Reducing Red-Tape Now!

reducing red-tape… now!

Some examples of red-tape in the government-funded employment services sector and what can be done to address them

1.Introduction

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At Jobs Australia’s CEO Forum on 1 November, we discussed a broad range of options for reducing administrative burden and complexity in Job Services Australia.

The Assistant Minister for Employment, the Hon Luke Hartsuyker MP, has asked Jobs Australia to compile these suggestions into a brief report, which is the basis for this document.

There is a clear and emphatic commitment from the new Government to make real and lasting reductions to red tape in Australia’s mainstream employment services – and, indeed, elsewhere in the economy.

And while reducing red-tape is an objective of most governments, the new Coalition Government has demonstrated its commitment by announcing some useful changes less than two months since taking office.

However, there is clearly a lot more to be done. Red tape and complexity has been allowed to proliferate for far too long. There is now a body of evidence demonstrating that red-tape has accumulated beyond what is appropriate and necessary for the accountability of taxpayer funds, going back to the Productivity Commission’s Independent Review of the Job Network in 2001.

In more recent times, Jobs Australia’s work with the Nous Group demonstrated the extent of the problem, finding that there is at least $130 million wasted every year in lost efficiency. That report prompted the Government to conduct its own red tape review, known as the Advisory Panel on Employment ServicesAdministration and Accountability (APESAA), which concluded in 2012. APESAA found that the Department “has a tendency toward hyper-specification of administrative requirements” and identified a range of measures to reduce red tape. Those measures remain largely unimplemented.

In the context of the next employment services contract, commencing in 2015, Jobs Australia has suggested a series of reforms in its Blueprint for the Future, which, as a package, would substantially reduce red-tape in the system. Some of these reforms would, however, take time to implement and there remains a need for more immediate reductions in the red-tape burden on providers, job seekers and employers.

This report, which is based on the direct feedback of Jobs Australia members, identifies a range of measures that could be implemented in the immediate or very near future.

Jobs Australia is grateful to the Minister for the opportunity to provide this information.

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2.Structure of this document

This document contains Jobs Australia’s recommendations for reducing red-tape in JSA in the immediate or short-term future. These recommendations are based primarily on the suggestions that were discussed at our CEO Forum on 1 November 2013, but are supplemented by information obtained through a post-forum survey, completed between 1 November and 15 November.

For your reference, the individual responses to that survey have been included at Appendix A.

We have also included in appendices extracts from previous government reviews that have made recommendations for reductions in red tape in the past. A number of these recommendations have been ignored, rejected or otherwise not implemented and remain a useful reference for policy makers.

On that basis, this document is structured as follows:

1.Introduction

2.Structure of this document

3.Summary of recommendations

4.Options for reform and examples

4.1 administrative burden on clients

4.2 Unnecessary administrative requirements

4.3 Duplication

APPENDIX A: INDIVIDUAL RESPONSES TO OUR POST-FORUM RED TAPE SURVEY

Appendix b: extract from the Independent Review of the Job Seeker Compliance Framework (Disney, 2010)

APPENDIX c: EXTRACT FROM THE ADVISORY PANEL ON EMPLOYMENT SERVICES ADMINISTRATION AND ACCOUNTABILITY FINAL REPORT (APESAA, 2012)

3.Summary of recommendations

1. Move to an off-benefits model for job placement fees and outcome payments (where possible)
2. Remove legal threats from templates for forms that employers sign
3. Remove the requirement to have a job seeker sign a ‘Job Seeker Referral Confirmation’ form
4. Remove ‘service items’ from the Employment Pathway Fund and adjust service fees accordingly
5. Simplify Employment Pathway Plans
6. Simplify the process for Special Claims
7. Align ‘special claim’ evidentiary requirements with the requirements of DHS and the ATO
8. Reduce transactions for service fee claims
9. Revise the way DHS conducts the JSCI to improve accuracy
10. Remove the link between the JSCI and Homelessness Rent and Crisis Accommodation claims.
11. Allow providers to refer clients directly for Employment Services Assessments (ESAts) for all streams
12. Simplify the Department’s client management software, ESS
13. Simplify the Work Experience Phase / Compulsory Activity Phase and associated paperwork
14. Take a consistent approach to site visits from the Department
15. Remove duplicated compliance requirements from the accreditation process for the Quality Pilot
16. Review DHS procedures with a view to ensuring that more job seeker sanctions / Participation Reports are enforced

Further details are provided in the next section.

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4.Options for reform and examples

This section summarises some reforms that Jobs Australia has formulated drawing on the feedback we have received. They do not cover every suggestion that has been submitted – instead, we have taken on board the range of suggestions, identified some common themes and drawn recommendations whee consistencies can be identified.

The other suggestions can be viewed, exactly as they were submitted to Jobs Australia, in the Appendices to this report.

4.1 administrative burden on clients

There are a number of examples of situations where red-tape currently gets in the way of the service or harms relationships with either job seekers or employers. Removing red tape from these areas delivers benefits not only in improving provider efficiency, but in improving the quality of the service itself.

Option for reform / Illustration of the problem / Solution

1. Move to an off-benefits model for job placement fees and outcome payments (where possible)

/ At the moment, every claim has to be backed up by separate documentary evidence from the job seeker and the employer. This harms relationships and providers often forego legitimate claims, simply because the evidence will be more hassle than it’s worth. And when evidence is pursued, it affects the provider’s relationships – particularly with employers.
As one provider has put it: “Employers are distancing themselves from us. Given that they have their own business to run it can result in having to lose claims or lodge overrides when out of time. Again very time consuming.”
Another Jobs Australia member has reported that “we have had an employer happy to employ one of our clients on a training placement but they didn’t want to deal with a Job Services Australia provider as it was too time consuming”.
This is further supported by feedback in a recent survey of employers, conducted by an independent research company engaged by Jobs Australia. While a clear majority of participating employers (76%) were satisfied with the support they received from the provider, there were also a number that were dissatisfied and their comments were enlightening. They included:
-“using these services increases our work load significantly”
-“Providers need to look at being considerate with small business when it comes to paperwork and requirements”
-“We don’t always have time to supply documents over and over again”. / When DHS (Centrelink) reduces the job seeker’s payments to zero because they are in employment, this should suffice as evidence that the job seeker is employed.
Certain outcomes are already defined in ‘off-benefit’ terms in the contract, but the guidelines provide that additional evidence is required from both the job seeker and the employer in order to substantiate claims for payment.
Some providers have suggested a short-term, off-benefit outcome could replace the job placement fee.

1. Remove legal threats from templates for forms that employers sign

/ Some of the templates supplied by the Department contain a reference to the Criminal Code. Providers can make their own templates, but still have to leave in words to a similar effect. The implicit threat contained in the reference can make employers reluctant to sign forms. / Remove the references to Criminal Codes / prosecution etc from forms. The general expectation that employers will not lie / defraud the Commonwealth can be readily conveyed in general information about the program.

1. Remove the requirement to have a job seeker sign a ‘Job Seeker Referral Confirmation’ form

/ When a job seeker is referred to a potential job, the conversation is usually conducted by phone rather than in person. If the job seeker is successful, then the provider needs to follow up and have the job seeker sign the Job Seeker Referral Confirmation. Once the job seeker has commenced employment, they are often difficult to contact.
One example from a provider is as follows: “We contacted a job seeker via telephone to discuss a suitable position with a fencing company. The job seeker agreed to attend an interview on the same day while the employer was in town. The employer hired the job seeker on the spot and they travelled to Central Qld to work the following day.” In this case, the provider forfeited the claim rather than chase down the job seeker for the paperwork. / Instead of requiring a signed form, allow providers to claim the placement fee on the basis of a file note in the system noting their conversation with the job seeker at the time of referral.

4.2 Unnecessary administrative requirements

There are also a number of areas where requirements add to the administrative burden on providers but do not deliver any real value, in that they do not substantially advance the quality of the service or the accountability of the system. Addressing these would reduce the time and financial costs for providers, with minimal impact on accountability.

Option for reform / Illustration of the problem / Solution

1. Remove ‘service items’ from the Employment Pathway Fund and adjust service fees accordingly

/ There is a connection between the Job Seeker Classification Instrument (JSCI), Barrier Management Tool (BMT) and the Employment Pathway Plan (EPP), as follows: (i) the JSCI identifies the job seeker’s barriers; (ii) the BMT opens in the computer system and presents the case worker with the list of identified barriers, which must be addressed; (iii) the case worker must then negotiate appropriate interventions to address the job seeker’s barriers and then list those in an EPP.
The EPP then becomes the basis for drawing down funds from the Employment Pathway Fund (EPF), in that the EPF may be used to purchase interventions specified in the EPP. If an intervention is not included in the EPP, then the EPF cannot be drawn down for that item of expenditure.
For example, if a case manager believes that a client will need training, then the training would be put in the EPP and then paid for from the EPF. Problems arise, however, if an additional service is required. For example, if a client needs Post Placement Support, then the EPP must be amended before the support can be provided and then claimed.
One provider has reported that some case managers are inserting a wide range of expenditure items into EPPs as a standard practice, to ensure they are able to make any claim without needing to bring the client back in for a new EPP. This practice runs counter to the expectation that plans will be individualised.
Similarly, Reverse Marketing (whereby the provider contacts employers to market a job seeker to the employer, without a vacancy having been advertised) is a standard practice and is therefore more appropriately funded through service fees, rather than billed to the EPF. / Service items, such as Reverse Marketing, Additional Contacts, Mentoring and Post Placement Support, should be removed from the Employment Pathway Fund. Instead, these items should be funded through Service Fees, as they are part of the service that all providers need to provide in order to achieve employment outcomes. A commensurate increase in service fees would be required, with no net change to overall program funding.

1. Simplify Employment Pathway Plans

/ Due to the linkage with the JSCI, the BMT and the EPF (see above), EPPs have to be re-negotiated frequently. EPPs are usually around 7 pages and read like a contract, through which the job seeker agrees to do the activities in the EPP. The final two pages are standard compliance rules.
This not only makes the EPP hard for job seekers to understand, it also puts the job seeker off. The focus on compliance means that harsh language is included in a document that is meant to be about engaging the job seeker. Many providers report that clients throw EPPs in the bin on their way out the door. / EPPs should be simplified, with plain English and less focus on compliance. Compliance requirements should be clearly explained in a separate document / brochure.

1. Simplify the process for Special Claims

/ In some situations, such as where the job seeker is supported into self-employment, a special claim must be lodged instead of submitting evidence from an employer.
Due to processing time, it can take in excess of a month for a special claim to be approved by the Department. There are also reports that some are rejected in error. As the Department cannot ‘reverse’ a rejection, the application process must then be started again. / Alleviate the unnecessary duplication of entering special claims detail by:

• Allowing the Department to reverse a rejection if it was demonstrably rejected in error;
• Have the Department contact the Provider for clarification prior to rejecting a claim; and
• Providing an IT solution where a rejected special claim can be copied or duplicated or reinstated to enable corrections to be made to the initial entry rather than having to re-enter all the data again to secure a special claim approval.

1. Align ‘special claim’ evidentiary requirements with the requirements of DHS and the ATO

/ A ‘special claim’ (ie: for claims where a job seeker has started their own business) requires the provider to gather more evidence for the Department of Employment than the job seeker is required to provide to DHS / Centrelink and the Tax Office. / If evidence supplied to DHS and the ATO cannot be used directly to support the ‘special claim’, then the requirements should at least be aligned, so that the job seeker can provide the equivalent evidence, not a greater level of evidence, to their provider.

1. Reduce transactions for service fee claims

/ Currently, service fees are claimed quarterly, with a claim submitted for each job seeker on the caseload. Each one has to be checked by the provider to see whether there has been sufficient engagement to justify the service fee claim. This involves the provider looking at the record for a job seeker, examining the diary entries to check that the case manager has had sufficient meetings with the job seeker, and then submitting the claim. / Service fees could be processed either yearly or half-yearly to reduce transactions and processing. The process could also be automated for most claims – ie: where there is sufficient engagement recorded in the IT system, the claim could be submitted automatically.

4.3 Duplication and other inefficiency

Finally, there are a number of areas where information is demanded multiple times, for no apparent additional value. Addressing these would reduce the time and financial costs for providers with no discernible reduction in accountability.

Option for reform / Illustration of the problem / Solution

1. Revise the way DHS conducts the JSCI to improve accuracy

/ Clients are frequently allocated to the incorrect stream due to barriers not being identified by DHS in the JSCI. This creates duplication because the provider then has to update the JSCI, have the client initial and sign, etc. Updated JSCIs are also reviewed by the Department of Employment for compliance purposes. As such, when the JSCI errors increase at the DHS end, it creates a greater amount of work for providers and for DEmp.
Many suggest that the reason that barriers are not being identified by DHS is that they almost always conduct the JSCI interview by phone, rather than in person. It has also been suggested that job seekers may feel uneasy about disclosing barriers to DHS, due to confusion about the purpose for which the information will be used.