The quiet loss of local community services

This is a guest post from Community Industry Group CEO Nicky Sloan. An earlier version was first published at the Illawarra Flame. 

Australia’s care and community support sector is undergoing significant change. While much of the public conversation has focused on reform, quality standards and accountability, there is another story emerging—one that deserves greater attention.

Across the whole sector, smaller, place-based organisations are steadily disappearing – either being absorbed into larger conglomerates or quietly closing their doors and disappearing forever. This is particularly evident in aged care, where recent reports reveal the number of providers has declined from around 3,000 in 1990 to less than 650 by 2025. This dramatic decline reflects a broader trend toward consolidation across the care economy.

For governments and regulators, there are understandable reasons for pursuing smaller markets. Cutting the quantity of funding contracts improves efficiency and consistency in contract management and strengthens oversight without increasing the bureaucracy. And of course the lessons from recent inquiries and Royal Commissions cannot be ignored. Australians rightly expect safe, high-quality care.

However, as reforms reshape the sector, we must also consider what may be lost along the way.

Small community-based organisations are more than service providers. They are often deeply embedded in the communities they serve, built on relationships that have developed over years, and often decades. Their leaders know local families, understand local challenges and respond to local needs in ways that larger, more centralised organisations can struggle to replicate.

For many people accessing care, these organisations provide something that cannot easily be measured through compliance frameworks or performance indicators: a genuine sense of connection, trust and belonging.

The growing administrative and regulatory demands placed upon the sector are often felt most acutely by smaller providers. Complex reporting requirements, workforce obligations, contracting arrangements and funding uncertainty can create pressures that are difficult to absorb without significant administrative resources. As a result, many organisations find themselves facing an increasingly difficult choice—merge, be acquired, or close their doors altogether.

This is not because they lack commitment to quality. Quite the opposite.

The community services sector is filled with organisations whose purpose is to improve lives and strengthen communities. Every day, dedicated staff, volunteers and leaders work alongside vulnerable families, older Australians, people with disability, and individuals experiencing hardship. They do so not because it is easy, but because they believe in the value of care, inclusion and community.

Their contribution deserves recognition.

It is also worth reflecting on the contrast between how we view small businesses and small community organisations. We frequently celebrate local businesses for their innovation, flexibility and contribution to vibrant communities. Yet many of those same qualities—local knowledge, responsiveness and strong community connections—receive far less recognition within the human services landscape.

Care is, at its heart, a profoundly human endeavour. While efficiency and consistency are important, they should not come at the expense of relationships and community connection. A system that values scale above all else risks overlooking the qualities that many people receiving care value most.

This is not an argument against reform, nor is it a criticism of larger providers, many of whom deliver high-quality services to Australians every day. Rather, it is a call for balance.
As governments continue to pursue improvements across the care sector, there is an opportunity to ensure that policy and funding settings support organisations of different sizes and models. A strong system should be capable of accommodating both large providers and smaller community-based organisations, recognising that each brings distinct strengths.

Its not just about how we improve care, but about kind of care system we wish to create. Do we want a future in which care becomes increasingly centralised and standardised, or one that continues to make room for the local organisations that have long been trusted anchors within their communities?

The answer matters, because when local community organisations disappear, communities lose more than a provider. They lose local knowledge, longstanding relationships and an important source of social connection. In many cases, they lose part of the community’s identity itself.

If we truly value care, we must also value the people and organisations that have quietly delivered it for generations.