Council seeks exit from final aged care home amid $5.5M losses

Victoria’s last Council-run aged care home appears to be living on borrowed time.

Having already closed two aged care homes in recent years, the Glen Eira City Council is now seeking an exit of its third home to a new provider.

Warrawee Community, located in Bentleigh East, 15km southeast of the Melbourne CBD, is forecast to report a FY27 loss of $5.5 million. 

In a statement, the Council said last year’s reforms have made residential aged care more complex, with increased requirements for governance, clinical care and compliance needing additional investment.

At a Council meeting on 9 June, the Council determined to seek a new operator for the 90-bed home through an Expression of Interest and Request of Tender process. The Council has stressed that the home is expected to remain open.

38% wanted Council to keep loss-making service

One of few remaining Council-operated aged care homes in Australia, the future of the Victorian home was put to community consultation earlier this year.

The 74-page consultation report found locals were concerned about continued Council oversight of the home, with 38% supporting the Council to keep operating the service even with the projected loss.

However, 34% acknowledged care quality had to be balanced with financial sustainability. No respondents supported the home being transferred to a For Profit provider.

The Council will require a vote before any future transfer can go ahead, and any change will be subject to approval by the Aged Care Quality and Safety Commission. 

Council already closed doors to two homes

In 2019, Glen Eira City Council sought a buyer for the three aged care homes it operated at the time during the Aged Care Royal Commission.

No buyers were found, and the two other Glen Eira-operated aged care homes were eventually closed – with a total loss to the community of 83 aged care beds:

• The 53-bed Rosstown aged care home in Carnegie, 12km southeast of the Melbourne CBD, closed and ceased to be accredited in 2023.
• The 30-bed Spurway aged care facility in Murrumbeena, 13km southeast of the Melbourne CBD, is closed and ceased to be accredited in 2022.

This week, we also report on Victorian Councils seeking to exit Commonwealth Home Support Program (CHSP) services ahead of the program being rolled into Support at Home. The Government has provided no update to its guidance of “no sooner that 1 July 2027” for the major shift – now only 12 months away.

Troy Stolz, Councillor of Upper Hunter Shire Council which recently closed the 14-bed Gummun Place in Maitland, NSW, told The Weekly SOURCE earlier this year that Councils shouldn’t be running residential aged care.

Watch this space to see which operator will be the successful bidder for the Victorian facility. Plenty of operators – think Respect Aged Care and Roshana Care Group – are in the market for stand-alone sites as they seek economies of scale.