National Disability Insurance Scheme spends $300 million on outsourced staff, lawyers in a single year

By Rick Morton

The managers of the National Disability Insurance Scheme spent almost $18 million on lawyers and legal advice in the last financial year, more than double the previous year’s bill, according to new data from the agency.

Figures contained in the latest senate order contracts report show the National Disability Insurance Agency (NDIA) outsourced almost $300 million worth of labour hire, consulting, legal fees and training and development for staff in the year ending June 30.

The vast majority of this — $162.8 million — was spent on “temporary staffing and recruitment support” as the NDIS powers toward completion. It was due to be finished in July this year but will not reach the estimated 500,000 participants until at least the end of next year.

Legal spending at the agency has long raised alarm bells because of tactics employed to defeat participants during appeals before the Administrative Appeals Tribunal. Of the 3027 cases that have been resolved throughout the life of the scheme, 2954 of these — fewer than 3 per cent — made it to a hearing. Instead, these were settled by the NDIA after proceedings had begun but before the case became public.

NDIA bosses have previously been embarrassed by precedents set by tribunal member decisions.

Settlements, on the other hand, are confidential.

This reporter previously revealed participants have eventually negotiated support packages many orders of magnitude larger than those first offered but the NDIA during these closed discussions.

In one case, a participant who requires 24-hour care and was initially granted a support package of just $55,000 a year but had their package increased more than fivefold to $465,000 annually after an ­extended legal battle with the agency.

As September began, the Coalition announced a new regime of “independent functional assessments” would be introduced into the NDIS which some disability and legal advocates viewed as a way to constrain costs and win more AAT cases.

The system would force participants of the scheme, which this financial year is expected to be worth $23.5 billion, to undergo short assessments by government-approved doctors to determine the level of need. This would do away with the current practice were participants need only provide evidence from treating therapists, physicians and other clinicians.

Much of the focus within the agency remains on the number of autistic people who have been judged eligible. At 31 per cent of all participants, people with Autism Spectrum Disorder are the single largest disability group in the scheme. Early estimates by the Productivity Commission forecast just 20 per cent of NDIS participants would have autism.

“There is no possibility that (government functional assessments) will deliver the results they claim or address the issue that they completely misunderstand and misrepresent,” convenor of Autism Aspergers Advocacy Australia Bob Buckley writes in a letter sent today to Prime Minister Scott Morrison.

“(These) ‘assessments’ are intended to exclude autistic people from the NDIS, to ‘assess’ autistic people out of the NDIS.”

Although consultancy spending within the agency is down about $26.5 million there are some curious new contracts reported for the first time,

Just days before the end of June, the agency entered into a six-month, $1.1 million consultancy with McKinsey Pacific Rim Inc for “services relating to Scheme work Phase 1, 2, 3.”

A separate six-month contract with Monash University, worth $121,000 and completed in September, is labelled the “evidence synthesis” project and was overseen by Associate Professor in occupational therapy Lisa O’Brien.

A spokesman for the NDIA told inkl the McKinsey project is “part of the Agency’s ongoing future planning work, to consider what the NDIS will look like four years from now.” “This includes participant-facing work, forecasting work volumes, considering skill base requirements and developing plans for the future,” the spokesman said. “As part of the Agency’s ongoing research program, the NDIA employed a research expert from Monash University on secondment to complete a range of evidence reviews across a number of different areas.”

On its website, the agency says the dramatic doubling in the legal spend is “in large measure” because it had to prepare for two royal commissions. One in aged care, for which the NDIA participation was minimal, and the other inquiring into violence, abuse, neglect and exploitation of people with disabilities.

“The legal spend has increased since the prior year, in large measure reflecting additional costs associated with preparing for various Royal Commissions, as well as supporting participants at the Administrative Appeals Tribunal (AAT), in line with the NDIA’s commitment to being a model litigant,” it says.

By comparison, the three largest listed aged care providers on the Australian Stock Exchange collectively spent $3.2 million in costs associated with the royal commission in the past financial year.

NDIA bureaucrats also paid $1.8 million in a single year to executive search firms Derwent Executive Pty Ltd and Challis and Company Pty Ltd and a range of other recruitments organisations for its “Executive Placement Program” which provide management-level secondments in a way that does not count toward the public service staff cap.

Rick Morton is the author of the bestselling One Hundred Years of Dirt. He has been a journalist for 15 years with a particular focus on social policy and national affairs. Rick is the senior reporter for The Saturday Paper.