funding reform - frequently asked questions
2 February 2006
what is funding reform all about?
which services will be affected by funding reform?
will small services be ‘squeezed out’ of the sector?
how will services benefit from funding reform?
when will funding reform start?
what do services need to do to get ready for funding reform?
many services have limited resources, how will they manage to do what is required?
where can I get more information about funding reform?
Q. what is funding reform all about?
A. The $1.2 billion budget enhancement has given DoCS the opportunity to review and improve its funding practices to reflect international best practice. Funding reform will enable DoCS to obtain the best possible services for our clients with the increased funding.
DoCS’ Funding Policy sets the directions for achieving reform over the next five years. It also contains concrete policy direction for the short term.
The Policy has three main themes:
- performance-based contracting to give services more flexibility and control over the way they manage their projects. Under new funding agreements and reporting arrangements, services will have the opportunity to highlight how their project improves client results, rather than document inputs and processes.
- strengthening the service system to ensure a viable, diverse community services sector that can meet the needs of our clients.
- funding options to make sure that DoCS selects the provider best placed to deliver the service required. This will involve using a range of funding processes from the most contestable Expression of Interest (EOI) processes to direct allocation of funding
Q. which services will be affected by funding reform?
A. In the first instance, DoCS’ Funding Policy will be applied as new funding from DoCS’ budget enhancement is rolled out.
Eventually funding reform will be applied to all funding programs and existing funding arrangements. This will be done in consultation with the sector and in view of the particular features and objectives of the programs.
Q. will small services be ‘squeezed out’ of the sector?
A. DoCS understands that there are some concerns in the sector regarding the possibility for small services to be defunded or “squeezed out” of the sector as a result of the implementation of the funding policy.
This is not DoCS’ intention. The Funding Policy clearly states our commitment to supporting a diverse community services sector and working with small organisations to ensure their viability and capacity.
DoCS’ believes that the sector needs a diverse range of service providers to meet the varied needs of children and their families throughout NSW.
When developing the Funding Policy, DoCS consulted with the peak organisations that represent small services and conducted stakeholder workshops to make sure that the policy was responsive to the needs of all stakeholders, including small organisations.
We would like to reassure all funded services that DoCS values sector diversity and will continue to develop strategies in partnership with services and peak organisations to preserve this diversity and develop the service system as a whole.
Q. how will services benefit from funding reform?
A. Some of the benefits of funding reform for services and their clients include:
- clearly outlined expectations for service delivery as negotiated between the services and DoCS
- simplified reporting requirements
- greater flexibility in how the service can respond to clients’ needs as DoCS shifts the focus from ‘how’ services are delivered to ‘what’ services are delivered to clients
- rewards for services that perform well (e.g. extended length of Service Level Agreements, up to five years)
- support tools to assist services to develop their capacity
Services will need timely and accurate information and effective support to understand and implement the changes to DoCS’ funding practices. DoCS will continue to work with services throughout this process. Good communication with services will be essential for DoCS to get feedback on the best ways of implementing the reforms.
Q. when will funding reform start?
A. Funding reform will be implemented over the next five years. Some of the initiatives outlined in DoCS Funding Policy are already underway. For example the Expression of Interest process has been run with the Out-of-Home Care High Needs Kids program and is currently underway with our Early Intervention Program. The process will be progressively integrated into all new funding rounds.
Over the next 12 months, you are likely to see a number of new initiatives:
- performance management frameworks will provide the basis for monitoring and managing all DoCS’ renewable contracts. The framework is designed to ensure that service delivery becomes more focussed on results
- Good Practice Guidelines for DoCS Funded Services provide tools to guide and support services. They aim to help services improve governance, management and service design and ultimately deliver better services to clients
- performance-based contracting will involve DoCS working with services to develop clearly written Service Level Agreements that focus on results rather than inputs and processes. Services will have greater flexibility to determine ‘how’ they deliver their projects to get the agreed results. Performance-based contracting will be introduced in stages. DoCS will support services throughout the process
Q. how do services get ready for funding reform?
A. DoCS Funding Policy outlines the funding directions over the next five years as well as providing concrete policy direction over the short term.
DoCS is funding Peak organisations to ensure services are better equipped to implement funding reform and runs training programs for NGOs. It might be useful to encourage service providers to examine their current practices, identify their needs, and inform their Peak Organisations and DoCS.
Q. many services have limited resources, how will they manage to do what is required?
A. DoCS regularly receives feedback from service providers and peak organisations about difficulties with administrative, legal, insurance and accountability matters faced by some services.
In response, DoCS has developed a number of strategies to support small, rural and remote services and services for Aboriginal Peoples and Torres Strait Islanders and Culturally and Linguistically Diverse Clients.
Such strategies outlined in the Policy include:
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Small services comprise the majority of the Department’s service system and provide valuable services that are responsive to local needs.
The Good Practice Guidelines for DoCS Funded Services will provide further support and guide the development and viability of all services.
DoCS will continue to explore a range of approaches to assist small service providers such as encouraging shared back-office support, streamlined funding and monitoring processes and training programs. DoCS also funds peak organisations to research ways of enhancing capacity in certain parts of the sector. -
Strengthening rural and remote services will include establishing new services or extending current services by using new enhancement funding from the Early Intervention and Out-of-Home Care programs.
DoCS will also work with service providers, communities and other funding bodies to develop strategies to help overcome the barriers to service coverage in rural and remote areas. This may involve local services forming partnerships with metropolitan-based services that are interested in extending their geographical coverage. -
Strengthening Aboriginal Peoples and Torres Strait Islander client services through a number of initiatives is another priority. The Aboriginal Capacity Building Project for Community Services Grants Program which is a joint initiative of DoCS and NCOSS aims to give Aboriginal community-based organisations opportunities to be mentored by larger, more established providers. The findings from this project will be important in developing strategies to support small Aboriginal services.
We are also initiating a new project to examine the feasibility of significant capacity expansion in a number of Aboriginal services.
Q. where can I get more information about funding reform?
A. Apart from DoCS Funding Policy, information on funding reform will also be made available to services in the following ways:
- see our page on funding reform - information is also available on the communitybuilders website
- information sheets will be mailed out to funded services and peak bodies
- peak bodies will be provided with information and articles that they can post on their websites and publish in their newsletters
- articles on funding reform will be featured in DoCS’ stakeholder newsletter, Inside Out
- DoCS’ representatives will be speaking at conferences and peaks’ seminars
- DoCS’ regional staff will be provided with information to be able to respond to requests for support/information from funded services
- DoCS’ regional staff will be running briefing sessions for funded services.
Service providers and peak organisations will also be invited to serve on working groups and comment on various papers and strategies that will be developed in relation to DoCS’ Funding Policy.