Risky business: Impact of outcomes-based contracting on nongovernment out-of-home-care services

Abstract

This article examines the impacts of commercialised contracting in helping or hindering policy objectives relating to Out-of-Home Care (OOHC) reforms in one Australian jurisdiction, New South Wales (NSW). Its particular focus is the impact of outcomes-based contracting on nongovernment organisations rendering foster and residential care services. Though contracting has long been present in government NGO funding models, of particular concern is the impact of the commercialisation of OOHC contracts. The author argues that this shift has had a detrimental impact on the nongovernment sector’s capacity to provide quality services to children and families. Contextualising commercialisation within the narrative of risk, it argues that political and ideological shifts in government policy and action reflect a strategy that absolves the government of the risks inherent in reforming the OOHC system or of managing OOHC contracts, a process that also minimises government accountability. The article presents evidence to show that reforms to the OOHC system in NSW have failed to achieve their intended outcomes partly due to the challenges to the nongovernment sector and its relationship with the government brought by contracting arrangements. As reported in other welfare systems internationally, it shows that a narrow conceptualisation of outcomes in conjunction with an emphasis on performance measures can detract from flexible and innovative service provision that is responsive to the needs of individual clients. The article adds to international evidence relating to the efficacy of contracting of services to meet policy objectives and identifies areas of management improvement.