National Disability Insurance Agency would swap labour hire for permanent staff under Labor

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The National Disability Insurance Agency looks to be high on the opposition’s priority list for agencies that would swap a lot of contractors for public servants if it wins government in May.

In Labor’s view, the NDIA provides a prime example of why it plans to remove the Coalition’s cap on Australian Public Service staffing levels, if elected.

In terms of headcount, the NDIA is a mere shadow of the agency envisioned by the Productivity Commission when it designed the National Disability Insurance Scheme, and its extensive use of contractors and consultants to perform key roles has been a major source of public complaints.

The opposition argues the strict budget control policy has been counter-productive, especially in social services, leading to functions it counts as core APS responsibilities being outsourced because leaders have no other choice—even when it doesn’t make sense because it costs more, risks inferior results and makes it harder for agencies to maintain and improve capability in the long term.

This is particularly evident in the case of the NDIA, according to a joint statement from opposition finance spokesman Jim Chalmers and shadow minister for social services and families, Linda Burney. They argue that without the staffing cap, the agency could convert a lot of positions it funds into APS jobs while “saving millions on corporate consultancies and outsourcing” in the process.

“The focus for the National Disability Insurance Scheme should go towards improving support and services for people with disability—not lining the pockets of consultants and multinationals,” argue Burney and Chalmers, who also claim the cap has caused “poor morale” in the APS.

The pair argue outsourcing of core public service responsibilities is “out of control” at the NDIA, seizing on a report that it spent $430 million on consultants and contractors in 2018, compared to about $300 million in 2017 and $70 million in 2016.

They appear unwilling to commit to reducing the agency’s external spending by anywhere near the full $430 million at this point, however.

In the article, The Australian’s social affairs reporter Rick Morton notes some questionable deals—like McKinsey Pacific Rim Inc getting “almost $4 million in a single month to correct work for which it had already been paid $5 million” —but also points out spending with standard labour-hire firms was only about $50 million last year. Morton explained:

“The vast majority of the $430m spent last year on outsourcing relates to contracts with non-government organisations to deliver early childhood and early intervention services and what it calls ‘local area co-ordinators’ who are the first point of contact for many people in accessing the NDIS.”

Burney and Chalmers hinted that these not-for-profit service providers may not be in their sights. “Local Area Coordination and Early Childhood Early Intervention services are critically important parts of the NDIS,” they said, clarifying that “outsourcing in other core areas” was their main issue.

The shadow ministers said “there’s a time and place for expert external advice” but argued that replacing contractors with public servants would also improve services at the NDIA, as permanent APS staff would be better trained and more dedicated than contractors.

“Australians deserve to know how much of their money is going to contractors, consultants and labour hire,” they added, referring to the parliamentary probe that explored why it is so hard to count the cost of outsourcing expertise and extra bodies across the whole APS.