November 28, 2019

What happened to the NDIS?

Associate Professor Gemma Carey, Research Director Centre for Social Impact, UNSW Sydney

It’s hard to look at a newspaper or turn on the TV without hearing about some kind of catastrophe with the NDIS. From people missing out, to concerns over budget blowouts, it seems like the scheme is fraught with problems.

Some of the most vulnerable people in our community have become a political football in the game of who is to blame for these problems. Did Labor mess up the legislation and design? Did the Coalition fail at implementation?

The answer to what happened to the NDIS is a tricky one. At the heart of the challenges people are experiencing as participants, or would be participants, of the NDIS is a mixture of design limitations, implementation problems, and political decisions.

The NDIS replaces an inequitable and piecemeal disability system. It aims to give people with a disability choice and control over their lives. These are laudable aims, and the change that has been put in motion to achieve them is unprecedented. 

Creating the NDIS involves:

  • A new agency co-owned by the states/territory and commonwealth government (the NDIA)
  • 3 waves of bilaterial agreement negotiations between 7 state/territory governments and the commonwealth
  • The creation of a brand-new regulatory body, the Quality and Safeguarding Commission
  • 13,000 new staff from the national to the local level
  • The creation of 9000 local disability markets across the country
  • The re-orientation of the entire disability sector
  • Sophisticated data collection and linkage capacity

While some of these areas have progressed better than others, the scale of this change, coupled the diversity of support needs the NDIS needs to meet, is extraordinary. A scheme so large and complex was never going to seamlessly come to fruition.

The challenges that have emerged around the NDIS are not a reason to abandon the scheme or declare it a failure (as we are increasingly seeing from parts of the disability sector and community). But they are a reason for us to do some soul-searching over what is happening with its implementation.

There are known limitations in the NDIS legislation worth reviewing. But the design of the NDIS, put forward by the Productivity Commission, offered a considered blueprint for reform. A blueprint we have now deviated from quite significantly during implementation through a mixture of politics, implementation decisions and lack of foresight capacity.

Capping the APS

One of the earliest and most damaging deviations from the original design has been changes in the structure and function of the National Disability Insurance Agency (NDIA). 

Under the Abbott Government, a staffing cap on the APS was put in place which extended to the NDIA – limiting the resource capacity of the agency. This was coupled with very ambitious, and politically driven, targets around the number of individuals in the scheme with plans. Quickly, this led to poor quality plans – ones which landed far from the goal of enabling individuals with disability to have choice and control.

Despite efforts to redress these issues, four years on the staff cap remains in place – continuing to constrain the agency. We see the effects of this in delays on plan reviews, on the number of complaints the agency receives and is able to respond to, the inability of participants to get consistent and timely responses, and the un-costed work of the disability sector picking up the slack of helping participants and their families navigate the scheme.

Contracting out

As part of this small government agenda, we also saw the contracting out of one of the most innovative and important aspects of the NDIS: Local Area Coordinators (LACs).

In the Productivity Commission blueprint, LACs were the glue in the system. They were envisaged as a network of local actors that would “help link people with disability to community groups and services”. They were going to support the growth of those 9000 local markets through connecting needs with responses, and building the capacity of both service users and providers. 

In outsourcing the LACs to a range of organisations across the country we have seen huge variability in the quality of their work and their ability to fulfil these functions.

The LAC contracts have had significant creep towards planning activities (to address the resource limitations within the NDIA) and away from the LAC functions the Productivity Commission described. This political decision also pushed knowledge about local markets outside of the main implementation agency (the NDIA).

When we revisit the design of the NDIA, the Productivity Commission said:

“The NDIA will require a small nucleus of senior management and administrative staff, and a regional network of Local Area Coordinators, regional managers and administrative staff”

This suggests an adaptive and decentralised form of governance for the scheme. In its place, we have a mixture of centralised authority and outsourcing – a model that will always struggle to be adaptive and responsive. Centralised decision making is known to be non-responsive to local needs, while outsourcing creates blocks in information flows and trust.

In outsourcing LACs and turning them into planners, we are losing the glue in the system. 

Free market fanaticism

While markets are at the heart of the scheme – it is through markets that people exercise choice and control – they were never envisaged to be stand alone.

We have shown in previous research that the rhetoric of a hands-off, free-market approach to the NDIS is much stronger amongst scheme implementers than it was in the design.

The Productivity Commission always anticipated that markets would not, and could not, meet the diverse and specific needs of 450 000 people with disability living across vastly different geographical locations. Various forms of block-funding and commissioning were highlighted in the design:

[Market] solutions are unlikely to be adequate in all situations … block funding may continue in certain circumstances, such as in building community capacity, pilots of innovative services, in some rural areas where markets might not support the provision of any service, and where there is a need to build longer term capacity, such as Indigenous-specific services”

Fairly early on in implementation, block-funding and commissioning became thought of as a sign of failure by scheme implementers in Commonwealth. A move away from the pure market vision of the NDIS, which never actually existed at its outset.

It’s hard to say what has driven this market fanaticism: politics, trends in public administration, the norms and values in the APS, or some combination these.

We still do not have clarity on how government(s) will respond to forms of market failure – from a complete lack of supply, to a homogenous supply that does not offer choice.

Part of this response will be about making markets work better, but as the Productivity Commission highlighted at the design stage – it is also about defining the on-going role of government in ensuring all citizens with disability have the services they need through non-market solutions.

Abandoning advocacy

When implementation if the NDIS began, advocacy immediately became a flashpoint. Some state governments dramatically cut or eliminated advocacy funding. While the Commonwealth has remained in the game, the market rhetoric has been strong – in a free market, don’t we all just advocate for ourselves?

What the research shows is that access to advocacy is fundamental to equitable functioning of the scheme. Access to an advocate can drastically change the funding a participant gets in their plan. One participant’s plan jumped from $600 to $32 000 after gaining access to an advocate. The NDIS is bureaucratically complex. Without advocacy supports, only those who have the resources to navigate this complexity will get the supports they need.

Recognising this, the Productivity Commission highlighted the importance of on-going funding for independent advocacy bodies: 

Advocacy plays an important role in the disability system. Systemic advocacy pushes for broad policy and social change, while individual advocacy promotes the interests of particular individuals by acting on their behalf to resolve specific issues. Current funding arrangements through [Commonwealth] and various state and territory governments should continue.” 

Right now, advocacy bodies like the Disability Advocacy National Alliance have experienced funding cutbacks, financial instability and a lack of clarity around their future funding sources. 

Without advocacy organisations, the vision of the NDIS outlined by the Productivity Commission, will be severely compromised.

Where do we go from here? 

Implementation is hard, any public servant will tell you that. Not surprisingly, the NDIS is no different. It’s important to look forward to where the NDIS can go, but we should also look back to its original design for guidance on how to address the challenges that are emerging.

This is something we need political leaders to do, as much as those charged with implementing the NDIS.


The author would like to acknowledge the contributions of the ARC Thin Markets and Market Capacity team, particularly Daniel Reeders and Eleanor Malbon, and input of advocacy groups Disability Advocacy Network Australia and Ideas, Info, Action.

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Comments (1)

  • 03.12.19 | 5:30PM

    Excellent summary about the NDIA and NDIS. As a Disability Advocate, consultant and early career researcher, we can't forget that there are some very great achievements that people living with disability have accomplished.

    As a person living with significant functional limitations, I am really looking forward to when the 'pendulum' starts to swing in the right direction for NDIS implementation.

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