8 ways public servants can help service providers prepare for the NDIS

By Stephen Easton

Friday February 24, 2017

One of the big challenges of the National Disability Insurance Scheme roll-out for state and territory governments is helping the mostly nonprofit service providers transition from block funding to the new era, and the New South Wales audit office thinks the state Department of Family and Community Services is doing a pretty good job in that regard.

The change is reflected mainly in survey results. When FACS assessed the transition progress of NSW providers in late 2015, it found almost a third were highly likely to need extra assistance to be successful in the NDIS era and was only confident that 14% would be OK without further help.

The audit office reports its survey of 299 providers in August last year, less than a year later, found most providers felt they were “on track to transition to the NDIS successfully” and 62% felt the programs and resources funded by FACS, and delivered via the peak bodies that represent the providers, had improved their readiness for the NDIS, with 54% saying they had made changes that “had a lasting impact on their organisation” as a consequence. Almost 20% of respondents had participated in an NDIS trial site and 49% operate in an area where the NDIS commenced in 2015–16.

As well as looking at his own state, deputy auditor-general Ian Goodwin provides eight “broad principles that may be relevant to other departments and agencies that are seeking to develop the non-government sector to deliver human services” in the new report:

  1. Commence work to increase the capacity of the non-government sector early to allow time for service capacity to be built in a sustainable way.
  2. Decide whether to increase the capacity of the sector by supporting existing providers to expand their operations, attracting new organisations from outside the existing provider group, or some combination of these.
  3. Tailor approaches to supporting groups that have additional support or access needs because of cultural or geographic factors.
  4. Define the desired outcomes for people using services and, where possible, include outcomes in service delivery contracts.
  5. Invest in the sector by partnering with sector peak bodies to deliver capability programs.
  6. Include one-to-one support and mentoring in capability building programs where possible to improve the targeting of support to the specific needs of providers.
  7. Collect baseline information on provider capability before commencing programs and build robust tracking and evaluation into their design.
  8. Establish whole-of-government governance arrangements to ensure roles, responsibilities and accountability for delivery are clear.

The ideas behind the NDIS didn’t just come out of the blue, and Goodwin notes that by “moving services provided by government into the non-government sector, funding early intervention and community-based disability support, and introducing some individual support packages” in the years before the NDIS was conceived, NSW was already moving away from the older model of institutional, one-size-fits-all services directly provided by government agencies.

The audit, completed in December, found the NSW department’s funding decisions over the past decade lined up with NDIS goals like “increasing support for people with disability to be more involved in the community and giving people with disability more choice about the support they receive” and that its investments in growing the sector, both in size and capability, have born fruit.

The department’s capacity-building work revolves around making sure “the business and operational systems of non-government disability providers are adequate but “its understanding of the outcomes for people using the services is limited” according to the report.

Goodwin decided FACS needs to do more work to build the sector’s capacity to support “people with the most complex support and access needs” and offered four recommendations in this regard:

  1. Work with the Australian Government, NDIA and other NSW Government agencies to identify gaps and develop the capacity of specialist clinical services, focusing on regional and rural areas.
  2. Continue to implement projects to increase the number of organisations that can support Aboriginal and Torres Strait Islander and culturally and linguistically diverse communities.
  3. Target remaining capability building assistance to less prepared providers, including via one-to-one support and mentoring in identified areas of weakness.
  4. Continue working with the Australian Government and the NDIA to ensure lessons from sector capability programs are shared.
Image: NSW Public Service Association.

The public sector union protested against the privatisation of NSW Government’s home care and disability services as part of the state’s transition to the NDIS, with the support of some people with disability and carers, and the biggest concern was that the groups mentioned in the recommendations above would suffer in particular.

The sale of the home care service to Australian Unity continues to be criticised by clients and the massive non-government organisation has accepted there are problems with the transfer, according to a report in the Newcastle Herald.

Despite the NSW department and the federal National Disability Insurance Agency working on building the capacity and capability of the sector, the auditors see “a risk the market will not expand quickly enough to meet the increase in demand for services” remaining.

FACS spent $30 million on delivering non-government sector “readiness” programs focused on “business strategy, corporate governance, financial management and marketing” in partnership with peak bodies. “The larger programs were evaluated and received positive feedback,” the auditors observed, and they felt the approach “gave the sector some responsibility for developing its own capability, which is important because the sector will not receive support from the NSW Government after the transition to the NDIS.”

But the overall impact of that funding is hard to quantify because the department failed to collect baseline data to compare against or set improvement targets before the programs began:

“The overall effectiveness of the Department’s spending on provider capability is not clear. The Department had some information on the general financial health and organisational capability of providers from previous industry development work. However, baseline information on provider capability was not collected before programs commenced and targets for improvements in provider capability were not set. Without this information, the Department cannot demonstrate clearly that the capability building programs it funded represent good value for money.”

The auditors believe the sector — which is 87% nonprofit or charitable, according to their own survey of 299 providers, and includes some local government providers funded by FACS — also needs support from carers and other sectors to be sustainable. Organisations that are not specifically geared towards supporting people with disability “will need help to make their services more accessible and inclusive to people with disability” as a result.

The auditors were happy with the governance arrangements for the transition developed by FACS and its contributions to the NDIA’s work on national policy and strategy around the roll-out. The report also confirms the department “shared sector readiness lessons” with its Commonwealth counterpart:

“Two NDIS sector readiness programs funded by the NSW Government were later expanded to national programs through funding from the Australian Government. New South Wales only received around five per cent of the total Australian Government funding for NDIS sector readiness initiatives. A report by the Australian National Audit Office in 2016 found there was limited evidence of a strategic approach by the Australian Government when allocating this funding to states and territories.”

The audit also notes approvingly that FACS has kept an eye on emerging “administrative issues” for providers and tried to fix them, “although some issues, such as the operation of NDIA administrative systems, are beyond its control.”

There were 78,000 people with disability receiving services in NSW that cost the state government about $3.3 billion in 2015-16, provided by a workforce of 25,000-30,000 working for just under 700 providers.

When the NDIS funding packages are available to all eligible NSW residents, the number of people receiving support is expected to jump to 142,000 and the total funding to $6.8 billion, requiring a workforce in the non-government sector of 48,000-59,000, according to the report.

At the federal end of things, the Productivity Commission has just released the issues paper that precedes its new inquiry that seeks to update the Commonwealth on what it’s all going to cost — noting, of course, the four insurance principles on which the scheme is based. As explained on the NDIA website:

  • the total annual funding base required by the NDIS is determined by an actuarial estimate of the reasonable and necessary support needs of the target population. The NDIS continually compares these estimates of utilisation and costs with actual experience and outcomes;
  • the NDIS takes a lifetime approach (i.e. seeks to minimise support costs over a participant’s lifetime) by investing in people early to build their capacity to help them pursue their goals and aspirations resulting in greater outcomes later in life;
  • the NDIS will invest in research and encourage innovation; and
  • the NDIS has the ability to act at the systemic level, as well as fund individual support needs. This is especially important for people with disability who are not participants (see also information, linkages and capacity building).

Submissions to the PC inquiry are due on March 24. There will be another round of consultation and a final position paper will be published in May.

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