JULY 1 is D-Day for council-run community aged care support services in Glenelg Shire and while no provider has yet been found, the federal government says it is confident an arrangement will be reached.

The need for a new provider or providers has become urgent since Glenelg Shire Council decided in February to pull out of providing the services from the new financial year, citing the need for significant investment in changes to its operating model and reduction in operating costs to comply with new federal government regulations around the sector.

The decision, which formalised one made behind closed doors in October last year, has been met with some consternation in the community, with many unsure who will provide their needed services, and at what cost.

The decision will affect about 762 customers of the service as well as 48 council staff.

Councillors also made the decision to come into effect one year before the new regulations come into force.

A spokeswoman for the federal Department of Health and Aged Care told the Observer that it was actively working with the council and was in the middle of a selection process for a new provider.

It had approached several providers about continuing services from July 1.

“However as the decision is not yet finalised, the number of incoming providers may change,” she said.

“Glenelg Shire Council is expected to actively work with the department and incoming providers on transition arrangements to ensure continuity of service for clients.

“The department is confident that an arrangement will be reached for service continuity prior to the point of transition.”

A council spokeswoman said it was working with the Commonwealth on the transition.

When the council made its decision it pointed to many other local governments pulling out of the sector because of the reforms.

However the department spokeswoman said it had “engaged with… councils about the reforms and the future of in-home care, reinforcing the messaging the Australian Government wants to retain a diverse and high-quality market for aged care services”.

“Not-for-profit and government delivered services will continue to play an essential role in aged care into the future,” she said.

“Councils are being actively encouraged to continue participating in the aged care reform discussions to ensure their voice is heard.”

All existing Commonwealth Home Support Programme providers were offered a funding extension for the next financial year, receiving a minimum increase in funding of five per cent to their base funding.

“The program is being extended to align with the Support at Home (the name of the new program that will replace the CHSP from next year) implementation,” the spokeswoman said.

The decision by Glenelg Shire Council was “an internal business decision by the organisation and the Australian Government cannot direct a provider or council to continue delivering aged care services”.

When formalising the decision at the February council meeting, councillors said providing the services cost ratepayers much more than the $250,000 to $300,000 annually (after the government funding is taken into account) a report for the meeting suggested.

Redundancy payments would also be required for staff but these had been “incorporated into long-term financial planning”.

While the federal aged care program has been the focus of the debate, the council has also pulled out of the Victorian Home and Community Care for Young People Program and the state government will have to find a provider for that.