A significant investment announced as part of the 2009-10 State Budget was an increase in price indexation for Department of Human Services (DHS) and Department of Education and Early Childhood Development (DEECD) funded services. VCOSS welcomes the increased price index and the certainty it provides to those organisations over the next three years given current economic conditions.
The 2008-09 State Budget included significant investment to enable the implementation of the Victorian Government’s Action Plan: Strengthening Community Organisations. Given this was a four year investment, it is not surprising that there were few additional resources provided in the current budget. However, VCOSS calls for the development of an Action Plan implementation strategy, with clear performance measures, to allow for its progress and the allocation of funds to be tracked and reported.
The VCOSS state budget submission for community sector sustainability included three key recommendations regarding price indexation, a community sector workforce strategy and continued investment in the VCOSS Training and Development Clearinghouse to support sector capacity building. The following analysis is based on these recommendations.
Negotiations have been underway for some time regarding indexation for the 2009-2012 Funding and Service Agreements between the Department of Human Services and health, housing and community services. The Price Index Working Group (a working group of the Peaks and State Networks Forum which was established to negotiate the Price Index on behalf of the sector) reached a settlement with Government just prior to the state budget.
VCOSS welcomes the Government’s commitment to an annual indexation of 3.14% each year for three years, plus a continuation of the $2 million per year capacity building payments allocated across the sector. The previous rate was 2.9% plus the $2 million capacity building payment.
VCOSS had been advocating strongly for a 4.2% price index, based on advice provided by the Allen Consulting Group in 2008. However, the gap is ameliorated by the significant reductions in Consumer Price Index (CPI) and Wage Price Index (WPI) projections resulting from the current economic climate.
VCOSS also welcomes the continuation of the additional $2 million capacity building payment, which is additional to the indexation rate, as its allocation is determined by the development needs of organisations. Although this payment has not been increased since the last agreement, it brings the total indexation rate to around 3.3%.
However, VCOSS was disappointed the price index applied only to Department of Human Services (DHS) and Department of Education and Early Childhood Development (DEECD) funded community services as a uniform price index is needed for all government funded services. VCOSS will undertake further advocacy work with relevant organisations to engage other departments, including the Department for Planning and Community Development and the Department of Justice, in the push for broader implementation of the price index.
Price indexation is one of two elements necessary to ensure adequate funding for the delivery of services. Price indexation ensures that the value of the base price is not eroded over time. However, it is also critical to get the base price right so that it covers the full cost of service delivery.
Demand for services is already increasing due to the economic environment. For example, the unemployment rate is expected to increase to an average of 7.0% in 2009-10 and 7.75% in 2010-11. These projections indicate that there is an urgent need to invest in community services which provide support to vulnerable and disadvantaged Victorians.
Although the Victorian Government’s Action Plan: Strengthening Community Organisations notes the merit of price reviews for identifying the full cost of service delivery, and to assess options for full and partial funding (action 17), this budget contains no commitment to increase funding levels across the sector to reflect the full cost of service delivery.
VCOSS is disappointed that there remains a lack of investment in sector sustainability through increased unit prices given price reviews have concluded for several areas, such as disability and family services. There is an urgent need to increase investment to ensure the financial viability of organisations.
VCOSS does welcome the small investment of $4 million to assist disability services to address costs pressures, upgrade infrastructure and develop business systems.
VCOSS is disappointed that there are no dedicated funds for the development of a comprehensive workforce strategy. The Community Services Workforce Capability Framework which is being developed is one part of a comprehensive strategy but does not address all the workforce issues facing the sector. VCOSS had called for resources to develop a sector wide coordinating body to deliver a sector workforce strategy to respond to the crisis in recruiting and retaining appropriately skilled workers for community services.
VCOSS supports investment in the mental health workforce. The Government has committed $2.4 million over four years to establish a mental health workforce development and innovation institute to support specialist mental health services to address workforce shortages and service quality issues.
$4.2 million over four years has also been provided to establish new time limited positions to lead local service planning and coordination and to support the integration of clinical, psychosocial rehabilitation and primary health components of the mental health system.
The mental health sector does face significant workforce issues so dedicated funding will assist to address some of these issues. Given the focus on partnerships in the Because Mental Matters mental health strategy, investment in partnerships and local service planning is also welcomed. An implementation plan needs to be developed to identify how these funds will be operationalised. VCOSS is concerned that these resources cannot address all the workforce and partnership issues given there are twenty-two adult mental health areas alone in Victoria.
VCOSS is disappointed that there is no ongoing funding commitment to date for the VCOSS Training and Development Clearinghouse.
The VCOSS Training and Development Clearinghouse is an organisational support service that is delivering free training, consulting services, publications and collaborations that strengthen the capacity of the community sector. The Clearinghouse has been funded until mid 2009.
In year one of operations a grant from the Community Support Fund of $160 000 translated into $550 000 worth of training and development delivered to community organisations across Victoria. Over 700 organisations received free training, and 100 organisations were matched with skilled volunteers.
Continued and expanded resources are essential to enable the Clearinghouse to maintain and expand its established program, and, importantly, to extend its role to engage in targeted capacity building for vulnerable parts of the sector, such as Aboriginal controlled organisations, and newly arrived immigrant and refugee groups.
VCOSS calls for a three-year recurrent funding commitment to maintain and expand the services and reach of the VCOSS Training and Development Clearinghouse.