Fresh from heavily criticising the Ministry of Health’s financial management, Treasury is now asking questions about the economics (or lack of)  behind one of the Budget showpieces, the national bowel cancer screening programme.

The programme gets a red flag in Treasury’s Major Projects Performance Report for November 2015 to February 2016.

In the Budget, the Government provided $2.2 billion for health over the next four years of which $39.3 milion was allocated to a national bowel screening programme scheduled to begin in the Hutt and Wairarapa DHBs  next year.

The report says: “The initial monitoring delivery confidence assessment for this new entry to monitoring is Red due to issues that reduce confidence that the programme can meet the time frames and costs indicated in its business case.

“The programme has had a highly compressed timeframe (three months) for completing the Programme Business Case (PBC) that did not allow sufficient time to consult with other parts of the health sector to sufficiently test assumptions, costs, benefits and timeframes.

“Specific areas of concern are: the level of the DHB Capital bid; workforce assumptions; an assumption that DHBs will absorb related costs; screening method options; and IT systems development timeframe risks.”

Treasury concedes that the strategic case for the programme is compelling but says more work needs to be done to specify the details and evidence that the proposed approach will deliver good value.

Health Minister Jonathan Coleman has defended the programme saying: “Treasury give advice in the leadup to a Budget and frankly, I don’t necessarily agree with all their advice either. 

“This is something that absolutely needs to be done and the Ministry of Health is absolutely focused on delivering it.”  

The bowel screening project is the only major project with a full red flag — the Christchurch central redevelopment programme over which Treasury and Minister Gerry Brownlee clashed back in April has now been elevated to an only partial red flag.


The $1.338 billion programme includes the Christchurch Convention Centre, a multi purpose sport and entertainment stadium, the redevelopment of the Square and the earthquake memorial.

But Treasury does have some worries about Otakaro, the crown company established to manage the central city projects.

It says Recruitment into Ōtākaro has started, “though executive recruitment will take time.”

 “Treasury recommends the immediate appointment of at least one executive, or the transfer of a CERA programme executive on a short-term contract, to mitigate risk.”

But Mr Brownlee in his role as Minister of Defence is presiding over a series of delays in re-equipping the defence forces.

The report says that the ship to replace the oil tanker HMNZS Endeavour has been delayed while the White Paper on defence is awaited.

That White Paper – expected next week, six months after its promised delivery date —- is extended to place an increased emphasis on the Navy being able to operate in Antarctic waters.

That would have design implications for any new oil tanker.

There is no detail in the report on the proposed replacement of the C130 (Hercules) transport aircraft.