NDIS poses ‘big financial risks’, should be delayed

THE National Disability Insurance Scheme’s rollout must be delayed by up to three years, according to the Commission of Audit.

THE National Disability Insurance Scheme’s rollout must be delayed by up to three years because it poses “significant financial risks” according to the long-awaited Commission of Audit.

As revealed by The Australian this morning, the Commission of Audit says the scheduled rollout of the NDIS is “highly ambitious”.

The report says “one option could be to extend the peak ramp-up period over the period 2015-16 to 2018-19, by another three years” with full rollout by 2022-23.

“The commission considers that there would be merit in pursuing a slower rollout schedule to help minimise the risks associated with the introduction of the scheme. An extended phasing in of the scheme would need to be renegotiated with the States. The current bilateral arrangements with each participating State are closely aligned with NDIS funding arrangements,” the audit report says.

It argues that aside from managing financial risks, a rollout over an extended period would allow lessons learned from the early results, particularly around expected average package costs, to be incorporated into the scheme’s design.

The commission says that the accountability for the NDIS must be strengthened, arguing that the governance arrangements for the NDIS are currently insufficient. Under the suggested changes, the National Disability Insurance Agency would become a prescribed statutory agency under the Financial Management and Accountability Act 1997.

It would be a stand-alone agency with a chief executive who reported directly to the federal minister. Under this arrangement, the existing Board and Advisory Council could be consolidated to become a single advisory committee.

“The proposed changes would however, bring a clearer focus on the responsibilities of the Minister and the National Disability Insurance Agency, and in particular, on ensuring the financial sustainability of the scheme. This is particularly important from the Commonwealth’s perspective given it has agreed to meet 100 per cent of cost overruns during the launch and transition phases,” the Commission of Audit says.

The commission says the National Disability Insurance Agency that is recruiting staff should seek to contract out functions, where possible, to the informal sector and other organisations already working in disability services. Such an approach would also allow it to leverage the experience of existing state disability services, where these are currently being provided in an efficient and effective manner.

Aside from the potential to realise cost savings through such a contracting arrangement, it is a good way of better integrating the informal care sector into the NDIS arrangements. The commission is aware that such approaches have already been used in NDIS launch sites, the report says.