Financial issues need ironing out

THE Economic Audit Committee’s recommendations for community services are expected to bring about major changes to the way the sector operates.

Among the issues addressed at the WA Business News boardroom forum were the effect the reform will have on the resources within the industry, how it will affect the organisations’ relationships with Lotterywest, and the need for organisations to work collaboratively despite being in a competitive tendering framework.

Autonomy in core service development was also signposted as a shift in the sector resulting from the reform.

Ruah chief executive Francis Lynch said while increased value and longevity of contracts may appeal to some organisations and encourage them to extend their services, every organisation would have freedom to design its core services.

“The fact the government may want to put out considerable mental health or other types of funding over the next two years doesn’t mean there will be willing takers of those services unless they are done in a way that makes sustainable sense to us as providers,” he said.

“If it was put out in a way that was not sustainable, we would just be increasing our exposure to loss.”

And while this process of reform may lead to a greater role for organisations in the development of their service delivery models, the forum agreed the process is already leading to a more collaborative delivery of services.

“It is about having shared undertakings, shared principles, shared visions and deciding what sort of outcomes we want and then having a menu of ways that we can deliver that,” Nulsen chief executive Gordon Trewern said.

But the view wasn’t entirely positive, with some at the forum expressing concern over the competitive nature of the tendering model.

“We are trying to cooperate with each other in a competitive environment. That makes it incredibly difficult at times to get the services on the ground that are actually needed,” UnitingCare West chief executive Chris Hall said.

“We have got an obligation around the table. Whether you partner with government or with each other, the critical thing is to get the services to be sustainable.”

Lotterywest chief executive Jan Stewart said she could see the EAC implementation and subsequent shift in government funding having a positive effect on the availability of resources within the community sector.

“I think it will free up a lot of resources and energy,” she said.

Discussion of Lotterywest funding centred on how economic independence would not only shift organisations’ resources, but would also affect what Lotterywest was approached for in terms of grants.

Senses Foundation chief executive Debbie Karasinski told the forum of the issues Senses experienced during the global economic crisis, when after attempting to make the foundation economically independent with various investments, the market went belly-up.

The foundation was left to its own devices, with the government advising at the time there was no assistance available.

“That was a reminder again of the relationship between the non-government sector and government. There is no way government would have done that with a business,” Ms Karasinski said.

The community organisation leaders said Lotterywest had become the go-to funding body for new infrastructure projects.

“We have to go cap in hand to Lotterywest. It is our only real option for most of us to renew or reinvigorate IT or to fund new premises. It is about that capacity building and the professionalising of services and it is very hard to do that with no ability to call upon X amount of dollars to lease another venue or build or fit out a venue,” Rocky Bay chief Michael Tait said.

Ms Stewart agreed, suggesting one of the things that resulted from this was that grants were skewed towards physical and IT infrastructure funding.

According to those at the forum, this could all change if organisations were allowed to become more autonomous in their financials, able to use funding at their discretion.