Secure Jobs and Funding Certainty for Community Services

Slide 1 - Secure Jobs and Funding Certainty for Community Services

This presentation outlines the Secure Jobs and Funding Certainty election commitment and why it is important for the NSW Government and the community services sector.

We will start with a brief overview of what the NSW Government wants to achieve under the election commitment followed by some context on why the election commitment is important to the community services sector.

We will then go into more detail on the election commitment including its governance and implementation.

Slide 2 - Acknowledgement of Country 

Before we start, we acknowledge Aboriginal people as the First Nations Peoples of NSW and pay our respects to Elders past, present, and future.

We celebrate the diversity of Aboriginal peoples and their ongoing cultures and connections to the lands and waters of NSW. 

Slide 3– Overview of Secure Jobs and Funding Certainty 

Secure Jobs and Funding Certainty was a commitment made by the NSW Government prior to the last election.

The NSW Government has reaffirmed this commitment by making Secure Jobs and Funding Certainty a focused commitment. A focused commitment means that the Government considers that it is critical to delivering the Government’s broader strategic agenda.

Slide 4 – Overview of Secure Jobs and Funding Certainty – cont.

What is the NSW Government hoping to achieve through this election commitment?  This slide provides some high level aims: 

Long term funding arrangement

o Deliver more job security and funding certainty for the community services sector, by introducing longer-term 5 year funding arrangements for key community service providers.

Whole-of-government pre-qualification scheme

o Establish a whole-of-government prequalification process so that organisations don’t need to repeat onerous accreditation processes.

Funding Framework and Jobs Compact

o Engage with the community services sector on the development of a new funding framework and jobs compact. 

o Review funding models and 

o Work to standardise and streamline reporting and contract management.

Slide 5 – The NSW community services sector at a glance  

Let’s now look at the community services sector and the challenges they face so that we better understand why this election commitment is important  

The sector is made up of over 7,800 NGOs, who provide essential care and support to over 1 million people in the state every year. 

Slide 6- NSW community services sector workforce 

The sector makes a major contribution to the NSW economy, with an annual economic output valued at $15.4 billion.

It employs over 230,000 workers. 80% of these workers are women and a quarter are aged 55 or over.

Half of the sector are employed on either a casual or fixed-term basis.

The sector is expected to grow by an additional 62,000 jobs by 2030, and a significant portion of those jobs will be in regional NSW.

Slide 7- NSW community services sector workforce

NSW Government agencies play an important role in funding the community services sector.

We have used data from the Department of Communities and Justice to demonstrate this as DCJ is the largest commissioner and funder of non-government organisations in NSW. 

In 2022-2023 DCJ provided over 2.2B in funding to 1,819 contract service providers – this includes grants.  

DCJ has ongoing funding relationships with over 700 service providers.  These 700 service providers have over 1500 multi-year contracts with DCJ. 

DCJ has also provided grants to about 1500 service providers over the last few years.

And while it varies depending on the size and structure of individual service providers, DCJ on average, funds approximately 14% of the total income of contracted service providers.

NSW Government is not the only source of funding for many service providers - Commonwealth or philanthropic funding may also play an important role for many non-government organisations

Slide 8 – Issues driving the election commitment

Let’s now look at why this election commitment is important for the community services sector.  

The challenges experienced by the sector are diverse and complex, however the following captures some of the main issues facing the community services sector.

Sector workers are predominately women, and 50% of the workforce are in fixed term or casual positions. 

Research tells us that casual work negatively impacts on an individual’s earnings when compared to potential earnings in permanent roles.

Data also shows that female workplace inequalities continue to increase as women age, further decreasing workplace outcomes.

One of the drivers behind the high percentage of fixed term and casual roles for workers is short term funding and the uncertainty around funding continuity at the end of funding arrangements. 

The sector has told Government that the recruitment and retention of staff is difficult, particularly degree qualified workers, and frontline practitioners. This has become more difficult over the last five years, especially in regional communities.

Recruitment and retention is of particular concern as it is predicted that the sector will grow by 62,000 jobs by 2030, with approximately 27,000 of these jobs to be in regional NSW. 

The sector has also told Government about the administrative burden of applying for funding, and the different application, acquittal and reporting processes for multiple sources of funding. One study (Ask Insight report) found that one NGO was managing 27 separate grants – this is complex and time consuming for providers .

Short term funding also results in discontinuity costs – this includes costs associated with staff recruitment and termination costs. 

Fluctuating funding makes it very challenging to run an organisation efficiently such as planning for future staffing requirements and service delivery commitments.  

Government has also heard that its pricing and procurement approach is creating a race to the bottom with wages, as organisations try to deliver more with limited funding envelopes, or compete with other organisations.

What the Government has heard can be summed up by the following statement- the growing demand for services and the associated expansion of service delivery, combined with the administration burden and recruitment and retention challenges are placing strain on organisations and sector workers. 

“The Social Sector in NSW: Capitalising on the potential for growth” report from Equity Economics (2021), commissioned by the NSW Council of Social Service (NCOSS) and other NSW peak bodies, describes this as ‘driving chronic stress and mental health concerns for workers and undermining service quality’.

As most of the NGOs funded in the sector are small to medium in size, that is they have less than 20 employees, these challenges are felt more acutely. 

Slides 9 – SJFC outcomes 

Looking at ways to tackle these issues will be part of the work to be undertaken to meet this election commitment. 

Desirable outcomes could include the following but this will be worked through as part of the election commitment: 

o Greater job security for thousands of women - leading to better long term economic outcomes (superannuation, housing, families etc).

o Improved health and wellbeing for sector workers.

o Improved service quality and outcomes for vulnerable people accessing services funded by the NSW Government.

Slide 10 – SJFC priority work streams  

Activities that may be considered under this election commitment could include the following but the final activities will be determined through the consultation phase of the RoadMap, and will need to be endorsed by the NSW Government.

Long term funding arrangements.

Implement five-year contract terms for community services across NSW Government agencies where appropriate.

Review the Human Services Agreement and other contracting instruments to get better consistency and investigate how contracts can support flexible, longer-term contracts.

Consider terms of 7 years and beyond for some contracts in Aboriginal and regional communities 

Funding frameworks.

Consider, in collaboration with key agencies and service providers, refinements to funding arrangements. This may include a review of: 

• NSW Government agency funding models (how funds are budgeted, prioritised and committed by agencies)

• Commissioning practices

• Indexation and other periphery matters that may be brought into scope

• How integrated program development and funding models may improve client outcomes

Work to standardise and streamline reporting and contract management.

Jobs Agreement/Compact: Negotiate an agreement to support the future needs of the sector and its workforce by looking at policies on how funding models and contracting can better support recruitment, retention and job security for the sector.

Whole-of-government Pre-qualification scheme

Establish pre-qualification for the community services sector to simplify funding practices and support more effective tendering. Pre-qualification conditions may include assessment of: 

• Financial stability

• Accreditation

• Policy & governance

• Service delivery capability and footprint.

Whilst this is an ambitious list it is important to remember that the final activities and priorities to be delivered under this election commitment will be determined through the RoadMap process and will be endorsed by the NSW Government.

Slides 11 – Governance and Project Management

The Secure Jobs and Funding Certainty Election Commitment will be led by the Minister for Communities and Families, and Minister for Disability Inclusion, on behalf of the NSW Government.

To support the Minister to deliver priority work streams under the commitment a Secure Jobs and Funding Certainty Leadership Group has been established.

This Leadership Group is made up of key government agencies and community services sector representatives as shown on the slide. 

Slide 12 – Governance and Project Management

The Leadership Group will lead the development of a Roadmap outlining how the election commitment will be delivered, including key deliverables, how it will be implemented and timeframes.

This Roadmap will be presented to the NSW Government for consideration.

The Leadership Group will guide broad and targeted engagement, and participation, from both government agencies, and the community services sector in the development and implementation of the Roadmap. The consultation phase is expected to take about 6 months.

The Department of Communities and Justice, as the largest commissioner and funder of NGOs in NSW, will resource a small project team to support the Minister to deliver priorities under this election commitment.

Slides 13 – Other engagement and participation

Following the release of the Roadmap, sector representatives including Peaks, NGOs and Government agencies may be invited to participate in working and advisory groups. These will focus on the delivery of specific initiatives within the scope of the Commitment. The working groups will be identified through the Roadmap consultations. Those on the working groups will have a specific interest, knowledge or expertise in one of the deliverables, and have resources available to assist.

If work is already underway that supports the aims of this election commitment  such as Closing the Gap initiatives, or sector workforce development activities then we will work to complement rather than duplicate this work.

Slides 14 – Implementation Plan and Timeframes

On this slide you can see the high-level implementation plan.

Meetings will be held with government agencies and community services peak organisations to discuss the membership, purpose and scope of the proposed Leadership Group. 

Following agreement the proposed membership and approach will be presented to the Minister for endorsement.

The first Leadership Group meeting will take place in March 2024. 

That meeting will commence the development of a SJFC Roadmap that will detail how the election commitment will be delivered, including key deliverables, approach to implementation, and timeframes.

The development of the Roadmap will include a broad consultation period of approximately 6 months.  

The Roadmap will consider potential solutions to the issues identified, and prioritise these activities into an achievable program of work. 

Once the Roadmap is approved by Government the implementation phase will begin.  As we want this reform to be comprehensive, meaningful and long lasting implementation is likely to be 2-3 years. 

Slide 15 - Get involved

Interested in finding out more?  

Visit the Secure Jobs and Funding Certainty website

https://dcj.nsw.gov.au/service-providers/secure-jobs-and-funding-certainty.html   

Or email the project team: Securejobsandfundingcertainty@dcj.nsw.gov.au