Media release: Major report on ACT community sector funding released

The ACT Council of Social Service (ACTCOSS) says that a major report released today shines a spotlight on the financial pressures faced by the ACT community sector and has applauded a commitment by the ACT Government to work with community services to develop a more sustainable model of funding.

ACTCOSS CEO Dr Emma Campbell said: “We welcome this report which provides strong evidence of the funding challenges faced by the community sector.

“We commend the ACT Government’s support for the project and its openness to this rigorous analysis of the gap between costs incurred and funding received.”

The Counting the Costs report, prepared by UNSW’s Social Policy Research Centre for the ACT community sector and ACT Government, found that:

• The annual indexation rate applied to funding was insufficient to cover rising costs
• Nearly half of organisations incurred losses on ACT Government funded programs
• To remain competitive, one in four organisations priced services below cost when tendering for contracts
• Almost two thirds or organisations had decided not to apply for funds to deliver services because available funding was insufficient to cover costs
• Demand for mental health services has doubled, yet funding for mental health services has not kept pace and the share of funding to community mental health services has decreased
• Nine out of ten organisations reported no funding or underfunding for monitoring and evaluation activities; and only one in three said they were adequately funded for regulatory compliance.

The report highlighted the historical undervaluing of the sector and an expectation by funders that the community sector would be able to sustain low overheads despite rising costs.

It also detailed issues including Canberra’s high costs of living, rising financial stress and significant unmet housing needs that was leading to rising demand for services.

The report made recommendations to improve the current funding situation including:

• Reviewing the calculation of indexation ensure funding levels kept pace with rising costs
• Reviewing all ACT funding agreements to ensure that costs of providing services were fully covered
• Building sector capacity to accurately assess the cost of services when applying for tenders
• Boosting funding for areas of high need for example where there are long waiting lists and clear evidence of significant and unmet demand
• Prioritising early intervention and prevention; and
• ACT community sector and ACT Government working together to further encourage efficiencies and reduce cost pressures.

Dr Campbell said: “ACTCOSS welcomed the ACT Government’s commitment in the 2021 budget to review the formula for calculating the indexation rate for community sector funding.

“We stand ready to engage with the Government to implement the remainder of the report’s recommendations to ensure our community services are supported.

“A sustainable funding model is desperately needed.

“Workers in the community sector continue to do an amazing job delivering essential services, including during the COVID-19 pandemic. However, we are seeing increasing rates of burnout by staff and leaders as they make difficult decisions because of resource constraints – including turning people away.

“It is not sustainable for the community sector to run essential services such as mental health support, community legal support or domestic violence services without sufficient funding to cover costs.

“This report has found that almost half the leaders surveyed ran programs funded by the Government at a loss. It also found that three in five community sector organisations are deciding not to apply for ACT funds due to poor cost coverage.

“This affects Government and clients by reducing the choices available for delivery of these services. It will also affect the Territory’s ability to recover from the pandemic as increasing numbers of services are unwilling to deliver desperately needed services because funding is insufficient to cover costs,” said Dr Campbell.

ACTCOSS advocates for social justice in the ACT and represents not-for-profit community organisations. Follow us @ACTCOSS on Twitter, Facebook and Instagram.

For more information or comment, please contact

Dr Emma Campbell, CEO, ACTCOSS, on 0424 910 617.