Victorian Government Budget Update 2023
What is the lowdown on last week's $677M investment in outcomes and early intervention?
Last week's State Budget gives us yet more evidence that the journey to outcomes-based funding is speeding up. While the Feds will build an outcomes-contracting fund (the Outcomes Fund) the Victorian Government is using its Early Intervention Investment Framework (EIIF).
Both the Outcomes Fund and the EIIF do the same thing - allocate funding to programs that pre-determine their performance targets. The point is to direct funding to those practices that show measurable, real impacts and that, as a result, lower the use of acute social and health services.
In both cases, measuring 'avoided costs' will be critical. Avoided costs are State Government service costs saved from a successful service intervention (or, Avoidable Costs minus services delivered = Avoided Costs). This is the high-bar for impact measurement as far as Governments are concerned.
What does this mean for you and your program? Are you 'Avoided-Cost' ready? Reach out to us if you'd like to talk about the implications of this shift. Read more for the full list of EIIF funding programs.
Federal Budget 2023
All about the outcomes
Well, we might be seeing the beginning of the tipping point in the 'outcomes' movement.
Following significant investment in social outcomes contracting initiatives in NSW over the years and in Victoria more recently, the Feds have come to the party with a range of initiatives focused on outcomes in last night's 2024 Budget.
Here are a few of the highlights.
The Strategic Growth Matrix
Are you determined to grow as an organisation and do you have a plan to do it?
How do you determine which service areas your organisation should invest in and what your growth targets are? Importantly - How do you balance growth in impact and growth in revenue?
Mission-led organisations need to focus on delivering both revenue (financial sustainability) and social impact (outcomes that matter to clients of our services). But in an environment of finite resources (and potentially diminishing resources) the question is how to assess where these limited resources should go to achieve growth goals and targets.
One way we have helped clients think about their growth is to review each of their programs across two dimensions using our Strategic Growth Matrix©. The purpose of the Strategic Growth Matrix is to force critical thinking about each of the services and programs the organisation offers and prioritise resources in a way that best achieves the mission of social impact. Sometimes organisations with lots of revenue and staff can feel their goal is simply to grow as an organisation - more money, more staff. But the Strategic Growth Matrix helps make the social impact goals of the organisation more explicitly reflected in strategy, not just the financial sustainability goals.
Managing when government cuts budgets
We are deep into Government budget time and, particularly in Victoria, there are challenging times ahead.
In Victoria, it is reported that there will be a 10% cut in spending on public sector wages across the board meaning a $3.6 billion cut over four years. While this may well be limited to ‘back of house’ costs, we know there will be either cuts to services or a narrowing of eligibility for some social programs. We also now know that more than half of all community health organisations are facing 15% cuts to funding that will impact direct services.
So what should we make of the spending restraint/cuts/efficiencies/austerity (choose your word) on the way? How do we try and quarantine our programs? How do we respond?
At times like this, we believe it is more important than ever to advocate not for your program and service budgets but for your client outcomes.
The steps you can implement to make sure you are advocating as powerfully as possible for your client outcomes are:
Responding to complex, novel tenders
When should you engage external, critical thinking in responding to a tender and when can you manage it in-house? We think you should answer two key questions to determine this:
Complexity and novelty
Where funders are looking for the most efficient and cost-effective way to deliver well-established services, you need a sharp focus on your operating model and being able to scale and/or replicate that with fidelity and at lowest cost. You will have a clear understanding of the costs to deliver and a target margin. In short, you need to deliver maximum services.
Strategic tender support is not likely to be a good investment in this case.
Where tenders are looking for novel approaches (for example, a collective or ‘alliancing’ approach to governance), or where there is added complexity (for example, where a sizeable proportion of the funding can be distributed flexibly) you really do need to think more deeply, strategically and innovatively about how you will respond. The traditional approach won’t maximise your chances in this case
In February, Dale presented at the Victorian Alcohol and Drug Association (VAADA) conference on how a whole social sector can come together to take leadership of data and develop a collaborative data project to share useful data across multiple stakeholders. Collaborative data projects enable a sector to see the 'whole impact' of the sector and measure outcomes in consistent ways. See the presentation pack below.