Why early childhood services are closing and how many, a reality check

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centre closures

Recently the commercial lobby made two big claims regarding the closure of early childhood services. The Early Childhood Council claimed that:

  1. The rate of early childhood service closures for this year was on track to more than double on last year.
  2. The reason why the rate of closures is on track to more than double on last year, is due to a funding shortfall related to pay parity.

The lobbyist also mentioned that between March-July of this year, 48 education and care centres closed.

However, the data do not support the claims.

As of August 23 this year, 102 licensed early childhood services have closed. Among these were 2 kindergartens, 4 Playcentres, 9 Kōhanga Reo, 51 home-based, as well as 36 education and care centres for whom the government offers funding for partial pay parity.

For all of 2021, 138 services closed.  The data do not suggest that services are closing at twice the pace of 2021. If we extrapolate closures so far for 2022, the full year total for 2022 may get close to 156 closures.

centre closures

Twenty-five (not 48) education and care centres closed between 1 March and 31 July 2022.  The reasons given for closure were:

  1. Te Whānau Putahi ECE – financial reasons
  2. Kindercare Learning Centres Linwood – financial reasons
  3. Little Wonderland Ltd – financial reasons
  4. Footsteps Adventist Preschool – moved premises
  5. TnT Kidscare – moved premises
  6. Early Years Whānau Centre – change of centre type
  7. The Rainbow Corner ELC ChCh – Ministry withdrawal of licence due to not meeting minimum standards
  8. Rainbow Kidz Matamata – Ministry withdrawal of licence due to not meeting minimum standards
  9. The Treehouse Private Kindergarten – loss of tenancy
  10. Gloriavale Christian Little Ones – declining roll
  11. The Rainbow Corner ELC Te Rapa – declining roll
  12. Sonrise Christian Preschool – declining roll
  13. Puddleducks’ Kindergarten – declining roll
  14. Turitea Childcare Centre – declining roll
  15. Castle Kids Ruru – declining roll
  16. Pebbles Montessori – declining roll
  17. Lollipops Pegasus – declining roll
  18. Just Kidd In Too Ltd – owner retired / disestablished service
  19. Akoteu Faka-Kalisitiane Ko Namoa – owner retired / disestablished service
  20. Rise to Shine Christian Preschool – owner retired / disestablished service
  21. Glenfield Early Learning Centre – owner retired / disestablished service
  22. Family Ties Educare Macandrew Bay – owner retired / disestablished service
  23. Talented Tots Mt Albert – owner retired / disestablished service
  24. Puddleducks Montessori Preschool – disestablished
  25. Beststart New Lynn – disestablished

The graph below shows for all licensed services closures, the reasons for closure by percentage.

reasons given for early childhood service closures - why centres and home-based services closed

A sizeable proportion of services that closed in 2020, 2021 and as of 23 August this year, had significant non-compliance with minimum regulatory standards leading to licence cancellation.  Other reasons given for closure were not having enough children to keep the service running, merging the licence with another service or changing licence to a different type of ECE service, loss of tenancy, and owner retirement and/ or not wanting to continue the effort of operating the service.  

Financial reasons were given for the closure of 12 licensed services in 2020, 10 services in 2021, and 4 services up to Aug 23, 2022.    

You may also be interested in:

Story – How hard is it for a centre to be closed down when it is bad for children?

Radio NZ interview in 2021 with the Early Childhood Council on whether its centres would pass on all new funding for pay parity to teachers as the government expected – the interview suggests that the ECC’s centres did not agree to passing on all new funding for teacher pay to teachers and would use the new funding for other purposes.

In 2011 Ministry of Education advice drafted by Simon Laube (who is now the ECC’s chief executive) and colleagues recommended that government make budgetary cost savings by restricting salary cost adjustments in funding to kindergarten associations only. From 1 July 2011 education and care centres that were not kindergartens began being funded less than kindergartens – which is why we have pay parity issues today.

ECE Services with licence downgrades and closed – Annual lists

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