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Redesigning human services commissioning in NSW

Redesigning human services commissioning in NSW

When KPMG was asked to help formulate a strategy for the smooth transfer of disability clients and staff from government to non-government providers, a new approach to commissioning was needed – one that took into account the diverse and complex needs of many stakeholder groups.

Kerry McGough

National Sector Leader – Health, Ageing & Human Services

KPMG Australia


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When the National Disability Insurance Scheme (NDIS) was introduced, bilateral agreements were made between the National Disability Insurance Agency (NDIA), the Commonwealth Government, and the states and territories, to make the NDIA the lead organisation responsible for how people with disability receive support.

In 2012, the New South Wales Government committed to the new approach, and set about rethinking its role as a service provider in disability services. It decided to increase the capacity of non-government disability services in NSW, and for the government to cease being a provider once this was achieved. The transfer was an essential part of ensuring capacity in the non-government sector.

The NSW Government’s Ageing, Disability and Home Care (ADHC), a division within Family and Community Services (FACS) had provided services and support for people with disability in NSW for many years. The new arrangement meant that it needed to smoothly transfer its vast array of services to the non-government sector, as well as the majority of its staff and all of its clients.

In 2015, KPMG’s Health, Ageing & Human Services Management Consulting team were engaged to be the Government’s strategic advisor for the transformation and to work in partnership with the government to achieve this.

The team understood the impact that these critical services have on the lives of people with disability and their families. With this in mind, they set out to work closely with FACS, together establishing a transfer strategy that would be collaborative and communicative, would feature continuity of services to clients, and would leave people in a stronger position than which they started.

Size and scale

A human services commissioning project of this size was unprecedented in Australia, so there was no ‘blueprint’ for the teams to follow.

KPMG began by ascertaining the full scope of the Government’s current services. This also involved understanding the Government’s asset base, as many clients received support, or lived in, government-owned accommodation.

KPMG was involved in helping with the transition of approximately 12,000 clients and 7,400 staff.

Legislation and stakeholders

A traditional ‘outsourcing’ project is about finding the right providers to perform a service. In this case, the added complexity was the need to find providers who could take on the staff as well as the clients.

This required a specific new piece of legislation to be developed by the government. The providers also needed to agree to provide staff with 2 years of guaranteed employment with set conditions.

Complex care needs

Another major challenge was the complexity of the support needs of many of the clients. Any decision made would impact their lives, so it was essential that they were matched with a provider equipped to meet their needs.


Consultation at the core

Once the scale, complexity and possibilities of the challenge were ascertained, the organisations worked together to develop a transfer strategy that was approved by all layers of government.

Core to the strategy was vast collaboration and stakeholder engagement – which reshaped how the government can approach commissioning into the future.

Over 300 forums with families and potential providers have been conducted, with more to go as the project continues.

With families, the team asked what they cared about, resulting in eight key characteristics that became essential criteria for any interested provider.

With providers, extensive consultation was undertaken to understand their key characteristics and to assess the state of the market.

For example, why would providers take on the new services? What would be the right market conditions? Would they need incentives? Was there sufficient market capacity?

Once a shortlist of providers was established, KPMG worked in partnership with FACS, utilising our different skills and capabilities to set up opportunities for families and clients to meet with providers and learn more, and to have a deeper input into the selection processes.

This also enabled the new providers and families, to build understanding, relationships and trust.

A number of providers have been successfully identified, and are now working with families through the transfer process. Our team are continuing to work with Government to assist the smooth transition of clients that have a multitude of complex support needs – again with a focus on continuity of support.



Throughout the process, the team applied their deep knowledge of government processes, disability support provision, and the support requirements of clients.

The team also offered vast skills in disability service delivery, financial management and market data analytics for decision making, as well as working with FACS to facilitate an unprecedented level of consultation with providers, clients, their families, and government stakeholders.

As a result of the team’s successful collaborative approach with FACS, the NSW Government expanded the scope of work, including engaging KPMG’s Deal Advisory team to conduct due diligence to support the transfer.

Building a relationship of trust

Through the process the team obtained a deep understanding of the needs of each stakeholder group, and built strong relationships of trust, which aided a smoother transition and better results for all involved. They were adaptable in the face of changing requirements and innovative in their approaches.

At the core of every decision was a deep commitment to ensure the best outcomes for all stakeholders involved.

As a result of KPMG’s and FACS’s thorough and collaborative approach, the Government is well under way with a smooth transition of its staff and clients to non-government providers, with continuity of client support at the core. It has a proven blueprint for community engagement that can ensure all stakeholders are part of a change, and the solution.

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