Coping with tumultuous change in the disabilities sector

Vision Australia chairman uses his disability and expertise in law and banking to good effect in governance.

Vision Australia chairman, Andrew Moffat MAICD, knows about resilience. Born with low vision, he excelled at school and university, despite being unable to read from a blackboard.

Moffat became a mediation practitioner and educator, had a long career in banking in Australia and overseas, and excelled in fencing and cycling.

Wanting to give back to the blindness sector, Moffat in 2001 became a trustee of the then Action for Blind People, a national sight-loss charity in the United Kingdom, and served for three years. The experience gave him insight into the immense contribution of disabilities governance.

Moffat’s expertise in law, banking and blindness governance – and his lived experienced with low vision – made him an ideal choice for the Vision Australia board. He joined as a director in August 2011 and was appointed Chair in October 2015.

The 53-year-old became Chair at a tumultuous time for Vision Australia and other disability organisations. After three years of trials, the rollout of the National Disability Insurance Scheme (NDIS) began in July 2016 – a momentous change for the disability sector.

“The NDIS had as profound an impact on Vision Australia’s business model as one could imagine,” says Moffat. “Through its history, Vision Australia had relied on centralised funding from Federal and State governments that, for the most part, gave us blocks of funding and certainty. Over a very short period, that centralised funding was withdrawn and replaced with portable, individual packages.”

Moffat adds: “Under the personalised funding model, Vision Australia had to justify funding resources from government for each blind or low-vision person we helped. That was massively more labour intensive and required an overhaul of our processes, reporting and technology.

Moffat likens the NDIS to ‘repairing an aircraft while it’s flying’. “Like other disability organisations, Vision Australia faced greater revenue uncertainty under the NDIS model. At the same time, we made a multi-million-dollar investment in upgrading our technology systems, staff training and changing internal processes. The board decided it was better to invest early rather than wait and see the impact, even if that meant overshooting a little on that spend.”

The hardest part, says Moffat, was working with management on a strategy to drive productivity gains across Vision Australia. “In became clear in the NDIS world that it wasn’t’ sustainable for an employee to work with two blind or low-vision people a day. In some cases, they had to work with more people each day to meet productivity targets and inevitably that meant spending less time with each person we help, which was very difficult for caring staff.”

Fatigue was another issue, says Moffat. “Change is difficult in any organisation, let alone one that has a 150-year history and has worked tirelessly to help blind and low-vision people lead their best possible life. The NDIS was big change to Vision Australia and it created stress in the organisation. At the same time, other staff were excited by the potential of NDIS but embraced Vision Australia’s strategy.”

Vision Australia has an important role in the disability sector. The national organisation assisted more than 25,000 people in FY19. Revenue was $111 million and a deficit of $7.9 million was recorded, particularly because of lower block funding and fundraising income. The deficit meant Vision Australia had to cut some jobs to reduce costs.

Moffat and Vision Australia CEO Ron Hooton said jointly in the FY19 annual report: “Pressure within the NDIS, in particular, has meant that our clients often struggle to secure the packages they need with the services they want, funded in a way that covers our costs. We hope and expect that, over time, client needs and NDIS and MyAgedCare funding will converge, but, in the meantime, we must reluctantly acknowledge that we can sustainably support only a simpler model of the infrastructure we have built over the past five years.”

Impact of NDIS far reaching

Vision Australia is far from alone in experiencing NDIS-related disruption. Rising demand for services, increased costs, policy uncertainty, and inadequate price setting by the National Disability Insurance Agency headline a long list of challenges facing disability organisations.

Almost three in four disability service providers said NDIS systems and processes were not working well, according to a National Disability Services (NDS) State of the Disability Sector Report 2018. Just over half of respondents said they would have to reduce the quality of services to meet current NDIS prices, although there was general support for the NDIS.

As was outlined in AICD’s 2017 Not-For-Profit (NFP) Governance and Performance Study, there remains strong support for the NDIS and the objective of improving outcomes for people with disabilities.

However, some of the challenges of operating under the NDIS were referenced in the 2019 version of the study, released in August. While not a specific focus of this year’s study, there is no doubt that many in the sector are struggling with the different operating environment.

One respondent said: “…The disability sector is very volatile and continual changes can be difficult to navigate to ensure you are making profit to reinvest to improve services for clients. I believe there will be plenty of M&A activities in the sector over the next few years. “

Others reflected on the opportunities that were emerging. Another director stated, “Our market is changing dramatically via the NDIS and I expect we'll see consolidation within the sector. This will create opportunities to further increase our scale.”

Others said the introduction of the NDIS and subsequent rising service demand had added to the workload of NFP directors, or in some cases encouraged NFPs to consider mergers that would create economies of scale and help them respond to NDIS challenges.

Ross Joyce, CEO of the Australian Federation of Disability Organisations (AFDO), says the NDIS has been a “dramatic change” for disability organisations and their boards. “The funding model they were used to was completely overhauled. Disability organisations can no longer rely on receiving a block of government funding and users can vote with their feet and move to another service provider if they choose. The sector didn’t have the systems in place for such change.”

Joyce, also a director of annecto, an NFP that works to increase community inclusion for people with disabilities, sees several challenges ahead for the disability sector. “From annecto’s perspective, we are worried about the lack of available service provision for people with a disability. The NDIS has delivered some good results, but it’s obvious that a growing number of disability organisations are struggling to adapt to the NDIS and maintain service-provision quality.”

The Disability Royal Commission, now underway, will create other challenges, says Joyce. “The sector has called for a Royal Commission into disabilities for many years and supports it. But the Commission will lead to inevitable change and reform in the disability sector. With that will come higher operating costs, new investment required and greater short-term uncertainty for some disability organisations.”

Long-term trends lifting demand for disability services

Moffat said the NDIS has coincided with rising demand for blindness and low-vision services in an ageing population. “As people live longer, the number of people who need help with low vision is increasing. There’s also an expectation, quite rightly, that people who are blind or have low vision should expect more out of life these days. That adds to the challenge of providing a more comprehensive service, to more people, than we have had to previously.”

The episodic nature of vision services is another complication with NDIS funding. “If Vision Australia is doing its job, blind and low-vision people do not become dependent on the organisation,” says Moffat. “We help them get set up and provide care as needed, so they can live independently. Unfortunately, the NDIS doesn’t work well for providers of episodic care like us, compared to, say, funding for an organisation that provides 24/7 care.”

Vision Australia has other governance opportunities and challenges. Three of nine Vision Australia directors are blind. “Board diversity for Vision Australia is more than gender and skills,” says Moffat. “We need to ensure the board has sufficient lived experience in blindness or low vision, to better understand the needs of the community it serves. The board also requires a diverse mix of skills, from clinicians to others who work in the blindness space.” All Vision Australia directors are volunteers, except for the Chair, who receives a small fee each year.

Moffat has served on other NFP boards. He is also President of VRI Fencing Club, Melbourne’s largest in that sport, and a former Chair of the Development and Coaching Commission of Cycling Victoria. “I spent my education and career taking in information through my ears and organising it in my head into categories. It’s a useful skill on boards because you get used to listening to a lot of people talking and breaking that conversation into information buckets.”

As a Senior Fellow and Lecturer in Meditation at the prestigious Melbourne Law School, Moffat has a busy workload, but hopes to add directorships of listed companies to his portfolio in coming years. “I never set out to build a governance career, but found my board roles, particularly Vision Australia, to be immensely satisfying and challenging. There’s no reason why blind and low-vision people cannot have successful careers, and that is true in governance.”