Targeted Funding for Disadvantage

In Budget 2017, Government announced an additional $10 million per year targeted to early childhood education (ECE) services and ngā kōhanga reo.

This extra funding aims to improve ECE affordability and quality for children from disadvantaged backgrounds and their families. Approximately 2,000 services and ngā kōhanga reo are expected to receive extra funding.

Funding will be targeted to ECE services and ngā kōhanga reo with high proportions of children at risk of underachievement due to disadvantage.

Questions and answers

How does Targeted Funding for Disadvantage relate to the current Review of Education Funding Systems (Funding Review)? 

The Government has confirmed that the Equity Index (EQI) used to allocate Equity Component A funding for early childhood education services me ngā kohanga reo (services) will be replaced in 2020 with a Risk of Not Achieving Index (Risk Index).

Targeted Funding for Disadvantage will allocate funding in a similar manner to the new Risk Index. However, it only uses one factor (welfare dependency) to estimate a child’s risk of underachievement, as opposed to the multiple factors that will be used in the Risk Index.

From 2020 the Risk Index will be used to calculate Equity Funding Component A and Targeted Funding for Disadvantage.

How will you identify children at risk of underachievement?

The 20% of children attending ECE who have spent the largest portion of their life as the dependent of a beneficiary are considered at greater risk of underachievement.

Our research shows that children who have been the dependent of a beneficiary for an extended period of their life have a greater risk of underachievement.

How is funding calculated?

Funding is based on an estimate of the number of hours children at risk of underachievement will attend each service and kōhanga reo – these are referred to as Targeted Hours.    

Attendance information from the previous year is used to inform this estimate.

Will all services and ngā kōhanga reo estimated to have Targeted Hours be eligible for funding?  

No. Government has decided to target funding to services with an estimated 20% or more Targeted Hours. Only services that meet this threshold are eligible for funding.   

This recognises that services with higher proportions of children from disadvantaged backgrounds have additional challenges.  

Approximately 2,000 services and ngā kōhanga reo meet this threshold – about 40% of licensed services. This is similar to the total number of services that receive Equity Funding Component A.

Funding is paid on an hourly basis

Similar to how Equity Funding Component A is provided, eligible ECE services and ngā kōhanga reo will receive additional funding for each Targeted Hour.

The funding rate per Targeted Hour will be determined in December 2017. This rate will only be calculated once and will remain the same each year.  

Is funding an entitlement generated from past attendance?

 No. Funding is based on an estimate of future attendance and need. It is not, like Equity funding, an entitlement generated from past attendance.

Will funding follow a forecast and wash-up cycle, similar to general ECE subsidies?

No. Services’ funding entitlement will only be calculated once per year. Funding will not be recalculated or altered during the year based on actual attendance.

The funding calculation the following year will pick up any relevant changes in attendance that may affect services’ funding entitlements.

Is Targeted Funding for Disadvantage a separate funding component?

Yes. Targeted Funding for Disadvantage is separate to other funding streams, such as Equity funding and general ECE subsidies.

Targeted Funding for Disadvantage will show up as a separate item in services’ funding notices. 

How often will funding be re-calculated?

In December each year, starting in December 2017, the Ministry will calculate the amount of funding services and ngā kōhanga reo will receive. 

Shortly afterwards, those entitled to funding will then receive a letter from the Ministry detailing their funding entitlement for the following year.  

Funding is likely to fluctuate year to year to account for changes in attendance.

When will funding commence?

Targeted Funding for Disadvantage officially starts on 1 January 2018.

Funding will then be paid to services and ngā kōhanga reo in three instalments each year in line with the ECE funding cycle (March, July, and November).

The first payment will be made to services on 1 March 2018. As shown below, this payment will cover the six month period from 1 January to 30 June 2018. All subsequent payments will only cover a four month period.   

Table 1: Payments dates and coverage

 

Payment

Payment date

Period funding is provided for 

First year of funding

1st

1 March 2018

1 January – 30 June 2018

2nd

1 July 2018

1 July – 31 October 2018

3rd

1 November 2018

1 November 2018 – 28 Feb 2019

Subsequent years 

1st

1 March 2019

1 March 2019 – 30 June 2019

2nd

1 July 2019

1 July 2019 – 31 October 2019

3rd

1 November 2019

1 November 2019 – 29 Feb 2020

Will services and ngā kōhanga reo be told which children have made them eligible for funding?  

No. To protect the privacy of individual children and avoid the risk of stigmatization, we will not identify which children are considered at risk of underachievement.

Services and ngā kōhanga reo have a good understanding of which children require additional support. The Ministry’s expectation is that services and ngā kōhanga reo will target extra funding to children they consider most in need.  

What is the funding intended for? What can services and ngā kōhanga reo spend it on?

In early 2018, the Ministry will publish guidance to ECE services and ngā kōhanga reo about how funding can be most effectively used.

We will work with the sector on what should be included in guidance. This will involve engaging with the Early Childhood Education Committee (ECAC) and a sample of ECE services.

Some examples of how funding could be used include:

  • employing more qualified teachers
  • providing children with transport to their ECE service or kōhanga reo
  • reducing fees for low income parents
  • providing food for children
  • supporting teachers’ professional learning and development and cultural  competence 
  • freeing up staff time for parental and community engagement. 

The Ministry encourages services and ngā kōhanga reo to target extra funding to children in their service they consider most in need.

What information will be communicated to services and ngā kōhanga reo?

In December each year, along with their annual funding entitlement, services and ngā kōhanga reo will be told the percentage of their FCHs we estimate will be generated by children at risk of underachievement the following year.  

In some cases, the Ministry will round this percentage to ensure children’s privacy is protected (such as, for particularly small services).

What information will the Ministry use to estimate attendance?

Where possible, Early Learning Information (ELI) data will be used to estimate the attendance of children at risk of underachievement.     

If a service has not connected to ELI, or has only recently connected, the Ministry will in most circumstances use information from the ECE Census.

The Ministry will only use ECE Census data for services that have a clear reason for not submitting the required ELI data. For example, services that have experienced issues with the compatibility of their student management system (SMS) and ELI are considered to have a clear reason.

How does Targeted Funding for Disadvantage relate to Equity Funding?

Targeted Funding for Disadvantage will not impact the level of Equity Funding services and ngā kōhanga reo receive.

This initiative is not replacing Equity Funding. It is intended to complement Equity Funding Component A and its objective of reducing educational disparities in New Zealand.

How does Targeted Funding for Disadvantage relate to the current Review of Education Funding Systems (Funding Review)? 

The Government has confirmed that the Equity Index (EQI) used to allocate Equity Component A funding for early childhood education services me ngā kohanga reo (services) will be replaced in 2020 with a Risk of Not Achieving Index (Risk Index).

Targeted Funding for Disadvantage will allocate funding in a similar manner to the new Risk Index. However, it only uses one factor (welfare dependency) to estimate a child’s risk of underachievement, as opposed to the multiple factors that will be used in the Risk Index.

From 2020 the Risk Index will be used to calculate Equity Funding Component A and Targeted Funding for Disadvantage.

Will there be any accountability requirements in addition to those in place for Equity Funding?

Targeted Funding for Disadvantage will adopt the reporting and accountability requirements currently in place for Equity Funding.

Funding must be spent in line with the objectives of the Equity Funding, which focus on reducing educational disparities in New Zealand.  

Services and ngā kōhanga reo that receive Equity Funding are also required to report to the Ministry of Education, parents and the community on how funding is spent. To ensure funding is used to best effect, the Ministry intends to clarify the required standard for the reporting of this information.

How will the Ministry protect privacy and data security?

As part of this initiative, the Ministry will complete a Privacy Impact Assessment as per the best practice guidelines published by the Privacy Commissioner. This will be posted on the Ministry’s website in late 2017.

The Privacy Impact Assessment will identify, and develop strategies to mitigate, any privacy and data security risks that may occur during the implementation of this initiative. 

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