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A group of prominent Indigenous leaders, bureaucrats and business chiefs is working to redefine the role of government in battling the enduring social dysfunction, third-world poverty, illness and deprivation that blights Indigenous Australia.

The dismantling of the Aboriginal and Torres Strait Islander commission (Atsic) in 2004 amid allegations of corruption, financial mismanagement and improper nepotism, tightly re-centralised responsibility for Indigenous Australia with state, territory and federal governments.

But despite billions of dollars being spent on Aboriginal and Torres Strait Islander communities over many decades, governments have achieved only the most glacial improvements nationally in the wellbeing of Indigenous Australians.

While improvements have been achieved in some communities through the introduction of, for example, welfare reform, domestic violence and housing initiatives, consecutive federal governments and leading Indigenous figures continue to express frustration and despair at the lack of anything resembling a national solution.

That is why last year at the Garma festival in northern Australia, Empowered Communities (promoted as a revolutionary and perhaps last-ditch proposal for Indigenous-led reform that was inspired partly by the radical welfare overhaul undertaken by Indigenous leader Noel Pearson in Cape York) received bipartisan federal support to recommend a new approach.

The Empowered Communities steering committee, including Pearson and Department of Prime Minister and Cabinet assistant secretary Liza Carroll will next month recommend the federal government give Indigenous communities far greater autonomy to allocate public funding and services to communities across the country.

Communities would have the choice of opting in to any new funding arrangement. But those that did would have to pledge greater responsibility for: attempting to eradicate domestic violence, drug and alcohol abuse; the protection of children and daily school attendance; the participation of capable adults in work or training and the care of public housing.

The broader Empowered Communities group has involved a formal collaboration between leaders from eight parts of Australia: east and west Kimberleys; north-east Arnhem Land; Cape York; the NPY lands of Central Australia; inner Sydney; the Goulburn Murray and New South Wales central coast.

While some community leaders from these areas have long swapped advice informally and tried to replicate each others’ successes, this type of formal collaboration to achieve best practice has never been tried before.

The leaders are likely to recommend an overhaul of the top-down government approach to the provision of services to Indigenous Australians, whereby broad initiatives that do not always meet the needs of individual communities are imposed nationally.

Duplication and wastage is pervasive, and some Indigenous community leaders volunteer that they have little idea how much money is being spent on which programs for their people.

Sean Gordon, chief executive of the Darkinjung Local Aboriginal Land Council on the NSW central coast, said the Empowered Communities model implicitly recognised the sometimes acutely divergent needs of communities in regional, remote and city areas.

“So, here we are 12,000 strong people in a broader region of 340,000,” Gordon said. “We are not a discrete, defined community because we are integrated into the broader fabric of a region. But still we face the same problems that beset Aboriginal Australia: employment issues, poor health outcomes, kids not going to school, higher levels of drug and alcohol dependency. But within those broad problems are a range of local factors and potential solutions.”

Gordon said communities such as his were frustrated because they could not establish under existing funding arrangements how much state and federal money was being spent on a variety of programs in their communities. This made reconciling program outcomes with spending enormously difficult.

“We need to know precisely how much all of the different service providers are receiving – from Indigenous employment and education programs to health services – and then we need to know if the government and the communities are getting the satisfactory outcomes.”

Leaders participating in Empowered Communities refer to problems associated with the “silo” nature of funding that can make it difficult to address broad lifestyle issues.

“For example, it is difficult to address the problem of a child not attending school in isolation; it doesn’t work until you can address housing issues relating to the family, possible health problems and the employment-related issues of parents,” Gordon said. “Empowered Communities aims to introduce a more holistic approach, so that national and state funding can be targeted to local needs as identified by distinct communities.”

Andrea Mason, coordinator of the NPY Women’s Council said her region had made significant advances in protecting women from fatal domestic attacks by coordinating intervention and response from police, courts, advocacy, legal and health services.

Between 2000 and 2008, 15 Indigenous women in her region were killed in domestic and family disputes. Due largely to advances brought by the more coordinated domestic violence approach, there has been just one death since 2008.

“This is an example of the sort of program that could be shared through any new arrangements determined by Empowered Communities,” Mason said.

Tony Abbott has maintained his commitment to the Empowered Communities project since becoming prime minister last year.

Speaking during last year’s election campaign, he highlighted the problems of service delivery, wastage, and governance in Indigenous communities, especially in remote areas.

Abbott cited the example of Aurukun in far north Queensland, “a village of about 1,500 people and there must be over 100 governmental, semi-governmental and non-governmental organisations working there, all doing in their own way an excellent job, but often tripping over each other and the poor people spend their whole life going to meetings rather than getting on with their life”.

Ian Trust, executive director of Wunan in the remote east Kimberley, said he expected the federal government and opposition to respond positively to the Empowered Communities recommendations after they were made on 19 September.

“We know they are keen to look at it because governments are sick of spending all of these billions of dollars and not closing the gap,” Trust said. “So we’re saying, ‘well give us a go in terms of devising an alternative strategy’. This alternative strategy needs to be Aboriginal-led. We want to be holding our own people accountable but we also want to be holding other people accountable in terms of service delivery.

“You know up here our people haven’t been involved enough. They have been bystanders if you like watching other people deliver services for them. And it engenders this mentality that you’ve got to do things for us and we will just take what is given. Well, this is about the cultural change that we are trying to implement – it’s not just about people coming and doing things for you, you’ve got to do things for yourself. Like government can’t get your kids out of bed in the morning to go to school. You’ve got to do that if you want to be a part of this reform.”

The Empowered Communities steering committee also includes senior bureaucrats from NSW, Queensland and the Northern Territory, representatives of Westpac and the Business Council of Australia.

The principles underlying the Empowered Communities reform of Indigenous services include uniform measurement of success based on outcomes; program innovation and site-specific program development.

Some of the leaders from the remote, regional and urban regions who are participating insist that, while Empowered Communities will not offer an immediate fix, it has the potential to radically improve the lives of Indigenous Australians because it will lead to real on-the-ground changes in service delivery.

They also reject suggestions that Empowered Communities will lead to the establishment of a new Atsic-style organisation.

“We don’t want to create another vast bureaucracy,” said the chief executive of Tribal Warrior Association, Shane Phillips, who is based in inner Sydney. “This is actually about streamlining the delivery of Aboriginal services – this is completely different to Atsic. There is no money it for those of us who are steering it. It is just about putting down policies for change that will result in far better outcomes for future generations.”

The deliberations of Empowered Communities committee members coincide with the release of a report by mining magnate Andrew Forrest that recommends sweeping government welfare and training reforms to fight Indigenous disadvantage.

The Forrest report is underpinned by a top-down approach to welfare reform. It proposes the introduction of a card for all welfare recipients that would end discretionary spending on alcohol and gambling.

This is fundamentally different to the Empowered Communities philosophy – that effective change can only be driven upwards and from within Indigenous communities.

The federal government has cautiously received the Forrest report. It is far more likely to welcome the broader Empowered Communities recommendations and respond with legislation and bureaucratic change.

The first critical step on that reform road will be continued bipartisan support. All involved agree that time has run out and the need for action is urgent.

Indigenous Australia is in a hurry. But are our politicians?

Paul Daley is a Canberra-based author and journalist who writes about Australian history, culture and identity.