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Treasury Advice to Target Early Childhood Funding to Those Who Would Benefit

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Target Early Childhood Funding.
By Sarah Alexander.
February 6, 2012.

The New Zealand Treasury has been recommending for a number of years that funding in early childhood education be targeted towards children from lower socio-economic groups but whether the government has paid any attention is another story.

It is often said that the benefits of early childhood education are higher for children from disadvantaged homes and yet these are the very children who are less likely to participate in ECE. Therefore it is better to target early childhood funding to those who would benefit.

Treasury has suggested a number of times over the years that funding should be targeted but so far the government seems to be largely ignoring the advice.

There is some limited targeting of early childhood education through grants such as the Discretionary Grants Scheme (recently replaced by the Targeted Assistance for Participation Scheme), equity funding for low-decile services and annual top-up funding for geographically isolated services. So targeting exists but mainly in a manner which is supported by ECE providers and affords the government good publicity opportunities.

In its latest briefing to incoming ministers, prepared for Finance Minister Bill English the Treasury states:

Despite large increases in government expenditure, early childhood education (ECE) participation rates for children in the lowest income brackets have not increased, with the expenditure instead supporting a greater volume of hours and higher proportions of registered teachers. Given the gains that can be made, we recommend further targeting of existing ECE funding to children from lower socioeconomic backgrounds. (Treasury, 2218133v5; 2012)

In other words economic growth would be helped by directing funding to support the education of children in low-income households. This reflects the message that Treasury has been putting forward for a number of years.

In 1987 Treasury said: “Equity concerns would have suggested a high degree of targeting in assistance – yet there appears in practice to have been very little. The ineluctable tendency for the middle classes to capture the agenda and the dollars in any broadly based government programme would seem to apply in the Early Childhood Services sector as much as in any other. The most highly assisted programmes appear to have been (until the advent of Te Kohanga Reo) largely catering for middle and upper class needs”. (Big87ii-4.pdf)

In 2005 Treasury said: “Early childhood education … is particularly beneficial for children from disadvantaged backgrounds if services are of high quality and if children participate regularly. Recently there has been significant government spending in this sector. We consider that value for money in this sector could be increased by targeting funding to children from disadvantaged backgrounds”.  (Big05-1.pdf)

In 2007 Treasury said: “There are strong pressure groups among both consumers and providers for increased public resources. By and large, consumer organisations and provider groups are united in general satisfaction with current policy trends and in their demand for more resources to enable further progress in established directions. The debate on ECS tends to be emotive and can at times generate more heat than light. There would seem to be two reasons for this. The first is that ECS raises issues of child-care practices and family patterns which evoke personal philosophies and experiences. Secondly, there is still relatively little objective evidence of the long-term effects of different childhood experiences which tends to lead to assertion and counter-assertion based on intuitive judgment and overextending the application of such research data as is available”.  (Big 87ii-4.pdf)

In 2008 Treasury said a medium term economic challenge was “to increase enrolments of children in ECE who go on to attend low-decile schools” (children who attend low-decile schools are considered to come from disadvantaged home backgrounds). The reason given for this challenge was that “participation is increasing over time in early childhood education (ECE), but there are persistent concerns about lower rates of participation in ECE by children from disadvantaged backgrounds and Māori and Pasifika children. This is a particular concern given the importance of ECE participation in developing non-cognitive skills, such as communication and social skills”. (Big08.pdf)

In 2012 Treasury is recommending a reform of the entire education system to improve educational attainment at a lower cost and says that for early childhood education one way this may be achieved is by targeting existing ECE funding to children in low-income households.

The Government may listen to Treasury this time because what Treasury is saying more closely resembles the government’s own agenda for changes in the ECE sector. Before the election the National Party said it would develop a new funding system in consultation with the ECE sector to produce a funding model that is more flexible and reduces bureaucracy and maintain 20 hours ECE funding and the current fee controls for 20 hours ECE. The Briefing from the Ministry of Education to the new Education Minister suggests that greater targeting of funding to encourage participation among children from low-income families or to support ECE services in low-decile areas may be imminent (click here to read a summary of what the Ministry of Education says in its briefing).

In the school sector the Treasury has recommended implementing initiatives to improve school teacher quality, funded by consolidation of the school network and increasing student/teacher ratios as a way of improving the sector while also lowering costs. Similar issues may arise in the ECE sector with the minister’s briefing covering reform of the ECE curriculum and improving quality.  Responsibility also is being shifted to parents giving a strong suggestion of movement toward a more market-driven model of provision and quality. While there is no mention of increasing child/teacher ratios in ECE, class sizes in ECE have been increased to 150 children 0- 5 year olds and provision has been made for services with children less than 2 years of age to have up to 75 babies and toddlers.

Perhaps a 1987 comment made by Treasury in relation to the contribution of Te Kōhanga Reo as a sound approach to (de-facto) targeting and its economic value for increasing the participation of Maori children in education is noteworthy to highlight today in the light of Government interest to target ECE funding within mainstream early childhood education services more toward Māori and Pasifika children and children from low income families.

Whatever the intentions behind the establishment of Te Kohanga Reo, the funding of the Kohanga does represent a de facto element of targeting to less advantaged parents in so far as Maori people tend to be among the more economically disadvantaged. … the allocation of substantial public funds to Kohanga was not the result of a deliberate decision to meet the pre-school needs of the relatively disadvantaged rather; it was the result of pressure from Maoridom for command over public resources for the purpose, largely, of its own cultural and linguistic survival. (Big87ii-4.pdf)

It appears that Te Kōhanga Reo whanau and children have not been well served since being incorporated into the early childhood education sector under the administrative responsibility of the Ministry of Education. The National Trust for Te Kōhanga Reo lodged an application with the Waitangi Tribunal following the release of the Government’s ECE Taskforce report last year. Te Kōhanga Reo feels its future is threatened. A hearing is scheduled for March 2012.

If the government does decide to allocate more funding towards supporting disadvantaged children it will be important to make sure that the funding is being directed in a way which achieves the desired outcome. Treasury’s advice in 2002 was that “knowing what works comes from good evaluation, monitoring, and reporting”. It cited a study in South Auckland for children entering Decile 1 schools which showed the value of evaluation alongside any educational intervention in order to obtain evidence about what works best for raising children’s learning achievement. In the case cited it was found that providing literacy-based professional development to early childhood teachers over the six months before a child started school and continuing support over the first year of the child’s schooling accelerated the progress of at-risk children so their achievement at the end of the first year matched that of national norms.

The recent briefing to the Education Minister included plans to increase monitoring within the ECE sector with ERO playing a greater role and working closely with services deemed to be under-performing. The briefing also stated that more information will be collated from new school entrants about ECE participation which may indicate whether more children from lower socio-economic backgrounds are attending ECE. However it might not be clear until later in their school life whether attending ECE has had a marked positive benefit.  It remains to be seen whether the government will implement further measures to target ECE funding towards specific groups. However it seems likely with projects such as the pilot Counties Manukau Participation Project already providing the basis for similar potential targeted schemes.

ECE Providers’ Reactions to Treasury’s Advice to Target Early Childhood Funding

Clare Wells, chief executive of NZ Kindergartens refers to a valid argument for providing universal funding as a non-stigmatising way to get children and families needing support to engage with ECE services. In a NZ Kindergartens press release she says, “Our current system is a universal model with funding going to ECE services. In addition to that, extra funding goes to support particular communities including low socio-economic communities.”

Maria Johnson owner of Little School centres in Wellington and president of business lobby group Early Childhood Council in a press says the ECC does not support access for low-income children being at the cost of less government funding for centres with children from more affluent families. She says centres will respond by lifting charges to parents as well as by reducing their numbers of qualified staff, increasing the number of children they have per staff and cutting back on educational programmes and building maintenance. Ms Johnson owns 4 private preschools in Wellington and charges parents up to $310 a week for 8.30am to 3.30pm childcare, with additional stationary and enrolment charges.

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