Hundreds of billions of dollars of govt funding not evaluated: report

A lack of proper evaluation of federal government-funded programs may be contributing to the significant issues in aged care, experts have said.

Of the annual $64bn government funding towards community services programs, including aged care, $61bn was not adequately checked whether it was achieving its purpose.

Last week's Committee for Economic Development Australia (CEDA) report also revealed that 19 out of 20 programs, accounting for over $200 bn in federal funding, had no tangible evidence to support whether they provided value for their money.

The aged care sector is set to become the fifth-largest area of expenditure for the federal government, with costs rising from $24.8bn in 2022 to an estimated $29.6bn.

Cassandra Winzar, a Senior Economist at CEDA, said despite the government's significant investment into aged care, the sector is hardly seeing any positive outcomes.

"It's hard to fix problems if you don't know what they are," Ms Winzar told Aged Care Insite.

"We need real investment in data and the capability to analyse what's going on in aged care. 

"Because, right now, there are hundreds of billions of dollars of government funding going to programs and policies we don't know if they work or not."

Australia's aged care sector is under significant financial pressure as reports estimate 63 per cent of aged care homes operate at a loss in December 2022.

Residential facilities are facing average losses of $15,98 per bed each day – a 54 per cent increase compared to last year's $10,31 per bed per day.

On top of impending reforms, such as the requirement for 24/7 onsite nurses in facilities by July 2023, an increasing number of aged care homes are opting to close.

Despite federal and state government spending roughly 5 per cent more each year on community services, progress in the aged care sector is slow, Ms Winzar said.

"It's difficult to determine where the money is going, what it's being spent on, and what outcomes you're getting from various spending programs and policy changes," she said.

"There's a real lack of transparency about how homes operate.

"It's all well and good to invest more money, but if you're not collecting data about whether the funding is achieving its goals, it's useless."

Ms Winzar conceded that although the sector may not welcome further policy changes, given the imminent reforms, a boost of evaluation processes is 'something that has to happen.'

"It's difficult to see what's going on in the aged care sector when you look at these high-level figures in spending," she said.

"That's where evaluation and investing in data can help."

CEDA's analysis of 103 federal, state, and territory programs revealed that 70 per cent had either an inconsistent, incomplete or poor evaluation framework.

A quarter had no evaluation framework at all.

For example, the Expansion of Telehealth Services program, which received $100m in 2020, had a poor evaluation framework and lacked targets to monitor its effectiveness.

Another program, Indigenous Aged Care, received $216m in 2015 but only had one report with a limited framework, and no evaluation had been undertaken since its release date.

Ms Winzar pointed out that many programs and policies lacked a clear objective from the beginning. 

According to her, the government failed to collect any data on achieving its goals, making it challenging to evaluate a program's effectiveness.

"This is one of the primary reasons why the desired impact of government spending is not being seen," Ms Winzar said.

Last week, Assistant Minister for Treasury, Dr Andrew Leigh, named the assessment of government-funded programs as 'piecemeal.'

Mr Leigh revealed the budget would allocate $10m over four years to install a 'centralised evaluation unit' to assess the effectiveness of key programs.

"This evaluation unit will be at the heart of the government and ask the question: does it work?

"Evaluation is one of the government's core purposes – it ought to be part of what we do."

Last month, CEDA called for the government to overhaul its evaluation process 'to 'end budget waste.'

"We can't keep increasing spending on these programs while they fail to make tangible progress," CEDA's chief executive, Melinda Cilento, said.

"The community rightfully expects that taxpayer funds are used to improve economic and social outcomes for all citizens effectively, but too often, this is not the case."

CEDA suggested the government should 'foster and champion' an evaluation culture among government departments and external providers.

It recommended placing incentives on evaluation processes, mandating frameworks to be submitted as part of budget processes and improving data access and availability.

Ms Cilento said major Commonwealth-funded programs should be reviewed at least every five years.

"Demands on government services keep rising even as budgets are under more pressure than ever," she said.

"Meeting community expectations in a fiscally responsible way requires robust and consistent evaluation and learning from the evidence.

"If we want to end the cycle of reviews and inquiries that gather dust on politicians' desks, evaluation must be integrated into government processes."

Get the news delivered straight to your inbox

Receive the top stories in our weekly newsletter Sign up now