NFP Financial Counselling in Limbo
10 February 2015 at 8:36 am
Hundreds of Not for Profit financial counsellors and thousands of people facing financial hardship are in limbo as the Federal Government’s new funding arrangements remain uncertain, according to peak body, Financial Counselling Australia.
FCA said it has been advised verbally that the Government will continue to fund the organisation until 30th June 2015 and that they will work with the organisation to consider longer-term options.
“This is positive, but also means that it is unclear whether $20 million in funding for financial counselling will continue,” FCA Executive Director, Fiona Guthrie said.
“The financial counselling sector itself has endured a tumultuous and difficult time for well over 12 months, initially due to funding uncertainty and subsequently through a bruising tender process.
“Although we are expecting the Government to release details of the successful tenderers in the next few weeks, it will take a few months still before things finally settle down.”
Guthrie said there were around 950 full-time and part-time financial counsellors working with welfare agencies large and small across Australia.
“More of these counsellors positions are under threat than not and we have lost a,lot of good people in this process,” she said.
“It is unclear when details of the successful agencies will be publicly released, but we are hopeful this will be by the end of February 2015.
“This will then allow unfunded services to begin referring existing clients to the new services and for the community sector to assimilate the new arrangements, for example, in amending information given to clients about available services in their local area.
“Financial counsellors who lose their jobs may also be able to approach the new services if there are jobs available.
“This whole process of settling down is going to take a few months and the extension of funding contracts until the end of June 2015 is sensible. However, the announcement may have come too late for some agencies, which had already retrenched staff.
“The sector is still in limbo.
“Until the funding announcement of successful tenderers is made, we are still unclear about the impact on financial counselling service delivery. We are concerned that some areas may have lost their financial counsellors as the larger agencies are likely to get funding over the smaller agencies.”
She said financial counsellors dealt with both the emotional and practical issues around financial hardship from people facing legal action from creditors, inability to pay for utilities, car repossessions as well as the significant mental stress that goes with this hardship and to try to find options for these people.
Guthrie said the FCA had set out the chronology of events to show just how uncertain the previous months for many in the Not for Profit sector had been since the Budget have been.
Approx 8 months from late 2013 to May 2014: Will the sector survive?
With the election of a new Federal Government, it is unclear whether $20 million in funding for financial counselling will continue. All funding contracts are due to expire on 30th June 2014. The sector does its best to make the case for the continuation of the investment in financial counselling to politicians and in the media. This period of some eight months or so causes great anxiety for many people.
May 2014: Budget continues funding, Existing Contracts Extended for Six Months
To our relief, the budget continues funding for financial counselling, albeit we are told, with some minor cuts. We find out in the next few days that the Government has re-engineered the grants program with the aim of streamlining grants and delivering efficiencies. This means that all existing services will need to tender for services into the future.
To allow services time to tender, all existing contracts are extended until 31st December 2014.
One month later (19th June 2014) – Tender documents released
The Department of Social Services (DSS) releases the tender documents.
Five weeks later (23rd July 2014) – Tenders are Due
Due date for lodgement of tenders. To our knowledge, the majority of existing services re-tendered. The tender process itself takes many, many hours of work. We now sit back and wait.
The majority of the tenders are competitive, but some are direct, including that for FCA.
Three months later (28th October 2014) – Existing Contracts Extended for Two Months
DSS extends funding contracts, that were due to expire on 31st December 2014, until 28th February 2015. This is because of the “unforseen volume of complex and high quality grant applications”. The “outcomes of the selection process will be announced by the end of December 2014.”
Two months later (23rd December 2014) – Unsuccessful/successful tenderers advised confidentially
Services are advised if they have been unsuccessful or are a “preferred provider” in the tender process. There is no information about the amount of funding offered to “preferred providers” or the locations. There is no public announcement.
Services that had applied for funding in the areas of Western Australia (Outback) and the Northern Territory – are advised that this funding is not going ahead. This is to provide an opportunity to align funding with the services funded separately through income management. Affected services will have their funding contracts extended until 31st December 2015.
FCA is also advised that the Government is not going ahead with funding for it under this tender process.
One month later (30th January 2015) – Existing Contracts for Most Unsuccessful Tenderers Extended for Four Months
As details of the successful tenders have yet to be announced, the Government announces a funding extension for services which will be losing funding, until 30th June 2015. This is to allow an adequate transition.
Successful agencies receive offers that include amounts and locations. This information is not publicly available as DSS and agencies may need to negotiate final details. New agreements are to take effect from 1st March 2015.
The organisations providing resourcing to the financial counselling sector, such as national newsletters and training, have been de-funded.
Guthrie said the good news is that the short-term funding extension means FCA can continue a number of projects, including the FCA Conference in Canberra on 18th-20th May.
"Given the long lead times in organising an event like the conference – last year there were over 500 registrations – we were already well down the track in our planning," she said.
“Registration details and the draft conference program will be available in the next few days.”