Disability employment provider Bedford to go into voluntary administration
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Bedford CEO Myron Mann said it would go into administration in the coming days. (Bedford Industries)
Disability support service and employer Bedford will go into voluntary administration in the coming days.
In a statement it said that, after an "exhaustive negotiation process with the state and federal governments, banking and commercial partners NAB", it had advised its clients, families and staff that the organisation was expected to enter voluntary administration on Sunday, July 27.
The statement said the "heartbreaking" move would "directly impact 1,400 people with disability across South Australia".
CEO Myron Mann said Bedford remained "steadfast in our commitment to supporting each of our clients, residents and staff during this challenging time".
"It is a devastating situation with vast personal impact," he said.
"Bedford provides a haven for so many South Australians and has done so for the past 80 years.
"It is an incredibly disappointing outcome not only for Bedford but for the national disability sector."
He said the organisation had tried to drive change and innovation to remain financially sustainable, but "the magnitude of challenges faced, particularly in relation to the supported employment model, remain complex to navigate and unprofitable for organisations".
According to its website, Bedford is the second-largest employer of people with disabilities in the nation, and has 22 sites across Adelaide and regional South Australia.
The employment provider was established in April 1945 and has this year been celebrating its 80th anniversary.
Disability support service Bedford has announced it will go into voluntary administration. (ABC News: Olivia Mason)
In an email sent to staff, and viewed by the ABC, Bedford said it had — like "almost 70 per cent of registered NDIS providers" — faced financial challenges "since the introduction of the NDIS".
"Despite this forward thinking and a strong balance sheet of $47m in net assets, we have faced more recent challenges with cashflow," the email states.
"This has restricted our ability to operate and to access more working capital to realise the sustainable future we are working so hard towards."
In the email, Bedford stated that it had been endeavouring to "access working capital to ensure our future" — but said the federal government had failed to deliver.
"While the South Australian government has been sympathetic to our situation, they require the Commonwealth government to fund at least half of the required amount we need to remain operational and the Commonwealth government will not provide this aid," the email states.
But the federal government said Bedford had received tens of millions of dollars in funding in the last 15 months alone.
"The Australian government has been supporting the South Australian government's discussions with Bedford in recent weeks," a spokesperson said.
Bedford is understood to have a full workforce of 1,650. (ABC News: Olivia Mason)
The government said it would work with Bedford "and other stakeholders to ensure every person receiving care and engaged in employment is informed about any changes impacting them".
Bedford is understood to have a full workforce of 1,650, which includes those it supports as well as other employees.
SA Premier Peter Malinauskas said he would meet with Bedford on Friday.
"The South Australian government has made offers of financial assistance to Bedford throughout this process and we look forward to those discussions continuing," he said.
"The state government's first priority is the care and support of the people who rely on Bedford."
Premier Peter Malinauskas said the state government had been in talks with Bedford about its financial situation for several weeks. (ABC News: Carl Saville)
Bedford's banking partner NAB said it had "been working closely with Bedford over recent months, as the business has faced into several financial challenges".
"NAB had provided the group with additional funding to support ongoing operations in the short term, whilst they have been engaging with state and federal government about their immediate financial needs," a NAB spokesperson said.
Disability sector 'in crisis', union warns
The most recent annual report published on Bedford's website states that the "financial result for the year is not strong on paper".Its financial summary for 2023/24 noted the company "incurred heavy costs" but was still "on target" to open its new $50 million advanced manufacturing and retail hub in Salisbury this year.
"All combined, the year finished with an anticipated loss," it states.
"As we approach the midpoint of our five year strategy to become financially sustainable, we are at the low point and the benefits of heavy investment will be incrementally realised in the forward years as our new manufacturing facility comes online and the new social enterprises mature.
"The necessary restructure has required both capital and operating investment and two major acquisitions resulted in higher than normal operating expenses."
The disability service provider and employer was established in 1945. (ABC News: Olivia Mason)
United Workers Union state secretary Demi Pnevmatikos said Bedford's move to enter administration came at a difficult time for the disability service sector, which she said was "in crisis".
Ms Pnevmatikos said the union had a "significant number of members" at Bedford.
"It's early days but we'll be supporting our members through that and working with Bedford in any way possible to make sure that we can work constructively and ensure that entitlements and work can continue to take place where possible," she told ABC South Australia and Broken Hill.
"One of the issues that flows from that is, that when organisations as big and as significant as Bedford is in this state, have challenges like this, that often it's the state government service that has to help pick that up."
Ms Pnevmatikos said Bedford was one of many "disability organisations that are struggling to make ends meet".
"They are struggling to be able to transition into an NDIS environment," she said.
"I know firsthand that Bedford was making an array of changes and restructuring the way that they were doing things but it seems like they're the latest who have fallen victim to a system that is broken and that needs massive reform at a federal level."
Similar concerns were also reflected in Bedford's statement, which noted the company had battled in recent years to move away from "reliance on funding models related to the NDIS".
Written by: Jessica Haynes, ABC News.
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