Independent Assessments are dead, long live the… ?

Wow.

Who saw that coming?

As you have probably heard by now, months of stubbornly insisting that Independent Assessments (IAs) were essential for the survival of the NDIS culminated in Minister Linda Reynolds announcing on Friday evening that the program has officially been scrapped. Her press release followed the Disability Reform Ministers meeting with the states and territories, in which she was seeking in-principle support for her amendments to the NDIS Act. The fact that the states and territories denied that support is unsurprising. But the commonwealth’s surrender to the “states’ revolt” was slightly more unexpected.

But how did this happen? And most importantly, where to from here?

To get some answers, we examine the swarm of important reports released in the lead-up to the decision and look at what they tell us about what might be next.

Independent Advisory Council (IAC) advice on scheme reforms

Last Wednesday, the IAC, a council consisting of people with lived experience of disability which reports to the NDIA board, broke its public silence on IAs and other proposed Scheme reforms. Its report, arriving two days before the ministers meeting, appears to have been hugely influential on the meeting’s outcome. In her press release, Reynolds noted that the advice had been well received by all the ministers and thanked the IAC for their “hard work, frank advice and professionalism.”

The mandate the IAC was given was to recommend “specific changes to the access and planning proposals, including independent assessment” but not to comment on “whether these changes should go ahead.” Those frustrating parameters basically asked council members to tell the government what they really think but nothing the government really didn’t want to hear. Regardless, the report’s first and probably most significant recommendation was that IAs should not proceed in the form they took in the pilot. Reynolds’s press release cited this as a reason for the government scrapping the program.

Importantly, the report did not just cover IAs. Some of the broader recommendations should definitely remain on Reynolds’s to-do-list, including:

Investing 1% of the NDIS’s annual spend in Tier 2 of the Scheme, covering people with a disability who are not eligible for individualised NDIS packages.
Adjusting provider registration requirements, requiring providers to avoid client capture (except in exceptional circumstances), avoiding SIL and Support Coordination being provided by the same provider, and becoming accountable to participant outcomes and have people with disability on the board.
Moving people from group homes to community living options.
Rebuilding the trust of the disability community through transparency and genuine co-design, which will be a challenge if ever I’ve seen one.

It’s unclear yet which (of any) of the IAC’s broader recommendations the Agency or government will act upon. However, given the emphasis on the council’s influence in the decision not to proceed with IAs, it might be politically difficult for the government to simply walk away from the rest of the report.

IA second pilot evaluation report

Last Wednesday, the NDIA also published the outcomes of the second IA pilot evaluation. Within two days, the report went from being an attempt to assure the disability community that IAs are safe and valid to being a post-mortem. However, understanding what went wrong with IAs will be important for developing the next assessment model. And make no mistake – some form of assessment is still on the table. In her statement, the minister said that the Agency would look to design a person-centred, co-designed “model consistent with the assessment requirements under the NDIS Act.”

One telling statistic from the evaluation showed that only 65% of surveyed participants felt that their assessment report was an “excellent” or “very good” reflection of their functional capacity. That means 35% of respondents did not believe that the final report accurately reflected their function. Measuring function is an IAs one job. Otherwise, what’s the point? If the Agency is going to design a new assessment model, it will need to address these issues with accuracy, which will not be an easy task.

Financial sustainability report

The weekend before the ministers meeting, the Agency released their apparently annual (though has anyone seen one before?) summary of the financial sustainability of the NDIS. After reading the 84-page report, I can honestly say I understand the financial situation of the NDIS significantly less well than I did before. And it seems I am not alone, as the states and territories don’t appear to know what is going on either. One of the outcomes of Friday’s meeting was “agreeing to undertake further work to understand the assumptions and cost drivers that underpin the actuarial modelling.”

The one thing you can take from the report with absolute certainty won’t come as a huge shock to you – the government is not happy with how much the NDIS is costing and plans to do something about it. All of this indicates that, even with IAs off the table, we can expect the conversation about Scheme sustainability to continue.

The headline-grabbing point from the report was the prediction that by 2029-30 the NDIS would cost $60bn, which is $22bn more than what the Productivity Commission projected in 2017. The question is how reliable this modelling is. To answer that, you would probably need a far more financially savvy mind than mine and access to considerably more raw data. However, when viewing this document in the context of the 2019-20 Annual Report (the closest thing I can find to a previous sustainability report), there is reason to be sceptical. Last year’s report did not put a dollar figure on how much the NDIS would cost by the end of the decade, but it did suggest that it would be the equivalent of 1.7% of the nation’s GDP. In the latest sustainability report, however, that estimate has gone up to 1.96%. That’s a small difference in percentage points, but in the context of Australia’s GDP we’re talking many billions of dollars.

It’s also worth acknowledging that the NDIS hasn’t really had a huge budget blowout to date. The sustainability report makes a big deal of the fact that 2019-20 was the first year that the NDIS cost more than was budgeted. At the start of that financial year, the government budgeted $16.3bn for the NDIS, but actual expenses were more than planned, at $17.6bn. However, if you look at the table below, you will see all previous budgets predicted the NDIS would cost more than $17.6bn that year.

So, you can’t really lower your projections substantially and then be surprised when you exceed them. The 2020-21 year did see the NDIS cost more than was budgeted, but the total amount spent was still within the range of the Productivity Commission’s 2017 estimates.

What's next?

We all want to know what the future might hold, but in many ways, that’s anybody’s guess. Some questions we will want answered before the NDIS Act goes to parliament are:

What will any new assessment model look like? Currently, all we know is that it will be co-designed, person-centred, and aligned with the requirements of the Act. So, really, we know next to nothing.
What does dropping IAs mean for plan budget flexibility? The NDIA would probably accuse us of trying to have our cake and eat it too here. But who wouldn’t want that? Cake is delicious.
Will the personalised budget program be proceeding without IAs? If so, how?

The Saturday Paper’s Rick Morton tweeted a copy of the leaked emails Reynolds and Hoffman sent NDIA staff. They don’t say much, suggesting that the Agency might not have any more answers than we do. The emails do list upcoming priorities, including Scheme affordability, fair outcomes, and consistent decision making, along with, weirdly, cracking down on fraud.