Let Funding Follow The Child

Hon Heather Roy Speech to Early Childhood Council Conference; Wellington Convention Centre; Friday, May 27 2011.

Peter Reynolds, CEO of the Early Childhood Council, Council members, Early Childhood educators, Ladies and Gentlemen - thank you for the opportunity to speak today.

The early childhood education (ECE) sector played an important part in my life for many years - as the mother of five children I am very familiar with Early Childhood Education services and I miss the parental involvement that is encouraged in your sector more than any other part of the education sector. Strong links between home and educators provide the very best education for our children.

I am also a former manager of a private kindergarten - Craighead Kindergarten in Timaru. My involvement in this way with the ECE sector was my first introduction to governance and management issues and to the Ministry of Education. This was an eye opener, I learned a lot and the experience has been invaluable in my political life since. During that time I was extremely grateful for the services of the Early Childhood Council. The advice and support our centre received was excellent and of great assistance to a "rookie manager"!

These days my involvement is solely political and I'm fortunate to have been involved in the development of policy for my party. The aim of ACT's ECE policy is to ensure that our children receive maximum benefit from the resources our society is prepared to invest in your sector – for the coming year $1.4 billion. Unfortunately we don't have limitless resources, so we need to do the best we possibly can with that which is available.

ACT's ECE policy, like our policy in the wider education sector, is founded on the principle of choice and it consists of two limbs:

1. We believe funding should follow the child, not the whims of Wellington based politicians and bureaucrats; and

2. Government funding should be targeted based on need, not on a universal funding basis.

ACT believes that (state) ECE funding should follow the child regardless of the ownership type of the service or the philosophy of service. We believe this is important because it gives parents greater choice when deciding where to enrol their children by making a wider range of centres financially accessible to them.

ACT wants parents to choose where to enrol their child, because we firmly believe that parents know their children best, certainly better than bureaucrats, and are better placed to make the decisions of the ECE centre that best meets their child's needs. For some that will be kindergarten, for others it may be Play Centre, Kōhanga Reo or a language nest, Montessori or Rudolph Steiner. For some parents and children full Day Care may be the option of choice for a variety of reasons.

No two children or two families are the same and it is essential if we want to match children's needs to the Early Childhood service that provides them with the best education possible, government must have policies that offer maximum flexibility. We must also ensure that resources invested in the sector are wisely spent for greatest gain.

ACT is pleased that the current ECE funding model already allows for a large proportion of state funding to 'follow the child'. Your sector sets an example for the way things could be in the compulsory sector. Parents frequently have little choice as to which primary and secondary schools their children attend. This is often determined by geography (where a family lives) and only the better off have the choice of private or integrated schools.

However Early Childhood does have some issues of equity that need to be addressed in my view. I am thinking in particular of the funding disparities that exist between kindergartens run by kindergarten associations and other ECE providers that were re-introduced in the Budget last week. ACT would remove such disparities.

The second limb of ACT's policy is that state funding for ECE should be targeted based on need. We are opposed to universal funding. If we are serious about giving our children the best start in life we need to be serious about minimising the amount of resource spent on often pointless bureaucracy - however well intentioned - instead of our children.

Taxing parents only to return their own money to them in the form of ECE subsidies is pointless bureaucracy. It means that a lot of money is wasted administering a money-go-around and estimates show that each level of 'churn' accounts for a loss of around 10% of funding.

Families that are sufficiently well-off to fund their children's ECE should be left alone to do so.

The role that ACT sees for the Government is to provide targeted funding for those families that are not sufficiently well-off to fund their children's ECE. ACT believes that a scholarship system for children based on need produces the right incentives, where funding follows the child. The value of scholarships could be adjusted to reflect a family's income and the number of children it has in ECE.

ACT's commitment to targeted funding is why we are opposed to the 20 hours free scheme. 20 hours free was introduced by Labour and despite saying in Opposition they would abandon the scheme, National has continued it.

Far from being targeted to those in actual need, that scheme is supposedly available to all, although in reality access is patchy around the country. It is hugely expensive - $786.5 million is budgeted for the coming financial year. Much of this money flows from middle class families to the Government and back to taxpayers, and a good chuck of it is wasted in the process.

Of course, there are other problems with the 20 hours free scheme - although centres like the income, the administrative hassle to be able to make use of the scheme, the restrictions on which centres qualify for the scheme and how the 20 free hours can be consumed are issues I don't need to explain to you.

If ACT controlled the Treasury benches the Government would simply decide whose ECE it is prepared to subsidise and by much. How that money was spent and at which ECE provider would be left for parents to decide.

In conclusion, the aim of ACT's ECE policy is ensure that our children receive maximum benefit from the resources our society is prepared to invest in your sector. To achieve this ACT would ensure that funding follows the child, and that funding by the state is targeted, based on need.

Thank you for the contribution you make every day to give our children the best start in life. And thank you again for the opportunity to address you today.