Aged care expansion ‘not viable’

A CONFIDENTIAL report from a top consulting firm has strongly warned Balranald Shire Council against pushing forward with the expansion of the Bidgee Haven Retirement Hostel.

Councillors resolved to release the 18 page report publicly after concerns were raised at their February meeting about the transparency surrounding the $3.5 million project, which would see the existing Mayall Street aged care facility expanded by 12 beds. 

Balranald Shire planned to fund the venture through a bank loan after securing a $2 million federal government grant for a 12 bed dementia wing in December 2014.

However the report, conducted by national audit and consulting firm RSM and presented to council in December last year, found that if the extension were to proceed, the hostel would need to generate a surplus of $5000 per resident per year simply to meet the interest cost on the loan.

In the report, RSM found that Bidgee Haven only remains viable through “explicit and implicit subsidies from council” — referring to the current system in place whereby the shire carries out the hostel’s administration services, including accounting and payroll, at a low cost. 

The report also found the hostel’s existing setup of 15 beds is sufficient for current community demand and that it will take around 16 years before an increased capacity of 30 beds is required.

A community consultation meeting was held about the hostel’s future two weeks ago, with RSM director of aged care Bruce Bailey travelling to Balranald to present the report to around 30 community members.

In his presentation, Mr Bailey said the aged care industry is looking more towards home based care and that small residential facilities will continue to face challenges around resourcing and skill management.

He gave numerous examples across rural Australia of hostels like Bidgee Haven which have transitioned away from local government operators.

For more on this story, pick up a copy of Wednesday’s Guardian (March 30, 2016).