1. Low Cost/Low Risk Improvements
IAF application and TIO changes June 2017

2. Introduction to Low Cost/Low Risk
All funding applications need to show alignment with outcomes desired by Government policy
Low Cost or low risk improvements are no exception
Key consideration taken into account:
What’s the best way to demonstrate a robust evidence base for small scale projects which are considered low cost/ low risk

3. Current v Future State Current State
Improvement activities up to $300K funded using a streamlined approach (minor improvements)
Capturing key information on each improvement activity via a spreadsheet
Summary information of the proposed total programme of works via TIO fields
Future State
Proposed name change to ‘low cost/ low risk improvements’
Proposed threshold increased – up to $1M per activity
Improved programme management during NLTP
More alignment to BC principles/ IAF
e.g.:
-activity name;
-Intervention type;
-total cost;
-cashflow

4. A balanced approach to Streamlined Assessment
Based on the streamlined assessment for Low cost/Low risk proposals, including a higher funding threshold, we’ve taken into consideration:
Reasonable Value for Money assurance
Alignment to the IAF
Alignment to the Business Case Approach
Obtaining necessary information without overburdening staff, or potentially discouraging good applications
Delivers a balance between robust, thorough assessment and a more streamlined approach.
As part of this
How much time and effort should be expended on specific items of evidence?
At what level should the assessment be done?
Programme vs project?
What evidence needs to be supplied?
Quality / Quantity / Timeliness?
From consultation we have decided upon an enhanced approach to what we already do with minor improvement applications.

5. Enhanced approach to Streamlined Assessment
Individual activity detail captured in the NZTA spreadsheet template
Key information summarised and uploaded directly into TIO
Investment assessment will be made at the programme level only (influenced from spreadsheet)
Some improved functionality and enhanced checks and balances in both TIO and spreadsheet
Further detailed information now follows on these changes themselves

6. LCLR spreadsheet – key changes
Roading & PT – sign off of each activity (proposed)
Roading & PT - additional (automated) column to capture outcome class – dependent on primary benefit chosen
PT only - additional (automated) column to capture intervention type
PT only - if “intervention” type is service related, funding will be available for a trial* - additional information is required around proposed performance of the trial
Where it has been identified it is service related: funding will be available for a trial* (up to a TC of $1M across the life of the trial).

7. TIO LCLR programme management
Proposed changes to the investment assessment:
NZTA spreadsheet template must be updated yearly with revised cashflows for each LC/LR project (both approved and proposed)
Conditional funding support – during the 3 year programme, claiming funding is conditional on entry and submission of the prior years’ NZTA spreadsheet template
TIO programme cashflows need to align to the updated NZTA spreadsheet template *
1st year
claiming access: available upon NLTP approval/ adoption
2nd year
claiming access: conditional on updating and submission of revised s/sheet
[end of 1st year]
3rd year
[end of 2nd year]
Little change at detail level.
i.e. should align programme costs with actual claimed costs from the previous year and updated costs for current year. This needs to be updated in TIO.

8. TIO LCLR programme vs phase
Clearer distinction between roading and PT LC/LR programme ‘phases’
Provides more clarity and assists investment partners with both LC/LR programmes
ACTIVITY AREA:
Outline
Alignment to key 11 documentation
Contact details 111
PHASE AREA
(separate for roading vs PT:
Specific templates available
Supporting documents (specific spreadsheet to attach)
Benefits capture for each
IAF Assessment for each

9. TIO LCLR programme assessment
Investment assessment will be made at the programme level (i.e. TIO), but entered/ recorded within the phase type
Benefit information will be collated from the spreadsheet template and automatically upload into TIO (again recorded against each phase type)
The outcome class summary captured in TIO allows assessment against Results Alignment criteria
Describe the consolidation process.

10. TIO LCLR programme assessment (cont)
LC/LR IAF assessment profile
Results Alignment - default is high unless outcomes are significantly different from Results Alignment criteria
Cost-benefit Appraisal - default is medium based primarily on supporting spreadsheet detail, and any other information that demonstrates value for money
Work Categories
Public transport now has its own distinct work category (532), distinct from PT infrastructure (531)
After assessment would expect an HM profile (i.e. this becomes the standard default).
* Results alignment: Exceptions are likely to centre if there is variance to the summary outcomes capture with the direction of the Agency or as captured in key planning documentation (changed to medium or low)
** CBA: Upon request, the Agency can ask for additional supporting information to the s/sheet that demonstrates VFM. Exceptions to a “medium” default centre around questionable alignment to what is being in invested in and delivery of VFM (change to 1 to 1.9, or 0 to 0.9).
From this it may be determined to lower the programme allocation, particularly if there is evidence of local share issues and past performance suggest over request compared to underspend.

11. Key takeaway: LC/LR programme vs Continuous Programme vs Improvement
Operational programme
Improvement activity
Type
Group of small scale improvement activities
Group of on-going related operational activities
Stand-alone improvement activity, can be part of a package
Dependency
Activities usually independent of one another
Activities primarily dependent on one another
Activities usually interdependent when part of a package
Funding size
< $1M per activity (proposed)
Variable, no limit except time period
> $1M per activity
Timing of approval
At start of NLTP
At time of development of each stage, separate to the NLTP adoption, seeks only NLTP inclusion
Funding approval
3 years but conditional release (i.e. ability to claim - following year)
3 year approval
(if “pass”, i.e. no rework or fail with conditions)
Upfront, one off approval (usually)
Assessment of Business Case
Single stage
Multiple stages