Creating Confident Consumers

The Role of the Ministry of Consumer Affairs in a Dynamic Modern Economy

May 2003

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10. Key Capability Issues

• Skills
• Research and Data Collection
• Monitoring, Evaluation and Learning
• Relationships with Stakeholders
• Key Areas for Future Work

In considering what the Ministry does now, and what it should continue to focus on, it has become apparent to the Review Team that there was nothing seriously wrong with the Ministry's current approach - rather the Review Team saw the need to articulate a more specific focus for what the Ministry should be seeking to achieve. Nevertheless it was apparent to the Review Team that there are a number of capability issues the Ministry must address in order to carry out its work programme more effectively.

The key strength of the policy team lies in its ability to focus closely on delivering effective policy projects - although, being small, it has less of an ability to maintain knowledge of particular policy areas. The strength of the Consumer Information Service team is in its understanding of how things are working in the community and in its strong links with community agencies and networks with consumer representatives; but it is not currently able to access the wealth of data available that would ensure it could provide robust information on consumer behaviour and market interactions. Together, these two areas of the Ministry have not fully realised their potential for ensuring that government policy is informed by a detailed understanding of how consumers behave and interact with markets.

The Ministry is also part of a bigger organisation (MED), which it can both gain leverage from and have more influence on through bringing a consumer perspective to the development of economic policy. In order to achieve its outcomes, the Ministry could make better use of its relationship with MED as well as those it has with agencies in the community.

Another key capability issue for the Ministry is its small size. It relies heavily on very experienced staff, and is vulnerable to the loss of skills and experience.

In this section the Review Team explores the key capability issues in detail.

Skills

Highly skilled staff are key to the Ministry meeting its objectives and achieving real outcomes for consumers. The Ministry is small and any loss of experience creates succession issues.

In the policy and consumer information areas, the Ministry has a small pool of dedicated, highly skilled advisers. Maintaining and enhancing its capability to advise the Minister, government, business, and consumers, and to develop lasting and meaningful policy on consumer-related issues, will be a key to the Ministry's future success. New issues and strategic priorities will continue to challenge the Ministry and require it to maintain high skill levels in the policy and information advice areas.

Just as important to the Ministry and its clients is the professionalism and technical competence of a small group of staff in the areas of trade measurement, consumer safety, and energy safety. These areas of activity have relatively low staff turnover: staff have been with the Ministry, and its predecessors, for a considerable time (in one case 35 years). This low turnover, however, presents a difficulty in itself. In the next few years staff, particularly in the Trade Measurement area, will retire and with them will go considerable experience and institutional knowledge. Maintaining capabilities through an appropriate recruitment and training programme will present a challenge for the Ministry. It must attract enthusiastic and dedicated people and provide new staff with good training and relevant qualifications that will be recognised by future employers.

Research and Data Collection

Undertaking research into existing and emerging consumer issues is essential for the Ministry to achieve its outcomes - a stance that was supported by stakeholders in the stakeholder analysis.

Research will provide the Ministry with an in-depth understanding of consumer experience, consumer behaviour, trader experience, and trader behaviour - including the way consumers access and use information, and the way in which consumers, traders, and markets interact. Research can also serve as a radar, informing the Ministry about issues that it may decide to engage in proactively, rather than being forced into a reactive position. More generally, research will enable the Ministry to develop expertise in and collect data on consumer perspectives and consumer interests.

The gathering of appropriate information can be undertaken in several ways, some or all of which should be harnessed depending on the circumstances.

These include:

• literature search
• deliberate networking
• empirical research, including snapshot surveys
• systematic collection of statistics (possibly in conjunction with other agencies such as Statistics New Zealand)
• media searches.

The Review Team considers that the Ministry is not currently devoting enough energy to research and data collection, leaving it with an underdeveloped radar for identifying emerging issues, and insufficient information for engaging in systematic and productive monitoring and evaluation of its effectiveness.

In particular, the Ministry needs to:

• research the implications of new marketplace practices for consumer policy and delivery
• develop a more in-depth understanding of consumer behaviour.

Given that some research capability already exists in the Ministry, the issues may simply be a need for focused training and improving capacity by addressing workload issues. The Review Team anticipates that in Phase 2 of this Review the Ministry will identify how the research and data collection "gap" can be resolved and look at appropriate means of improving the Ministry's capacity.

Monitoring, Evaluation and Learning

For the Ministry to be most effective in "managing for outcomes", it needs to be able to provide robust analysis of the impact of its policy and operational outputs on the outcomes it is trying to achieve. Evaluation provides an important mechanism for improving the effectiveness of policies and programmes. Building evaluation criteria into policy proposals provides a focus on desired outcomes right from the outset. The need to think about evaluation at this stage in the policy process ensures a link between the proposed outputs and the outcomes framework. Systematic monitoring and evaluation provides a vital feedback loop into the future design and review of policies and programmes. Learning from experience can also be achieved in other ways, such as through comparative analysis across a range of countries that have similar policy settings.

Monitoring and evaluation capability is underdeveloped in the Ministry, as it is across much of the public sector. Work is currently being undertaken by central agencies to provide guidance to departments on how best to undertake effective monitoring and evaluation. Phase 2 of the Review should consider ways of enhancing the Ministry's monitoring and evaluation capability, having regard to monitoring and evaluation within the wider MED, as well as best-practice guidelines being developed across the public sector generally (for example, as part of the Pathfinder Project). [30]

The Review Team highlights the need for the Ministry to develop appropriate measures of its impact upon consumers and society generally, as a first step towards effective monitoring and evaluation. However, this is not an issue for the Ministry alone. It will be critical that other key players within the consumer outcome framework are conducting appropriate monitoring and evaluation, such that the Ministry on behalf of Government and consumers can be assured of their effectiveness.

Relationships with Stakeholders

Strategic relationships with stakeholders are an important element of any organisation's capability. The information sharing that arises out of such relationships can better inform research into emerging issues, facilitate data collection (which can be used in monitoring and evaluation), and enable work programmes to be aligned in related areas. In the product safety area, for example, the Ministry could work with ACC and/or the Ministry of Health to develop an injury prevention programme. The Review Team also notes that, given the expected role of global markets in the near future, there may be value in the Ministry consolidating and building its existing range of international relationships.

The Review Team considers that the Ministry's existing relationships with stakeholders are extremely positive, but that these relationships

• tend to be personal rather than institutional
• are in some cases underdeveloped - this includes relationships with other departments whose functions are closely aligned with the Ministry (such as Te Puni Kōkiri, the Ministry of Pacific Island Affairs, and the Ministry of Justice) and
• are not subject to regular review.

A number of these relationships are crucial to the Ministry achieving its outcomes. This includes the Māori Women's Welfare League who undertake consumer activities in the Māori community, the Citizens Advice Bureaux who provide advice on consumer law and the Commerce Commission which, via its enforcement activities, impacts on suppliers' incentives and on consumer confidence in transacting.

Internal relationships, within the Ministry and also within MED, are equally important if the Ministry is to achieve its outcomes. These, too, are underdeveloped and every opportunity should be taken to strengthen them. In particular, the relationship with MED's Regulation and Competition Branch (RCP) is important because of the close relationship between consumer and competition policy.

In addition, the Review Team has noted that the Commerce Commission's accountability arrangements are with the RCP Branch and that the Commerce Commission is the agency responsible for enforcing New Zealand's major consumer law - the Fair Trading Act 1986. We consider it is important that MCA works more closely with RCP on developing the accountability arrangements in relation to the enforcement of consumer law.

Key Areas for Future Work

The Team has identified two key areas for future work. These are:

• Enforcement, compliance and redress (including self-regulation). At the inception of this Review, questions were asked whether the boundary between policy advice on and enforcement of the Fair Trading Act is appropriate. As the Review progressed, it became apparent that this issue was too large to be considered here. Consequently, the Review Team suggests that these issues be addressed as part of the proposed review of consumer protection law and its enforcement.
• Examining the impact of changes in demographics, and evolving consumer/supplier characteristics and needs, on the ongoing effectiveness of the Ministry's current information delivery strategies. This includes considering:
  • the information needs of targeted consumers in the context of what information the market is likely to supply or not, and
  • where it is appropriate for the Ministry to supply information, how that information needs to be delivered to achieve its purpose.

[30] The Pathfinder Project is an initiative seeking to better integrate outcome information into the Public Sector Management system. See http://www.ssc.govt.nz.

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