NDIS cost-cutting taskforce told to reduce growth in participants and spending
The agency that runs the national disability insurance scheme has quietly established a new taskforce aimed at cutting growth in funding packages and participant numbers.
Guardian Australia has obtained an internal document, published below, that shows the National Disability Insurance Agency has created a new unit to make “short term, immediate changes” to the scheme, citing a forecast “cost overrun in 2021-22”.
“The actions of the [Sustainability Action Taskforce] will make immediate changes to slow growth in participant numbers, slow growth in spend per participant and strengthen operational discipline, in accordance with the requirements of the NDIS Act and Rules,” the three-page document, marked “sensitive”, says.
The establishment of a new unit aimed at slowing spending growth comes amid an already fierce fight between the government and disability groups over a planned overhaul of the NDIS Act and controversial introduction of independent assessments, both of which are viewed by advocates as attempts to gut the scheme.
The document claims the new taskforce is a separate to “scheme reform” initiatives such as moves to overhaul the NDIS Act and introduce independent assessments.
But it appears to consolidate increasingly alarmist warnings buried in the NDIA’s corporate plans about NDIS spending and will fuel concerns among the disability community about the agency’s plans.
Martin Hoffman, the NDIA’s chief executive, announced the establishment of the taskforce in an internal staff update last month, saying he had appointed a former McKinsey associate partner and existing NDIA general manager to lead the unit.
While Hoffman’s all staff update refers to a need to “moderate growth and spending” in the next six months, it’s not as explicit about the claimed need to slow “growth in spend per participant”. The internal document was designed for frontline planning staff and “strictly not for external distribution”.
Dated April 2021, it outlines “seven principles that should be applied every time staff create a participant’s plan”, and notes that these will “help ensure the scheme is financially sustainable”.
Notably, the first principle is “Fair for everyone, both today and for future generations”.
Others include “Fair funding to pursue your goals”, “Evidence-based best practice” and “Fair supports for your disability needs”.
The document includes talking points for staff, which include: “At the moment the costs of the scheme are increasing at a much higher rate than expected because we’ve been building budgets based on inconsistent information and decision-making.”
Labor’s NDIS spokesperson, Bill Shorten, said the “leaked secret plan” showed the “Morrison government is acting directly against the interests of Australians with disability”.
“It is a disgrace that they are instructing government staff to deliberately slow down getting people on the NDIS and reduce their funding,” he said.
“This is just the latest leak of a broader plan against the NDIS and participants that the government are hiding in the shadows because even they know it is shameful.”
Catherine McAlpine, chief executive of Inclusion Australia, said the organisation was “greatly concerned that a model of short-term cost-cutting will not make the investment needed for the social and economic participation of people with intellectual disability”.
“It’s a false economy to penny pinch, when it is investment that will keep costs down in the long term.
“The NDIS has told us for months that the proposed changes to the scheme are about fairness and consistency. The disability sector has expressed consistent concern that the real issue is cost-cutting. It seems that our concerns have been justified.”
The NDIA document says that the total budget for participant and scheme expenditure grew at 23% on average between the 2019-20 and 2021-22 financial years.
“This is almost six times the capped 4% per annum rate,” the document says.
“The Sustainability Action Taskforce (SAT) has been set up to identify and deliver the immediate actions we need to take to avoid this forecast overrun for the 2021-22 financial year.”
The NDIA’s corporate plan has previously identified supported independent living – where participants receive round-the-clock support to live in shared accommodation – as a driver of
the growth in spending.
But the plan noted the agency would target “both SIL and non-SIL services” in reforms to drive “better outcomes for participants while ensuring financial sustainability”.
Advocates have argued that one of the reasons for the growth in spending is that participants are increasingly being empowered to utilise their plans. They say the scheme was never intended to place a cap on supports and have repeatedly criticised the agency’s focus on “sustainability”.
The NDIA’s last annual report, meanwhile, notes that there have “continued to be more children approaching the Scheme than expected”.
There are about 430,000 participants in the scheme, a figure expected to increase to 532,000 participants by 30 June 2023.
The 2019 budget revealed a $1.6bn underspend in the NDIS, which prompted an unlikely joint statement from the NSW Coalition and Victorian Labor governments accusing the government of short-changing people with a disability.
A spokesperson for the NDIS minister, Linda Reynolds, said the minister was “committed to working collaboratively with states and territories and the sector to ensure the NDIS achieves the coverage intended and supports quality outcomes for all NDIS participants in a way that is fair, equitable, consistent and affordable”.
“The government also acknowledges its responsibility to ensure that participants continue to receive the reasonable and necessary supports they need, and to ensure the long-term financial endurance of the scheme,” they said.
“She is currently receiving comprehensive briefings and is consulting with all state and territory disability ministers, the disability sector and NDIS participants.”
A spokesperson for the NDIA said funding for the NDIS continued to grow, with the original budget allocation for 2021-22 increasing from $21.7bn to $23.8bn.
“That said, the agency is bound by the NDIS Act and that means we need to ensure we stay within our allocated budget consistent with the agreements between the Commonwealth and states and territories, so we need to assess the support we provide through a sustainability lens as well,” the spokesperson said.
“To ensure we abide by our obligation to follow the Act, the agency set up an internal team to identify, design and deliver the actions we need to take to improve how we operate the scheme to make sure the NDIS is sustainable.
“The team’s early focus has been developing clearer information about creating and using NDIS plans, including enhancing the principles we follow to create NDIS plans – which are founded on existing information in the NDIS Act rules which instruct the CEO and agency to establish operating guidelines to ensure appropriate operation of the scheme.”