The ECC’s Funding Panic: What’s Fact and What’s Spin
SECTOR NOTICE – 12 November 2025
This month, the Early Childhood Council (ECC) issued a warning in its newsletter, raising concerns about Ministry of Education funding payments to service providers. The ECC reported high levels of anxiety among services, with some considering staff reductions, withdrawing from pay parity, or even closure. According to ECC Chief Executive Simon Laube, some providers are facing unbudgeted shortfalls of $20,000–$30,000, with one reportedly experiencing a shortfall exceeding $100,000.
Laube described the situation as “a good reminder to ECC members why it’s so important to be part of our association. While the financial benefits of ECC membership stack up well, it’s times like these that you really appreciate having our support.”
The ECC attributed the funding discrepancies to possible human error, issues with the Ministry’s Pourato system, and the Pay Parity funding moratorium.
However, the Office of Early Childhood Education (OECE) has reviewed the situation and found that the facts do not support these claims. Key points include:
- The Ministry recently changed how funding is displayed in Pourato reports. Figures are now shown as GST-exclusive, whereas previous reports included GST. This change can make amounts appear smaller, even when actual funding remains unchanged.
- The Ministry communicated this GST adjustment clearly in advance.
- Services that regularly monitor forecast funding based on FCH would likely have anticipated these fluctuations.
- The November 1 advance funding covers the period from November 2025 to February 2026, which includes the Christmas and New Year holidays. Many services close during this time, and even those that remain open typically report lower Funded Child Hours (FCH) due to public holidays—resulting in lower funding for this period.
- The Ministry has been working directly with providers who raised concerns, helping them interpret Pourato data and resolve discrepancies, including those related to Student Management System (SMS) entries.
The Ministry maintains that Pourato is functioning correctly and that funding has been paid accurately based on data submitted in RS7 returns. It disputes the ECC’s claims and notes that any errors appear to stem from misinterpretation or incorrect data entry at the service level.
Historically, the last major funding error by the Ministry occurred over 16 years ago, when a 4% funding increase was mistakenly applied twice to approximately 2,000 centres. That error resulted in an overspend of more than $20 million, and (to the delight of ECE services) the Ministry did not seek repayment. More information on that incident is available here: Overpayment Funding Calculation.
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