Objective

The policy objectives are:
1. to ensure sound governance of DHBs commensurate with their role and responsibilities
2. to provide DHBs with an appropriate range of powers, and freedom to manage their affairs, while enabling the Minister to exercise control where necessary and desired
3. to ensure that DHB Boards have clarity over their role and accountabilities
4. to provide appropriate mechanisms for communities to have input into DHB deliberations

Statement of the problem and the need for action

2. The combination of elected and appointed members on DHB Boards creates a perception of dual accountability within Boards: to the Minister of Health, and through elected members, to the community.

Feasible options to achieve the desired objectives

3. The paper concludes that the only feasible option to ensure sound governance is to establish a single, clear line of accountability between Boards and the Minister of Health. Without this it will be very difficult for Boards to manage their affairs effectively and efficiently and manage the dual responsibility they may feel.

Non-regulatory measures

4. The nature of the policy objectives means that there are no viable non-regulatory interventions available

Regulatory measures

5. Governance arrangements for DHBs, and in particular the detail of the establishment, composition and function of the Boards will be included in legislation, or legislation will enable the Minister of Health to determine such arrangements. The proposed governance arrangements will be captured in the New Zealand Public Health Services Bill

Statement of the net benefit of this proposal

Benefits

6. The key benefit of having a single line of accountability between DHB Boards and the Minister of Health is that Boards will be in a position to be able to balance the many, potentially competing considerations which will arise:
   1. the Government's policy objectives as mandated through accountability documents
   2. the interests of the community
   3. consumer interests
   4. Maori aspirations
   5. the long term interests of DHBs
   6. the use of public funds appropriated for a particular purpose

   Costs

   7. The cost of having a single line of accountability is the potential for concern from the community and elected DHB Board members that the community's views have not been adequately taken into account and their preferences reflected in the purchasing of services. This can be managed through strong accountability arrangements between the Minister and DHBs which include a requirement to establish strong links with their communities.

   Consultation

   8. The following agencies were consulted in preparation of the attached Cabinet paper: Health Funding Authority, Crown Company Monitoring Advisory Unit, Department of Prime Minister and Cabinet, The Treasury, Te Puni Kökiri and the State Services Commission.