This week the NDIA released its tender for Local Area Coordination (LAC) services in Victoria.
The scope of this tender is for the three areas of Victoria that will commence in the NDIS from 1 July 2016 – North Eastern Melbourne; Central Highlands; and the Loddon area.
The LAC model will involve one LAC provider selected for each of the three Victorian areas starting in the NDIS from July 2016 (each area comprises 5-6 Local Government Areas).
The total value of the tender is around $60 million over three years (1 July 2016-30 June 2019), with North East Melbourne the highest expected cost ($32.6m), and Loddon and Central Highlights each with around $13 million over this period.
What will Local Area Coordination do?
The purpose of the LAC service is to both help people with disability to engage with the NDIA and their funded supports to make the most of the NDIS as well as improve inclusion of people with disability across the community.
The role of LACs in the tender is broader than many expected – they key change to the role of LACs is that they will be developing plans with cohorts of participants and submitting these to the NDIA for approval. To date, the NDIA has employed its own planners to work with participants and has not outsourced its plan development functions (except for some participants in Large Residential Centers).
The tender identifies the specific tasks for LACs as:
- Assisting all people with disability and their carers to exercise choice and engage with the NDIS
- Assisting NDIS participants engage with the Scheme
- Building community awareness of the needs of people with disability and promoting inclusion
- Encourage greater options for social and economic participation for people with disability in local community
- Assist people not eligible for the NDIS:
- Deliver capacity building activities (for non-eligible people with disability and their families and carers)
- Provide information, linkages and support services (for non-eligible people with disability and their families and carers)
- Assist participants engage with the NDIS:
- Assist in explaining and communicating the Scheme
- Create plans for participants that are submitted to the NDIA for approval
- Help participants move from getting supported by the NDIA in their planning (Stream 2) to become self-planning (Stream 1)
- Provide support to people to implement their plan including choosing a provider for their NDIS funded supports and linking with community and mainstream services
- Engage with the broader community
- Provide information about the NDIS, including what the NDIS is not responsible for funding
- Create more options for people with disability to participate socially and economically
- Build understanding of the needs of people with disability
- Document how options for participation have changed over time
How will the funding work?
The NDIA will be paying the provider of LAC services directly for the provision of these services – the funding is not attached to participants in the way that other NDIS funding is delivered.
The NDIA will have three components of their payment to LAC providers:
- A fee for pre-NDIS establishment services – developing plans for community capacity building, workforce training and development and how the LAC model will operate; as well as recruiting staff. This amount does not have a specific cap.
- A fee for delivering pre-phasing activities to prepare people for the NDIS before the scheme begins (Loddon and Central Highland only).
- Monthly invoices for the work undertaken once the NDIS is operational.
The value of the LAC services are as follows:
- Central Highlands – total LAC contract value is $13.38m (1 July 2016-30 June 2019), including $590,000 for pre-phasing services.
- Loddon – total LAC contract value is $13.34m (1 July 2016-30 June 2019), including $705,000 for pre-phasing services.
- North East Melbourne – total LAC contract value is $32.6m (1 July 2016-30 June 2019).
Implications beyond these sites
The Government announced that all the NDIA’s LAC funding would be sourced to the community and this is the first insight into how these LAC services will operate.
The Productivity Commission estimated that LAC services would require around $550 million in funding in the NDIS. The NDIS tender for LAC services includes both the activities that the Productivity Commission identified as well as other planning functions that it estimated to be part of the NDIA’s budget.
The tender does not provide the NDIA’s assumptions for working out the value of the LAC contract. The LAC contract value will be higher in the initial year when large community education efforts are required and planning is done for the first time with all participants. Then will stablise over time as the NDIS becomes more mature in that location.
The average LAC cost per participant for each of the areas is around $1,550. This provides a rough rubric for estimating the LAC funding that may be available as the NDIS is rolled out across Australia. Applying this assumption to the whole of Australia, the NDIA would be tendering for around $690 million of LAC services.
Tender next steps
Responses to the Victorian tender are due by 18 December 2015. The NDIA is expecting to notify preferred tenderers by mid-February 2016 with contracts to commence in early March 2016.
The NDIA will be holding a briefing session on the tender on 5 November 2015.
The tender documents are available on the Australian Government tender website (https://www.tenders.gov.au/?event=public.atm.show&ATMUUID=BD8AF277-C378-0AAF-679EF18622E90F0E), Tender ID NDIA 020.