• Greater competition, contestability and informed user choice could improve outcomes in many, but not all, human services.
• The Commission's preliminary finding is that there are six priority areas where introducing greater competition, contestability and informed user choice could improve outcomes for people who use human services, and the community as a whole.
  • The Commission's view is that reform could offer the greatest improvements in outcomes for people who use social housing, public hospitals, specialist palliative care, public dental services, services in remote Indigenous communities, and grant-based family and community services.
  • Well-designed reform, underpinned by strong government stewardship, could improve the quality of services, increase access to services, and help people have a greater say over the services they use and who provides them.
  • The purpose of this report is to seek participant feedback on the Commission's findings before the public release of its study report in November 2016.
• Introducing greater competition, contestability and informed user choice can improve the effectiveness of human services.
  • Informed user choice puts users at the heart of service delivery and recognises that, in general, the service user is best-placed to make decisions about the services that meet their needs and preferences.
  • Competition between service providers can drive innovation and create incentives for providers to be more responsive to the needs and preferences of users. Creating contestable arrangements amongst providers can achieve many of the benefits of effective competition.
  • For some services, and in some settings, direct government provision of services will be the best way to improve the wellbeing of individuals and families.
• Access to high-quality human services, such as health and education, underpins economic and social participation.
  • The enhanced equity and social cohesion this delivers improves community welfare.
• Government stewardship is critical. This includes ensuring human services meet standards of quality, suitability and accessibility, giving people the support they need to make choices, ensuring that appropriate consumer safeguards are in place, and encouraging and adopting ongoing improvements to service provision.
• High quality data are central to improving the effectiveness of human services.
  • User-oriented information allows people to make choices about the services they want.
  • Data improves the transparency of service provision, making it easier for users to access the services they need, and increases accountability to those who fund the services.
  • Governments are better able to identify community needs and expectations, and make funding and policy decisions that are more likely to achieve intended outcomes.

People should be at the centre of the services they use

The Productivity Commission has identified six priority areas where the potential to give people a greater say over the human services they use could improve the effectiveness of those services.

The Commission proposes to examine six human service areas in the next phase of its inquiry:

• social housing
• services at public hospitals
• specialist palliative care
• public dental services
• services in remote Indigenous communities
• family and community services.

The Productivity Commission inquiry into applying competition principles to human services was a recommendation of the Harper Review (Competition Policy Review).

'Reform in the areas we have identified has the potential to improve the lives of users and the welfare of the whole community. We welcome feedback both on the areas we have identified and others that we may have missed,' said Productivity Commissioner Stephen King.

'Placing consumers and choice at the heart of human services will be a key focus for the inquiry,' he added.

'The services we have identified are all different, and one policy response will not fit all. We will be taking a case by case approach to unlocking the potential for reform,' Dr King said. The report says that change must come with strong and effective stewardship from governments and acknowledges that this role not always been the case.

'Strong government stewardship of human services is needed. We will be looking at the lessons of the past in developing recommendations on governments' future role,' said Productivity Commission Special Adviser Sean Innis.

‘We recognise that more choice will not help everyone. Some users of human services are very vulnerable and will need protection. This will be a key focus for our further work,' he said.

The Productivity Commission encourages interested people to provide submissions to the final study report due to be released in late November 2016. An inquiry report will be completed next year and will include recommendations on policy reform.

Details can be found at http://www.pc.gov.au/inquiries-and-research/human-services/identifying-reform.

Download the infographic

• High resolution - Human Services (PDF - 848 Kb)

Human Services (Text version of infographic)

Unlocking choice and the benefits that come with it

We have identified six areas where greater choice and competition could improve services.

Social housing (public and community)

Public hospital services

Services for remote Indigenous communities

Public dental services.

Specialist palliative care services.

Family and community services.

Read the preliminary findings report and make a submission.