Opposition mounts to Abbott Government's Cashless Welfare Card

Greens Senator Rachel Siewart has made clear her party's opposition to the Abbott Government proposal to introduce a cashless Welfare Card for Indigenous and non-Indigenous people. Her media release is below.

Legislation for a 12 month trial of  the Welfare Card in a number of locations will be introduced into Parliament this week, but can only pass with the support of Labor or at least 6 crossbench senators.

The idea for the Welfare Card was originally proposed by philanthrocapitalist and mining billionaire Andrew Forrest who recommended a cashless welfare card for all working-age Centrelink clients in his 2014 review of Aboriginal employment.

The Welfare Card aims to prevent welfare recipients gambling or buying alcohol or drugs. The intention is that the card will apply to every adult  who happens to be on welfare. It is promoted as a way to stop alcohol fuelled violence and abuse of women and children.

There are two distinct elements to the proposed Welfare Card.  Firstly, the introduction of a cashless welfare payments system, and secondly, the implementation of universal restrictions on the spending of those welfare payments (including the inability to withdraw cash).

In the trial sites the card will target Indigenous and non-indigenous people and veterans, aged pensioners and others will be able to opt into the card should they choose to do so. 

In the trial sites 80 per cent of all welfare payments will be placed onto the cashless debit card and the remaining 20 per cent will go into an ordinary cash account.

However, as Eva Cox has shown there is no evidence such programs work.  She argues that such programs start with the wrong assumptions, that the spending of income recipients is the problem.

Cox argues that they can undermine recipients’ capacities to make their own choices, costs a lot per person to administer, which could be better spent on other services, reduce the focus on external problems (such as job seekers greatly outnumbering jobs and employers' prejudices affecting work prospects) and blames the most vulnerable and reinforces hostile public views

An independent evaluation of the Northern Territory Income Management Program concluded:

The evaluation could not find any substantive evidence of the program having significant changes relative to its key policy objectives, including changing people’s behaviours.

More general measures of wellbeing at the community level show no evidence of improvement, including for children.

The evaluation found that, rather than building capacity and independence, for many the program has acted to make people more dependent on welfare.

Unsurprisingly, there is division among Aboriginal leaders, with some supporting the proposal and others opposed to it.

ACOSS's statement opposing the Welfare Card is here.

Critiques of the Welfare Card proposal are here, here, here, here and here.

Christopher Chew from Monash University analyses the proposal from an ethical perspective and concludes:

In summary, it seems that the proposal for a Healthy Welfare Card is disproportionately paternalistic, rests on controversial and elitist assumptions about welfare recipients and the nature of welfare system, and will only serve to infantilise and alienate an already vulnerable part of the Australian community. It is most certainly not empowering, will not give people complete freedom and will certainly not end paternalism. Perhaps the intent of this amazing doublethink is that “welfare recipients” will become as demonised as the ‘illegal boat people’ of election campaigns past.

The proponent of the card, Andrew Forrest has contributed to this important social policy debate by dismissing anyone who critiques the proposal  as 'useless “hand wringers and pontificators'.

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Extract from media statement by Senator Rachel Siewart

"I urge the Labor party to be genuine opposition when it comes to voting on legislation that will seek to rollout the healthy welfare card trials.

“It is incomprehensible that a paternalistic thought bubble by a billionaire could materialise with the support of the Labor party, rolling out as early as next year.
  
“80% of someone’s income support forcibly quarantined to a card will make life remarkably harder for this already struggling group.

“Limiting access to cash will severely restrict the ability to budget and decision making. Whether it be at the markets, lunch money for their kids, or a bus fare – all these things add up and may not be available via card payment. 

"Most importantly people have spoken of being made to feel like second class citizens when talking about their independence and dignity.

“We know that paternalistic top down measures do not work. Income management has not worked. We know from evaluations that income management hasn’t delivered results. The healthy welfare card is just a continuation of this approach.
 
“The Government should focus its energies on a range of measures and wrap around supports; just restricting spending and access to cash doesn’t address the underlying causes and people will find other ways to buy alcohol and money for gambling.

“The Government and it appears the Opposition are desperately supporting silver bullet measures, these are complex issues that need to be addressed.

“The Australian Greens will not be supporting the healthy welfare card in the House of Representatives or the Senate. We will move to send this measure through to a Community Affairs inquiry so that it can be further scrutinised.

“We must abandon top down approaches that have failed in the past and will fail again. We must work closely with community members to address disadvantage."

Challenging market orthodoxy: the economic lessons of Elinor Ostrom

It is time that those of us concerned about social and economic justice and the role of the NFP sector and civil society start developing serious policy alternatives to the market driven policies that are being imposed in social policy and the delivery of social and community services.

Three years after her death in 2012 the work of  Elinor Ostrom remains more relevant than ever for those of us campaigning for alternatives to the contemporary orthodoxy of market fundamentalism and neoliberalism that has colonized large parts of the not-for-profit and civil society sectors.

 

 Ostrom who was a Professor at Indiana University was the first woman to be awarded the Nobel Prize for Economic Sciences in 2009.

Ostrom's work challenged and rebutted fundamental economic beliefs, particularly free market and neo-classical economic paradigms. Ostrom was particularly concerned with  relational aspects of economic activity — the ways in which people interact and negotiate with each other to forge rules and informal social understandings.

Ostrom's early work focused on what she called co-production.

 

Ostrom argued that many public services depend heavily on the contribution of time and effort by the persons who consume these services, i.e. the clients and citizens.

 

Ostrom believed that services rely as much upon the unacknowledged knowledge, assets and efforts of service ‘users’ as the expertise of professional providers. It was the informal understanding of local communities and the on the ground relationships that make services more effective.

Co-production describes the relationship that exist between ‘regular producers’, like health workers, police, and schoolteachers and their ‘clients’ who may be transformed by the services into safer, better educated and/or healthier persons.

Ostrom defined co-production as

 “…the mix of activities that both public service agents and citizens contribute to the provision of public services. The former are involved as professionals, or ‘regular producers’, while ‘citizen production’ is based on voluntary efforts by individuals and groups to enhance the quality and/or quantity of the services they use”

One implication is that privatization of public services and the turning over of services to the market fundamentally transforms the relationship between provider and service user, hampering the development of co-production and democratic governance.

Her later work examined how people and communities collaborate and organize themselves to manage collective shared resources like forests, fisheries and natural and social resources. The research overturned the conventional wisdom about government regulation  and challenged the idea that private ownership of public resources is better and more effective than the public and collective sphere.

Ostrom's work provides clear evidence  that the commons-based traditions of cooperation and communal management of resources is not a violation of basic economic common sense.

Her work undermines political conservatives and mainstream economists who denigrate collectively managed property and government and who argue that only private property and the "free market" can responsibly manage resources.  Her work also directly challenges current ideas that privatization and private ownership and expert management of resources is a more effective strategy than collective and public management

Ostrom advocated a “polycentric” approach to managing shared or common resources involving oversight “at multiple levels with autonomy at each level. She argued that shared management of resources helps to establish rules that “tend to encourage the growth of trust and reciprocity” among people who use and care for a particular commons.

Ostrim argued that key management decisions should be made as close to the scene of events and the people and groups involved as possible. Her work showed that the people most affected by or with a stake in shared or common resources are the ones best able to collaborate to use and manage those shared resources effectively and sustainably.

Her work demonstrates that ordinary people are able to create rules, institutions and systems that ensure the equitable and sustainable management of shared and common resources, what is often called our 'common wealth'.

She demonstrated the importance of shared (collective) rather than expert or private management of resources and knowledge and emphasises the importance of active citizen participation. She cited a comprehensive study of 100 forests in 14 countries that detailed how the involvement of local people in decision making is more important to successfully sustaining healthy forests than who is actually in charge of the forests.

 David Bollier writes of the significance of Ostrom's work:

In the 1970s, economics was quickly veering into a kind of religious fundamentalism. It was a discipline obsessed with “rational individualism,” private property rights and markets even though the universe of meaningful human activity is much broader and complex. Lin Ostrom pioneered a different, more humanistic way of thinking about “the economy” and resource management. She originally focused on property rights and “common-pool resources,” collective resources over which no one has private property rights or exclusive control, such as fishers, grazing lands and groundwater. This work later evolved into a broader study of the commons as a rich, cross-cultural socio-ecological paradigm. Working within the social sciences, Ostrom proceeded to build a new school of thought within the standard economic narrative while extending it in vital ways.

 Ostrom's work also has direct relevance to the current economic and environment crises. She wrote:

"We cannot rely on singular global policies to solve the problem of managing our common resources: the oceans, atmosphere, forests, waterways, and rich diversity of life that combine to create the right conditions for life, including seven billion humans, to thrive.....Success will hinge on developing many overlapping policies to achieve the goals,.......We have a decade to act before the economic cost of current viable solutions becomes too high. Without action, we risk catastrophic and perhaps irreversible changes to our life-support system.”

Articles written in memory of her work are here, here, here and here.

A reading list of her work is here.

The last article she wrote before she died is here

Her last book, published just before her death was titled Working Together: Collective Action, the Commons, and Multiple Methods in Practice, and describes the advantages of using several different research methods to study a problem.

The Abbott Government, social policy and the greedy ghost of market fundamentalism

Treasurer Joe Hockey's announcement that the Abbott Government plans to increase the pension age (from 67 to 70), impose more welfare means testing and introduce co-payments for medical services comes as no surprise, but provides more evidence of the continuing assault on public spending for the less well off, the vulnerable and disadvantaged.

The Abbott Government has already imposed severe spending cuts across many portfolios and shown its intention to cut back public expenditure for the less well off by fundamentally transforming income support in areas such as the Disability Support pension (DSP), family and welfare payments and welfare support for the long term unemployed.

In addition, there is the expectation that both the report into the Welfare System (the McClure Review) and the report of the National Commission of Audit (the Business Council of Australia report), both due to be released soon, will recommend serious austerity policies and market driven social policies.

The Abbott Government's market fundamentalist policies and its austerity agenda are intended to dismantle public spending for the less well off and the vulnerable, and fundamentally transform public spending and public assets to make them suitable to deliver profit to the business and corporate sector and largess to the already well off.

What is also worth noting is that this fundamental transformation of social policy and welfare support is being undertaken without any real consultation with the social policy and welfare sector, and continues to be driven by advice from, and the agendas of influential pro- business and corporate lobby groups, such as the Business Council of Australia.

Moreover, the Abbott  Government has consistently concealed its real social policy intentions and denied it was planning to impose these policies. None of the policies were made public prior to the last election and back in November 2013 Treasurer Joe Hockey lied when he said that the Government had no plans to increase the pension age.

While it dismantles social policies that support the less well off and the vulnerable it retains and expands profligate policies for the corporate and business sector and the rich and already well off, such as superannuation tax concessions, various housing-related tax benefits, paid parental leave, asset tests and corporate tax benefits, to name but a few.

On his blog En Passant former Tax Office economist, blogger, activist and academic John Passant alerts us to the hypocrisy and deceit of Treasurer Joe Hockey's proposals on the age pension:

Let me get this right. The revenue forgone on tax concessions for superannuation at $45 bn will soon be more than the cost of the pension (over $40 bn). Of that $45 bn in tax concessions $10 to $15 bn will go to the top 10% of income earners. Yet Australia’s greatest Treasurer, Joe Hockey, wants to rein in expenditure on the pension by for example extending the access age to 70 (after Labor increased it to 67 over time by 2023) and tightening up the asset test to perhaps include the family home. Priorities. 

According to the OECD Australia has one of the lowest relative pensions of any member countries (Turkey and Mexico are lower) and 35% of Australian pensioners live in poverty. Priorities.

Gerry Georgatos and the power of combining citizen journalism and social justice campaigning

Gerry Georgatos is a West Australian journalist who combines investigative reporting with a powerful commitment  to campaigning on social justice and human rights issues.

Gerry is  a Western Australian based reporter for the National Indigenous Times for whom he writes important stories about Indigenous and social justice issues that few other journalists are willing to cover.

Gerry is also the Principal and Convener of the Human Rights Alliance through which he has initiated  and led groundbreaking social justice campaigns in WA. Gerry is also a Phd researcher  on Aboriginal Deaths in custody.

It is this combination of investigative journalism, social and political research and social justice campaigning that has resulted in Gerry exposing injustices ignored by the mainstream media and politicians, including the illegal imprisonment of Indonesian youths in adult prisons in WA, Police violence inflicted on a young Aboriginal man in Albany and the appalling state of Aboriginal homelessness in the Kimberley region.

As well as the National Indigenous Gerry's articles also appear in many other places including Indy Media, Indy Media Brisbane, Green Left Weekly and the Donnybrook-Bridgetown Mail.

Gerry's article below is about the decision by the UK multinational corporation Serco and the WA Department of Corrective Services to deny Aboriginal prisoners access to prisoner transport to attend family funerals. 

The article will appear in the National Indigenous Times this week. 

Gerry Georgatos on Aboriginal Funeral outrage

The National Indigenous Times has been contacted by two sources during the last couple of weeks, one within the Department of Corrective Services (DCS) Western Australia and another within SERCO, that Aboriginal inmates will no longer be transported to funerals. Instead they may be left with the option of paying their respects to loved ones by either viewing a recorded or where possible live screening of the funeral and the procession while alone in a prison wing room. This has been slammed as inhumane, and culturally inappopriate by most Aboriginal Elders.

Both sources said that this initiative was flagged allegedly due to SERCO's reluctance to transport prisoners to funerals. The multinational which has the contract to much of the State's prisoner transport, and manages Acacia Prison, on the outskirts of Perth, and the lucrative Immigration Detention Centre network Australia-wide, is allegedly reluctant to provide compulsory funeral attendances for Aboriginal inmates - it has been alleged that SERCO management claimed high prison officer risk issues at funerals and also allegedly cost benefit issues. SERCO is one of the world's wealthiest companies.

The National Indigenous Times contacted the DCS, and its spokesperson Brian Cowie said "Gerry, we will have comment for you next week." 

UWA law student and Nyoongar rights activist Marianne Mackay the former chairperson of the Deaths in Custody WA contacted the National Indigenous Times a few days ago to confirm that she had also been advised that an Aboriginal prisoner was refused transport to a funeral last Friday. "This is a first, it doesn't happen that one of our people is not allowed to attend a funeral. Apparently SERCO refused to transport him and this has stunned us considering how everybody knows how important it is for our people to attend funerals. It attacks our cultural integrity."

SERCO is yet to respond to the National Indigenous Times.

Another Nyoongar rights activist, Iva Jackson-Hayward has responded with a call for the State Government to ensure that the DCS and SERCO ensure Aboriginal inmates do not have their cultural rights eroded. "The DCS and SERCO are dutibound to protect the rights of our people. Aboriginal women and men in prison cannot break their customary duty to attend funerals. It's outrageous what is happening, and it's a human rights abuse. This is all about money, and SERCO trying to make more of it by abusing the rights of our people. It is the Government's duty to pull SERCO into line."

Ms Mackay said the Inspector of Custodial Services, Neil Morgan was contacted on Friday.

The WA Prison Officers Union (WAPOU) said the State Government should scrap SERCO's prisoner transport contract. WAPOU Secretary John Welch made this call following another whistleblower's leaking of serious allegations.

The whistleblower said SERCO transported prisoners to wrong prisons, was late in bringing prisoners to their Court appearances, transported seriously ill prisoners in prison vans instead of ambulances. It was only a couple of months ago a prisoner who had open-heart surgery was returned to the prison in a van instead of an ambulance and arrived with serious injuries which the DCS tried to play down however CCTV footage proved otherwise.

All three whistleblowers said SERCO was not turning up to transport Aboriginal prisoners to family funerals, and that SERCO made no effort to account for its failure.

Mr Welch said SERCO's failure to ensure contracted prisoner transports gave rise to stress and tensions in prisons.

"These latest allegations are so serious that the Barnett Government should cancel SERCO's contract and bring these services back for the Department of Corrective Services to run so that we can be confident the community is being kept safe."

Australia has one of the world's worst prison suicide rates, with privately run prisons, according to the Australian Institute of Criminology, enduring proportionately more deaths in custody than Government run prisons.

Other serious allegations were made by the whisteblowers to the National Indigenous Times and we will follow these through.

When progressive ideas are used to conceal market agendas

This piece from the UK Social Work and Action Network describes vividly how supposedly progressive reforms and ideas like social inclusion, social innovation and user centred services are deployed to conceal market based agendas and how, as a result, they end up destroying effective human and community services.

The piece also demonstrates that the use of market based approaches damages the most vulnerable and the most disadvantaged and undermines the capacity of human and communty services, thereby creating  the conditions for even more marketisation and privatization.

Sadly this situation also applies here in Western Australia.

I work for the NHS within Community Mental Health Services as part of a team whose remit was to enable service users to access educational and employment opportunities. We ran what I considered a unique and progressive service. We worked in a building not far from the city centre. We had an ICT suite where service users could gain qualifications and with our support create or update their CVs.
 

Within the centre we had a café where service users could gain work experience to gain relevant qualifications with currency in the catering industry. It was also a place where service users could come along for a hot meal, a coffee and a chat.

Our reception was also staffed by service users gaining work experience and relevant qualifications. We delivered in house courses in Building Confidence and Self Esteem. The team alongside ex service users also developed and delivered workshops to service users based on the Recovery Model.
 

We worked closely with local education providers delivering courses such as: Rights and Responsibilities at Work, Working in Retail, Working in an Office, Working in Customer Services and Working in the Public Sector. We also worked closely with Welfare Rights who regularly delivered workshops and advice sessions on benefits, debt and housing issues. We also had thriving Art and Drama projects which rebuilt the confidence of people who had endured a variety of mental health difficulties.

The whole project was person-centred, the idea being that it was a sort of stepping stone which gave them renewed self confidence and skills to move on with our advice, guidance and support into mainstream opportunities to enhance their life chances.

The whole project was person-centred, the idea being that it was a sort of stepping stone which gave them renewed self confidence and skills to move on with our advice, guidance and support into mainstream opportunities to enhance their life chances.

Then came the reorganization. The reorganization was pushed through using ideas and progressive language originally developed through the previous New Labour government’s Social Inclusion Unit. Day Centres we were told were bad, they simply institutionalized people with mental health difficulties. The whole new focus was to create services without buildings.

During my time working in Mental Health Services I have seen some pretty awful places. Day Centres which offered patronizing services that oozed with boredom with no real progression for service users. Our project was not like this.

The NHS Trust I work for was at the time of our reorganization looking at squeezed budgets and the cost incurred in leasing buildings. They do have a building programme for new inpatients units, but as yet not one brick has been laid and in some instances planning permission is not yet approved, yet they closed the only inpatient ward in the City.

Our project has changed beyond recognition. Some staff will be taking pay cuts in the reorganization which has had a massive impact on morale. We are now expected to record all service user contacts and outcomes from each appointment on 3 separate and different I.T. systems. But more importantly we can no longer deliver the range of opportunities to service users. Everything has to be accessed in the wider community. The café and service user reception has gone. We cannot make appointments to see service users in the building when we are offering advice, guidance and support. We now have to go out in twos to the service users home to ascertain from the service user what we can do for them to promote their social inclusion. The outcomes of the first contact with the service user are discussed at a team meeting and then a member of the team (an education worker, employment worker, volunteer coordinator, arts worker, sports worker) is allocated to the service user, depending on what kind of ambitions they have.

This is followed by a telephone call to the service user and arrangements are made to meet them somewhere in the community. The advice from the trainers from the Social Inclusion Unit was that a café may be a suitable venue for the first appointment. Yes a public place when the service user may be disclosing personal and often quite distressing information.

As a team we are now finding that many opportunities in the community for our service users: colleges, arts projects, leisure centres, etc are few and far between because of the current round of cuts .The local council has made cuts to the passport to leisure scheme which helped people on benefits access leisure centres etc. The local colleges have changed the criteria for fee wavering for people on benefits meaning that many of our service users are unable to access educational opportunities. As the cuts start to bite deeper there will be fewer and fewer opportunities for our services users in the wider community.

To make staff morale worse our building may be given to different teams within the Trust. We have recently heard that we may be supplied with laptops and work from our cars, dropping into Trust buildings to use docking stations to send data to the I.T. systems. We will probably end up as lone workers apart from one afternoon per week when we attend a caseload allocation meeting. It seems to me that our service has now been slimmed down to such an extent it is ripe and ready for privatization.

Welcome to modern, progressive mental health day services in 21st Century Britain.

Abbott led opposition to adopt UK style Big Society policies

 Writing in the Sydney Morning Herald Lenore Taylor traces the influence of the UK Conservative Government's Big Society agenda on the Coalition Opposition's social policy agenda for the next election.

Coalition frontbenchers have been instructed to slice away federal bureaucratic oversight of aged care, childcare, employment and family services in a bid to devolve government power and deliver budget savings through public service cuts.

The Coalition, which needs to find more than $30 billion in spending cuts, will pledge cuts to the bureaucracy, but says it will not hit frontline services. The policy is in line with the controversial ''Big Society'' philosophy of British thinker Phillip Blond, who was in Canberra this week for meetings with Coalition leader Tony Abbott and most of his frontbench.

Coalition families spokesman Kevin Andrews told The Saturday Age he had developed the model for stripping unnecessary federal oversight of federally funded services delivered by community and private organisations.

But Big Society rhetoric provides cover for severe austerity measures and a fundamental transformation of the delivery of publicly funded human and community services. 
 
In the UK Big Society rhetoric was used to justify sweeping cuts to public services, to community services and even to the community and voluntary organisations it was supposed to nurture.
 
It has also produced the largest ever privatisation of human and community services in UK history with large swathes of the human and community services industry now under the control of private corporations.

Despite promises by the UK Government that local devolution would primarily benefit small community based not- for- profit, it has been large corporations who have been the real winners.

Taylor notes, correctly, that:

But in Britain, the outsourcing program that was supposed to benefit little community groups ended up giving enormous contracts to large corporations, such as Serco, which runs Australia's detention centres, and in some parts of Britain now runs all the government-funded schools.

The implications of the Big Society agenda for Australia are well documented in a recent report by the Centre for Policy Development titled Big Society: How the UK Government is Dismantling the State and what it means for Australia. 

The Report shows among other things that the reality of Big Society Agenda is vastly different to its rhetoric. The impacts of the Big Society programs in the UK have included:

• An £81 billion cut in public spending over four years including an average 19 per cent budget cut to government agencies, 60 per cent cut to the budget for new public housing and £7 billion cut to the welfare budget.
• The UK’s public service is expected to shrink by up to 710,000 public servants over six years.
• Corporations and the largest charities have dominated the commissioning process: 35 of 40 Work Programme (employment agency) contracts were awarded to corporations.
• Cameron’s budgets have dealt a £5 billion funding cut to the UK’s community sector and funding cuts of £110 million to 2,000 UK charities
• The number of people employed in the UK’s community sector fell by 70,000.
• Local government budgets were cut by more than a quarter in 2010-11 resulting in staff cuts of 10-20 per cent and widespread cuts to programs.
• During 2010-11, public sector employment fell by 4.3 per cent. Private sector employment increased by 1.5 per cent.

Under outcomes based contracting small agencies are the big loser

More evidence that outcomes based contracting approaches such as payments by results and prime/lead contractor models are bad for small not- for- profit human and community services organizations.

In the UK outcomes based contracting models lead to the issuing of larger contracts which primarily benefit large corporate prime contractors.

Outcomes based contracting has the effect of forcing smaller agencies out of public procurement processes.

This report is from the UK online publication Third Sector

Heather Wilkinson, chief executive of Striding Out, which provides career support and training, told Third Sector her organisation had been affected by changes to the way government departments commissioned contracts for the Work Programme, the Skills Funding Agency and the National Citizen Service. 

"The challenge is that these departments are now only looking to work with large corporate prime contractors with a view to only issuing bigger contract values, and they are paid-by-results models."

Striding Out had been in talks with a prime contractor about NCS services, she said, but "due to its profit margins, the money it offered us for delivering our element of work was unviable".

"The money is there and the contract opportunities are there, but the problem is that we cannot get to them," she said.

"I don’t feel there have been fewer opportunities, but our ability to bid competitively and fairly has been reduced."

James Allen, head of public services and partnerships at the National Council of Voluntary Organisations, said the introduction of payment-by-results contracts, such as those offered to charities under the Work Programme, had proved particularly problematic.

"Payment-by-results is a significant barrier to organisations bidding for contracts in the first place," he said.

"The problem is moving from a model of upfront payments and grants straight to payment-by-results without the transition being skilfully managed. Organisations are already under pressure and margins are tight. They won’t bid because they cannot take the risk."

The dangers of outcomes based contracting models

As the Barnett Government and the funded not- for- profit sector in Western Australia move to adopt outcomes based contracting models for the delivery of human and community services, the evidence from the UK demonstrates the danger to the sector of such models.

The use of outcomes based contracting models- such as prime or lead contractor models and payment by results models- within the UK Government Work Programme is having devastating impacts for small agencies and disadvantaged service users.

The UK experience is that outcomes based contracting and procurement- in its many forms- results in Governments, or the agents of government, moving public money into bigger contracts and bigger services, which increasingly are awarded to large private and multinational corporations  such as SERCO G4S, A4E, Virgin, Ingeus (There Rein's company) and Capita to name but a few.

The majority of contracts are won by large for profit corporations who claimed that they would sub-contract smaller local not- for- profit providers to deliver tailored specialist services, however this has not happened.

Many of the smaller not- for- profits were used as "bid candy" to enable the corporate providers to tender for and win the contracts and were promised work as sub-contractors. Such work (and income) has not eventuated and even when it has major delays in being paid have severely affected the income and cash flow of small agencies.

The result is that more and more smaller agencies are having to shut down due to cash flow problems and loss of income. And the closure of small agencies with specialist knowledge and expertise and strong local links directly impacts on the most vulnerable and disadvantaged clients.

The Third Sector, an online  publication for the sector reports that:

Eco-Actif Services, a community interest company based in Sutton, south London, and Red Kite Learning, an education and learning charity in Southwark, south London, both closed in July and blamed the government’s move to large-scale payment-by-results contracts.

Lin Gillians, chief executive of the LVSC, said: "Over the past two years, longer, larger contracts for employment programmes have been almost exclusively awarded to large private sector providers.

"The intention was that specialist voluntary and community sector providers would deliver tailored support as subcontractors – however, as time goes on we are seeing this specialist provision disappear.

"This raises enormous concerns about the quality of support available to the thousands of Londoners facing serious or multiple barriers to work."

The homelessness agencies the Single Homeless Project and St Mungo’s have also withdrawn from the Work Programme in recent months, citing problems with the way it is run.

Gillians said: "The government urgently needs to review the impact of this commissioning model on disadvantaged job seekers and special employment providers before more damage is done.

"This isn't about blaming the Work Programme or prime contractors – it's about providing appropriate support to give everyone a fair chance to work."

Brendan Tarring, who founded RKL 25 years ago, said: "The Department for Work and Pensions needs to reassess its one-size-fits-all mentality and acknowledge that individually tailored employment support for vulnerable jobseekers is best delivered by innovative mid-sized charitable organisations."

A crises parly caused by decades of market driven reform

photo courtesy of ABC News and Micaela Rehle, file photo Reuters)

The crises in the aged care sector is indicative of what lies ahead for the human and communty service sector more broadly.

It is the culmination of 2 decades of market driven reform in which the provision of care and the delivery of human services is marketized, privatized and corporatized.

The report below is from ABC News:

The aged care sector in WA says nursing homes are sacking staff and cutting services in a bid to stay viable, following an overhaul of Commonwealth funding.

Providers predict they will receive up to $24,000 less for each elderly person in their care, under the new funding arrangements.

The head of Aged and Community Services WA, Stephen Kobelke, will attend crisis talks with dozens of stakeholders today.

He says the cuts have put pressure on an industry already struggling to cope.

"Is it sustainable to remain in residential aged care?

"They're the things they'll start to look at; WA providers are deeply concerned about their ability to operate, or in fact their desire to do so.

"They want to look after older people but they've got to have the tools."

Mr Kobelke warns companies have no choice but to cut services and staff.

"Rural providers have already needed to start some sort of downsizing," he said.

Mr Kobelke says the industry is already doing it tough thanks to WA's workforce shortages, building costs and isolation.

More evidence on the failure of the privatization and outsourcing of human and community services

Excellent piece by Bill Mitchell ( Billy Blog) on the two decade long failure by Federal Labor and Conservative Governments of the privatisation and outsourcing of human and community services in the employment support field (what is  now known as the Jobs Services Australia Network).

A 2002 report by the federal Productivity Commission described the Job Network as a ‘managed’ or ‘quasi’ market for the provision of subsidised employment services, which aims to mimic the activities of competitive markets by allowing scope for competition, flexibility in service delivery, rewards based on outcomes and some degree of choice for the unemployed.

First, the Job Network comprises multiple independent agencies, each having a share of a common system of public service provision. Second, the agencies will be a mix of profit and not-for-profit organisations; and third, job seekers do not purchase services but have services purchased on their behalf by government.

Under the Job Network, the government was a purchaser and regulator of employment services, not a direct provider. The role of government was to award contracts through a competitive tender process, regulate providers, determine standards, and to collect and disseminate performance information.

However, this perverse “quasi market” soon revealed it was not immune from market failure.
There was policy schizophrenia in expecting an outcome-based funding model for employment services to deliver ‘better and more sustainable employment outcomes’ in the absence of concomitant policies to alleviate the macroeconomic constraint and create real employment opportunities.
In a highly demand-constrained labour market, characterised by persistent unemployment and marked regional disparities, it was always unclear how the supply-side focus of the Job Network could be effective.established a new industry – with private parasites pursuing a profit motive by meeting perverse performance targets specified in their contracts. These agencies were meant to support the unemployed but quickly assumed a police-type role imposing fines and disciplining the unemployed.

The system failed to achieve any of its stated purposes which were, of-course, not the real roles that the government was interested in pursuing anyway...........................................................................................

Subsequent evaluations of the effectiveness of the Job Network showed it failed to provide sustained employment prospects for the vast majority of the case load.

One of the features of the system that was most repugnant was known as “breaching”. The Government of the day (in 2002-03) reacted to the early criticisms of its failed program by reinforcing what it called the Active Participation Model – aimed at reducing the outlays that were rising as unemployment continued to increase in the face of the on-going failure to stimulate aggregate demand.

The reality is that the new compliance regime that the Australian Government introduced did not address the substantive cause of the mass unemployment – the failure of the economy to provide enough jobs.

It established a new industry – with private parasites pursuing a profit motive by meeting perverse performance targets specified in their contracts. These agencies were meant to support the unemployed but quickly assumed a police-type role imposing fines and disciplining the unemployed.

The system failed to achieve any of its stated purposes which were, of-course, not the real roles that the government was interested in pursuing anyway.

Why privatization and corporate delivery of human and communty services to vulnerable people should be opposed

It is, instead, almost surely a glimpse of a pervasive and growing reality, of a corrupt nexus of privatization and patronage that is undermining government across much of our nation.
Paul Krugman

When a market liberal like Paul Krugman writes in a mainstream US newspaper about the horrors resulting from the privatization of human services to corporate and for profit providers it is more evidence that the privatization of public functions and the corporate delivery of  human and community services to vulnerable and marginalised people must be opposed.

Krugman's piece focuses on an investigation by the The New York Times about New Jersey’s system of halfway houses — privately run adjuncts to the regular system of prisons.  Krugman writes that the horrors described in the New York Times piece are not an isolated example but part of a broader pattern in which essential functions of government are being both privatized and degraded. 
Krugman also highlights how the privatization of public functions is built upon powerful networks and connections between politicians, elected offocials, lobbyits and the corporations who win the contracts.

Krugman writes:

"... the Times’s reports instead portray something closer to hell on earth — an understaffed, poorly run system, with a demoralized work force, from which the most dangerous individuals often escape to wreak havoc, while relatively mild offenders face terror and abuse at the hands of other inmates.

It’s a terrible story. But, as I said, you really need to see it in the broader context of a nationwide drive on the part of America’s right to privatize government functions, very much including the operation of prisons. What’s behind this drive?

       

You might be tempted to say that it reflects conservative belief in the magic of the marketplace, in the superiority of free-market competition over government planning. And that’s certainly the way right-wing politicians like to frame the issue......

So what’s really behind the drive to privatize prisons, and just about everything else?

      

One answer is that privatization can serve as a stealth form of government borrowing, in which governments avoid recording upfront expenses (or even raise money by selling existing facilities) while raising their long-run costs in ways taxpayers can’t see. We hear a lot about the hidden debts that states have incurred in the form of pension liabilities; we don’t hear much about the hidden debts now being accumulated in the form of long-term contracts with private companies hired to operate prisons, schools and more.

      

Another answer is that privatization is a way of getting rid of public employees, who do have a habit of unionizing and tend to lean Democratic in any case.

      

But the main answer, surely, is to follow the money. Never mind what privatization does or doesn’t do to state budgets; think instead of what it does for both the campaign coffers and the personal finances of politicians and their friends. As more and more government functions get privatized, states become pay-to-play paradises, in which both political contributions and contracts for friends and relatives become a quid pro quo for getting government business. Are the corporations capturing the politicians, or the politicians capturing the corporations? Does it matter?

       

Now, someone will surely point out that nonprivatized government has its own problems of undue influence, that prison guards and teachers’ unions also have political clout, and this clout sometimes distorts public policy. Fair enough. But such influence tends to be relatively transparent. Everyone knows about those arguably excessive public pensions; it took an investigation by The Times over several months to bring the account of New Jersey’s halfway-house-hell to light.

       

The point, then, is that you shouldn’t imagine that what The Times discovered about prison privatization in New Jersey is an isolated instance of bad behavior. It is, instead, almost surely a glimpse of a pervasive and growing reality, of a corrupt nexus of privatization and patronage that is undermining government across much of our nation.

Business can learn more from not- for- profits than not- for- profits can learn from business

I have long been a critic of those who argue that not-for-profit and civil society organisations should become "more businesslike" and operate more like business and remodel themselves along business and market lines. It is in my view a ludicrous and dangerous claim.

The claim reflects a naive understanding of not-for-profit  organizations and is predicated on a false assumption that not for profits are run by well intentioned amateurs who need a dose of "business thinking" to be more effective and effective. My view has always been that the reverse is in fact true.

Business and corporations would in fact benefit more from the values, principles and practices of many not-for profit and civil society organizations.

So I was interested in this piece by Debra Allcock Tyler ( Director of the UK Based Directory for Social Change) which appeared in the UK Third Sector News.

Charities are good at what they do, and business should learn from us

By Debra Allcock Taylor

Nick Hurd's recent assertion that charities should learn from businesses is the wrong way round, says our columnist.

I like and respect Nick Hurd, the Minister for Civil Society. I really do. But I find myself in the grip of an overwhelming desire to bash him over the head with a copy of the Charities Act 2006 after his recent remarks in this magazine. He said: "The sector has to open its mind to absorbing skills from the private sector because it clearly needs more business skills."

Have people forgotten the recent financial crises already? Maybe I wasn't paying attention, but I don't think it was expenditure on grants for charity bodies that brought the world's financial markets to its knees, was it? Was the banks' decision to extend credit to a sub-prime market a good business decision, or just greed? Was it good business to have the hedge funds underpinning so much of the financial economy?


It is estimated that, at the height of the financial crisis, about 95 firms in the UK were going bankrupt every day, some 20 per cent more than during the 1990s recession.

With the coalition government opening up the public services to competition and private providers to a much greater extent than any of its predecessors, one can't help but wonder if business models really are the most appropriate mechanism.

This culture of commoditising social needs - characterising our needy citizens as consumers of a public sector product - is, I think, dangerous. Vulnerable people aren't consumers. They're vulnerable people. And we are really skilled at helping them.

So why do people who don't run charities keep telling us how to do it? What precisely are these business skills that we apparently need? The ability to deliver excellent services to vulnerable people on tuppence ha'penny? The ability to convince people to give of their time and money for no other reason than it's the right thing to do?

There are probably some badly run charities, of course, but in my experience they are the exception rather than the rule.

So I have to ask, what is this constant exhortation to ape the private sector really all about? Is this just a euphemism for becoming inappropriately competitive; focusing on revenue rather than cause and becoming bigger, because that's what drives companies?

Forgive the sexism, but it's a bit of a macho paradigm, isn't it? It's the size that counts? Well, I don't think it's about how big you are or how much cash you flash. It's about being good at what you do.
Bulldog Rescue & Rehoming survives on less than £25k a year and does what it says on the tin: a wonderful job with an army of volunteers who simply care about what they do. It doesn't need to become Bulldog and Budgerigar Rescue & Rehoming.

Be open to new ideas and ways of working. But charities - I beg you, ignore those calls to be more like businesses. You're absolutely great at what you do when you remember you're charities. Frankly, I think business has more to learn from you.