Houston, we have some problems

On New Years Eve, Minister Porter announced the make-up of the new NDIA Board and its new chair Dr Helen Nugent (details of new Board click here). Bruce Bonyhady, the inaugural Chair has exited pushed out by the Federal Government. It has been a difficult birth for the NDIS under Bruce’s leadership and this article draws on the issues he raised as most challenging for the future in his parting letter to Minister Porter and the NDIS Standing Council.


The Challenges Ahead

The 12 months between now and December 2017 will see the NDIS tested on just about every front as the transition to full scheme becomes real. Not only does the NDIA have to complete plans for a staggering 100,000 people with disability. But the NDIA will do this while managing through a mess of in-kind arrangements handed to them by the Commonwealth and States, an overly strict cap on their own staffing, as well as building a new program to help over one million Australians with disability or who are carers.

Despite the NDIA creating a rod for their own backs from time to time (eg. the removal of the float for self-managed participants), the NDIA deserve our patience and goodwill as they try and deliver the near impossible in 2017.

The NDIA will need to deliver an extraordinary effort to meet the challenges it will face between now and December 2017.


Challenge #1: Approving 2,000 plans every week

Governments have instructed the NDIA to create around 100,000 new NDIS plans throughout the 2017 calendar year. This is a staggering number of people to go from being unknown to the NDIA to being fully signed up NDIS participants.

The NDIA will need to deliver 2,000 plans each and every week throughout 2017 to achieve this target. More people will get a plan between New Year’s Day and Easter this year than become participants over the whole first 3 years of the NDIA trial!

Assuming the NDIA survives the 2017, the challenge doesn’t get any smaller:

“In 2018-19, the Agency will need to approve around 850 plans per day and also review approximately 1,100 plans per day” – Bruce Bonyhady letter to the NDIS Standing Council


Challenge #2: Getting Information, Linkages and Capacity Building (ILC) right

2017 is the year that the NDIA will have to get a whole new program of funding right – Informational Linkages and Capacity Building. The NDIS is throwing away the rule book for grant-funding and forging a new path of ‘outcomes focused’ funding through ILC.

Everyone now understands that the NDIS is not for everyone with disability. And that the NDIS is often not meeting the needs of carers. The answer: Information, Linkages and Capacity Building (ILC).

The NDIA has been handed the most miniscule possible budget for this work. Just $132 million when the NDIS is fully rolled out. With this funding the NDIS is expected to develop a system to provide assistance to 1.2 million people (900,000 people with disability + 350,000 carers).

That is 0.6% of the NDIS budget… for 1.2 million people!

The NDIA is focusing on making this small funding bucket achieve the most impact possible. That’s why they are so focused on ‘ILC outcomes’ because not a cent of this tiny bucket can be wasted.

Without an effective ILC program, people with disability will not achieve genuine community inclusion. Further, it means that the NDIS participants numbers are likely to blow out as people with less severe functional impairments have no choice but to exaggerate their disability in order to get something from the NDIS.

So, will the ILC funding be enough to address the huge challenge the NDIA faces?

“Currently only $132m has been allocated to the ILC. This is not sufficient and means that one of the key foundations on which the NDIS is being built is weak” – Bruce Bonyhady’s letter.

(DSC is running a workshop in Canberra on 3 February to assist organisations prepare for when the first ILC funding round kicks off click here for details).


Challenge #3: Building the NDIA’s own capability

Put yourselves in the NDIA’s shoes for a minute. You are the CEO, CFO or head of HR. Your organisation has to bring in 100,000 new people in 2017. But instead of getting the 10,000 staff you needed, the government told you to outsource 7,000 jobs.

With your remaining 3,000 people, you have to manage all these contractors (LAC and ECEI partners). Plus, you have to do the planning for the 20% of participants who are the most complex. Plus, create a new ILC funding program for 1.2 million people. Oh, and don’t forget registering all the providers in the scheme. Plus, create frameworks, strategies and operational plans to meet the needs of participants who are at risk of missing out. And then try and incentivise the market to create 12,000 new accommodation places.

Clearly setting up the NDIS is a huge endeavor. National scale will eventually mean low administrative costs. But in setting up the scheme the Commonwealth has put a firm cap on costs – the NDIA cannot spend more than 7% of the Scheme’s budget on its own administrative costs.

The 7% cap might sound good (who wants to spend more money on bureaucrats?). But most of the problems in the NDIA come from this administrative cost cap.

  • Why is your client’s planning conversation over the phone? Rather than face to face. Because it is cheaper

  • Why did the planning conversation only go for 30 minutes and now they refuse to review the mistakes in your participant’s plan? Because they don’t have the money to employ enough planners.

  • Why do you wait for hours on the provider support line? Because the NDIA cannot afford to pay more staff to answer questions.

  • Why is the portal not fit for purpose? Because the Commonwealth did it through Centrelink because it is cheaper.

2017 will be the year of seeing whether the NDIS really can run on the smell of an oily rag. It might have been able to pull this off doing a few thousand plans a year, but there are serious questions about whether it’s sustainable when they need to deliver 2,000 plans every week.

“The Agency has been set an operating cost target of 7%...it would be a mistake to hold the Agency to an aspiration operating cost target if it threatens a blowout in package costs…this is not sustainable and so administrative cost targets should be reviewed” – Bruce Bonyhady’s letter.


Challenge #4: Managing the in-kind mess and transitioning existing programs

In-kind: either people don’t anything about it, or it’s one of their most frustrating aspects of the NDIS. As programs transitioned into the NDIS many began relying on NDIS funding. However some continued to be funded through the state or Commonwealth government, meaning their participants nominally had funding through the NDIS, but the provider couldn’t claim this funding because they were still being paid through their existing contracts.

These arrangements turned out to be much more complicated than anyone thought. There are different payment rates through in-kind compared with being paid directly by the NDIS. And for some services, this means that they get more from the NDIS than if they were paid through the normal participant packages. This is driving up the cost of services and protecting them from market competition.

In-kind option mean that some NDIS participants are being told that they cannot change provider because their service has been ‘pre-paid’. This is leaving participants no better off in the NDIS than if they stayed in the existing state system.

The NDIA’s challenge for 2017 will be to either make this complex set of arrangements work across the country, or more forcefully tell governments that in-kind is undermining the scheme.

“In-kind arrangements are not consistent with choice and control and participants ensuring that services are value for money” – Bruce Bonyhady’s letter.


Challenge #5: Creating a whole new national quality and safeguards system

Every State continues to regulate NDIS providers and workers. Every state is different. The regulations often reflect an old world of protecting people with disability and not allowing providers to deviate from the standard specialist disability service delivery model.

A new quality and safeguards system is coming in 2017. More so than anything else in 2017, this will be a fork in the road for the NDIS’ development – it could open up new possibilities for innovative services and organisations to enter the NDIS, it could stifle innovation for decades to come.

Getting quality and safeguards right in 2017 is critical. Both to foster a dynamic market for NDIS funded services, but also to ensure that people with disability are protected from the abuse that State and Commonwealth royal commissions have shown that individuals, organisations and governments have too often failed to address.

“[There is a need for] an independent quality and safeguards authority, which is separate from the NDIS, reports directly to Parliament, has own-motion investigative powers, has a comprehensive data collection and analysis capability and has the powers to sanction service providers” – Bruce Bonyhady’s letter.


Power & Responsibility

With the changes to the Board, the Federal Government and Minister Porter have now taken much greater control of decision making in the scheme. With this increased power, comes the increased responsibility for how well the NDIS is implemented. Many of the changes that need to be made to make the scheme a success, sit with the Federal Government. Australia is watching and will judge the government on its performance in how it meets these challenges rolling out a scheme that is so important to so many people.


To read Bruce Bonyhady's full letter to Minister Porter, click here.