Senate Inquiry report damning of destructive, disrespectful Commonwealth community service tendering processes: ACOSS

17 September 2015

ACOSS has welcomed the findings of a comprehensive Senate Inquiry probing the devastating impacts on the community of $270m in funding cuts within the Department of Social Services, which are now being implemented.

“The Report confirms the community sector’s view that the Commonwealth tendering process of community services, following the Federal Budget in 2014, was the worst of its kind in living memory,” ACOSS CEO Dr Cassandra Goldie said.

“During the Inquiry, Senators heard from one organisation after another about the myriad ways in which the tender process had failed: bad process and bad outcomes with devastating impacts. The Inquiry Report verifies that the extent of the cuts – totalling $270 million over four years – left many people, vulnerable and in need, without critical support and services around the country.

“Based on overwhelming evidence, the Committee concluded that the 2014 tendering process was ‘poorly planned, hurriedly implemented, and resulted in a loss of services.’ It was damning of the process which ‘does not seem to have been equitable and transparent’ and undermined many of the outcomes.

“The Committee said subsequent gap-filling funding decisions, coming so shortly after the tendering process, were ‘effectively an admission that the process had significant flaws’.

“ACOSS and many witnesses to the inquiry highlighted the department’s failure to identify and communicate areas of need prior to conducting the tender and develop a funding strategy that addressed key priorities. The Committee concluded that this was a major shortcoming leading to loss of services in areas around Australia, particularly in housing and homelessness and emergency relief.

“As recommended by the Committee, the department must immediately make public its analysis of service delivery gaps, to ‘increase transparency and enable informed discussion of a strategy that ensures vulnerable people are properly supported right across Australia with no gaps’.

“The Report found that the timelines for the tender process were too short to allow for considered applications to be produced, causing a great deal of strain for services. It points out that the subsequent multiple funding extensions offered to organisations did not take into consideration the unique challenges faced by organisations winding down services and referring clients on to other services. The Committee shared the community sector’s deep concern that the loss of services and uncertainty around services had ‘potentially negative impacts on the health and well-being of vulnerable clients’.

“Importantly, the Committee acknowledged that in some circumstances, competitive tendering processes may not meet the needs of the community sector, and recommends the adoption of alternative processes to ensure there are no gaps in service provision in the future. ACOSS has long argued that a market-based approach to service tendering does not necessarily result in better outcomes for the community sector, and can often prevent the collaboration and coordination at local level essential to improving service delivery in an efficient way.

“The Senate Inquiry report expressed concern about the defunding of advocacy and peak organisations, which will ‘impede their ability to advocate on behalf of members of the community and community service organisations, including in consultations and policy reform which are designed to achieve the best outcomes for service users’. ACOSS strongly supports the recommendation that advocacy support ‘be considered a vital component of community services in future funding arrangements and is given appropriate weighting in funding assessments’.

“We have been delighted to hear the new Prime Minister highlight the need for a more collaborative style of government in an open democratic way. This Report sets out how the Government can do so, in the crucial area of community services.

“In light of these compelling findings, ACOSS calls on the Government to immediately implement all 12 key recommendations.  As the Committee noted, the general concern expressed by witnesses was that ‘the process was deeply disrespectful and had damaged their relationship with the department’.

“We urge the Government to work with community service organisations to repair this relationship and get the process right – starting with determining adequate funding levels to meet community needs and ensure social and economic participation. We need an urgent review of where critical service gaps continue to exist and this must done in an open way with the public, with service gaps identified promptly filled to make sure that very vulnerable people get the support they need.

“ACOSS also concurs with the Committee’s recommendation that the Auditor-General conduct its own review into the tendering process. This would enable us to get to the bottom of what happened in this “broad-banded” competitive tendering process, the likes of which has never been seen before in community services provision in Australia.

“Australia’s community services sector contributes 5% of national GDP and employs around 8% of people across the country. At a time of increasing hardship amid a slowing economy and rising unemployment, we should be bolstering efforts to support people who are falling behind, not weaken important frontline services,” Dr Goldie concluded.

Media Contact: Fernando de Freitas – 0419 626 155

DOWNLOAD Full Senate Inquiry Report

More Information:
List of 12 Recommendations
ACOSS Submission to Inquiry

About the Inquiry:
Australian Senate Community Affairs Committee Inquiry
Impact on service quality, efficiency and sustainability of recent Commonwealth community service tendering processes by the Department of Social Services.