Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

I present an interim report of the Community Affairs References Committee on the Commonwealth community service tendering processes by the Department of Social Services together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

I move:

  That the Senate take note of the report.

The committee is presenting this interim report to report on progress on its inquiry into the impact on the service quality, efficiency and sustainability of recent Commonwealth community service tendering processes by the Department of Social Services. We have held one hearing to date for this inquiry, and we have received 97 submissions so far. There are some very important issues that have been brought up so far by the submissions and at the day of hearing. As there is so much information and as the committee also has a heavy workload, we sought earlier in the Senate to extend our reporting date to August. However, because there are some key processes that are happening now—and I will go into those in a minute—the majority of the committee felt it was important to consider this interim report.

The grants process was a new process introduced when the government came in. Announcements were made during the budget about how the new programs for providing social services and supports would roll out across the country. The department opened a very extended tender process—extended in terms of what it covered, the particular services that were covered, and the grants that were covered—and they did it in a very short time frame. One chapter of this report deals specifically with one aspect of the process that we looked at during the hearing and from the submissions that we have received to date. I think it is fair to say that, from the submissions and the oral evidence that we received, there is overwhelming frustration in the community sector about the process that the government, through the Department of Social Services, undertook through this grants process. The report looks at the process around the tender time lines, the process of communication and communicating a funding strategy and engagement with the sector. There has been a huge amount of criticism of all of those things. The things that people are extremely concerned about are not only the short time frames—and I will go into that in a second—but also the fact that they were notified about the results of the tendering process just before Christmas. The impact on providers, both those who were successful and those who were unsuccessful, just before Christmas, was intense—and that just added to the level of overwhelming frustration.

What we have done with the evidence that we received and the comments and the evidence that people gave orally and through written submissions is compare the process with what the Commonwealth grant guidelines say should be done and also with the ANAO's Implementing Better Practice Grants Administration processes. The Department of Social Services, when they came before the committee—and I have to say the committee will be calling them again, because we ran out of time to enable us to ask all the questions that we had—said that they had complied with those guidelines. I am sorry to say that the evidence that we have received to date does not support that claim. It does not support the claim that they have complied with either the Commonwealth grants guidelines or the ANAO's recommendations in Implementing Better Practice Grants Administration. We have also found that there are some holes in the Commonwealth grant guidelines, and the committee is recommending that the Auditor-General have a look at those processes.

There was a short time frame between announcing in the budget that this process was going to be thrown open and when applications opened. There was no consultation with the sector around what the tender process would look like or what was in the tender process—and, in fact, the grant guidelines say that should happen. The department said at estimates: 'No, we can't possibly talk to the stakeholders, because this is a competitive tender process.' That is not what the guidelines say. There was a very short time line for the tenders to go in, and there was a lot of concern and misunderstanding about what was required for the tender process, because this was a whole new process. As I said before, there is a great deal of concern about the time frame and what happened with the pre-Christmas—just days before Christmas—announcement, and also the time process for signing off on grants.

What the committee in its interim report is recommending is that the Auditor-General consider a review of the 2014 Department of Social Services community services tendering process. One of the reasons we want to report now is that the ANAO is currently considering its program for the next round of auditing review processes, and we thought that it was important to make a recommendation that the tendering process go through that audit review. We are also recommending that the Auditor-General consider reviewing the 2004 community service tendering process conducted by the Department of Social Services, with a view to updating the Commonwealth grant guidelines, because the committee process has identified some gaps in those guidelines in terms of how they send the appropriate signals to departments when they are carrying out tendering processes.

This is only an interim report. Quite frankly, we have only touched on a portion of the issues that have been raised by the submissions and the oral evidence that we have received. The report only reflects some of the extreme frustration that the community sector continues to feel with this process. When we finally report on the rest of the terms of reference of this inquiry, we will be canvassing all the issues that have been raised with us by the community, and we will endeavour to reflect the sense of frustration that the sector feels in terms of the way that this process was carried out.

Claire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | Link to this | Hansard source

There were two reasons for this committee to consider this particular tendering process. One was to reflect—as indeed Senator Siewert has put on record—the intense frustration across the community sector with the way that this particular tendering process operated. The second—leading on from frustration and the desire to do things better—was a need that this should not happen in this way again.

It is important to acknowledge that we, on the committee, have seen and talked with the government representatives on a number of occasions: through some extremely long and quite difficult—I would even use the term 'robust'—discussions through Senate estimates; as well as through a number of exchanges of information through the committee hearing; and through documentation that continues to be exchanged about exactly what happened in this tender process. Throughout that, there has never been a sense that we have underestimated the amount of effort and commitment that the people in the department have expended in this exercise. There is no question that there is commitment within the Department of Social Services to ensure that community receives effective services, and we do not want to be seen as in any way making unjust criticism. But when we see the evidence in the over 90 submissions that were provided to this particular exercise, expressing concern, frustration and anger about the way that the process operated, it is important that we, as a parliament, respond to that and look at exactly what happened and look at suggestions into the future.

There is no such thing as a perfect competitive grants process. There will always be difficulty; there will always be different views; there will always be disappointment about the results. But, in my opinion, the particular process that happened from June last year was a textbook example of how something should not occur. There was an overenthusiastic and overoptimistic expectation of how the process operated. In terms of the environment, we had very significant machinery of government changes to the way that the departments operated and the number of grants. Indeed, as we have heard many times, under the machinery of government changes there was an amalgamation of 18 discretionary grant programs from five former departments. So that was an enormous change, and just the mechanisms of working together and making sure that it would operate were a significant challenge to all included. On top of that, there was a significant government decision—a funding decision—to cut over $250 million from the pool of grants available.

That situation was building up to what was almost a perfect storm: you had a major government change, you had different processes operating, you had previous departments being pulled together, you had a significant financial restriction, and you also had a very tight time frame under which this should operate. All of that was going to cause problems. My major issue throughout this whole exercise is: it was clear that there were going to problems, it was clear that it was going to be a major exercise, but until the end of the process it was very difficult to get anyone to acknowledge that there were problems.

When we asked questions, we were given polite answers saying, 'It's okay. Trust us. It's going fine'. Not only were those answers given to members of the Senate, they were given to the people who were applying for grants in the process. There was limited time for information, before every applicant had to have extraordinarily detailed applications in to the department. However, from that point onwards, there did not seem to be any particular time frames. In fact, there were two extensions of the time to make a decision sought and provided to the department and to the minister. There was, inevitably, some tension from the very people who were trying to ensure that their clients were going to receive effective, appropriate, well-resourced services. The time frame and the pressure under which they were operating seemed to have been contrasted with the way that the department was not able to respond on time, effectively and personally to the people who were involved in this grants round.

There are a range of documents which set out how grants should be done. We had a Productivity Commission inquiry several years ago which talked about the need for a respectful relationship between the people in the community providing services and those that fund the services. A key aspect was to have effective, transparent communication with a genuine respect for those people who were providing information when they were seeking a grant.

Of the whole process, the thing that frustrates me most—and that is a very big call, as I know Senator Siewert agrees—is that there did not seem, on the evidence that we have seen, to be that genuine respect between the funding body and those organisations in the community with extensive experience who were actually applying for grants. We acknowledge that there had to be decision made. It was a competitive process, but throughout that, there should have been an acknowledgement and a respect for the experience of those organisations and the actual business needs of those organisations in terms of making decisions that would fit their staff—if a negative decision came out, how they would effectively terminate the process and how they would work with the community who were receiving the services to ensure that they continued to receive whatever the program was. This was particularly important when we were looking at support services, counselling services and services around emergency funding, which were of immediate need to community members. This did not seem able to be effectively translated between the funding body and the organisations.

I am not saying that the department did not care. I am saying that they were not able to effectively communicate that care. We have had a number of statements from organisations that have been working within the system for a very long time talking about their anger, never having seen a worse performance, never having felt so disrespected, not feeling confident that their wishes were understood and, most importantly, not feeling capable of having effective communication between the funding body and the organisations.

This report is important. I think it is important for a number of reasons. Firstly, it gave the organisations who felt abused by the process the opportunity to express their feelings and talk about what happened to them in the process and, most importantly, talk about how across the board the process could be done better in the future. That is why we had this committee inquiry—to look at how we can do this better in the future. We have a majority report which recommends that we have a good look at this through the audit process. Through the audit process we will be able to look very closely at the processes that were put in place, what was done, what could have been done better and the impact of effective grants processing.

I really commend this report to the department. I commend it to the organisations that were generous enough to provide us with their experiences. I think it is absolutely critically important for the effectiveness of future funding grants rounds and the effectiveness of government services in the wider community to learn from this experience, to acknowledge what happened very openly and to work clearly in the future to rebuild a positive relationship with organisations and the community because, without that, none of our services will work. I seek leave to continue my remarks later.

Leave granted; debate adjourned.