Minister ‘pretty unhappy’ as Bedford gets more taxpayer millions
The Federal Government is stumping up millions more dollars to keep the ailing disability employment services provider, Bedford, afloat.
The Federal Government will provide ailing disability employment services provider Bedford with an extra $4.4 million with Disability and the NDIS Minister Mark Butler saying the company’s financial position was so bad that “they can’t even operate from week to week”.
Announced today, the extra funding builds on $15 million in state government money given to Bedford in July, which rescued the not-for-profit from falling into voluntary administration.
Bedford is the second-largest employer for people with disability in the country and supports some 1400 people.
In a statement, Butler said the Commonwealth Government agreed to provide $4.4 million to the state government to support the Bedford sales process “following careful consideration”.
“McGrathNicol, who were appointed as restructure advisors to Bedford throughout this process, have continued to uncover a very severe financial crisis,” he said.
“Bedford, as a registered NDIS provider, has and continues to receive substantial Commonwealth funding.
“The Commonwealth remains committed to working closely with the South Australian Government, the National Disability Insurance Agency, the NDIS Quality and Safeguards Commission, and other stakeholders to ensure continuity of care and support for all affected participants.”
In July, Bedford leaders said its “heartbreaking decision” to appoint administrators came after the company had “spent recent years firmly focused on innovation to decouple the organisation from the reliance on funding models related to the NDIS”.
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A rescue package for the not-for-profit was announced in July with McGrathNicol appointed as restructuring advisers reporting directly to Bedford’s board and chief executive Myron Mann resigned from his position.
Speaking to FIVEAA on Friday, Butler said the money would keep the company operating until the sales process started. Potential buyers have until mid-October to make a bid for the not-for-profit.
“That’s how bad their financial position is,” he said.
“They can’t even operate from week to week to allow the market to determine whether there’s someone out there willing to buy them.
“So we’re going to have to find $4.4 million of taxpayer funds to essentially keep them liquid while the sales process winds its way through the course of October.”
He said he was “pretty unhappy that we have to do that”.
“Frankly, they should be in a position where they can find themselves week to week to allow this, but that’s how dire their financial situation is,” said Butler.
“I’m even unhappier though about the situation of those 1500 people… They’ve been working hard, they’ve got no part in the dire situation that effectively Bedford management has got this venerable South Australian icon into.
“But we’ve got to make sure that it has another 80 years ahead of it. That’s why we’re giving it the best chance today with this money.”
He said at its core Bedford was a “strong business” – “they just made some very poor financial decisions”.
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“I’m hopeful there’s a buyer out there that recognises this has a great history, has a great brand still in South Australia, and wants to deliver a strong future for those 1500.”
The development followed comments from South Australian Premier Peter Malinauskas in state parliament in September that scrutiny of Bedford documents showed that its financial position was “even more dire than what we first understood”.
However, Malinauskas assured that 40 residents living at Bedford’s Balyana site in Clapham had until “at least the second half of 2026” to leave the accommodation.
Bedford was told to make clear in a recent meeting with families that residents – some who had lived at Balyana for many years – would not be rushed to move as the $15 million sale process had bought far more time for them to plan the transition, he said.
The significant Adelaide foothills 3.9 hectare Balyana site was opened by former Prime Minister Gough Whitlam in 1974 and has motel-style accommodation for nearly 30 people and a series of individual units.
He told parliament there had been a “real risk” that “the people living at the Balyana site could find themselves abruptly having to find alternatives”.
“By us acquiring the Balyana site it put the South Australian government in the box seat to have greater security of the people living there.”
A spokesman said the government had no plans to sell or develop the Balyana site at this stage – that property industry sources previously indicated would be worth more than $20 million on the open market, given its size and prime location.
News of the extra funding also followed the collapse of the not-for-profit MS Society SA and NT, which appointed voluntary administrators in September, citing “sustained financial pressures”.
A federal government spokesperson said it was “the first the government has heard of them going into voluntary administration”.
“The Department of Health, Disability and Ageing will engage with MS SA and NT for further information,” she said.
NDS CEO Michael Perusco told InDaily providers were forced to rely on dwindling cash reserves to stay afloat amid stringent regulation of registered providers, challenges that could mean more providers collapse unless they were urgently addressed.
“We have been highlighting the financial strain that quality providers in the NDIS have been experiencing for some time now,” Perusco said.
“We know that quality providers are fundamental to the success and sustainability of the scheme, and the reality is we can no longer take that for granted.
“We know that over 50 per cent of quality providers are making losses, and the rest are barely breaking even.
“It is really important that this issue is addressed urgently in order to prevent more exits of quality providers from the market.”
