Council currently subsidises the program to the tune of 65% and as a result of its decision to remove itself from the responsibility, it will stand to save $68,000 in the next financial year.

In moving a motion to cease the subsidy at the end of the school year, Cr Wayne Rice said the situation relating to school crossings was far more complex than many people would realise.

He moved that council cease subsidisation of the school crossing supervision program at the end of the 2015 school year, but in the next six month, that it work on a transition and pilot program collaboratively with VicRoads, the Department of Education and Training, local schools and the community to ensure the safety of school children. Cr Rice also moved that the appropriate measures be put in place for the commencement of the 2016 school year on the proviso that no ratepayer funds are committed beyond December 31, 2015.

It was advised in a report to councillors that council has no legislated requirement to provide the service, but it is a service that council has traditionally provided with a small operating grant from VicRoads.

The grant totals $23,500, which is divided between providing services to Stawell 502 Primary, Stawell Secondary College, Stawell West Primary School, St Patrick's Primary School and St Arnaud Primary School.

"The government, as we have seen recently, is to introduce rate capping based on 2.5% CPI and as a result of that, council has had to make very tough decisions on what services it needs to review in the future," Cr Rice said.

"In my opinion the very terminology school crossing, suggests that the control of school crossings should be in the area of the school, not in the area of the council.

"I think it is ridiculous that the state government give VicRoads money, who pass it to council who monitor and operate school crossings. We actually don't even operate the crossings, all we do is provide the safety equipment, the Stop and Go signs and the training for these people.

"We shouldn't even be part of it. We need to get ourselves, as part of red tape reduction, to step out of this area and allow VicRoads to fund the schools directly.

"We're not cutting of the school crossings and saying we're going to close them and the kids will be left to their own devices, we've shown a very responsible attitude here that we will work with VicRoads, the Department of Education and Training and other people, to ensure the safety of the children is absolutely paramount, but we can't afford to be in this when our funding is going to be cut by government departments over our heads."

Cr Jason Hosemans said he was concerned that cost shifting from both state and federal level to local government was ongoing and looked set to continue into the future.

"This is a continual case of cost shifting from the state and federal governments to services that are provided at a local level," he said.

"Effectively now, school crossings are funded virtually two thirds from a local government perspective and a third from VicRoads or the state government. It is just another example of cost shifting, putting costs for things that don't necessarily fit into the Northern Grampians Shire's basket of things that we should be delivering off our own bat.

"Technically between the Department of Education and VicRoads, this is a service they should be providing themselves. We are the middle man in between who is caught holding the pale as such and funding two thirds of it.

"With the continual lack of adequate funding at local government level, these sort of services will start being shifted back to the state and federal level, because if we don't have the money, we can't provide a service. It's as simple as that."

Mayor, Cr Murray Emerson said the decision to cut the subsidy for school crossings had been a very difficult one for council to make.

"This decision is something that probably won't be taken too kindly by some members of our community, but if we are not here in the long run to administer this shire, well then we won't be able to make any decision," he said.

"We will not be letting our children be disadvantaged by this. I'm sure we will be able to work our way through some significant decision and arrangements with the state government and education department and that's where we are heading with regard to this."