ChildForum Office of Pre-Primary Education

ChildForum Office of Pre-Primary EducationLead advisor on early childhood care and education 
National membership 

Publisher of the New Zealand-International Research in Early Childhood Journal


Targeted Funding for Disadvantage - $10 million a year

money hopscotch childfoumAs a result of private information sharing between government departments early childhood services may find they are quite a bit richer come the first funding payment for 2018.

A separate and new funding stream for ECE services called “Targeted Funding for Disadvantage’ (aka funding for children of beneficiaries) is to be provided from taxpayer money by the Ministry of Education.

Without the knowledge of most people affected that this was how their information was going to be used, Ministry of Education staff accessed and cross checked Ministry of Social Development data on parents/caregivers and children with the data it stores on its computer system about ECE services and children. 

Then it created new information on children firstly in deciding which children to classify as being at risk of underachievement due to “disadvantaged background”, and secondly by developing and recording a risk score for each child identified. 

The Ministry of Education will use information on the time a child has been the dependent of a beneficiary to determine which children are most at risk of underachievement. Our research shows that this is highly predictive of educational underachievement across ECE and schooling (quoted from Ministry of Education Fact Sheet)

Only one factor has been used by the Ministry to determine whether a child is at risk of underachievement - if a child has a parent/ caregiver who receives a benefit. This is wrong and may result in stigmatisation - read more below. 

An estimated 33,000 children have been identified as being at educational risk and will generate extra revenue for the service they attend.

ChildForum encourages concerned parents to request information from the Ministry that it holds on them and their child. 

The Ministry says that it will refuse requests for information by a parent/ caregiver on a child’s risk score and classification. Risk scores and classification will not be able to be corrected. It's reason for declining is that it would disclosure the benefit status of any other parent or caregiver. However, in many cases there is no other parent/caregiver or in the case of couple this is known information and both parents parents/ caregivers could jointly apply for the personal information that the Ministry has created to be given to them. Parents/ caregivers could argue that they have a right to know and ask for their child's risk score and classification to be corrected if necessary.

Read more:  How much new money can services expect?   What a service can do to improve its eligibility and how it may use its new found status to bring in other revenue


How it works and winners and losers under this funding stream

The Ministry of Education’s statisticians have identified the 20% of children attending ECE who have spent the largest portion of their life as the dependent of a beneficiary.

Targeted Funding is based on an estimate of the number of Funded Child Hours the 20% will generate in each ECE service in the coming year – these are referred to as Targeted Hours. The funding is not “an entitlement generated from past attendance”.

Some services could miss out while other services could get extra funding for children they supposedly have for x number of hours during the 2018 year but don’t.

Services with a high percentage of Targeted Hours may have their funding rounded up or down e.g. 90% Targeted Hours may be rounded to 95%, while services with a small number of children may be excluded altogether.

Should the Ministry get it wrong it will be unable to claw back any portion of the funding from any service since it has promised that “funding will not be recalculated or altered during the year based on actual attendance.”


Privacy, prejudice and stigmatisation issues

While any new funding will be welcomed within the sector, moral and pedagogical issues for teachers and service operators are attached to Targeted Funding.

Read more: The presence of significant risks to privacy and the family’s right to information

To protect privacy the Ministry says that it will not tell services the names of children that the Targeted Funding is meant for. 

Nevertheless, it expects services to use their own methods and judgement to identify these children and to show/ report on how the Targeted funding has been directly used to support the children’s learning.

“It is wrong to take one factor only, in this case having a parent or a caregiver on a benefit, and say that because of this factor alone a young child is more at risk than another child and potentially doomed in terms of achievement. The child may do as well or better than another child whose parent does not receive a benefit”, says ChildForum's chief executive Dr Sarah Alexander.

“Some parents do a tremendously good job of parenting under adverse circumstances but now there is risk of these parents being singled out from others at their service as being deficient.”

Read more:  It’s not who the parent/ caregiver is that is important it is what the parent/ caregiver does    

Already the children of parents/ caregivers who receive a benefit are treated differently in our public system with parents/caregivers threatened with 50% reduction of their benefit should they not have their child in an early childhood service.  No other group in NZ society faces sanctions if it does not use ECE.

Read more:  Implications of the ECE Social Obligation policy 


A Guinea Pig for testing one part of a proposed new funding system 

In July last year the government announced that a new funding system based on a Risk of Not Achieving Index would replace the schools decile system and the equity funding index for early childhood services. The Education Minister said that she did not know if it would be possible to implement in the new funding arrangement in time for the 2019 school year.

Work was still being done on the factors that would make up the new risk index but the Education Minister indicated it would most likely comprise of the following factors:

  • Proportion of time the child has been supported by benefits since birth
  • Child has a Child, Youth and Family notification
  • Mother’s age at child’s birth
  • Father’s offending and sentence history
  • Ethnicity
  • Youth Justice referral
  • Mother’s and father’s average earned income over previous 5 years
  • School transience.

The Ministry of Education is using the early childhood education sector to trail the introduction of Targeted Funding and to test for privacy breaches and issues.  ChildForum believes this could by why the funding is based on one factor only: the number of child funded hours attended by the children of beneficiaries. 

ChildForum suggests that some families may decide not to enrol at a service that has been categorised as being for children from disadvantaged backgrounds through being eligible for Targeted Funding.

This would be an unfortunate outcome of the new funding regime for two reasons said Dr Alexander.

“One, a service’s long-term financial sustainability depends on enrolments.”

“Two, cognitive outcomes for children can be improved when the early childhood service has a broad socio-economic mix of children and families.”


Targeted funding to be paid in addition to and not as a replacement to equity (decile based) funding

The Ministry of Education would like to see Targeted Funding spent on the service it is given to and specifies its use must be reported by service licence number.

“This is an admission of sorts by the Ministry that equity funding can be misappropriated so this additional funding stream will have some tighter controls”, says Dr Alexander. 

But there's no indication that the Ministry will get tougher in ensuring that services spend equity funding on the purposes intended. Targeted funding will be paid in addition to the equity funding services already get.  

Read more: The abuse of equity funding

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