Thank you for the opportunity to provide a submission in response to the issues paper: A stronger more diverse and independent community sector.

It is difficult to know how to respond to such a paper without suggesting that the knowledge about what is needed to strengthen community sector organisations and improve the way the Department of Social Services engages with the sector has already been clearly communicated for over a decade, and repeatedly ignored.

There is little or no contention, for instance, that the length of social service contracts requiring the employment of staff should not be less than three years, or that notice periods to end contracts should be at least six months.  There is also little contention that such readily accepted fundamentals are regularly ignored by the Department of Social Services.

More than a decade ago the Productivity Commission unambiguously laid out some of the reforms needed to boost community sector productivity through more effective and efficient contracting of non-government organisations in this report: Contribution of the Not for Profit Sector – Commissioned study – Productivity Commission (pc.gov.au)  CCA and our members support the recommendations of this report, at least ten of which relate to the way governments engage with and contract community organisations.  This report should be the reference point for any action.

In terms of paying what it takes to provide contracted services, this is another good starting point: Paying what it takes Report, Social Ventures Australia and the Centre for Social Impact

Eight years ago CCA provided a submission in relation to the way the Department of Social Services contracts NGOs.

A copy of this submission is attached (see: https://communitycouncil.com.au/wp-content/uploads/2023/01/CCA-DSS-Grants-Sub-0315.pdf). All of the recommendations in this submission remain current and CCA would like this submission to form the basis of our response to the latest issues paper.

The recommendations in this 2015 submission are:

Summary of Recommendations 

1. Australian governments should urgently review and streamline their tendering, contracting, reporting and acquittal requirements in the provision of services to reduce compliance costs.  This should seek to ensure that the compliance burden associated with these requirements is proportionate to the funding provided and risk involved.  Further, to reduce the current need to verify the provider’s corporate or financial health on multiple occasions, even within the same agency, reviews should include consideration of:

• • development of Master Agreements that are fit-for-purpose, at least at a whole-of-agency level
  • use of pre-qualifying panels of service providers.

(Recommendation 12.7 Contribution of the Not-for-Profit Sector, Productivity Commission, 2010)

2. The Department of Finance and Deregulation should develop a common set of core principles to underpin all government service agreements and contracts in the human services area. This should be done in consultation with relevant government departments and agencies and service providers.

(Recommendation 12.8 Contribution of the Not-for-Profit Sector, Productivity Commission, 2010)

3. All government tendering processes should actively involve those being contracted to provide services and those who will benefit from the services in the design and implementation of programs.

4. All government tendering processes should have a publicly stated policy goal, and a measurable indicator of success. 

5. Funding decisions need to be supported by a clear and transparent account of the criteria used to assess applicants, the process by which these criteria were applied, the information used to inform decision making, and the rationale for final decisions. 

6. Expertise in the area of service provision being contracted should be included in all decision-making panels. 

7. When entering into service agreements and contracts for the delivery of services, government agencies should develop an explicit risk management framework in consultation with providers through the use of appropriately trained staff.  This should include:

• • allocating risk to the party best able to bear the risk,
  • establishing agreed protocols for managing risk over the life of the contract.

(Recommendation 12.6 Contribution of the Not-for-Profit Sector, Productivity Commission, 2010)

8. All government contracts seeking to achieve a social purpose should have at least a 5% allocation to support the collection and reporting of appropriate performance measures.

9. Contracts with not-for-profits to provide community services should be for at least three years and no program should lose funding with less than six months’ notice.

10. Establish a closed independent feedback loop to enable NFPs a confidential solutions focused avenue in provision of feedback on government relationships with the sector.

As already noted, the questions about what needs to be done to strengthen the community services sector through better contracting arrangements have been repeatedly discussed and generally agreed by the sector, and by key inquiries and reports over more than a decade.  No doubt most of these recommendations will again be reported by the Department of Social Services in summarising this current process.

The most important question that now needs to be answered is whether the Department of Social Services has any real intention or commitment to implement any of the changes required?

Thank you for considering this submission.

David Crosbie

CEO, Community Council for Australia