Social Business Best Placed for NDIS
Wednesday, 29th June 2016 at 8:43 am
Commercially-minded businesses with a social bent are well placed to not only survive but reap the opportunities of the National Disability Insurance Scheme, while providing choice and control for people with disability.
While Not for Profit organisations are predicted to struggle as they lose their block funding and transition to demonstrating their value for money and measurable outcomes, these practices are already familiar to social, or “for-good”, businesses.
Director of the Centre for Social Impact, Professor Jo Barraket, told Pro Bono Australia News that the $20 billion quasi-market would “undoubtedly” attract new players to the space.
“When we did the FASES [social enterprise] research, NDIS was raised through the national focus groups we conducted as a market opportunity for social enterprises,” Barraket said.
“I think there’s going to be a diversity [of businesses]. I don’t think there’s any single business model, but given that it is people-centered, or at the very least client-centered, it’s going to need to attract players who are engaged with the issues and needs of people with disability, in all their diversity.”
She said for NDIS consumers there were many advantages of more social businesses entering the sector.
“There’s advantages to their being a diversified market, and that includes multiple kinds of players, there will be some benefits that arise from competition between players,” she said.
“And the client-centered focus of it is likely to stimulate social innovation. So I think there’s definitely going to be some of those benefits.”
Flagstaff Group is a social enterprise disability training provider in New South Wales. CEO Roy Rogers told Pro Bono Australia News the organisation was prepared for the NDIS rollout in July.
“Because we’ve run our business as a social enterprise and very commercially-minded, and what I mean by that is we only attract 15 per cent of our revenue as government funding, 85 per cent of our revenue comes from commercial trading. I think Flagstaff is in a really good position,” Rogers said.
“We’re used to having to deal with customers, we’re used to having to be innovative, we’re used to having to deliver value for money and deliver on time, deliver quality.
“Whereas I think there are certain other services that may have just had block funding that may have not have had that in their culture. So I think we’re in a really good position.”
He also said that scheme provided opportunities for the social enterprise.
“We provide a lot of work experience for people with disability, and those opportunities will come from being able to provide those wrap-around skills,” he said.
“We’re a real skills-based, skills-oriented organisation, and that builds independence and sense of achievement. I believe there are a lot of other skills [we provide that] we don’t get funded for at the moment… including travel training, budgeting, literacy, numeracy, a lot of those other life skills where there’s an opportunity for us to pick up some additional funding.”
Other business models, including cooperatives and mutuals, are also providing NDIS consumers more choice and control.
CEO of the Business Council of Cooperatives and Mutuals (BCCM) Melina Morrison told Pro Bono Australia News there was a “huge opportunity” for consumers of disability services to organise themselves in the marketplace as “bulk purchasers”
She said if consumers, or “budget holders” who received funding under the NDIS, pooled their finances together they would have more service options at their disposal.
“It creates the opportunity for them to scale up their purchasing,” Morrison said.
“So they might get a better range of services because they can enter the market as a larger purchaser. That’s on the demand side.”
Morrison said there were also great opportunities for cooperatives on the supply side of the NDIS, especially for organisations that are likely to struggle under the new service model.
“What we’re seeing at the moment is that there are a lot of existing providers of services which are… not sufficiently large enough or robust enough to compete in the new decentralised marketplace,” she said.
“So what they can do is come together in enterprise cooperatives… so they can scale up and get some backroom efficiency, so they can compete with larger providers.”
The PaRA Cooperative, or parent-assisted residential accommodation, which operates in Sydney, is run by the parents of three young men with autism, including Steve Anthony’s son Patrick, 27, as well as three staff.
Previously the men lived in a house run by a non-government organisation that used 20 per cent of funding in overheads.
Anthony worked with the New South Wales Government to combine the three disability support packages and establish a cooperative, which he said was a “very democratic” organisation.
“The rules of the co-operatives [mean] only people who are actively participating can be members. So the three men with autism would be members if they could function appropriately, but as they can’t, we do that,” Anthony said.
“But their families know them well and know what their needs are and their wants and interests. So we work collaboratively with the staff to see that they’re very well supported and have interesting lives.
“In the typical government group home, a person has no say about where it’s located, no say about who else shares the house with them, and there’s normally very limited access for parents and family members to interact with them, and all those things are terrible really.
“What you want is to have them living where they want with the people they want, supported by the carers who know them and are consistent and care about them, and with a lot of time with their families.”
Anthony said that there were also benefits for staff working in a cooperative.
“They feel that they’re involved and they can influence how things happen. We have almost no staff turnover as a result because it’s a place where they want to work,” he said.
However, Barraket said that small-scale social businesses would experience the same pressures as Not for Profits when large for-profits enter the space.
“There was an understanding amongst social entrepreneurs that new, private sector actors would come into the market,” she said.
“I think the challenges for [all] Not for Profits, not just talking about social enterprise, the challenges that I’m observing both with NDIS and a range of other social sector reforms, is the potential for models that privilege larger organisations.
“The great irony of that is one of the reasons we’ve entered into these forms of new public governance is because of the argument that Not for Profits have well-developed, close, trusting relationships on the ground, but the very organisations that have that kind of social capital, are less likely to be privileged and less likely to participate in markets like NDIS.
“So that’s going to be an ongoing challenge I think, both in terms of the users of the services, and in terms of the quality and diversity of that market.”
But Rodgers was confident that Flagstaff Group would not be affected by corporations.
“I guess the for-profits, the Bupas or whoever, they’re going to come in and cherry-pick where the highly-profitable areas are. We’re operating commercial businesses in a very competitive environment and I believe we do it really well, and I don’t see, in my space, there’s a lot of risk,” he said.
“I can’t see Bupa doing a business case to come in and do some of the stuff we do. But I could see them doing a business case to go into some of the other block-funded or larger-funded areas that may not be as efficiently delivered as a for-profit could do.’”