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Matching intentions and outcomes: tendering in the human services sector

Rebecca Vassarotti 13 November 2019
Deb Pippen

Tenants’ Union ACT executive officer Deb Pippen. The Tenants’ Union ACT is responding to a tender for services that they have provided for over two decades, placing emotional and financial stress on staff and the organisation. Photo: File.

In recent weeks we have been alerted to two curious cases where local services have been subject to significant uncertainty in relation to funding provided to provide legal services, advice and support to at-risk groups. This has included the provision of the domestic violence advice service provided by ACT Legal Aid and a tenancy advisory service provided by the Tenants’ Union ACT. While Legal Aid has now been informed that funding will be continued to provide their domestic violence service,  the Tenants’ Union ACT is now responding to a tender for services that they have provided for over two decades.

The decision regarding the tenancy advisory service has sparked a campaign that is being supported by unions and a range of community organisations.  The campaign has included a call for the Government to reverse the decision. Supporters point to the fact that the Tenants’ Union ACT is the only free service that tenants can turn to if they are dealing with issues regarding their tenancy and has been providing this service for the last 25 years, funded through the interest generated from rental bonds. They raise questions as to the timing of the decision, coming at a time when significant changes in tenancy laws passed the ACT Legislative Assembly earlier in the year that both tenants and landlords will need to respond to.

As well as acknowledging the impact of this decision on a particular service and the people they serve, this decision should also generate a reflection of the usefulness of market testing as a mechanism to deliver high-quality human services to individuals and communities. Any reflection of this type must begin from a premise that services, including those provided by the not-for-profit sector, should not be afraid of accountability and review. There are expectations by both funders and providers that contract management should include active dialogue and problem-solving to ensure accountability, value and responsiveness to emerging needs.

Funders have a right to market test services they purchase. They need to ensure, however, that they are clear about what they are trying to achieve through market mechanisms and ensure that procurement processes are designed in a way that is fit for purpose and deliver on desired outcomes including best value services. They need to consider the often unintended impacts that these processes can have, particularly in creating uncertainty for organisations that are delivering outcomes for the community that are not often easily replicated by other organisations.

Indeed, a few years ago, the Productivity Commission looked into the issue of contestability in the human services sector and found this was a big issue. It concluded that short-term contracts and uncertainty about when services will be put to tender prevent service providers from planning ahead, innovating and investing in their workforce. So counter-intuitively, sometimes the decision to market test ends up undermining service delivery as it unsettles staff and often results in skilled and capable staff leaving organisations due to the need to have job security.

Many services hold rational fears that the current tendering methods do not adequately value intangible elements of services that are provided to marginalised individuals. In particularly specialised areas, or when working with particularly vulnerable clients, experience suggests that traditional market mechanisms do not appropriately value elements such as independence, trauma-informed practice, community development delivery models or responsiveness to community need.

In an environment of scarce resources, tender processes can create a situation where complimentary services are forced into competition, and fight for poorly resourced contracts to cobble together a viable overall organisation. While many procurement processes seem to be premised on a belief that a smaller number of organisations delivering a larger number of services saves money, this is yet to be proven, with higher infrastructures costs needed as organisations grow.

For many years, the relationship between the Government and the community sector was set within the framework of the Social Compact. This outlined the principles of respect, open communication, engagement, continuous improvement, leadership and diversity as key to this relationship. The last time the Social Compact was renewed was in 2011. While it’s still an active document, the discussion of how to frame contract management discussions within this framework seems to have been forgotten by many. As we look at the local human service system and sub-sectors such as homelessness, we need to design tender processes that reflect the principles and expectations that were developed and agreed to by both Government and the community sector.

I think it’s time for new discussion about how we can support a partnership approach between Government and the community sector in their joint work to support individuals, households and the broader Canberra community. What do you think?

Rebecca is on the Board of a number of local human service organisations. She is an active member of the ACT Greens and ran as a candidate in the 2016 Territory election.


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