The previous government privatised the Commonwealth Employment Service to create the Job Network - by outsourcing its services to a mixture of community based non-for-profit organisations, Australian based for-profit companies and one or two international for-profit companies. In 2002 a Productivity Commission into the manner in which Job Network services were being outsourced concluded that this was not an efficient way to run a tender process.
The Rudd Government has continued the outsourcing of these services this week - now re-badged as Employment Services Australia - but the process now seems to have gone totally off the rails. The decisions on these contracts announced in the last couple of days show neither rhyme nor reason. It is fair enough to change providers if a quality service is not being provided but this does not seem to have been the basis for the decision making of the Government. Some of the highest rated providers (4 and 5 stars) have been overlooked, and in some cases have seen their services handed over to other providers from different regions whose services have rated poorly (1 or 2 stars). We have also seen a couple of large overseas commercial providers brought in - including A4e from the UK.
The community sector is understandably upset by the inequity and lack of logic of the outcomes - but the thing that has rankled more has been the manner in which the process has been run. Having had to submit complex and time consuming submissions, there appears to have been little cross-checking of claims and evaluation of the capacity to deliver a particular service in a particular location, and service quality.
Over the last two weeks, organisations have struggled to get any useful information from the department - they have not been contacted and informed about the status of their applications and have been given the run around when seeking information. Many are still struggling to get an understanding of exactly what the on the ground impacts of these decisions will be. This makes things particularly difficult when they are bound to give staff advance notification of whether or not their jobs will soon be terminated.
The whole process has undermined the relationship between the Government and the community sector right at the time when this relationship is crucial to their ability to tackle the impacts of the financial crisis on those most at risk. It has undermined their trust and is likely to have derailed the discussions of a 'compact' with the sector ... and left their much vaunted 'social inclusion' policy in tatters.
This is the kind of ignorance that can only creep into government departments which have spent over a decade managing contracts rather than actually delivering services. It is clear that DEEWR hasn't engaged in or simply doesn't get the 'whole-of-government' approach to 'joined-up-policy' and 'wrap around services'.
The results of the tender process demonstrates that the values underpinning the tender focused much more heavily on the false God of the market rather than the values of equity, sustainability and community, despite Mr Rudd's recent comments.
How else could you decide to redirect your funds away from your best performing employment services at a time when the nation is sliding into recession and unemployment rates are expected to go through the roof?
As unemployment rises dramatically, these services will be at the front line. Local community based providers are best placed to develop the innovative programs that will be needed with high unemployment and few new jobs.
When it comes to delivering compassionate and joined up services to help those in need, it is clear that the profit motive shouldn't be the main driver of service delivery.
Experience overseas has shown that there are few real efficiencies to be gained by privatisation of these services, and that the easiest way for for-profit companies to make a buck is to cut corners on training and to focus on the payment criteria at the expense of delivering sustainable employment. This strategy is referred to as 'churn and burn' and often results in unemployed people being pushed into jobs for which they are neither qualified or suited - with the result that they are back on the dole queue in another six months time, with their self esteem and the goodwill of their employers both shredded in the process.
The issue is not just that thousands of workers in not-for-profit community organisations who will become unemployed on 1 July, but also the knock-on impact on other related community-based programs. These are crucial links in the 'wrap around services' that have been a central theme of the Rudd Government's social inclusion rhetoric ... and that community organisations have quietly been building. These organisations reinvest the "profits" from the Job Network (and, in the case of the charitable and church based providers, money secured through private philanthropy) back into the provision of additional essential community services.
When local not-for-profit organisations lose Job Network tenders they also lose the ability to provide other vital services, and the less tangible social inclusion benefits for those with more complex needs also fall by the wayside. Many staff will have to be let go and other services are at risk.
While some of these staff may be able to secure work in the new for-profit services (which invariably have higher client to staff ratios) these organisations are not known for encouraging compassion in their workers, whom they also seem to burn out and churn through at an alarming rate.
The Australian Greens have called on the Government to ask the Australian National Audit Office to conduct an independent audit on the awarding of employment services contracts. There seems no rational basis for the decisions made on who got contracts, with 4 and 5 star rated providers losing out. If the Government doesn't implement such an audit the Australian Greens will be both putting a motion to the Senate calling for such an audit and referencing the matter to the Senate Finance and Public Administration Committee for inquiry.
Prime Minster Rudd said in his speech that "Communities acting spontaneously, together with communities acting through the conscious agency of government, will now be critical to help individuals and families through the difficulties that lie ahead."
With his Government's decision on the provision of employment services, he is placing a premium on perceived market efficiencies and has cut the community out of the equation.