Sustainable funding models and a strong community service sector are key to the delivery of services that meet the needs of the WA community. State Government policies and funding strategies need a continued focus on sustaining healthy organisations so that we can have thriving communities.
At a minimum, sustainable funding models must consider adequate funding to meet direct and indirect costs of service delivery relative to demand (that is, baseline funding) and be flexible enough to respond to market and environmental fluctuations.
Government agencies undertaking engagement and collaboration with not-for-profit organisations must have regard to the Partnership Principles outlined in the Delivering Community Services in Partnership Policy (DCSP), originally released in 2021 and reviewed in 2023. Among other valuable principles of outcomes, collaboration and trust, the policy clearly articulates an enduring commitment to the sustainability of community services.
Underfunding resulting from a lack of service reviews is one of the primary reported challenges to sustainability for social service organisations. This underfunding negatively impacts the provision of services to clients, contributes to staff burnout, and presents a real threat to organisational survival. A large part of the underfunding is the inability of contract funding to keep up with wage growth and other direct and indirect cost increases.
Recently, the WA Department of Treasury released the Financial Guidelines for Government Agencies – Commissioning Community Services. A key purpose of these guidelines is to provide guidance on the costing and benchmarking of community services. It is long overdue for a raft of contracted services in the community services sector that have been languishing under the current indexation policy and awaiting recommissioning through the State Commissioning Strategy.
Gilchrist and Perks highlighted the inappropriateness of using consumer price and wage price indexation to capture cost changes in human services. Our case studies confirm their findings.