Local disability service providers have had to lay off staff, cut services and sell off assets in a bid to survive the transition to the National Disability Insurance Scheme (NDIS).
A combination of unrealistic transition deadlines, the sudden end of state government funding, and a tough new payment system have forced many service providers to trim their operations to the bone.
This has seen dozens of staff leave the sector at a time when there is already a shortage of qualified disability support workers, and the shutting down of crucial services such as transport and respite care.
Cody Boylan, the operations manager of mid-north coast disability services provider Aces Inc, said the launch of the NDIS had been like ‘a plane taking off without a fuselage’.
‘We’ve had to let probably four or five admin staff go,’ Mr Boylan said.
‘Under the new payment and pricing model there’s nothing for the organisation’s back end – the administration.
‘We’ve had to cut spending pretty dramatically.’
Service providers interviewed by The Echo said that the biggest impact on the sector was the shift from the old state government block funding model to the new demand-based system.
While previously organisations would be funded months in advance to run particular programs that people with a disability could then apply to access, they are now effectively competing with other organisations to attract participants and then invoicing the National Disability Agency (NDA) afterwards based on how many people took part.
The sudden loss of guaranteed state funding in combination with the very lean hourly rate for disability services set by the NDA has left the service providers with little choice other than to downsize.
Service provider Lifebridge, which covers a large swathe of the northern rivers, has recently been forced to let the equivalent of ten full-time staff go in order to make ends meet.
The organisation’s chief executive Bronwyn Mitchell said that they had managed to achieve the necessary staff reductions through voluntary redundancy.
‘Obviously we would have preferred to not to decrease staff, but we didn’t have the funds to continue the hours of service that we’d been providing,’ Ms Mitchell said.
‘When we began to do our preparation work we realised that a significant amount of money wasn’t going to be coming in and our income wasn’t going to be able to cover what we were doing.
‘We were going to have to become leaner and I think that’s the case across the entire sector.’
Despite the major changes forced upon her organisation, Ms Mitchell believes that the NDIS will ultimately be good for Lifebridge and the sector more broadly.
‘It’s entirely different from the way we’ve been operating, but I think there are real opportunities there,’ she said.
‘I think in the past programs tended to become overhead intensive because you got a block of funding from the government and you had to spend it all on that program.
‘So there wasn’t much of an incentive to be efficient or particularly innovative.
‘The NDIS expects us to be operating in a market with very low overheads, and that’s been a huge cultural shift. Suddenly we’re investing in new software, IT, change management, marketing managers.
‘I think once we’ve got the efficiencies in place we’ll be in a very strong position to grow because the demand for services under the NDIS is growing dramatically.’
For now, though, Lifebridge and many other local service providers are trimming their operations wherever possible.
Another local service provider, FSG, has recently cut wages, sold off a number of property assets, and increased its borrowing to cover a $5.2 million loss of revenue last financial year.
‘To put the loss into perspective, it represents 7.6 per cent of gross income,’ FSG’s financial report states.
‘The changes being forced on our industry in both staffing and business operations are profound and most organisations are grappling with the need to adapt in a very short period of time.’
Perhaps the most concerning impact of the NDIS transition has been the cuts to local services it has entailed.
The combination of cut-backs and funding gaps in the new scheme has seen organisations reduce their respite services, planning and coordination, travel assistance, information services, supported employment and early intervention.
A report prepared last year by the peak body for disability service providers – NDS – identifies transport as a particular area of concern.
‘NDIS funding for transport… is significantly less than disability service providers have been expending,’ the report states.
‘As a result, a growing number of disability service providers are considering selling vehicles used to assist participants to travel. NDS has concerns this transport will be lost before other options emerge, severely disadvantaging NDIS participants.’
For two local service providers the loss of state funding and the failure of the NDIS to pick up the slack could be fatal.
Ballina-based organisation DAISI and Ability Advocacy in Alstonville say they may be forced to close when the NSW government cuts their funding in June as part of the NDIS transition.
Kim Tyson from Ability Advocacy said that the state government had claimed that the NDIS was now responsible for funding them even though the agency that runs the scheme ‘categorically state that it does not support advocacy’ – their core business.
‘As a result, one of the most vulnerable groups of people in our society, people with disabilities, may be without someone to stand up and speak out on their behalf,’ Mr Tyson said.
Nevertheless, Mr Tyson, like many others in the sector, still has faith that the NDIS will benefit those with a disability.