Speeches

Getting It Right: A Regulatory And Funding Framework That Is Right For Children And Families

‘Getting it Right’: A Regulatory and Funding Framework that is Right for Children and Families Susan M Thorne Chief Executive Officer Early Childhood Council ceo@ecc.org.nz ECC Annual Conference 2007 Christchurch, New Zealand 30 March 2007 Good afternoon delegates. It is my very great pleasure to speak to you this afternoon on the topic of regulation and funding in the early childhood education sector. The New Zealand early childhood education sector is a huge success story – and there can be no disputing that. The growth of our diverse and dynamic sector is testament to that fact. In 1990 there were 110,073 children attending 2,572 licensed early childhood services in this country – 15 years later that number had swelled to 164,521 children attending some 3,598 licensed services. Those numbers are remarkable enough, but dig down even deeper into the statistics and see what has happened in our own education and care sector. Over the same fifteen-year period, centre numbers grew from 719 to 1,754 and child participation from 31,033 to 83,889. This has seen the share of children’s enrolments in the education and care sector go from just 28 percent in 1990 to 51 percent in 2005. To fully understand this amazing growth both in the numbers of children participating, and the number of new services that have been opened, I need to take you back to the late 1980s to the substantial reforms that created the foundations upon which the current sector sits. But first I want to make it clear to you that when it comes to education – policy does indeed matter. Good policy is one of the keys to obtaining good outcomes for the children attending your services. While policy does not influence the sector in the same direct way that a good teacher, a good centre manager or a good governing board does, policy is important in that it sets the overall environment within which the sector operates and sets out the rules that govern the sector as a whole. It is far more likely that the early childhood education sector will attract good teachers and managers and achieve good child outcomes if it is well regulated and properly funded, than if these two things are not present. Good policy can help governments achieve their economic, social and educational objectives. Conversely, bad policy can frustrate the attainment of those objectives. And this is why it is of critical importance that the guardians of early childhood education policy – Parliament, Ministers and government advisers – get it right. There is much to be gained when they do, and much to lose when they do not. The dynamic early childhood sector that we as a sector and families enjoy today is a triumph of the good policy making of the Fourth Labour Government. In 1989 the bold Before 5 Reforms were introduced. These reforms were so good and so widely appreciated by the sector and parents that no subsequent government dared to change them. So what were the factors that gave way to encouraging so many individuals and community groups to develop early childhood services? While any new piece of legislation contains a bewildering number of clauses and sub-clauses, two elements of the Before Five reforms were key to unlocking the early childhood sector’s potential in a way that none of us dared imagine: 1. A new funding system. 2. A new regulatory framework. Looking at that new funding system – the successful and enduring funding model that was introduced had these key features: · Services were paid a funding subsidy based on the number of children and number of hours those children are enrolled. · The more successful a service was at attracting parents/children, the more they got paid by both parents and the Government. Services that failed to meet the needs of parents and the local community did not survive, those who met those needs grew and expanded. · Funding followed the child – a parent could choose any licensed service (or combination of services) they liked. The funding subsidy automatically followed, no matter what type of provider. · Services were able to charge parents a fee on top of the subsidies received from the Government. These additional fees are controlled by the market and allow parents to pay more for additional services and for services in more expensive locations. · To ensure equitable access across all income groups, an additional subsidy was made available in a targeted way to low income families. This direct subsidy to parents directly reduced their fees. If parents moved their child from one service to another, this subsidy entitlement followed them. · Services were bulk funded. That is, services were able to spend the funding on any operational or capital cost they wished, providing considerable scope for innovation and allowing a diversity of service features to flourish. These features continue to this day – nearly two decades later. There are three essential elements to a sound policy framework that will encourage investment in early childhood education to ensure a diverse and responsive sector: · First, there must be a consistent and predictable regulatory framework where the rules are the same for everyone who wants to provide early childhood services for families. · Second, there must be adequate universal funding with additional targeted funding to make sure that children at the bottom of the heap get their fair share of access to early childhood education. · Third, there needs to be a mechanism for providing parental confidence, through a credible independent agency that provides an objective assessment of the quality of services. In her speech to our conference in 2001 our then President, Raywyn Ramage, noted the progress made in the early childhood sector in the previous decade. She observed that the sector had moved from being bitterly divided at the beginning of the 1990s to becoming more united with the shared goal of working to serve children and families. I quote here from Raywyn’s speech: “United in our aims we now are – but uniform we are not. We have been able to maintain our clear differences. Diversity is essential. Diversity gives parents choice. Diversity allows growth, development and innovation. Diversity is and has long been a great strength of early childhood education sector in New Zealand. People are different, Children are different. Personalities and brains work very differently. It is essential that individual differences in children's and parents' needs and philosophies are fully recognised. Different pathways must always be available to meet different needs for care and education. One size cannot fit all. Historically, diversity is a feature of early education in New Zealand. This diversity must be treasured as we strengthen early education in the decade ahead.” This statement is even more true today than when Raywyn Ramage said it in 2001. It is more true today because our society has become more – not less – diverse. New Zealand now hosts a rainbow of ethnicities and cultures. We have Maori centres, Pacific Island centres, Chinese centres, teen parent centres, and Christian centres, and Montessori centres and Rudolf Steiner centres and many many more – no matter who or what you are in this country, you can find an early childhood service that suits your child. The regulatory and funding framework introduced by the Fourth Labour Government has survived successive governments of varied political stripes. It has allowed the diversity of our sector to thrive. This diversity has been instrumental in allowing our sector to respond to the seismic economic and social shifts that have buffered New Zealand since the 1980s, including the development of a multi-cultural society and the growth of women’s participation in the labour force. This diversity has been critical to meeting the varied needs of families and communities across New Zealand. It is for this reason that we need to be watchful of anything that will unravel the fundamental aspects of reforms that have stood the test of time so well. It is therefore troubling and perhaps a little ironic that nearly 20 years on – it is a Labour Government that is seeking to undermine its own good work. Few in this room would not be aware of the policy to introduce 20 free hours of ECE for 3 and 4 year olds in teacher-led services from 1 July 2007. First announced in Budget 2004, this policy has received more headlines than any other in our sector that I can recall and I have been around ‘these parts’ a lot longer than even I might like to recall! What’s all the fuss? Gracious, if something is free, it must surely be good for the families we serve? If I told you today that there was free bread available down at the Ministry of Food you’d probably be pretty keen to check it out. You might, however, be less enthusiastic if you got down to the store and found that the only free bread was white unsliced and baked three days ago and you had to queue to get your loaf. And that is the risk that 20 free hours ECE poses to parents. Let me explain the policy to you. It was announced by the Labour Government in the run-up to the 2005 General Election. It promises 20 free hours ECE a week for all 3 and 4 year olds in teacher-led services. The potential benefits of such a policy are very good. The problem that 20 free poses for all of us is how on earth we deliver this thing without having to sack staff or cut services in order to do it. For many of us – especially those in high cost areas like Auckland – the problems seem irresolvable. I know how a lot of you feel about your centres and your families and your children. You have spent many years, perhaps a decade or more, creating programmes and services for the specific communities in which you live. And now the Government is saying to you – I want you to provide 20 free hours – and if you have to sack staff to do it – and if you have to cut programmes for children to do it – please go right ahead. And I know for a fact that for hundreds of you this goes against the most fundamental of the values that you bring to the work that you do. The government is offering the same hourly rates for all services whether they are located where property is cheap or where there is no change out of a million dollars. And they are offering the same no matter whether you pay a lot or a bit less for your most valuable resource – your staff. This puts services – especially those in high cost areas, under impossible pressure. Do you offer this valuable opportunity to the children that you care for – at the cost of sacking staff or cutting services – or do you tell your families “sorry no, you can’t have 20 free”? It is beyond me why anyone would imagine that a single funding rate could possibly make sense in a sector in which charges to families vary currently between $2 and $15 per hour. We have just completed a survey of the ECC’s membership – which includes both not-for-profit and commercial centres – and the results are worrying. We asked you “will your centre be opting into Free ECE?” Only 23.9% of you said yes, 30% said no. 46.1% were undecided. And three quarters of the undecided group told us they would not opt into Free ECE were they required to make a decision today. The situation is particularly bad in the high cost areas of New Zealand – primarily urban centres. Only 11.9% of you in Greater Auckland said yes to the question “will your centre be opting into Free ECE?” 28.6% in Greater Wellington said yes to the same question, 18.8% in Christchurch, 25% in Tauranga, and 22% in Hamilton. I fear however that uptake of Free ECE will be even lower than this. This is because many centres seem to have indicated that they will opt into 20 free only because the government has not made the rules clear to you. Yes it is true that only 23.9% of you answered “yes” to the question “will your centre be opting into free ECE?” but worse than that, according to our survey many centres with costs in excess of the free ECE rates are opting in only because they believe they are able to offset their losses by increasing fees for the hours 3 and 4 year olds attend over and above the 20 free, or by increasing fees for 1 and 2 year olds. On Monday, the Minister of Education made clear to me and representatives of three other major sector groups that this is not the case. If you had planned such a strategy to offset the impact of 20 free hours, you had better think again. Those of you struggling to provide Free ECE without sacking staff or cutting services are likely now to feel seriously misled about the rules for this policy. I fear that the already limited uptake of Free ECE is almost certain to get worse once our centres realise the most common techniques for balancing the ‘20 free hours books’ have been ruled out. The key 20 free hours problem for all of us has been how to make this policy available to as many parents as possible without sacrificing the quality of our services. I have struggled with this question myself for at least a year and half, and I fear that for our members with costs in excess of the free rates there is no answer to this question unless the government is willing to radically rethink the policy. The ECC represents a vast diversity of centres – look around you. We are community-owned and we are privately owned. We are Montessori and Rudolf Steiner, we are Chinese and we are Christian, we are Pacific Island and we are Maori. Our diversity is our strength and must be preserved.

30/03/07 - Sue Thorne