New Department of Building and Housing

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State Services Minister Trevor Mallard and Acting Housing Minister Rick Barker today announced several changes to government agencies aimed at improving and streamlining building and housing services for the public.

Monday, July 5th 2004, 8:10AM

by The Landlord

The Ministry of Housing will be expanded through the transfer of relevant functions from the Ministry of Economic Development, Department of Internal Affairs, and Ministry of Social Development.

The expanded Ministry of Housing will be a one-stop shop, renamed the Department of Building and Housing.

"Our government is committed to strengthening the public service so it better serves New Zealanders. Our decisions from the housing sector review will see a ‘one-stop-shop’ for regulatory issues and standards affecting building and housing, and for dispute resolutions," Trevor Mallard said. "It will provide a much more integrated approach to policy development and advice to government, and to compliance and enforcement."

Rick Barker said a recent review of agencies with housing and building-related responsibilities had found building and housing regulatory and dispute resolution functions were spread across too many departments.

"Consequently resources are spread too thinly, it is difficult to develop ‘critical mass’ for policy advice, and policy and operations are too distant from one another," Rick Barker said.

"The improvements will be of real benefit to the housing and building industries also, as we bring together people who are already working on similar issues but in different departments."

The reconfigured department will:

* carry out the present work of the Ministry of Housing;
* manage the administration of the Weathertight Homes Resolution Services Act 2002;
* be responsible for administration of the new Building Act (including absorbing the functions and employees of the Building Industry Authority) and the occupational licensing regulation associated with the building and housing sector;
* administer the Retirement Villages legislation currently administered by the Ministry of Social Development and Ministry of Economic Development;
* perform a range of other duties including regulation of housing standards, administration of the legislation around the fencing of swimming pools (currently with the Department of Internal Affairs), and Electrical Workers Licensing; and
* provide policy advice to Government in relation to the dispute resolution and regulatory responsibilities.

The new department is expected to be in place by November 2004, with the transfer of functions to be carefully phased in over the next couple of years.

"In particular, users of the Weathertight Homes Resolution Service should be assured that the service will be transferred intact to the re-configured department, and will continue to operate as a dedicated service," Rick Barker said.

The department will work closely with Housing New Zealand Corporation, which will retain its current responsibilities including leadership of the development and implementation of the New Zealand Housing Strategy.

Staff will be offered continuing employment on their current terms and conditions of employment when functions move into the department.

The cabinet paper outlining this decision is available on www.ssc.govt.nz

Questions and Answers on Housing Sector Review

What is the background to the housing sector review? Sector reviews were suggested in the government’s 2001 appraisal of New Zealand’s public management system, the Review of the Centre. The Review of the Centre identified four areas for improvement:

* focus more on results/outcomes;
* becoming more citizen and community centred;
* building the culture, people and leadership; and
* better integration of structures and processes.

The Review recommended a series of initiatives to address fragmentation and improve alignment of state sector agencies with Government objectives. The full Review report can be found at: www.ssc.govt.nz

What other sectors have been reviewed? Other sectors and agencies that have been reviewed include the transport sector, the justice sector, the Ministry of Women’s Affairs and Ministry of Youth Affairs.

What is the purpose of the reviews? The government is always seeking ways to improve the performance of the state sector. This work programme follows on from the government decision in its last term to improve the performance of the social sector by merging the Department of Work and Income with the Ministry for Social Policy.

The purpose of the sector reviews is to consider ways to improve whole-of-government effectiveness to achieve results for New Zealanders. The reviews are intended to increase alignment between government agencies and reduce fragmentation where this is a barrier to improving performance.

How did this particular review come about
# In 2003 Ministers decided to review the role and functions of the Ministry of Housing with the objective of:achieving a more integrated approach to housing;
# achieving greater clarity of roles;
# reducing fragmentation;
# achieving better integration and linkages between agencies;
# ensuring the delivery of quality advice and service delivery; and
# to determine the appropriate future role of the Ministry of Housing.

The government had also decided, as part of the work around the Building Bill, that building control functions should no longer be carried out by a crown entity, but should be the responsibility of a government department. It was therefore necessary to decide which department should take up this role following the dissolution of the Building Industry Authority.

The government was also considering where the Weathertight Homes Resolution Service should be located in future.

What problems are being fixed?

* uncertainty around the future location of building control functions and weathertight homes resolution services;
* fragmentation of functions, including fragmentation between policy and operations in the building control and weathertightness areas;
* insufficient critical mass in the Ministry of Housing to best perform its policy advice role.

What will improve?

* staff working in the building control and weathertightness areas can be confident about the future;
* the expanded Ministry of Housing can drive synergies between its new policy and operational roles;
* a single department will specialise in the important area of building and housing regulation thus improving focus in this area.

How will the changes affect staff The relevant functions of MED, DIA and the BIA will be transferred to the reconfigured department. Staff in these areas will be offered continuing employment on the same terms and conditions of employment. Staff will be consulted about the change process and collective agreement coverage is also protected.

Ministry of Housing staff will not need to go through the process of being offered employment. That is because, legally, their employing department is not changing.

The Public Service Association has been consulted on the proposed changes and will be involved in the process.

The BIA has around 60 staff, and around 18 MED staff are working in functions which will transfer. The WHRS has approximately 30 employees in Wellington, and 80 regional staff, the majority of whom are contractors. The Ministry of Housing currently has approximately 150 staff throughout the country.

The chief executive of the Ministry of Housing is an employee of the State Services Commissioner who will be making a separate announcement with regard to this role. See www.ssc.govt.nz

When will the changes take place The transition to the expanded department will be carefully phased with building control (Building Industry Authority and Ministry of Economic Development policy) functions moving first once the new Building legislation, now before Parliament, is passed.

This is expected to occur in November 2004. Following that, in 2005 and early 2006 further functions will transfer into the reconfigured department with sufficient time to address transitional issues and provide for consultation with stakeholders.

In particular, users of the Weathertight Homes Resolution Service should be assured that the Service will be transferred intact to the re-configured department, and will continue to operate as a dedicated service.

Why is the change being phased in The change in the building area, with the enactment of the Building Bill, is a major one and we are focusing on getting that right first.

The Weathertight Homes Resolution Service depends for its effectiveness on public trust and confidence. We are taking time to ensure that the transition can be managed with maximum opportunity for stakeholder consultation.

How much is this costing and what will the money be used for? Cabinet has approved additional operational funding of $934,000 in 2004/05, and $187,000 in further years, to assist with set up costs including:

* the additional expertise the reconfigured Department will need to develop financial, HR, and IT/information management systems;
* the cost of recruiting for some positions currently filled by fixed-term employees;
* establishing an ‘identity’ for public awareness purposes including updating letterhead and signage as these come up for reprinting or replacement.

There will be additional modest capital investment of $315,000 to fund development costs associated with integrating IT systems across the Department.

Why was Housing Corp not transferred as well?
The option of including Housing New Zealand Corporation in the Department of Building and Housing was considered but rejected. Such a combination would create conflicts of interest which would be difficult to manage; for instance where the same agency was both a landlord and provider of tenancy mediation. The best option was to have one department focused on regulation and dispute resolution while the Corporation continues to focus mainly on the policy and operational functions connected with housing provision.

Hon Steve Maharey 30 June 2004

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