Investigation into the Department of Jobs, Precincts and Regions’ administration of the Business Support Fund

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Letter to the Legislative Council and the Legislative Assembly

To

The Honourable the President of the Legislative Council

and

The Honourable the Speaker of the Legislative Assembly

Pursuant to sections 25 and 25AA of the Ombudsman Act 1973 (Vic), I present to Parliament my Investigation into the Department of Jobs, Precincts and Regions’ administration of the Business Support Fund.

Deborah Glass signature

Deborah Glass OBE
Ombudsman

27 April 2021

Foreword

My mental health has suffered due to watching my life’s work deteriorate in front of my eyes … I feel sad, frustrated, angry and defeated that through no fault of my own, I am being penalised …

From complainant to Ombudsman

At first it was about delays. In April 2020 the trickle began, complaints from small business owners applying for a government grant to keep them afloat, waiting for an answer to their application. Then a stream; by July, a flood. By then, the complaints were not only about delays, but also denial of a grant. There was desperation in people’s voices, they were counting on a grant to pay bills, rent, wages – to survive.

By September, after my staff had sought to resolve over 600 individual complaints with the Department of Jobs, Precincts and Regions, I launched an investigation into the systemic issues.

The COVID-19 lockdowns fell like a hammer blow on small businesses. To the Victorian Government’s credit, it had swiftly announced an economic survival package to provide $10,000 grants to eligible business owners. It was a tough job for the Department, quickly setting up systems to administer more grants in one year than it had done in the previous 52 years. For many people, it worked: tens of thousands received an economic lifeline.

But for thousands more it didn’t. Applications could only be made online and not everyone is computer literate; small business owners are not all fluent in English; some have disabilities or communication difficulties; the process was complicated, confusing and occasionally contradictory. The Department made mistakes. People made mistakes. Mistakes were, in the fraught circumstances of the pandemic, completely understandable.

But the consequences of people’s mistakes could be devastating. Thousands of applications were rejected because, unbeknown to the applicants, they remained in ‘draft’, awaiting further information, when the deadline expired. Others were not processed because people made a typo in the form, a keystroke error on a number or email address. Updates to the online form after the eligibility criteria were expanded, and while the Fund was still open, led to confusion. Despite the stress and anxiety caused by COVID-19, in an environment where their businesses were being destroyed, people were being penalised for their honest mistakes.

Nor did the processes help where they should. The call centre could not initially handle the volume. It was then expanded – but the outsourced staff were not given access, on privacy grounds, to the database containing the information needed to help business owners struggling to pursue their applications. Well- intentioned – but not fit for purpose.

A good internal review and complaints process should be a priority for any system of public administration, even more so when it is set up in haste. Complaints will quickly identify the pressure points, the things that must be fixed. But when the Fund opened there was no information on the Business Victoria website about how to challenge a decision or lodge a complaint. Eventually people were signposted to the Ombudsman, effectively outsourcing the complaints process to my office.

What went wrong? The Fund was established and scaled at speed. The Department had nine days to implement the program, with no opportunity to test its design or delivery. But its design missed some of the key checks and balances that would have picked up the inevitable flaws. Many complaints could have been resolved without coming to my office had the Department been more reasonable in what, to small business owners, was a highly stressful situation, with some businesses fighting to stay alive.

Despite the stress and anxiety caused by COVID-19, in an environment where their businesses were being destroyed, people were being penalised for their honest mistakes

Good intentions got lost in translation. The aim of the Fund was laudable, to support a hugely vulnerable cohort affected by lockdown. But administering it inflexibly undermined its very purpose. The people were forgotten in the process. If someone was genuinely eligible for a grant, why should they be refused because they made a simple mistake, or were confused by what was indeed a confusing process?

These principles went to the heart of the Ombudsman’s proposed resolution of, by now, over a thousand complaints.

The Business Support Fund was supposed to be a lifeline for businesses, and for many it was – but in other cases all it did was add to their stress, anxiety and uncertainty. When the Government announces such schemes in the future, it needs to ensure the basic fundamentals are in place – the ease to apply; good communication; staff who have the ability to provide fulsome information and the discretion to show compassion and flexibility when it is right to do so; a proper complaints process.

To the Department’s credit, it engaged constructively with my office from the outset, resolving large numbers of complaints and improving its processes along the way.Many people received their grants while the investigation was ongoing. A draft of this report resulted in the final acknowledgement that thousands more people should have their applications reconsidered.

Sometimes, it takes the nudge of the Ombudsman’s elbow to encourage public servants to do the right thing. In the end, that they do the right thing is what matters.

Deborah Glass

Ombudsman