Contestability and social justice: The limits of competitive tendering of welfare services

Abstract

This paper critically analyses competitive tendering as a model for the provision of welfare services. Competitive tendering, driven by National Competition Policy and other imperatives for greater efficiency and a smaller public sector, is now used extensively by governments to fund welfare services. However, the suitability of this funding model to welfare services generally, and specifically welfare services in non-metropolitan areas, can be criticised on both theoretical and empirical grounds. Competitive tendering is grounded in economic rationalist, urbo-centric assumptions that are largely inappropriate for welfare provision, and have limited validity in rural areas. There is little rigorous empirical evidence of improved efficiency and effectiveness of service delivery under this model. Conversely, there is mounting evidence about the negative impacts. In rural areas this includes the erosion of community service obligations, less collaboration and greater secrecy between agencies, the reduction of choice, limited opportunities for local planning, cost shifting, and threats to continuity of care. This paper concludes with a call for greater application of the ‘public benefit’ test under the provisions of the National Competition Policy, and the development of more sophisticated frameworks for assessing the contestability of welfare services. Social workers have a leading role to play in challenging the dominant ideology of competition-orientated welfare reforms.