Coalition’s privatised DES blows out to $40,00 per job
May 27, 2021 14:06:28 GMT 7
Denise likes this
Post by bear on May 27, 2021 14:06:28 GMT 7
Cost of Coalition’s privatised disability employment system blows out to $40,000 per job
Exclusive: report reveals government’s reforms increased the cost of the program by 48% in two years yet jobseekers who found work only increased by 8%
A report calculated that the cost of getting one person into six months’ of work under the disability employment services program had increased from $27,800 to $38,400 in two years after the reforms.
The cost of the Coalition’s privatised disability employment system has ballooned to nearly $40,000 per long-term job placement, according to a report that reveals Coalition reforms boosted provider revenue but didn’t lift jobseekers’ chances of finding work.
Last year the government contracted Boston Consulting Group to review the $1bn-a-year disability employment services (Des) program amid fears about spiralling costs and doubts over whether a 2018 overhaul of the system had worked.
Internal documents obtained by Guardian Australia under freedom of information reveal the Department of Social Services was so concerned about the impact of the reforms it “locked down” its IT system to stop providers gaming the system.
Boston Consulting Group’s final report, also obtained under freedom of information, found the reforms had increased the cost of the program by 48% in two years, partly due to a 46% increase the number of participants.
Yet the number of employment outcomes – that is people who found work – had only increased by 8%.
This meant the likelihood of a DES participant finding work had declined by “around 12-14% since the July 2018 reforms”, despite the labour market remaining flat.
The report calculated that the cost of getting one person into six months’ of work under the program had increased from $27,800 to $38,400 in two years after the reforms.
Meanwhile, more than a quarter (28%) of the 100-odd providers had boosted their revenue by more than double, and the larger providers increased their overall market share.
While the report noted some providers had also exited the market, others had embraced the further deregulated market by boosting their spending on marketing and using promotional tactics such as offering free iPads.
Under Australia’s welfare system, about 300,000 jobseekers whose primary barrier to work is disability are sent to the disability employment services program, which sometimes has more relaxed mutual obligations than the larger jobactive scheme, which has about one million participants.
The government’s 2018 reforms sought to increase competition within the Des program by allowing jobseekers to choose their provider, boosting bonus fees for getting the most disadvantaged into work and loosening the requirements for agencies to refer the unemployed to education courses.
These bonus fees – known as outcome payments – can be claimed by a provider after they complete a set number of weeks of employment or education, with the fees varying depending on the person’s circumstances.
Des providers get their remaining 40% of revenue from service fees for coaching jobseekers, matching them with jobs, connecting with employers, and administrative tasks such as overseeing job search requirements, known as mutual obligations.
Internal documents reveal the Boston Consulting Report was triggered in part due to departmental fears of “emerging trend where participants assigned to a higher funding level are being channelled into education activities as opposed to employment”.
This prompted a department crackdown which included “locking down IT systems to ensure providers cannot influence participant eligibility for education outcomes”.
It’s understood the department took action to stop providers lowering a person’s education qualifications in the system, which had allowed job agencies to claim a higher bonus fee from the government.
Boston Consulting Group then warned there was “limited evidence” the increase in education fees claimed meant jobseekers were graduating their courses, or that they were being “enrolled in courses which relate to their employment prospects”.
Jobseekers were pleased they could choose their provider, the report said, but they were still concerned providers’ “support was not individualised” and jobs offered were often unsuitable.
One jobseeker told the review, “We are just money to them. It’s a pay packet, they don’t listen.”
Employers told the review they dealt with “poorly skilled staff who lack an understanding of the corporate environment” and were “flooded with inappropriate applications”.
The review also found providers’ efforts to offer a quality service were hampered by “compliance and administrative burdens”, such as administering mutual obligations, which might be better handled by Centrelink.
The review’s recommendations included tightening bonuses paid to providers for education outcomes, considering whether to combine jobactive and Des into a single program, and reassessing the funding the government provides for “effective program oversight”.
Kristin O’Connell, an Australian Unemployed Workers’ Union spokesperson, said the report was “damning evidence about the failures of privatised employment services”. She said some of the money would be better spent lifting payments for welfare recipients.
The Greens senator Rachel Siewert said that while she supported increased spending on employment services, extra money that went to providers should lead to better outcomes for jobseekers. The report showed this was not the case.
Anne Ruston, the social services minister, said the government’s 2018 reforms were aimed at giving jobseekers more options and improving competition between providers.
While she said there had been positive progress, “further refinement” was needed to make the program more efficient.
Ruston said “upskilling and retraining can be important”, but added: “Clearly, we have a situation where some providers have an overemphasis on education outcomes that are not leading to jobs and this needs to be addressed.”
“In the 2021-22 budget we have already acted on this and now service providers will only be paid for an education outcome when courses align with the National Skills Commission skill shortage reports,” she said.
Ruston said the government would also allow jobseekers to request to join the new digital employment service.
It is also working on an updated provider star rating system, which was also criticised in the report.
The National Employment Services Association was approached for comment.
www.theguardian.com/australia-news/2021/may/27/cost-of-coalitions-privatised-disability-employment-system-blows-out-to-40000-per-job#:~:text=The%20cost%20of%20the%20Coalition's,jobseekers'%20chances%20of%20finding%20work
Exclusive: report reveals government’s reforms increased the cost of the program by 48% in two years yet jobseekers who found work only increased by 8%
A report calculated that the cost of getting one person into six months’ of work under the disability employment services program had increased from $27,800 to $38,400 in two years after the reforms.
The cost of the Coalition’s privatised disability employment system has ballooned to nearly $40,000 per long-term job placement, according to a report that reveals Coalition reforms boosted provider revenue but didn’t lift jobseekers’ chances of finding work.
Last year the government contracted Boston Consulting Group to review the $1bn-a-year disability employment services (Des) program amid fears about spiralling costs and doubts over whether a 2018 overhaul of the system had worked.
Internal documents obtained by Guardian Australia under freedom of information reveal the Department of Social Services was so concerned about the impact of the reforms it “locked down” its IT system to stop providers gaming the system.
Boston Consulting Group’s final report, also obtained under freedom of information, found the reforms had increased the cost of the program by 48% in two years, partly due to a 46% increase the number of participants.
Yet the number of employment outcomes – that is people who found work – had only increased by 8%.
This meant the likelihood of a DES participant finding work had declined by “around 12-14% since the July 2018 reforms”, despite the labour market remaining flat.
The report calculated that the cost of getting one person into six months’ of work under the program had increased from $27,800 to $38,400 in two years after the reforms.
Meanwhile, more than a quarter (28%) of the 100-odd providers had boosted their revenue by more than double, and the larger providers increased their overall market share.
While the report noted some providers had also exited the market, others had embraced the further deregulated market by boosting their spending on marketing and using promotional tactics such as offering free iPads.
Under Australia’s welfare system, about 300,000 jobseekers whose primary barrier to work is disability are sent to the disability employment services program, which sometimes has more relaxed mutual obligations than the larger jobactive scheme, which has about one million participants.
The government’s 2018 reforms sought to increase competition within the Des program by allowing jobseekers to choose their provider, boosting bonus fees for getting the most disadvantaged into work and loosening the requirements for agencies to refer the unemployed to education courses.
These bonus fees – known as outcome payments – can be claimed by a provider after they complete a set number of weeks of employment or education, with the fees varying depending on the person’s circumstances.
Des providers get their remaining 40% of revenue from service fees for coaching jobseekers, matching them with jobs, connecting with employers, and administrative tasks such as overseeing job search requirements, known as mutual obligations.
Internal documents reveal the Boston Consulting Report was triggered in part due to departmental fears of “emerging trend where participants assigned to a higher funding level are being channelled into education activities as opposed to employment”.
This prompted a department crackdown which included “locking down IT systems to ensure providers cannot influence participant eligibility for education outcomes”.
It’s understood the department took action to stop providers lowering a person’s education qualifications in the system, which had allowed job agencies to claim a higher bonus fee from the government.
Boston Consulting Group then warned there was “limited evidence” the increase in education fees claimed meant jobseekers were graduating their courses, or that they were being “enrolled in courses which relate to their employment prospects”.
Jobseekers were pleased they could choose their provider, the report said, but they were still concerned providers’ “support was not individualised” and jobs offered were often unsuitable.
One jobseeker told the review, “We are just money to them. It’s a pay packet, they don’t listen.”
Employers told the review they dealt with “poorly skilled staff who lack an understanding of the corporate environment” and were “flooded with inappropriate applications”.
The review also found providers’ efforts to offer a quality service were hampered by “compliance and administrative burdens”, such as administering mutual obligations, which might be better handled by Centrelink.
The review’s recommendations included tightening bonuses paid to providers for education outcomes, considering whether to combine jobactive and Des into a single program, and reassessing the funding the government provides for “effective program oversight”.
Kristin O’Connell, an Australian Unemployed Workers’ Union spokesperson, said the report was “damning evidence about the failures of privatised employment services”. She said some of the money would be better spent lifting payments for welfare recipients.
The Greens senator Rachel Siewert said that while she supported increased spending on employment services, extra money that went to providers should lead to better outcomes for jobseekers. The report showed this was not the case.
Anne Ruston, the social services minister, said the government’s 2018 reforms were aimed at giving jobseekers more options and improving competition between providers.
While she said there had been positive progress, “further refinement” was needed to make the program more efficient.
Ruston said “upskilling and retraining can be important”, but added: “Clearly, we have a situation where some providers have an overemphasis on education outcomes that are not leading to jobs and this needs to be addressed.”
“In the 2021-22 budget we have already acted on this and now service providers will only be paid for an education outcome when courses align with the National Skills Commission skill shortage reports,” she said.
Ruston said the government would also allow jobseekers to request to join the new digital employment service.
It is also working on an updated provider star rating system, which was also criticised in the report.
The National Employment Services Association was approached for comment.
www.theguardian.com/australia-news/2021/may/27/cost-of-coalitions-privatised-disability-employment-system-blows-out-to-40000-per-job#:~:text=The%20cost%20of%20the%20Coalition's,jobseekers'%20chances%20of%20finding%20work