Child based funding in Early Learning Review of funding systems for Early Learning and Schooling: Child based funding in Early Learning

Background – current funding arrangements The two largest funding streams are: the ECE Subsidy - 30 subsidised hrs/wk for children aged 0-5 20 Hours ECE - 20 subsidised hrs/wk for children aged 3-5 years The ECE Subsidy is paid on the basis of a child place which can be shared by more than one child no restriction on number of subsidised hours if a child attends more than one service 20 Hours ECE is paid on a per child basis funding is attached to each child’s enrolment, rather than to a child place NOT GOVERNMENT POLICY

Recap – proposed direction for change Move the ECE Subsidy from being child place based to being child based Funding for the ECE Subsidy would be provided for up to a maximum of 30 hours per child per week Objectives: better position funding system to invest in children better support children most at risk of educational under- achievement reduce system complexity clarify intent to provide 30 subsidised hours per child per week across all service types NOT GOVERNMENT POLICY

Your input For children are enrolled in different services, where are parents most likely to choose their 30 hours? Will the change to child-based change the business model for some services? How? What operational considerations should we be thinking about? NOT GOVERNMENT POLICY

funding systems Review of for early learning and schooling Funding for Disadvantage Children Early Childhood Advisory Committee (ECAC) Damian Edwards: Associate Deputy Secretary, Education System Policy

Risk index NOT GOVERNMENT POLICY

Equity funding Objectives of Equity funding Reduce educational disparities between different groups in New Zealand communities Reduce barriers to participation Support ECE services in raising children’s level of educational achievement. We’ve made significant progress, but there’s still room to improve… Sustained growth in ECE participation for our most vulnerable groups Disadvantaged children are still less likely to participate in ECE, and, on average, participate for shorter periods of time. Children in lower deciles are starting behind other children in higher deciles NOT GOVERNMENT POLICY

Equity funding The Equity Index measures the extent to which a service draws children from low socio-economic communities The Equity Index score (EQI) is worked out on the basis of enrolled children’s addresses and information taken from the New Zealand Census. Equity funding = EQI (funding rate) * funded child hours (claimed in RS7) Services are then assigned an EQI based on their relative rank. Equity funding Component A rate Funding is provided at a service level Every child in an eligible service, despite their circumstances, attracts Equity funding. Funding is not attached to individual children. A funding rate is attached to a service. NOT GOVERNMENT POLICY

Identifying disadvantaged children We are exploring a funding model that targets funding to those children most at risk of poor educational outcomes Current model Disadvantage is defined by children’s neighbourhood characteristics Funding = EQI rate * total FCH All children in an eligible service (EQI 1 - 4) generate funding Funding eligibility can only be updated every 5 years Potential future model Disadvantaged is defined by children’s individual circumstances Funding = funding rate * at risk hours Only children identified as disadvantaged generate funding Funding eligibility is updated annually. NOT GOVERNMENT POLICY

Equity Funding – concentration Equity funding is concentrated between EQI 1-4 Equity funding was established in 2002 with $5m in funding. When Equity funding was introduced a decision was made to: Exclude services below a certain threshold Provide more funding to services with higher concentrations There are services here with children from disadvantaged backgrounds. But they are not eligible for funding due to their low relative concentration. NOT GOVERNMENT POLICY

Discussion: Improving the effectiveness of Targeted funding From your perspective, are there ways we can improve the effectiveness and impact of targeted funding? What would it take to help ECE services significantly reduce educational disadvantage? How would we know if we’ve been successful? NOT GOVERNMENT POLICY