Where are we in terms of the NDIS? National Disability Services chief executive Ken Baker asked this question of the audience at the NDS NSW Conference 2017 in Sydney last week. “I think we are in the midst of very stormy weather and there is anxiety and uncertainty and we don’t know quite where we are heading.  The scope of national reforms is bigger than the NDIS which includes employment services as well and is under pressure in four directions and I include the NDIA, governance, service providers, people with disability and their families and carers in this,” he said

“The first is the sheer scale and pace of change. At present the agency, the NDIA, is processing and approving 450 plans per day and is struggling to do that effectively. In 2018/19 it will be processing and approving 850 plans a day and reviewing 1100 plans from previous years. I think the feeling is that this pace of change is compromising some of the quality of the planning that is occurring and some of the processes that are under way.”

The second key pressure, he said, is financial and this is happening at two levels one is the political level for government and the fiscal pressure on the federal budget in particular. “If you have been following Federal politics over the past few months you would have seen a couple of telling signs. The government has established a special fund, an NDIS savings account where money for the future of this scheme is going to be quarantined. The government is firmly committed to finding the money for that fund so the NDIS will be fully funded at $22 billion per annum in 2019/20. But it is going to have a difficult and complex job securing that money.  It was planning to close an education infrastructure fund which was not being used since been established in the previous budget but the opposition, particularly the opposition spokesman on education was opposed to this.

“This is a sign of things to come. Everyone in the opposition and in the government is committed to the NDIS. Everybody wants it, everybody thinks it is a good idea but when it comes to reaching into their own pockets or their own portfolio to find savings to fund it they don’t want to do it because their priorities and their portfolios are more important. We are going to see a lot more of these political machinations in the future,” Baker said.

The other level is the agency itself and although costs are being contained at present there are significant pressures on the agency’s budget for the NDIS.

The third pressure comes from the systems that have been set up to process participant plans and register providers. Systems that were set up in the trial phase are having difficulties meeting the pace of acceleration as the volume of people increases. “I think we can expect to see some hard-headed reviews of existing systems to remodel them so they can scale up.”

The fourth source of pressure is market supply. “We know demand is going to enlarge rapidly from 35,000 participants to 460,000.The question is can suppliers and supplier supports withstand at a comparable rate? And if supply cannot expand at a comparable rate are we are going to see an increasing and widening gap between supply and demand?”

He said NDS research clearly shows that most of the existing service providers do not have the financial capacity to grow or invest in growth and change to the extent required to meet the escalating demand.  Profit margins are too slim, and access to capital is restricted. At the same time providers are looking at NDIS prices that are tight without the margins required to invest in growth.  For new providers that have registered in the scheme around 30 per cent are For-Profit Providers with very few making a substantial investment at this point. “They put their toe in the water and are looking hard at the same prices that existing providers are looking at with expectations of higher profit margins. They have to deliver more to their shareholders and Not-for-Profit organisations and I don’t think they are seeing the rationale for investing in growth at this stage.”

Baker said complicating this terrain is the new system that will eventually replace the state based quality safeguarding systems. This will create a two-tiered market with one tier largely unregulated while the other is regulated. People who self-manage their support can engage unregistered providers who do not have to comply with existing prices or meet quality assurance requirements, comply with NDS standards or report serious incidents to the new national complaints commissioner. “Their compliance costs will be much less than regulated and registered providers within the new scheme. That would not matter much if the proportion of people self-managing remains at the level it is at present which is about 5 per cent, but the ambition of the NDIA is to boost self-management to 50 per cent or more of participants. This carries the potential risk of creating an un-even market where there are different rules with different layers within the market that runs against the principle of competitive neutrality.”  The other concern is that it exposes a significant proportion of participants to a higher level of risk with no necessary connection between the capacity to self-manage and vulnerability to abuse and neglect. “This is a problem in the current design of the scheme we need to be wary of.”

He also spoke about the importance of collecting data and evidence. “When all seems to be change and disruption we must focus and prosecute our case by looking at the data that ultimately will convince the NDIA board and also convince Social Services Minister Christian Porter who is very receptive to arguments, especially when underpinned by data.”

As for the way forward he said this should include providing simple documentation of existing reports as the basis for the first plan.  Another is to inform providers when one of their clients has an approved plan so that the first point you don’t learn about when they have an approved plan is when state government funding ceases.

He also made a call for greater communication because: “I hear this from providers all the time. While this is not my call, and the way the agency structures itself is its business, but it does need to be adapted. We don’t have a NSW state manager who could help resolve some of the different interpretations of policies across the regions. We need communication for changes as they occur – there are lots of them and they are not easy to track and not easy to follow.”

In closing, Baker spoke about key projects undertaken by NDS in recent years. One of the major initiatives rolling out now is the Workforce Innovation Fund which the NDS is administering on behalf of the Commonwealth Government. The first round of grants for the $4 million fund opens next week and invites applications on innovative workforce practices.