Is headspace making a difference to young people’s lives?

6. The Costs of headspace
Revenue/
Expenditure
Round 1 Round 2 Round 3 Round 4 Total (Rounds 1-4)
No. of Occasions of
service
Average cost per
OoS
44,669 68,067 36,846 41,189 190,771
$210 $264 $250 $314 $260
Note: Round 5 centres have not been included in this analysis.
Data Source: Authors’ calculations from hCSA and hCFA
In assessing the allocation of headspace grant funding to individual centres within the 2013/14
financial year and the value of total expenditure as a function of the number of occasion of service,
we observed a large degree of heterogeneity at the centre level (results not shown). This variation
can be caused by a number of factors including:
• operational phase relative to start-up time
• an undercount of occasions of services in the headspace centre services allocation data
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• reporting errors in either datasets
• variation in centre location and lead agency partnership.
Taking only those centres that could be considered fully operational within the 2013/14 financial year
(primarily Rounds 1-4 centres), there remain a number of centres that have very high headspace
grant investment with relatively low occasions of service. These centres require further investigation
as to the underlying causes and operational efficiencies that could be achieved as well as the
necessity of the overall grant revenue in receipt.
Turning to the variation among centre rounds, we can observe that centres operating in rounds 1-4
record an average cost per occasion of service of $210 - $314. Round 1 centres have the lowest
average cost per occasion of service and Round 4 the highest, which is also likely to be a product of
the relative newness of these centres in 2013/14.
Our estimate for government investment via the headspace grant within the 2013/14 financial year is
$260 per occasion of service. This estimate takes into account that the expenditure component only
and includes Rounds 1-4 centres.
headspace national office
headspace centres also receive ongoing support from headspace National Office (hNO). This
involves a range of services and support including human resources, compliance training and
assistance, information technology, specialised training, clinical support, contract management
and community engagement and awareness. The Department of Health has allocated $96,000 per
centre annually for hNO to be able to deliver these services. The actual expenditure from this grant
component varies, and it is not possible to extract a precise value from the current financial data due
to the inter-relationship with other headspace services. The grant allocation of $96,000 per year is
taken to be an estimate of the actual expenditure towards support from hNO for each centre. This
equates to a value of $6,336,000 for those centres that are in-scope, within the 2013/14 financial
year (Rounds 1-4).
Medicare Benefits Scheme (MBS)
More than 45% of services received at headspace centres attract a Medicare subsidy. This pattern
reflects the headspace model and funding arrangements, which were designed to leverage from
the MBS. Given the substantial MBS benefit that is realised through headspace centres, we
have considered that government investment via the MBS is in-scope for analysis of the overall
government investment to provide services to young people at headspace centres across Australia.
It is recognised that a number of services that are related to headspace and also attract the MBS
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This has been an issue in Broome for example, but has recently been addressed.
Social Policy Research Centre 2015
headspace Evaluation Final Report
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