Supporting local service providers through the National Disability Insurance Scheme

Written by Brian Lee Archer, Director, IBM Cúram Research Institute.

The National Disability Insurance Scheme (NDIS) is one of the most significant changes in Australian social policy since the introduction of Medicare.  The Productivity Commission estimates around 410,000 Australians have significant disabilities requiring ongoing support.

It is anticipated the scheme will cost around $6.5 billion a year in addition to the $7 billion of existing state, territory and commonwealth funding. 

While media attention to date has been on the benefits the NDIS will deliver for people with a disability and concerns over long term funding, there has been little discussion about the impact of the scheme on organisations providing services.  Service providers located all across Australia, form a vital part of the service economy within local government areas.    They are predominantly locally based community service organisations funded in part or whole by state/territory human service departments.   

The introduction of the NDIS will have a profound impact on the service provider ecosystem.  People receiving assistance under the NDIS will exercise choice in the type of services they consume and the organisations supplying the service.  Unlike the existing block grant system (in most jurisdictions) where providers apply for funding from a government agency, individualised funding packages under the NDIS will create competitive markets in each community.  The significant amounts of new money flowing through the NDIS will encourage new entrants leading to takeovers, mergers and unfortunately for some, failure.

Community based organisations, a key contributor to social capital in local communities, will need support to develop the capacity and capability required to meet the competitive threat of new and potentially larger entrants to the market. Local Government is a potential source of support through funding and in-kind programs that can assist small businesses remain competitive.

The establishment of the NDIS coincides with the launch of the ‘RightServicing’ approach – a new business model for social program transformation. The IBM Cúram Research Institute is putting forward the model to help governments - federal, state and territory - design the business system for the NDIS. The IBM Cúram Research Institute defines RightServicing as “a set of organisational attributes combining to provide flexibility and agility for a differential service response. RightServicing offers value and benefits for society, governments and social program management organisations through social, program outlay and productivity dividends.”

Community based service providers are a vital part of the delivery ecosystem for the NDIS.  For the local service provider community, collaboration with government and other organisations is key. Leveraging the Ecosystem, a characteristic of RightServicing, addresses this need for collaboration with the service provider community. Some small enterprises will need assistance with business and management skills development, access to affordable premises and IT infrastructure to maintain their viability – and peak disability bodies will take a lead on identifying these areas of need.  Local governments should take notice when these organisations request assistance to help member organisations in their local community. They should explore all options available to them as the service provider marketplace will be turned on its head with potential consequences for local employment opportunities and consumer choice.

The RightServicing report is available at: