Australia's Disability Scheme splashes $180 million on consultants in 16 months

14 December 2017 6 min. read
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Australia’s landmark scheme to assist the living of millions of disabled citizens has been plagued by set-backs since its roll-out in 2016. Now the National Disability Insurance Scheme has come under fire for it’s ever-growing consulting spend, as it attempts to recover from staffing and IT issues.

Australia’s consulting market grew by more than 5% to a value of $4.6 billion last year. In line with global trends, the growth is thought to have been driven by a strong economy, renewed client focus on expansion, and a healthy appetite for digital innovation. However, a large factor in the industry’s success in the land Down Under is the substantial uptake for its services by the public sector, with current Prime Minister Malcolm Turnbull’s reform agenda seeing governmental spending on external expertise rise 8.2% to AU$845 million since his assuming office.

This agenda has seen digital adoption become an important driver across both government and the education sector – however the spending of the Australian government spending on consulting in order to implement this has not been without its detractors. Australia’s national government have been under increasing media scrutiny following the announcement executive spending on consultancies had hit a staggering AU$5 billion over the past decade. The Liberal/National coalition also faced accusations of conflicting interests, as a number of prominent ex-civil servants and even a former Prime Minister were among consultants hired via the tax-payers’ purse.

Now, leaked financial records pertaining to the National Disability ­Insurance Scheme (NDIS), first reported by The Australian, have revealed that executives in charge of running the governmental agency behind the scheme spent more than AU$180 million on consultants and contractors between July 2016 and October 2017. Of that figure, as much as AU$41.5 million was spent on just two major consulting industry players for “strategic advice”.

The NDIS was initiated by the Australian Government to assist Australians with a disability, and following its establishment by the National Disability Insurance Scheme Act 2013, the NDIS commenced being rolled out nationally on 1 July 2016. The AU$22 billion reform has been hit by growing numerous set-backs, following a lengthy process to enshrine it in bilateral agreements signed between the federal government and states under the Labour administration of Julia Gillard, and it has since been heavily criticised by the Productivity Commission.

Consulting spend of the Australian National Disability Scheme

In order to improve the performance of the NDIS and work through major problems with the fledgling scheme – including issues pertaining to a near total IT meltdown in the middle of last year, which saw a number of client plans left in disarray – the National Disability ­Insurance Agency (NDIA) engaged outsourced expertise over the past 16 months. The total fee for those services came to almost triple its $66 million consulting bill between 2015-16, in an act that took the Agency’s total taking the total reckoning to almost a quarter of a billion Australian dollars. In contrast, the whole of Australia’s Department of Social Services spent $15.5 million on consultants in 2016-17.

The leading beneficiary of the NDIA’s spike in funding was global behemoth The Boston Consulting Group, which brought in $21 million as its help was sought to overhaul a planning system which had been criticised by those with disabilities as deceitful and underhanded, as they were often shunted onto support packages with little or no understanding of what had transpired. Adding to the public ire now surrounding the glut in consulting spending, however, a conflicting fund of $10 million was provided to consultants at Australian Healthcare Associates, in order to conduct telephone planning and “information gathering” for the first support plans of NDIS clients, which were the very ones being jettisoned under the new “participant pathway” BCG subsequently helped design. The BCG contract for planning reform officially came to an end on October 30th, however a “small team” is remaining to assist the embattled Agency.

Big Four professional services firm Deloitte were close behind BCG in the total fee they levied on the NDIA, as the recipients of a total invoice of $20.5 million to date. The consulting giants hold an ongoing contract with the NDIA, as its ICT Services Strategic Partner, as the NDIS struggles to recover from numerous digital issues.

According to an NDIA spokeswoman, the difficulties experienced by the Agency are par the course, stating, “The National Disability Insurance Scheme is a complex and highly valued national reform and the scale, pace and nature of the changes it is driving are unprecedented in Australia.”

Short staffed

At time of writing the NDIS has 120,000 people with disabilities on its books, with a target of 460,000 set for the middle of 2020. However, those targets remain a distant figure, as the Agency remains severely under-staffed. The NDIA has struggled to recruit experienced, full-time staff despite having spent heavily on recruitment services. The largest recipient in this respect was with Hays Specialist Recruitment, at $15 million, while $7.5 million was paid to DFP Recruitment Services. The NDIA also spent $17 million with Cushman & Wakefield, a commercial property specialist.

As discussed at a Senate estimates hearing in October, the NDIA employ 2127 staff, 1012 contractors and 2203 local area co-ordinators. This means, according to executives at the hearing, that the Agency remains “about 500-ish” full-time equivalent ­positions below a public service cap of 2460 places – however a number of these hires are non-permanent.

In this respect, the NDIA are in line with the Civil Service hiring policies of the UK, which is similarly stretched by the new workload of Brexit – following departmental layoffs thanks to seven years of austerity cuts. Whitehall have also relied heavily on outsourcing to professional services contractors, as a short-term answer to what may well be a long-term issue.

In terms of Australia’s NDIS, regardless of where those staff have come from, to date, many service users feel under-supported. One notable source reported in newspaper The Australian said that she was extremely frustrated, having requested an iPad and speech app in March for her five-year-old daughter Felicity, who has severe speech and language delays.

“Five months after making the request, our speech pathologist was sent a letter stating the NDIS had changed its forms and we had to reapply,” Adelaide-based mother of two, Chantelle Care-Wickham said.