Outcomes focused and strategy Led

Introduction

The Transport Agency aims to focus away from managing the delivery of activities and toward influencing the development of the transport network to deliver the government’s desired outcomes. This section provides an overview of the Transport Agency’s process to encourage an outcomes focused and strategy led approach to transport planning and investment.

An outcomes focused strategy led approach

The Transport Agency invests in activities that best achieve the impacts that the government identifies in the Government Policy Statement on Land Transport Funding (GPS A Government Policy Statement on Land Transport Funding issued under section 86 of the LTMA ). The Transport Agency believes that influencing and shaping land transport proposals during their early, strategic stages provides the best opportunity to influence and align local regional and national investment directions and achieve value for money Selecting the right things to do, implementing them in the right way, at the right time and for the right price. .  

The advantages of adopting a strategy led approach are that:

• It provides an holistic appreciation of the strategic issues, priorities and potential solutions. The Transport Agency expects that a whole–of-life and a whole-of-network approach will be taken by all organisations proposing land transport investment opportunities. This means that the evaluation and assessment of activities, including alternatives A strategic option that may encompass a mix of modes and/or high level routes and/or land use options. Alternatives would be considered during strategy development, with the preferred alternative being selected and taken through into package and project development. and option selection, considers long-term operational and maintenance costs as well as the upstream and downstream impacts on the transport system. 
• It provides the opportunity to collaborate with regional and local authorities and stakeholders and to communicate our respective strategic contexts, objectives and desired investment outcomes. The objective is to align investment directions and take a whole-of-network investment approach that leverages the combined investment in the land transport network.
• It enables value for money Selecting the right things to do, implementing them in the right way, at the right time and for the right price. and affordability to be considered early in the process so as to understand whether the strategy is achievable within the wider funding framework. It also provides an opportunity to consider the ability of the Transport Agency, Approved Organisations and any other parties to fund the strategy and/or investigate possible alternative funding sources.
• It provides the Transport Agency with better knowledge of the likely funding requirements in the medium to long term. This in turn enables the Transport Agency to provide its investment partners with greater investment certainty.

The Transport Agency’s expectation is that applications for funding assistance will demonstrate that they are driven by a strategic focus on outcomes. These strategic outcomes (and how they will be implemented) may be identified in:

• National, inter-regional and regional transport strategies, e.g. inter-regional freight strategies,
• Integrated sub-regional strategies, e.g. corridor or area based multi-modal strategies that integrated transport and land use,
• The strategic aspects of Activity Management Plans Plans describe the tactics to give effect to a strategy. They are specific in content, action oriented and outputs focussed, resulting in a tangible set of activities to be delivered within a clear timeframe. and Regional Public Transport Plans.

The Transport Agency’s Investment and Revenue Strategy

The Transport Agency’s key document for investment is its Investment and Revenue Strategy (IRS). This sets out the Transport Agency’s investment direction and its Assessment Framework. The Framework is the Transport Agency’s means of assessing the relative contributions of transport strategies and the activities they propose to achieve the GPS A Government Policy Statement on Land Transport Funding issued under section 86 of the LTMA impacts. This is achieved by rating activities based on their strategic fit, effectiveness and efficiency, and then prioritising them for investment.

From strategies to delivery; the planning and investment streams

The following chart provides a general overview of the progression from strategy development to the delivery of transport activities. It illustrates (at a high level) the issues that the Transport Agency considers in a planning and investment context. A key part of the process is the development of supported strategies and endorsed packages.

Planning and delivery stream

The Transport Agency’s Investment and funding stream

A summary of the general process from studies and strategies to delivery is shown in the Studies, strategies, packages and plans overview.

A supported strategy is required for projects over $20 million 

The Transport Agency will require (unless agreed otherwise) that investigation funding assistance for any improvement project with an estimated construction cost over $20 million will only be approved for funding from 2012/13 if it is identified in an Transport Agency supported Programme Interrelated and complementary combination of activities that, when delivered in a coordinated manner, produce synergies – can span more than one work category and more than one activity class, e.g. a programme could include a road improvement and public transport improvement activities. Business Case.

Seeking full or conditional support for strategies

Prior to the adoption of the Business Case Approach, the Transport Agency’s policy was to encourage development and submission of  transport strategies for formal support. As of 1 July 2015, the Transport Agency no longer supports new strategies nor funds the development of strategies. Instead, it will require the use of the Business Case Approach and will fund the development of Programme Business Cases. In the meantime, during the 2015-18 NLTP A National Land Transport Programme Interrelated and complementary combination of activities that, when delivered in a coordinated manner, produce synergies – can span more than one work category and more than one activity class, e.g. a programme could include a road improvement and public transport improvement activities. adopted by the NZTA under section 19 of the LTMA, as from time to time amended or varied , the Transport Agency will consider requests for strategy support, which are expected to incorporate the Business Case Approach concepts and principles.

In some circumstances the Transport Agency may only provide conditional support for a strategy. Conditional support applies to instances where Transport Agency wants to support most elements of a strategy but considers there are areas where its support needs to be qualified.

Seeking endorsement of packages

Prior to the adoption of the Business Case Approach, the Transport Agency’s policy was to consider packages for assessment and endorsement, where eligible.  The Transport agency will continue to consider endorsement of new packages already being developed under this policy.  Over time however the Transport Agency expects that these will be developed as Programme Business Cases as the Business Case Approach is transitioned in.

Packages of transport activities are the means by which strategies are implemented, and achieve their strategic outcomes. A package is a collection of transport activities or projects in a defined area that will provide synergies and require a coordinated approach to their implementation to optimise their synergies. For example, a package of potential public transport infrastructure projects might include:

• bus priority lanes and bus stops,
• changes in bus services and timetables,
• infrastructure such as footpaths That portion of the road reserve set aside for the use of pedestrians only. to provide better access to bus stops.

It is important to note that packages may also include activities that we may not fund. However, these activities should still be included in the package as part of an integrated and synergistic solution.

The process of endorsing packages enables the Transport Agency to test whether the desired strategic outcomes are likely to be achieved and can be funded. The process of endorsing packages is also a significant decision point, providing an opportunity for the Transport Agency and its investment partners to optimise the effectiveness of a package, its ingredient projects and their sequencing.

For our partners, endorsement of a package by the Transport Agency provides a higher level of confidence that the component activities will be funded in the future, enabling their further development toward construction and/or implementation

Currency of the Transport Agency’s support for strategies and endorsement of packages

Although the Transport Agency will endeavour to provide long term stability around outcomes, support for strategies and endorsement of packages cannot be timeless. Some of the reasons for support or endorsement review are: 

• Significant changes in government or the Transport Agency’s policy that mean the grounds for the Transport Agency’s support has changed, or that support is no longer applicable
• Monitoring of the strategy and its environment demonstrates that some of the basic assumptions, such as population growth and/or the sequencing of development have altered to a degree where the strategy’s outcomes are no longer appropriate or cannot be delivered.

The Transport Agency cannot provide a funding guarantee for strategies and packages

The Transport Agency’s support for a strategy does not mean that there is a guarantee of funding. The reasons why funding cannot be guaranteed are:

• Changes in investment direction set out in the GPS A Government Policy Statement on Land Transport Funding issued under section 86 of the LTMA mean that  the criteria for strategic fit can change substantially,
• The absence of investment commitment ensures that there is no constraint (real or implied) on the ability of Approved Organisations to form or review their future policy directions,
• The coarseness of the information supporting the strategy, particularly around its economic efficiency, means that a full assessment profile The three-part rating for an activity, rated as high, medium or low e.g. HMM, and representing the assessment for Strategic Fit, Effectiveness, and Benefit and Cost Appraisal respectively. cannot be generated with any degree of certainty. For this reason, the Transport Agency provides a firm rating on strategic fit rating and an indication only of effectiveness, and economic efficiency,
• Affordability issues and funding plan risks can take time to resolve and are often in an indicative state at the time of strategy support. Implementation plans at this level are intended to demonstrate feasibility of a proposed strategy, rather than being a definitive list of works that is locked in when a strategy is supported.

As for strategies, endorsement of packages is not a guarantee of future funding. The reasons for not guaranteeing future funding are similar to those given for strategies, (albeit that they apply at a different stage of the development process), and include:

• The coarseness of the information supporting the package, which depends on the level of its development. For instance, a package with a feasibility estimate benefit-cost ratio is ready for investigation funding approval but not design or construction funding approval as there are too many uncertainties and risks to do so, and
• The funding plan is unlikely to be refined to the point that enables the Transport Agency to commit to the investment.