WACOSS Update on State Government funding announcement

The Government has delivered a landmark funding decision in the State Budget which will help to sustain the critical services upon which our community relies.

In total, the Government has delivered a $1 billion social services package which will help make the community sector more sustainable, thereby protecting services and support for disadvantaged and vulnerable people in the Western Australian community.

As part of that package, the WA Government's 2011 State Budget announced funding for the not for profit community sector of $604 million over the next four years. This funding is intended to address a shortfall in the amount paid by Government to the sector for the services they provide, to enable staff to be paid fair wages and help to ensure the sustainability of services.

This will make a real difference to up to 30,000 workers in the WA community sector and the hundreds of thousands of people they help every day.

The funding commitment signals to the sector that the Government is serious about rebuilding the Government's relationship with the not for profit sector so we can deliver better outcomes for those most disadvantaged in our community. It is a serious step in addressing a significant shortfall in funding that has worsened over recent years and put enormous pressure on service organisations.

In this update we provide details of the State Budget funding decision and the Partnership Forum Briefing for funded service providers on the funding and procurement announcements to be held 1 June 2011.

Details of Measures to Address the Shortfall in Funding for Community Services

The WA Government's 2011 State Budget announced funding for the not for profit community sector of $604 million over the next four years.

The funding increase to service agreements with the not-for-profit sector will result in an average 25% increase to contracts over the next three years to 2014-15.

The funding increase will be rolled out in two components and will also include annual indexation on service agreements, starting with 4% indexation in 2011-12.

The first component will be a flat 15% price adjustment to increase the funding levels in all existing contracts.

The second component will provide an average increase of 10% on existing contracts as they are revised to match the new procurement policy – the Delivering Community Services in Partnership Policy.

Component One

The first component will fund an upfront across-the-board percentage price adjustment of 15% for eligible human services contracts from 1 July 2011. For details regarding eligibility please see the Department of Premier and Cabinet fact sheets or visit the Department website and download Department of the Premier and Cabinet - Sustainable Funding and Contracting with the Not-for-Profit Sector.

Component Two

A second increase averaging 10% will be rolled out between 1 July 2013 and 30 June 2014 as contracts are reviewed, and will be linked to the roll out of procurement reforms.

The second component is targeted towards ensuring the inequities in the funding shortfall are addressed. The adjustments are linked to progressing key contracting reforms, with additional funding allocated to contracts to ensure that services are funded in a sustainable manner. It is designed to address particular funding inequities, including the higher operating costs in regions and other complexities.

Procurement Reform - Delivering Community Services in Partnership Policy

The second component to the funding increase is based around a new procurement policy – the Delivering Community Services in Partnership (DCSP)policy. The DCSP policy has been developed jointly by the public and not-for-profit sectors to build and support a more mature contracting relationship between the sectors. The DCSP policy will replace the Funding and Purchasing Community Services policy. It facilitates a greater focus on achieving better outcomes for the community through the funding and contracting of sustainable community services by both sectors.

Indexation

The funding also includes $96m for indexation which will be an additional 4% in 2011-12.

On 13 December 2010, the Government endorsed the continuation of the Non-Government Human Services Sector (NGHSS) Indexation policy. The NGHSS indexation rate is a composite of the Perth Consumer Price Index (CPI) (20%) and the Wage Price Index (WPI) (80%), in recognition of the labour intensive nature of human services.

Sector Briefing 1st June 2011 – Partnership Forum Presentation on Funding and Procurement Announcements

The Partnership Forum will host a briefing for funded organisations effected by the State Budget announcements. The Briefing will provide greater detail about the roll out of the funding increases, including detail on the eligibility of different organisations and how they will be impacted.

This event will be critical for funded organisations to understand the impact of the State Budget announcements on their contractual arrangements and on the community services sector more generally.

The Department of Premier and Cabinet Director General, Peter Conran, and the Chair of the Partnership Forum, Peter Shergold, will provide an overview of the Budget decision and they will also be joined by guest speakers from Government and the not for profit sector.

The event flyer can be found at the WACOSS website at: http://www.wacoss.org.au/Libraries/eNews_261/2011_PF_Sector_Briefing_Flyer_Final.sflb.ashx

How Should Community Service Organisations Respond?

The intention of this funding is clearly to improve the sustainability of community services. The predominant use of this extra funding is to be directed towards improving wages of staff in the sector, as well as investing in training and professional development and the sustainability of the organisation.

WACOSS encourages community organisations to think and plan carefully about how these funds are deployed in each organisation. The sector is highly diverse and the funding will effect individual organisations in very different ways. The eligibility for the increased funds varies across the sector, and organisations should seek advice directly from their funding providers, as well as refer to the Department of Premier and Cabinet fact sheets. Department of the Premier and Cabinet - Sustainable Funding and Contracting with the Not-for-Profit Sector

WACOSS will work closely with our members and the broader community services sector to assist organisations with their implementation of the funding and procurement reforms. We encourage all funded service providers to attend the upcoming Sector Briefing on 1 June 2011, and for regional organisations to keep an eye out for the regional broadcast of the event when it is released.

Professional Advice

WACOSS can link our members with support from Employer Assist to provide guidance about the implementation of the funding increase, particularly in relation to wage increases. We encourage community service organisations to be aware of their obligations and to seek professional advice about how to ensure they are compliant with their legal and contractual obligations and the intentions of funding providers that these funds are used to improve staff wages, and build sustainable services.

WACOSS will circulate further advice from Employer Assist to support organisations between now and 1st July 2011 when the first component of the funding increases comes into effect.

Further Information and Support

WACOSS will continue to provide further information and support for organisations throughout the implementation process in the coming weeks, months and years. The process for implementing these reforms will take some time, and we encourage organisations to take the time to plan their response carefully.
WACOSS will support the sector with regular updates like these, workshops and events and help build capacity in small organisations to respond to the reforms and strengthen their sustainability
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