Inquiry into funding and delivery of programs to reduce homelessness

© Australian Housing and Urban Research Institute Limited 2017. Key findings This Inquiry into the funding and delivery of programs to reduce homelessness in Australia provides the first comprehensive Australian evidence of the funding of specialist homelessness services (SHSs) and mainstream services (e.g. in the health sector) with a homelessness service delivery focus. It examines the funding of these services and the implications of funding for service delivery effectiveness and client outcomes. Three research projects inform the Inquiry. In the first of these, Flatau, Wood et al. (2016) collected and analysed survey data from 298 Specialist Homelessness Services (SHSs) and 21 non-SHS services drawn from a survey, the AHURI Financing of Homelessness Services Survey, they designed specifically for this Inquiry. MacKenzie, McNelis et al. (2017) provided further insight into the role of funding obtained from nine case studies of homelessness services and programs and social enterprises. Spinney, Habibis et al. (2016) examined the funding of Indigenous-focused services. Current funding profile of the sector The Inquiry found that the homelessness sector was highly reliant on government funding, most notably, funding under the National Affordable Housing Agreement (NAHA) and the National Partnership Agreement on Homelessness (NPAH). This heavy reliance on government funding makes the sector vulnerable to changes in government policy and to inefficiencies caused when overarching agreements, such as the NPAH, remain in the balance, and government contract negotiations are not conducted in a timely manner. Government funding represented 84.6 per cent of funding provided to SHSs in the Flatau, Wood et al. (2016) Financing of Homelessness Services Survey, and 60.6 per cent of funding for non-SHSs. It represents a much higher 94.3 per cent of funding for Indigenous-focused services. Funding from government sources was perceived by services to be comparatively inflexible (Flatau, Wood et al. 2016). However, it is also perceived as essential to resourcing the provision of core activities of homelessness services. Stakeholders believe non-government funding is best placed to fund one-off projects and complement existing government funding of core services. Services attempting to raise additional funding are significantly more likely to be non-SHSs (94%) than SHSs (58%) and report meeting a lower level of client demand (Flatau, Wood et al. 2016). Homelessness among Indigenous people is a priority issue in Australia due to the very high rates of Indigenous homelessness (AIHW 2014), but, overall, there appears to be a lack of policy and funding coordination to address Indigenous homelessness. No major government homelessness funding programs were identified in the Inquiry that specifically targeted Indigenous people. The cultural competency of available homelessness services can vary leading to the possibility that Indigenous people experiencing homelessness may not be receiving culturally appropriate support. Of the Indigenous Community Organisations (ICOs) which do provide services for Indigenous Australians experiencing homelessness, very few receive funding through NAHA or the National Partnership Agreement on Remote Indigenous Housing (NPARIH). Onerous application and reporting conditions act as a deterrent for smaller ICOs that might otherwise enter the space. There is a high level of government funding and hence service instability in the homelessness sector, with 22 per cent of SHSs in the Flatau, Wood et al. (2016) study reporting a significant change in their funding in the last year. At the same time, other SHSs on the state and territory government rolls were no longer being funded at the time of completing the Financing of Homelessness Services Survey. This instability in funding appeared higher in the non-SHS sector, primarily relating to this sector's dependence on philanthropic sources of funding. The Inquiry found that funding instability negatively affects the ability of services to efficiently provide long-term homelessness support, and adversely impacts on client outcomes and the achievement of government homelessness objectives. It is also more prevalent in the Indigenous-focused services, where the very short-term nature of service contracts, sometimes as short as three months, and changes in government policy has resulted in a significant negative impact on the ability of organisations to operate effectively and meet clients' needs (Spinney, Habibis et al. 2016). Evidence of funding diversification Government policy recognises a need for the homelessness sector to develop a more diverse funding base in order to add more resources into the system, and many homeless services indicated that they have taken steps to diversity their funding base. However, non-government funding is concentrated in two sources, namely, philanthropic giving through foundation funding and fundraising and rent from clients (where services provide accommodation). Philanthropic giving is more prominent in the non-SHS sector (21.3% of funding) than the SHS sector (3.6% of funding), but this relates to a small number of large philanthropic grants and is not uniform across the non-SHS sector. Corporate giving to the homelessness sector is very low save for some prominent exceptions such as the BHP Billiton support for the Perth-based Youth Foyer. It is important to note that not all service types are in a position to access funding from non-government sources. Accommodation-based services generally have a more diversified funding base, including internally-generated income (3.2%), mostly from client rent, and philanthropic income sources (6%). Services operating in regional and remote areas are more heavily government funded than those in capital cities (non-government funding representing 3.6%, 2.4% and 7% of funding, respectively). Case study evidence showed that larger agencies with a developed brand, services with target groups which are considered more 'attractive', such as families and children, and/or services which provide material support, have a greater ability to attract philanthropic funding and corporate sponsorship. Additionally, some services are concerned about the potential negative consequences of a diversified funding base, with over 90 per cent concerned about increased reporting, excessive output/outcome measurement and a drain on resources (Flatau, Wood et al. 2016). Other concerns noted were a potential change of focus flowing from the demands of funders and conflicts of interest. Capacity to meet demand with current funding The Inquiry found that homelessness service funding was considered by services to be inadequate to meet client demand (Flatau, Wood et al. 2016). This was particularly true for non-SHSs and Indigenous-focused services. Only about one third of surveyed services in the Financing of Homelessness Services Survey indicated that they were able to meet 90 per cent or more of client demand. The situation was worse for homelessness services not within the SHS sector, where only 28 per cent of services were able to meet 76 per cent of demand or greater (Flatau, Wood et al. 2016). Client-related outcomes most constrained were client employment initiatives, client facilities provided by the SHS and access to permanent housing. The financial stability of the service was also nominated as a key concern by services. Lack of access to permanent housing is a recurring issue for homelessness services. This is associated with lack of capital funding for affordable housing. The proportion of funding for capital purposes identified by respondent organisations was much larger for non-SHSs (9.3% of total funding) than SHSs (0.7%). However, this largely related to a single grant to one non-SHS from an independent government agency. In the main, services reported no new capital funding. Given the sporadic nature of capital investment, the two-year window in the study conducted by Flatau, Wood et al. (2016) may not be representative of long-term capital investment. Nevertheless, it does suggest a lack of investment in capital projects in recent times (after fairly high levels evident in the Rudd/Gillard Governments). Access to permanent affordable accommodation was considered by services as a priority area for additional funding.