Tug of war, on bright background

CHOICE and the Australian Council of Social Service (ACOSS)’ research report Competition Policy and Human Services: Where Theory Meets Practice assessed two areas of human service where various combinations of choice, contestability and competition have been significant in recent years – vocational education and training (VET) and employment services. It examined outcomes achieved, when different levels of competition have been in place.

Researchers found that the competitive models introduced into these two sectors have largely failed to deliver better outcomes for consumers, and have caused major barriers to improving collaboration.

ACOSS CEO Dr Cassandra Goldie said:

“The report’s findings show there are significant risks in introducing further competition into human services, particularly as the benefit to people is doubtful, and is not evident in these two examples.

“Where competition has been introduced in vocational education and training, it’s led to rising costs, people being placed in inappropriate courses through aggressive sales practices, and a significant reduction in quality across the sector.

“In employment services, ‘marketised’ service delivery has led to private providers focusing their efforts on people who are job-ready rather than people who need more assistance. That’s part of the reason why so many people remain unemployed for 12 months or more. Further, choice for people who are unemployed is severely restricted by the harsh benefit compliance system, which employment service providers play a major role in administering. The current model of employment services, and its predecessors, have left people behind.

“Finding examples of human service delivery areas where more intense competition or contestability leads to better services is challenging. All too often, any benefits are outweighed by new risks imposed on service users such as high turnover of service providers and the cost-cutting strategies often pursued by for-profit services.

“We need to seriously rethink the competition agenda in human services, to ensure we don’t keep making the same mistakes in service delivery that can have a devastating impact on people.

CHOICE CEO Alan Kirkland said:

“This report reinforces the fact that competition should only be pursued where it is going to lead to better outcomes for consumers.

“Introducing competition into sectors like vocational education and training appears unlikely to help consumers, and could in fact be harmful.

“Our first priority should always be to ensure that people have equitable access to good quality services. Competition, especially where it involves for-profit service providers, should only be pursued where it will help achieve this.”

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