social housing where those communities are not functioning effectively |
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| Inability to keep pace with tightening market conditions, including the current credit crunch, and being exposed to private sector risks with public sector funding/accountability |
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| Funding levels may not enable the Corporation to maintain housing stock to agreed property quality standards |
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| Maintenance budget may be insufficient to maintain standards and levels of service |
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| Corporation staff, contractors or tenants sustain intimidation or physical injury due to inappropriate tenant and/or third party behaviour |
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Physical assets and capital intentions - the state housing portfolio
The Corporation manages, maintains, upgrades and grows the state housing portfolio on behalf of the Crown to achieve the Government's social objectives.
State housing is the second largest Crown asset with about 66,000 state homes (the housing portfolio, excluding leased houses) and land valued at $15.1 billion as at June 2008. Rental properties were valued at $6.6 billion, and the freehold land at $8.5 billion (including the sections occupied by state houses).
The following section outlines the challenges facing the Corporation in managing the state housing portfolio, the Asset Management Strategy and associated activities it is pursuing in response and, finally, how the Corporation will measure and report on whether it has met these challenges.
Asset challenges
The Corporation faces challenges to meet future housing need.
An ageing housing stock
Housing upgrades involve improvements such as ventilation, insulation, energy efficiency retrofits, renewing bathrooms and kitchens, painting and re-carpeting. The Corporation is responsible for the cost of maintaining and upgrading about 66,000 owned houses.
The Corporation's portfolio is a mix of old and new, including houses built before 1940 (3 percent of houses) and post-2000 (7 percent). The majority are over 30 years old, built between 1940 and 1960 (31 percent) and 1960 and 1980 (37 percent). They are built from a range of materials and have been upgraded at different times over the years, affecting the upgrade requirements of each house.
The challenge for the Corporation is twofold: the Corporation has deferred upgrades over time and has a significant backlog of immediate and major upgrades; and the nature of tracking what is needed for each house and phasing of upgrades across 66,000 houses is complex.
Upgrading is an ongoing activity, with upgrades required at different stages of the economic life cycle of a house to maintain the standard over time. The extent of each upgrade varies. It is currently estimated that about $2 billion of upgrade activity is needed to bring the current portfolio up to a modern but modest standard.
The Corporation is accelerating upgrade activity over 2008/09 and into 2009/10. In 2008/09, the Corporation partially or fully upgraded over 5,000 houses (8 percent of the portfolio). In 2009/10, the Corporation is expected to upgrade about 13,000 houses (20 percent of the portfolio). By the end of 2009/10, about 28 percent of the housing portfolio will have had some form of upgrade in the preceding 2 years.
The increased level of upgrades in 2009/10 will reduce but not eliminate the total upgrade backlog. Energy efficiency retrofits, however, will be completed in 2013.
Mismatch of housing to demand
A large proportion of older state houses are the wrong size and type to meet the increasing demand of smaller and larger households. There is also a mismatch between the areas of greatest housing demand and the location of many state houses.
The Corporation needs to replace three-bedroom houses with some more four- to six-bedroom houses, and many more one- and two-bedroom houses.
Acquiring housing in a challenging economic climate
The housing market has slowed and economic conditions have deteriorated. Developers are less able to finance building and some developments have stalled. This makes it difficult for the Corporation to find suitable development partners.
Sales to tenants will not generate sufficient revenue to maintain stock numbers and will result in an increased reliance on leased houses.
