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

I present the report of the Community Affairs References Committee on 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.

Basically the committee was looking at the tendering process for Department of Social Services grants, commonly called DSS grants. The process was ironically called A New Way of Working for Grants. The department said it was 'a new, broadbanded discretionary grant programme structure which will strengthen our capacity to deliver grant programmes, services and support to individuals and families.' I think it is fair to say from our grants inquiry that that process did not strengthen our capacity to deliver grants, programs and services and the tender process did not pay off as the department thought it would. The benefits that the department and the government thought would eventuate have not come to fruition. In fact, many people think that it built in more inefficiencies and that the administration burden was not eased.

Before I go on, I would like to thank all the participants in the inquiry—the people who made submissions, the witnesses who appeared before us and of course the ever hardworking community affairs secretariat, who, once again, have done an extraordinary job pulling together all the evidence from the many submissions that we received.

This is in fact our second report. We did report earlier in the year on some of the process-related issues and around the Commonwealth grant guidelines and the ANAO process. These recommendations—we make 12 more—build on those recommendations. Many issues were brought up during the committee's inquiry. There was particular concern about the loss of services around Australia, including emergency relief, housing and homelessness services, and of course the impact that the loss of those services has on the service users, who are, when all is said and done, what this process is about. We are also deeply concerned about a diminishing vibrant and diverse community sector and about the need to highlight the point that this sector needs to be supported and maintained.

We also looked at the issues around transparency and accountability and we mention that in the report. One issue that came up there is the fact that we have lost some of our smaller service organisations and bigger organisations have, to a certain extent, taken over those contracts but then have subcontracted back to the organisations which lost the grant in the first place but which were told, 'By the way, you do it without getting administration support.' In other words, it is having a negative impact on that smaller organisation. But that then rolls out to the people who they are in fact working to support and that of course increases their administration burden.

Concerns are articulated in the report around the termination and loss of staff that some of these organisations have experienced and the poor timing in terms of notifications; the lack of indexation and varying indexation rates where organisations are getting indexation; the defunding of advocacy organisations and the changing of timing; and the withdrawal of some funding lines during the process.

The department has recognised that there are significant problems with this process and has organised its own internal review, the NOUS review, which is into the internal processes, not some of the outcomes but which has—get this!—not been publicly released, which is also of concern to the committee. We make recommendations around publishing any gap analysis that the government has already done of gaps in the provision of services. We talk about issues around the tendering process and the fact that it might not meet the needs. Some of the evidence we received was to the effect that the tendering process did not meet the needs of smaller organisations and they were therefore consequently shut out of the process. We recommend in any future tendering process the weighting of the way that smaller community-based organisations work and the value they bring with the unique and specialised services they provide. We also recommend that this issue around subcontracting be looked at.

Very serious concerns were raised about data and what data the government now wants organisations to collect. We make recommendations about indexation, that the NOUS review of the process should be released publicly and that an urgent review be conducted as to where the critical service gaps continue to exist.

The government acknowledged that there were problems with this process because, after they announced the initial tender process, they then released more funding to cover some of those gaps that had been identified. I think it is fair to say that there is no reassurance in the community that all those service gaps have been recognised and plugged.

The committee recommends that, after 18 months of operation, an independent evaluation be undertaken to determine if the outcomes of the tender process have in fact improved services, which is what the government claims that it should be doing.

The committee also recommends that the Auditor-General conducts its own review into the tendering process, including examining the department's pre-tender work and identifying service needs, because that was another issue that came up, and also, importantly, by region. The committee could not identify that the department carried out any analysis of the impact of the tendering process at a regional level. The committee did do that. We talked to three regions to make three case examples, Geraldton, the south coast of New South Wales and Western Sydney, to look at what the overall process, a withdrawal of services and the tender process, was on those regions. The department had not done that and we did in fact identify some adverse impacts in a regional context when you are withdrawing and changing funding for services at so many levels.

We also recommend that the Auditor-General in that review also looks at the subcontracting process, the capacity of community-based services, whether the capacity has been reduced and whether the issues around, for example, Aboriginal communities and CALD communities had been factored into the tender selection process and then looks at the impact of the process on the delivery of services, advocacy and support available to vulnerable people and communities.

This sort of process should never happen again—to throw all these particular grants up in the air in such a short period of time, on top of a significant cut to funding, because overall they were dealing with taking out $270 million through this process. This should never happen again. It is very obvious that it has caused enormous distress to the community sector. There are gaps in services, there are cuts to services, it has not produced a better process and, when all is said and done, it has not produced better outcomes for the most important people who we need to look at in this process, the users of the services: the vulnerable members of our community.

Carol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | Link to this | Hansard source

I too rise to speak on the Senate Community Affairs References Committee's final report into the Department of Social Services community services tendering processes. This inquiry came about as a result of the government's savage $270 million of funding cuts to community services grants and the shambolic tender process that followed. The evidence to the committee was that the multiple concurrent tender processes, the unworkable timeframes and the poor engagement and communication with the community services sector only compounded the devastating impacts of the government's $270 million cut to funding for community services.

The committee heard evidence from individuals and organisations that have committed years and even decades to supporting some of the most at-risk and vulnerable individuals, families and communities in our country. One thing that was frequently noted by these individuals and organisations—and Senator Siewert touched on this in her contribution on this report—was the complete lack of respect the department and the government had shown throughout the tender process and in their dealings with the sector. Ms Susan Jane Helyar, Director of the ACT Council of Social Service, told the committee:

I just think we need to affirm to you that the ACT Council of Social Service and our members have described this as the worst tender process they have been part of. Members of ours have talked about never having been treated like this by any form of funder. I think it has been characterised by completely reckless disregard for the work that people do and the contribution that they seek to make.

She said 'reckless disregard'. I think those comments from the ACT Council of Social Service really tell the story of the funding cuts and the process that was undertaken. The funding cuts and the tender process made it blatantly clear that this government do not understand the critical importance of the community services sector. They simply do not recognise the importance of these organisations in building inclusive, strong and resilient communities and families.

While I encourage everyone in this place to read this report and the committee's interim report in full, I will take a few moments now to highlight a couple of the recommendations that the government needs to act upon immediately. The committee recommends that an urgent review be conducted of the critical services gaps that continue to exist, that this review be made public and that these gaps are met immediately to make sure that very vulnerable people get the support that they need. This cannot be achieved without completely reinstating the full $270 million in funding that the government has axed. By the government's own admission, the cuts and the tender process have created service gaps across the country. The government has made some attempts to address the gaps but I fear these decisions have been short-sighted and politically expedient. This is one of the reasons that an Auditor-General's review of the conduct of the tendering process has also been recommended. Critically, the report also makes recommendations about the need for five-year contracts and adequate indexation of funding to provide certainty and sustainability in the sector.

I would like to highlight the acknowledgement in the report that in some circumstances competitive tendering processes may not meet the needs of the community sector. As we have seen in this process, combined with the funding cuts and the short timelines, the competitive tender process stifled collaboration and innovation and crippled a number of organisations—in particular, small local organisations that do not necessarily have a national footprint but have incredible grassroots connections and community engagement. The funding cuts and the disastrous tender process have devastated vital community services for vulnerable communities and individuals. I only hope that this report can highlight important lessons for future processes because this simply cannot happen again. Our community service organisations and their staff and their incredible volunteer base deserve better. Vulnerable and at-risk individuals, families and communities simply cannot afford to continue to bear the brunt of the government's cuts any longer.

Like my colleagues, I would like to thank the secretariat on their work with this report, but I would also like to take a moment to read into Hansard comments from a witness about the fact that the tender process has resulted in the loss of smaller community based services and the diversity of service provision. Volunteering Victoria gave the example of a Queensland based service provider that won a tender over an established local provided to deliver services in Tasmania, my home state. They said:

One of the objectives of the new model was to provide ‘a foundation for integrated, community-led program delivery that understands and meets local needs’ … However, we were dismayed to hear that in Tasmania a Queensland-based service provider was successful in displacing an established VSO—

a volunteer service organisation—

with strong community connections. We understand this provider has plans to expand to other parts of the country, which is also a potential threat to future funding for other existing place-based VSOs. This outcome is at odds with the Government’s stated objective and fails to recognise the value of the knowledge and connections that existing service providers have built up over many years of serving their local communities.

There are many more examples in this report of the evidence that was given to the committee about how let down they felt. First of all we had the $270 million cuts; we had a shambolic tender process; we then had Minister Morrison saying, 'If there are any gaps come to me; write to me'. That announcement by Minister Morrison about members of parliament and organisations being able to go to him to identify service gaps was just a smokescreen. There was so much concern. There was so much concern in the community and in the community service sector about the impact of these cuts and the impact of the tender process that was being undertaken. That has been borne out by the fact that Minister Morrison had to put some more money in—not enough—and then had to make what I regard as politically expedient announcements to cover some of the gaps that his cuts left.

I would like to thank the secretariat for their work on this report. It is an excellent report. I would like to thank Senator Siewert for her work as chair on the committee. I would also like to thank the hardworking individuals and organisations who took the time to make submissions and give evidence to this inquiry. It is clear that the tender process failed these organisation and the people they support and represent. I commend the report to the Senate. I seek leave to continue my remarks later.

Leave granted; debate adjourned.