4102.0 - Australian Social Trends, 2003

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Contents >> Economic resources >> Expenditure: Community services sector

Expenditure: Community services sector

Expenditure on community services and related activities increased by 32% between 1995-1996 and 1999-2000, with most of this growth driven by Not for profit organisations.

The community services sector assists and supports individuals, families and communities in need, contributing to the wellbeing and quality of life of these Australians. Direct assistance is offered through activities that include: child care; personal and social support; financial and material assistance; and residential care and accommodation for the aged or people with a disability. In June 2000, there were 9,300 organisations operating in the community services sector, of which 94% were private organisations. During 1999-2000, community services organisations received 7.6 million requests for information, advice and referral services, and managed 3.7 million cases of individual and family support, and 1.7 million cases of financial and material assistance (on a temporary emergency basis).

Over the 1990s, arrangements within the community services sector shifted towards governments contracting out services, competitive tendering for government funding rather than bulk grants, and an emphasis on measurable performance outcomes.¹ This was a result of trends in policy, at all levels of government, towards privatisation and government purchasing rather than the delivery of services. This article discusses the growth of the community services sector in the latter part of the decade, in light of this continuing policy shift.

Community services organisations and activities
Data in this article come from the 1995-1996 and 1999-2000 ABS Community Services Surveys which collected information on the workforce, expenditure and activities of organisations engaged in the provision of community services. Both private and government organisations were included in the surveys. Community services activities, and their associated employment and expenditure are separated into two categories depending on the nature of the activities.

Direct community services activities are those provided to individuals or families on an interactive or face-to-face basis, or on their behalf. Employees classified as working on direct activities spend the majority of their working time on direct community services provision.

Other community services activities include: fundraising; providing assistance to other organisations; social planning and policy development; government administration of funding and monitoring; group advocacy and social action; and licensing and regulating of service providers. Employees involved in other activities were mainly managers and administrative support staff, but also included other employees such as cooks and cleaners.

Community services activities were classified according to the National Classification of Community Services (NCCS), developed by the Australian Institute of Health and Welfare (AIHW).

Improvements in the ability of organisations to distinguish between direct and other community services activities may affect some time series comparisons between 1995-1996 and 1999-2000. For more information see Community Services, Australia, 1999-2000 (ABS cat. no. 8696.0).

Growth in the sector
In the four years to 1999-2000, total expenditure on community services activities increased by 32% to $12.6 billion. This expenditure also increased as a proportion of Australia’s Gross Domestic Product (from 1.9% to 2.0%). At the same time, the number of organisations and employees involved in the provision of community services increased by 15% and 7% respectively. However, growth was not consistent across the sector, with increases (or decreases) varying across types of organisations and the nature of the activity they were involved in. This variation partly reflects the changes in government funding and service delivery arrangements that continued to be implemented over the period.

CHANGE IN THE COMMUNITY SERVICES SECTOR - 1995-1996 TO 1999-2000
Graph - Change in the community services sector - 1995-1996 to 1999-2000

(a) Change in employees from June 1996 to June 2000.

Source: Community Services, Australia, 1999-2000, (ABS cat. no. 8696.0).

Government organisations
Between 1995-1996 and 1999-2000, expenditure by Government organisations on community services increased by 25%. While more than three-quarters of the $3.4 billion spent in 1999-2000 was spent on direct community services activities, most of the growth over the four-year period was due to an increase in Government expenditure on other community services activities. Expenditure on these activities more than tripled over the period (from $258 million to $806 million). While some of this increase reflects improvements in data quality, it also reflects the additional administration, monitoring and support costs associated with the purchasing of services rather than directly delivering them. This expenditure on other activities by Government organisations does not include funding to other community service organisations for service provision.

GOVERNMENT COMMUNITY SERVICES ORGANISATIONS

		1999-2000	Change since 1995-1996

		$m	%
Expenditure		3,445.2	25.4
	Direct	2,639.5	6.1
	Other	805.7	211.9

		'000	%
Employees(a)		59.2	-13.0
	Direct	49.0	-5.8
	Other	10.2	-36.2
Volunteers(b)		18.0	-18.5

(a) Employees at end June 2000 and June 1996.
(b) Volunteers for the month of June 2000.

Source: Community Services, Australia, 1999-2000 (ABS cat. no. 8696.0).

Also consistent with the scaling down of actual provision of community services by Government organisations,² were changes in the number of employees in these organisations over the period. Between 1995-1996 and 1999-2000, the number of employees in Government community service organisations decreased by 13%. The numbers of employees involved in both direct and other activities declined (down 6% and 36% respectively). The comparatively large decrease in the number of employees involved in other activities, and the large increase in other expenditure, is likely to reflect the tendency by governments to contract out functions supporting community services facilities, such as catering and cleaning.

Private organisations
Private providers of community services include both For profit and Not for profit organisations. In terms of the level of expenditure, and numbers of employees and volunteers, Not for profit community services organisations tend to dominate the entire community services sector (i.e. Government and private organisations combined). In 1999-2000, private Not for profit organisations accounted for 56% of expenditure, 64% of employees and 93% of volunteers involved in community services activities. Further, between 1995-1996 and 1999-2000, Not for profit organisations experienced the strongest growth of all organisations in the community services sector, driving much of the growth in the sector overall. They experienced the largest growth in spending, reaching $7.1 billion in 1999-2000, an increase of 42% on 1995-1996 expenditure. In keeping with the continued privatisation of the provision of community services over the period, growth in expenditure by Not for profit community services organisations on direct activities was more than double that of other activities (47% and 20% respectively).

Not for profit organisations also experienced an increase in number of employees between 1995-1996 and 1999-2000 (up by 21%). This growth reflected a 47% increase in the number of employees in direct services provision, which more than compensated for a decrease of 25% in employment in other activities. Volunteer participation is also vital to the operation of many Not for profit community services organisations.³ In June 2000, there were 128 volunteers for every 100 people employed by these organisations, representing an overall increase of 31% in volunteer numbers since June 1996. This is in keeping with the increased proportion of Australians generally participating in voluntary work over the period (see Australian Social Trends 2002, Voluntary work).

PRIVATE COMMUNITY SERVICES ORGANISATIONS

		Not for profit organisations		For profit organisations
		1999-2000	Change since 1995-1996	1999-2000	Change since 1995-1996

		$m	%	$m	%
Expenditure		7,086.2	42.0	2,111.3	13.4
	Direct	6,010.2	46.9	2,098.3	15.8
	Other	1,076.0	19.6	13.0	-74.5

		'000	%	'000	%
Employees(a)		217.8	2036	64.4	-8.7
	Direct	168.2	46.7	60.1	6.4
	Other	49.7	-24.7	4.3	-69.5
Volunteers(b)		278.3	30.7	3.1	-20.8

(a) Employment at end June 2000 and June 1996.
(b) Volunteers for the month of June 2000.

Source: Community Services, Australia, 1999-2000 (ABS cat. no. 8696.0).

In contrast, between 1995-1996 and 1999-2000, For profit community services organisations experienced more modest growth in expenditure (up 13% to $2.1 billion), and a decrease in the number of employees. The decrease in the total number of employees was the result of a 70% decrease in the number of employees involved in other community services activities, to 4,300. This was partly offset by a 6% increase (to 60,100) in the number of employees involved in direct community services activities in For profit organisations.

Direct community services activities
In 1999-2000, expenditure on direct community services was concentrated on three main activities. Residential care and accommodation placement accounted for over half of spending on direct activities, followed by personal and social support (20% of direct activities expenditure), and child care (11%). However, foster care placement showed the largest growth in direct activities expenditure between 1995-1996 and 1999-2000, up 69%. Over the same period, spending on personal and social support services by the sector rose by 49%, a result of private organisations (both For profit and Not for profit) doubling their expenditure on this activity.

EXPENDITURE ON DIRECT COMMUNITY SERVICES ACTIVITIES

	1999-2000	Change since 1995-1996
Type of activity	$m	%

Residential care and accommodation placement	6,091.8	24.6
Personal and social support	2,170.4	49.0
Child care	1,156.3	16.7
Training and employment for people with a disability	498.5	33.3
Juvenile and disability corrective services	246.4	28.5
Statutory protection and placement	232.8	18.7
Foster care placement	189.9	68.8
Financial and material assistance	141.6	-3.4
Other direct community services activities	20.4	-39.3

Total	10,748.1	28.1
Source: Community Services, Australia, 1999-2000 (ABS cat. no. 8696.0)

Endnotes
1 O'Brien, J. 2000, 'Resignation, radicalism or realism? What role for non-government agencies in the changing context of child and family welfare?', Children Australia, Vol. 25, No. 1, pp. 4-9.
2 Kerr, L. and Savelsberg, H. 2001, 'The Community Service Sector in the Era of the Market Model: Facilitators of social change or servants of the State?', Just Policy, September 2001, No. 23, pp. 22-32.
3 Ohlin, J. 1998, Will Privatisation and Contracting Out Deliver Community Services?, Social Policy Group Research Paper 15, Parliamentary Library Web Pages <www.aph.gov.au/labrary/pubs/rp/1997/98rp15.htm>, accessed 29 August 2002.