2014 DSS Grant Process Review

In 2014, the Federal Department of Social Services (DSS) Grant Program (which funds emergency relief, settlement services, volunteering among other social services) was simplified and streamlined and a competitive tender process was implemented for a range of services.

The impact of the 2014 DSS competitive tender process (‘2014 tendering process’), and subsequent cuts to programs jolted the sector from decades-long funding arrangement. The change seemed too harsh, too fast and lacked a level of transparency and sector engagement that resulted in a Senate Inquiry in 2015.

The Inquiry made 12 recommendations that the Auditor-General consider a review of the 2014 tendering process that included an assessment of how the process fared against key grants guidelines principle; and a series of recommendations around process, time frames and communication.

The Government’s response to all recommendations was presented to the Senate out of session and tabled in Parliament on February 2016. The Department’s response was accompanied by the Nous Group Process Review which identified areas for improvement and implementation. In its response, the Government indicated that:

  • Funding was reduced through the 2014-2015 Budget and subsequent Mid-Year Economic and Fiscal Outlook by a total of $270 million over four years.
  • DSS will not publish its recent analysis of service delivery gaps (Recommendation 1). In addition to various data and service mapping sources, policy objectives, local knowledge from state and territory offices and stakeholder views all informed funding decisions. Ultimately, ‘[T]he sensitivity of some information that applicants may have provided in their applications and expectations of confidentiality limit what could be published’.
  • A mix of open competitive and direct or restricted selection process will continued to be used in the future, and it was noted that nearly half (12 out of 26 rounds) of the 2014 rounds were restricted or direct.
  • DSS it is considering how best to support small organisation. DSS pointed out that factors including organisation’s capacity to deliver a service, broader organisational capacity, local knowledge and expertise are part of the selection mix. DSS noted that around 73% of community organisations receiving funding through the 2014 round are classified as small (they do not have a national service footprint), accounting for 44% of funding received.
  • DSS remains committed to implementation of 5-year grant agreements – where appropriate.
  • A summary of the privacy impact assessment (PIA) of the Data Exchange will be published on DSS website when available.

While we know that up to $820 million was made available, we surmise that the $270 million reduction through the 2014-2015 Budget have reduced this to $550 million being ultimately distributed. This represents approximately 33% reduction in grants, which coupled with a shifting of funding towards the most critical areas of need, can reach up to 70% in some service areas. Additional funds were put up in between March 2015 and June 2015 to enable a smooth transition to the new service landscape, some of which included the DSS identifying service gaps and engaging in direct selection process. This gave services breathing space as they adjust to a new service envrionment, connect with new providers and bring clients along with the changes. 

Communities and services reacted differently to these changes. In the context of budgets cuts and austerity rhetoric at the political level, clients were attuned to the impact funding cuts had on service support. Members reported frustration, anger but also understanding and resignation as some of the responses they had from clients when notified of cuts to funds. While some clients may be able to manage as a result of reduced support, CISVic is concerned that the most vulnerable will be hardest hit. As long as the social safety net continues to be inadequate, emergency relief will continue to be the last safety net for the poorest in our communities.