How to fix funding problems in early childhood education

We need to recognise the public good that early childhood education provides and commit to funding top quality services accessible to all families, argues Sue Cherrington.

Two children playing with toy animals

Comment: Budget 2023 included several positive additions to early childhood education (ECE) funding, particularly the extension of the 20 hours-free funding to cover two-year-olds. Also announced, albeit with less fanfare and media attention, was $322 million allocated towards pay parity for teachers in education and care centres with their kindergarten counterparts.

This marks the third round of pay parity funding for the sector—and it’s urgently required. The current challenges in attracting and retaining teachers have led to a staffing crisis and the closure of several education and care services.

However, the roll-out of the first two lots of funding has been problematic and frustrating for the sector.

Services have been able to choose whether to access additional funding to support increasing teachers’ salaries. However, many centres that would like to offer pay parity cannot afford to do so, because the funding to date has not been enough to cover the increase in salaries required—especially in centres with experienced teachers or teachers with advanced qualifications.

To the Ministry of Education’s credit, it has been working on proposals to address these issues. In a quietly released consultation document on its Pay Parity Funding Review, the ministry asked for input into proposals to replace the two main subsidies (the ECE Funding subsidy and 20 hours ECE subsidy) with two new subsidies: a teacher salary subsidy and an operating subsidy.

On the face of it, this new approach looks attractive. It aims to provide differing levels of funding to services that employ more qualified, registered teachers, and acknowledges the costs associated with hiring more highly qualified or experienced teachers.

There is, however, a major flaw in the proposals presented for consultation: the starting point in the document is how existing subsidies can be reallocated, rather than how the overall funding crisis affecting the sector can be addressed.

In each option presented, the ministry has acknowledged that some services, including those providing specialist infant and toddler programmes, are likely to be negatively affected (some to the point of being unviable).

The imperative to stay within existing funding allocations has also resulted in a complex and lengthy consultation document, which may affect the amount and quality of feedback received.

So, what’s the answer?

Instead of reworking existing subsidies, the Government should acknowledge these kinds of funding model are not fit for purpose. Not only are they complex to operate and mean ECE is unaffordable for many families, but the current subsidy model does not provide the level of funding necessary to support the development of consistently high-quality ECE across the sector.

This issue is not addressed in the proposals out for consultation. It is also not clear whether the additional funding towards pay parity announced in the Budget will overcome the current funding shortfall.

ECE services committed to providing the structural elements of quality provision—including 100 percent qualified staff, good staffing ratios, and maintaining staffing so children experience consistent relationships with their teachers—are struggling to remain financially viable.

Our current funding model ignores the public good that comes from children being able to participate in quality early childhood education. Research is clear about the importance of the early years, including participation in quality ECE, in terms of brain development, social competency, emotional awareness and oral language, and developing understandings of their identities as learners and within their family and community.

Early childhood services also play an important role in supporting parents, many of whom are geographically remote from the support of extended whānau.

For many families, their ECE teachers and kaiako are the professionals with whom they have the strongest relationship and the most contact. ECE teachers often provide the bridge for families to link to other agencies and support services. Yet access to ECE is unaffordable for many families. We also know children’s participation in ECE reduces during difficult economic times.

Though it is an improvement to see more funding for pay parity, it would be far better for our government and society to recognise the public good that ECE provides and commit to funding top quality services accessible to all families.

There are several ways this could be done. Key among these is to shift to a model that aligns with the schooling sector. This would see kaiako and teachers’ salaries paid directly by the government through the Ministry of Education with an operational grant going to the ECE service, as happens with schools.

For those who think this is too radical or unworkable an idea, they should know it is exactly the model that existed for many decades in the kindergarten sector up until it was scrapped by the National government in 1990, so there is a precedent. Such a model would ensure the affordable, quality early childhood that our tamariki and their whānau deserve.

This article was originally published on Newsroom.

Sue Cherrington is an associate professor in the School of Education at Te Herenga Waka—Victoria University of Wellington.