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

2. 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

3. 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

4. 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

5. 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

6. Risk index
NOT GOVERNMENT POLICY

7. 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

8. 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

9. 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

10. 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

11. 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