Guidelines for New Policy Proposals

Drafters preparing Cabinet Submissions and Memoranda should follow the mandatory requirements set out in the Drafter’s Guide.  For Submissions coming forward outside the Budget process, these requirements include the preparation of a brief implementation statement.

Implementation statement guidelines – non-Budget

  1. Drafters need to consider the implementation of proposals being developed for Cabinet consideration. Departments and agencies should consult service delivery agencies and the Cabinet Implementation Unit (CIU) in PM&C at an early stage in the development of proposals likely to require significant implementation effort. The key issues section of the cover sheet should also indicate whether there are significant implementation risks. Submissions may require an implementation statement when a proposal:
    1. addresses a major or complex issue;
    2. makes major or complex changes;
    3. involves significant cross-agency or cross-jurisdictional issues;
    4. is particularly sensitive;
    5. requires urgent implementation;
    6. involves new or complex delivery systems; or
    7. have been developed over a very short period.
  2. Issues that may be addressed in an implementation statement include:
    1. implementation strategy (including financial implications) – identifying key strategic implementation milestones and associated funding;
    2. risks to implementation – listing risks at particular implementation milestones;
    3. stakeholders – briefly describing key stakeholders involved in implementation and delivery, including any other jurisdictions or agencies and setting out the mechanisms for engagement/consultation and any timing imperatives;
    4. success criteria – setting out how the success of the proposal will be assessed (e.g. key performance indicators) and by when;
    5. governance – briefly describing key accountabilities, including reporting mechanisms to government (e.g. Cabinet Committee), lead agency/minister (where relevant); and
    6. resourcing/contracting – where applicable, addressing major resourcing issues pertaining to the proposal (e.g. significant staffing and training requirements, major capital, infrastructure or system requirements) and significant or sensitive contracting and procurement issues.
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Information on Implementation – Budget-related proposals

The inclusion of information fields on the implementation of new measures aims to inform Senior Ministers’ and Cabinet deliberations on new policy proposals coming forward in the Budget context.

The aim of the process is to provide as much assistance as possible to proposing Ministers and Cabinet on the deliverables, risks and timeframes associated with a measure.

This information is provided in cumulatively greater detail, from Senior Ministers’ Review through to the Portfolio Budget Submissions. The key outputs and milestones form the basis of implementation plans which may need to be lodged with the Cabinet Implementation Unit as the basis for reporting to the Prime Minister and Cabinet.

A risk rating must be provided for every proposal, and a global risk rating for each proposed package of measures. The ratings should take account of the risks inherent in all key stages of the implementation process. The risk ratings should not be used to argue for or against the adoption of policies or options, but provide a frank assessment of the implementation risks involved in the delivery of the proposed measure, as described below. Care should be taken to identify the risks that may arise at each stage of the measure’s implementation, how the risks will be handled and by whom.

Proposals that fall into the following categories will automatically be considered to be at least of medium risk:

  • addresses a major or complex issue;
  • involves the introduction of major new technologies or service delivery arrangements;
  • involves extensive cross-portfolio coordination;
  • involves cross-jurisdictional coordination;
  • are particularly sensitive;
  • requires urgent implementation (unless the proposal in question is particularly straightforward); or
  • have been developed over a very short period.

For other proposals, three key issues need to be considered to determine whether a low, medium, high or extreme risk rating is warranted:

  • the nature of the sources of risk, as effective treatment relies on a thorough understanding of these sources.  Are there more systemic issues generating this risk that need to be considered?
  • the likelihood that the risk will arise; and
  • the extent of the impact if the risk eventuates.

Discussion of a new policy proposal with the relevant service delivery agencies is a key assurance and risk mitigation factor.  These discussions should take place at the earliest opportunity in the policy development process.  A low risk assessment will generally not be accepted for any measure of significance where such discussions have not taken place.
At a minimum, Ministers would need to be assured on the following factors before certifying a proposal as low risk:

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  • the projected timeframes for the measure are realistic and can it delivered against the milestone commitments
  • there is little likelihood of a cost overrun
  • there are good prospects for delivery in accordance with the Government’s expectations? 
  • there are minimal risks associated with stakeholder acceptance and support.

The risks to a proposal’s delivery should be assessed for all stages of a measure’s development and implementation.  Questions to be considered include (this list is not meant to be exhaustive):

Objectives
  • Are the deliverables clearly defined
  • Are the deliverables able to be delivered on time, on budget and to the government’s expectations
  • Are critical success factors defined and how they will be measured?

Scope

  • Is there clarity around the scope of work, including the need for further micro policy development?
  • Is there a need for cross-portfolio implementation
  • Is there agreement between policy and service delivery agencies?
  • Significantly extended roll-out or delay between delivery and impacts

Political / stakeholders
  • Is there potential embarrassment for the Minister or Government
  • Is there a need to negotiate with State Governments or other providers
  • Are there potential adverse impacts on the community or the private sector
  • Will there be resistance encountered in the implementation phase?
  • Are there any potential hazards to the public?

Governance
  • Is there clarity in the governance structures (especially regarding roles and responsibilities)?
  • What risk management procedures in place to manage risks and implement contingency plans for unforseen events?

Timing

  • Is the timeframe realistic?
  • Are the proposed milestones identified and achievable?
  • What are the dependencies that need to be managed
  • What is the impact of slippage and the relevant contingencies?

Financial
  • What is the degree of confidence with the initial costings?
  • What is the likelihood of unexpected costs?
  • How will changes to costings be managed?  Note: while major expenditure or savings proposals do not necessarily generate a high risk, proposals involving significant expenditure or savings warrant particularly close examination

Legislative
  • Is there a need for major and/or sensitive legislation/regulations?
  • What is the likelihood of passage through Parliament?

Resourcing
  • Are there the necessary resources (eg people, skills, and equipment) to achieve successful implementation?

Related projects / programmes
  • Do any related or subsidiary projects / programmes impact on the measure?
  • Is the measure dependent for its success on any other initiatives or projects?
  • Is the required infrastructure in place?

Procurement
  • What is the complexity of the supply-side arrangements (eg single supplier, network etc)?
  • Is there depth and capability in the provider market
  • Is there the expertise and resources available to manage suppliers ?

Technical
  • What is the extent to which the project involves innovative solutions?
  • What is the impact on delivery organisations (eg amount of change required)
  • What is the impact on existing systems and data

Communications
  • How important is a communications strategy?
  • What are the key messages that need to be communicated?
  • Can these be communicated in the time available?

Having identified and assessed the risks, the risk rating allocated in the new policy proposal will be based on an assessment of the likelihood of risk occurrence; its potential impact (consequence); and the residual risk after risk treatments have been applied.  For consistency across the Budget, ratings should be based on a matrix along the following lines:

Qualitative Risk Analysis Matrix

Qualitative Risk Analysis Matrix

Rating risk level:

(E)

Extreme risk - detailed action/plan required

(H)

High risk - needs senior management attention

(M)

Moderate risk - specify management responsibility

(L)

Low risk - manage by routine procedures

Likelihood:

A

Almost certain - expected in most circumstances

B

Likely - will probably occur in most circumstances

C

Possible - could occur at some time

D

Unlikely - not expected to occur

E

Rare - exceptional circumstances only

Consequences:

5

Severe - would stop achievement of functional goals / objectives

4

Major - would threaten functional goals / objectives

3

Moderate - necessitating significant adjustment to overall function

2

Minor - would threaten an element of the function

1

Negligible - lower consequence

Further resources on the processes for identifying, assessing and managing risk are available from the Cabinet Implementation Unit at PM&C (telephone 02 6271 5251 or e-mail to implementation@pmc.gov.au

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Last Updated: 16 October 2006