Six-Monthly Performance Report to Ministers

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1 LABOUR, SCIENCE, AND ENTERPRISE GROUP IN CONFIDENCE Six-Monthly Performance Report to Ministers Vote: Business, Science and Innovation Portfolio: Science and Innovation June 2016

2 CONTENTS 1. Ministerial priority key achievements, issues and opportunities 1 2. Performance measure variances 1 3. Financial performance 9 4. Ministerial satisfaction 10 MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT i

3 1. Ministerial priority key achievements, issues and opportunities Achievements over the last six months Working towards the milestones and long-term objectives of the NSSI National Statement of Science Investment (NSSI) Critical in implementation of the NSSI direction was the delivery of your Innovative New Zealand Budget package as part of Budget 16, which delivered (or will enable delivery) on the system-level investment signals set out in the NSSI. We have also continued to work to ensure the integration of the NSSI priorities, principles and strategic direction into the broader Ministry science work programme, in particular through other programmes of work such as the development of the Health Research Strategy, Assessment of the Marsden Fund, and development of the Strategic Science Investment Fund. Implement a new contestable science funding system Changes to the Ministry Contestable Fund were announced in October 2015, along with the launch of the 2016 Round. Budget 2016 saw the fund launched under its new name the Endeavour Fund and additional funding being provided to increase the amount of funding available to invest each year. The new process reinforces the importance of Excellence and Impact and is an open process with the removal of research questions specifying the areas of research open for investments. The process starts to moves away from assessment panels being used to determine consensus assessment scores and comments. The 2016 Round generated a high level of interest, with 338 applications submitted for Smart Ideas Concepts and 168 applications submitted for Research Programmes. All applications have now been assessed for Excellence and Impact. Fifty-seven of the Smart Ideas were invited to submit Full Proposals, and 79 of the Research Programmes applications advanced through the Excellence assessment to be assessed for impact. The Science Board will make final funding decisions in August Its decisions will be guided by the results of the assessment process and the signals agreed by Cabinet in the Investment Plan for the Endeavour Fund. The additional funding released in Budget 2016 has increased the size of the 2016 Round from $35 million to $48 million per year. Therefore, the total contract value for this year s Science Board s decisions will be more than $150 million. Health research strategy Cabinet approved the release of discussion document supporting the development of the Health Research Strategy in April this year. MBIE, the Ministry of Health and Health Research Council have held a number of consultation meetings, with a high level of interest; 275 attendees attended ten 1

4 regional meetings, with further focus groups held in the main centres. We have received 163 submissions to date. We currently expect a Health Research Strategy to be ready for Cabinet consideration towards the end of this year. We expect the strategy to improve alignment between health researchers and users of health research, and lead to a more connected and agile health research system in New Zealand. Review Crown Research Institute (CRI) core funding and implement recommendations from the review We have provided you with advice on the establishment of the new Strategic Science Investment Fund (SSIF), which will replace CRI Core Funding. The SSIF will provide you with greater transparency over the use and performance of the funding within CRIs, and will facilitate a strategic conversation between shareholding Ministers and fund recipients about future direction of that funding. We currently expect to publish an investment plan for SSIF in October, which will cover existing core funded activity, collections and databases, existing infrastructure investment, and potentially additional initiatives such as the new Bioinformatics Institute. We will continue to engage with CRIs and other stakeholders through the development process. Improve evaluation and performance measurement in the sector We have recently provided you with a further draft of the Science and Innovation System Performance Report, which is the first in an annual series of information reports that explores the performance of the science and innovation system through the provision of transparent, comparable data. We have also recently provided the final draft of the Science, Research and Innovation domain plan, which sets out our medium-term vision for the development of strong information and data systems, which will eventually enable much more sophisticated and timely analysis of system performance. We have also progressed the implementation of ORCID, a unique identifier for researchers and a core component of the Domain Plan, and we hope you will be in a position to announce the establishment of the national consortium which will manage the identifier in October. Development of a strategic investment plan for research infrastructure A strategic investment plan for infrastructure will now be part of the SSIF investment plan, following your decision to incorporate infrastructure investments into SSIF (see above). We have provided you with advice post-budget on specific investments in the RV Tangaroa, a new Bioinformatics Institute to succeed NZGL, and Nationally Significant Collections and Databases. Increase business investment in R&D Ensuring the effective delivery of existing BGA Innovation Actions We have continued to manage the BGA Innovation work programme through this reporting period. Agencies have made further progress in implementing BGA actions. At the end of June 18 projects have been completed (four in December), 28 are in progress (25), and 15 are implementing (21). We have also added a further three projects to the workstream as work programmes have expanded. 2

5 Maximise the value from Callaghan Innovation Callaghan s Performance Improvement Framework assessment was undertaken during the reporting period. We have worked closely with the State Services Commission on the review. In parallel, Callaghan has continued with its Getting to Great change programme which we have sought to actively support by providing wider policy context to Callaghan senior leadership. Review Callaghan Innovation Grants We have been working in close partnership with Callaghan Innovation in looking at how the delivery of Project and Growth Grants conforms to the policy intent and opportunities to optimise their delivery and performance. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxx Hubs and Precincts The Lincoln hub programme business case was completed in February The hub appointed a new chair and has set up a new governance structure to take forward the strategic case. We have actively supported that transition process. The hub is continuing to work on the project business case for new buildings on the Lincoln campus. We have maintained our working relationship with the Canterbury Development Corporation on the Christchurch Innovation Precinct. June and July saw the opening of the precinct s first two anchor tenants, Kathmandu and Vodafone. We are now working with CDC on the future of Greenhouse, which you opened in 2015, and which CDC sees as an important hub and connector for the precinct. We are providing support to Callaghan Innovation in the development of its business case for the development of the Gracefield site, and in particular, its vision for the site as an innovation precinct. Square Kilometre Array We have actively participated in negotiating sessions setting up an international organisation to build and operate the Square Kilometre Array telescope. It is hoped that these negotiations will be completed at the next session in September. In support of that process we undertook initial analysis of potential benefits for New Zealand and prepared advice to Cabinet on an appropriate level of New Zealand contribution to construction of the telescope. We have also supported ongoing New Zealand participation in technology development for the project by extending contracts for VUW and the SKA Alliance (led by AUT) to cover the 15 month period between the expiry of existing contracts, and new dates for commencement of construction. The value of these contracts is $320,833 (VUW) and $409,582 (SKA Alliance). We have also funded $800,000 of additional activity from the Catalyst fund to support the positioning of New Zealand institutions within the wider project through additional research inputs. Development of a new regulatory regime for outer space and high altitude activities We have been coordinating an interagency project to develop a new regulatory regime to govern outer space and high altitude activities that take place from New Zealand. MBIE has taken on new 3

6 responsibilities as the lead agency for space policy and for designing and implementing the new Outer Space and High Altitude Activities (OSHAA) regulatory regime. As part of this MBIE has worked closely with agencies over this period to: secure Cabinet agreement to the policy, develop the OSHAA Bill ready for introduction to Parliament and prepare interim contractual arrangements relating to these activities before the new regime is brought into place. We have also worked closely with MFAT to make arrangements to accede to the UN Registration Convention and conclude negotiations on a Technology Safeguards Agreement with the United States. Strengthening links and synergies between publicly funded science and the private sector Regional Research Institutes We have worked alongside the three shortlisted applicants for the first round of the Regional Research Institutes initiative to develop robust business cases for presentation to Cabinet. We expect to be advising you on progress of these shortly. Deepen international links of the science and innovation system Develop an International Science Strategy We continue to work on the international science strategy, now called a Strategic Action Plan. Work during the first half of the year focused on developing the Strategy framework and focus areas, which involved extensive discussions across government and with key people in the science sector. This work also built off the State of Play report prepared in The framework was approved in June, and focus area topics in July. MBIE is now preparing a full draft Strategic Action Plan for closed consultation. This will be provided to the Minister in August A new visual identity for the Catalyst Fund was approved, and inaugural funding rounds were well subscribed. Attract multinational corporations to invest in R&D in New Zealand The Multinational R&D Attraction Programme is one of three focus areas for the Investment Attraction Taskforce. The target for this Programme is to attract at least ten multinational companies to undertake R&D activity by Over the past six months, the Programme s working group has: Generated a pipeline with 94 R&D opportunities Progressed flagship projects in our five priority sectors: agri-tech, med-tech, ICT, high-value nutrition, and high altitude and space Successfully attracted our first multinational: Proliant has agreed an R&D partnership with Massey University, announced on 7 June Advanced discussions with three multinationals (OCP, Valley and Prolong) Secured rainmakers to identify opportunities or areas of strength in New Zealand and match those with their contacts in relevant multinationals Attended the 2016 annual meeting of Industrial Research Institute, an organisation of over 200 multinationals, and held one-on-one meetings with over 30 multinationals, resulting in 14 new opportunities being added to our pipeline 4

7 Commissioned three analyses focussing on barriers to entry, baseline levels of R&D in New Zealand (to identify opportunities to expand existing R&D partnerships), and on New Zealand s value proposition in high-value nutrition Initiated development of a website to promote New Zealand as an R&D destination and provide information for multinationals interested in conducting R&D here. Te Pūhaha Hiringa: Māori Innovation Fund The second funding round for Te Pūnaha Hiringa: Māori Innovation Fund Commercial Advisors Scheme was completed and you and Minister Flavell announced the 31 successful recipients on 2 August. We are now preparing contracts for the more than $2 million that will be invested into professional business advice and mentoring for Māori collectives as part of this scheme. Thirty-nine successful recipients from the first funding round have now received commercial advice and expertise to help Māori collectives realise the economic potential of their assets. Some of the funding extends over two years. A large proportion of the one year funding recipients have now completed their projects. Te Pūnaha Hiringa: Māori Innovation Fund Governance and Management Development Scheme continues until December We have shifted funding towards those providers that have proved more effective in delivering services to Māori collectives. We are preparing advice for you and Minister Flavell on next steps for the Te Pūnaha Hiringa: Māori Innovation Fund. National Science Challenges (NSCs) All Challenges have been launched, including Our Land and Water, A Better Start and Building Better Homes, Towns and Cities in early Challenge Chairs, Directors and Operations Managers are meeting regularly to share problems, issues and best practice solutions across Challenges. MBIE has developed a Performance Framework to measure achievement of the objective for each Challenge and the aims of the NSC policy. The Framework includes an outcomes framework, indicators, and requires annual reporting of performance and statistical information. Annual Reports are due to MBIE at the end of August. Science within the Challenges is gaining momentum. Most Challenges have run, or are currently in the process of running, contestable funding rounds. A Nation of Curious Minds He Whenua Hihiri I Te Mahara A National Strategic Plan for Science in Society We have made a number of additional investments to support the objectives of the National Strategic Plan for Science in Society (the Plan) including funding 44 new projects as part of the Unlocking Curious Minds contestable fund. Pilot Area Leads for the Participatory Science Platform also completed investment rounds which resulted in the funding of a number of new projects. Strengthening communications and engagement has been a major focus. A new version of the Curious Minds website was released which profiled initiatives and projects, and opportunities for the 5

8 public to get involved. Brand guidelines and supporting material were released to third parties for them to adopt to raise the profile of the Curious Minds brand in the community. The process and outcome evaluation of selected initiatives that contribute to the aims of the Plan is nearing completion. The results will inform possible changes to the profile of investments to support the Plan, and will be an input into the structured review which is due to be complete by 30 June

9 2. Performance measures The 2015/16 Output Plan for the Science and Innovation portfolio within Vote Business, Science and Innovation contains 11 measures, ten from 2015/16 Estimates and one Output Plan performance measure. These measures relate to the Output Expenses Science and Innovation: Science and Innovation Contract Management and Policy Advice and Related Outputs (MCA). Below is a table summarising the progress of these measures. Achieved Not Achieved Not Yet Reported Of the 11 Estimates and Output Plan measures for the Science and Innovation portfolio, seven were Achieved, two were Not Achieved and two are Not Yet Reported. Science and Innovation: Science and Innovation Contract Management Estimates performance measures Performance measure Applications are processed in accordance with specific guidelines Performance of contracts assessed in accordance with the monitoring plan Maturing science contracts assessed against contract outputs Timing / Standard Result at 100% Achieved 100% Achieved 100% Achieved Comment/variation Policy Advice and Related Outputs MCA Estimates performance measures Performance measure The satisfaction of the Minister of Science and Innovation with the policy advice services, as per the common satisfaction survey Technical quality of policy advice papers assessed by a survey with a methodological robustness of 80% The total cost per hour of producing policy outputs Timing / Standard Result at 70% Not yet reported At least an average of 73% At most $155 Achieved Not yet reported Comment/variation We request you complete your Ministerial satisfaction survey on the Ministry s policy advice and overall performance (see Section 4 of this report). MBIE is working to determine the estimated cost by the end of August Related Services to Ministers Science and Innovation Estimates performance measures Performance measure Ministers receive advice on entities Statement of Intents, Annual Report and Quarterly Reports, within four weeks receipt Timing / Standard Result at 100% Achieved Comment/variation 7

10 Performance measure Timing / Standard Result at Comment/variation Percentage of requests completed within either specified or statutory timeframes: Parliamentary Questions 95% or above Not achieved 91% of 125 Written Parliamentary Questions were responded to within five days compared with the standard of 95%. 11 of the 139 Written Parliamentary Questions were not completed within the specified timeframe. The Ministry is continuing to develop its processes so all ministerial standards can be achieved. This includes the implementation of a centralised Ministerial Servicing tool the hive. Ministerial correspondence 95% or above Not achieved 93 % of 60 Ministerial Correspondence were responded to within 15 days compared with the standard of 95%. Four of the 10 Ministerial Correspondence were not completed within the specified timeframe. The Ministry is continuing to develop its processes so all ministerial standards can be achieved. This includes the implementation of a centralised Ministerial Servicing tool the hive. Ministerial Official Information Act 1982 requests 95% or above Achieved Output Plan performance measure Performance measure Quality of Regulatory Impact Statements which are subject to assessment by the Treasury or by the Ministry of Business, Innovation and Employment s Regulatory Impact Analysis Review Panel against criteria of completeness, convincing, consulted, and clear and concise Timing / Standard 80% fully meet the criteria and the remaining 20% at least partially meet them Result at Achieved Comment/variation 8

11 3. Financial performance Vote: Business, Science and Innovation Portfolio: Science and Innovation Full Year Appropriation Budget ($000) Actual ($000) Variance ($000) Variance (%) Departmental Output Expenses 27,194 25,537 1,657 6% Science and Innovation: Science and Innovation Contract Management Policy Advice and Related Outputs MCA 19,438 17,654 1,784 9% Policy Advice - Science & Innovation 5,148 5,180 (32) -1% Related Services to Ministers - Science and Innovation 2,608 2,703 (95) -4% Variance explanations Commentary has been provided where the individual appropriation variance is over 5%, and where the variance in dollar terms is greater than $50,000. The Science and Innovation Contract Management appropriation is $1.784m (9%) underspent as funding earmarked for the Information Management System (IMS) and other system improvements remains unspent as business case processes are worked through. There have also been delays in the Multi National Corporation project and Science in Society project. In principle expense transfers have been approved for the IMS platform ($1m), Multi-National Corporation ($600k) & Science in Society project ($200k). 9

12 4. Ministerial satisfaction There is a commitment in the Ministry s Output Plan to formally request Ministers to indicate their level of satisfaction with the overall quality of information that the Ministry has produced. This is scheduled to occur twice a year. As Minister of Science and Innovation you are asked to provide an assessment based on the following standard questions. For questions 1-4 and 6-7, please give a rating between 1 to 10, where 1 is extremely dissatisfied and 10 is extremely satisfied. For question 5, please give a rating between 1 and 10, where 1 is extremely unlikely and 10 is extremely likely. Question 1 How satisfied are you that the cost of the policy advice you receive from the Ministry represents value for money? Results as at 31 December 2015 Results as at 2 How satisfied are you that the policy advice you receive from the Ministry meets your needs? 3 How satisfied are you that you receive policy advice in a timely manner? 4 How satisfied are you that the policy advice you receive from the Ministry is of high technical quality, considering the following: Clarity Accuracy Analytical rigor Fitness for purpose Relevance to the wider context 5 How likely are you to tell other Ministers that you get good policy advice from the Ministry? 6 How satisfied are you with the overall performance of the Ministry? You are also asked to provide an assessment for the following question relating to monitoring the performance of Crown Entities (Callaghan Innovation, REANZ [Research & Education Advanced Network NZ Ltd KAREN], and seven Crown Research Institutes [AgResearch, Institute of Environmental Science and Research, GNS Science, Landcare Research, National Institute of Water and Atmospheric Research, Scion and Plant and Food Research]). Question 7 How satisfied are you that the monitoring advice you receive from the Ministry meets your needs? Results as at 31 December 2015 Results as at 10

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