Proposed Funding Model Could Do More Harm

Child Poverty Action Group (CPAG) says that axing the current decile funding system on the basis that it is too crude, only to replace it with another that is already said to to be unreliable, may have the result of seriously disadvantaging schools on a national level.

A new Targeted at Risk Funding (TARF) component of the operational grant was introduced in the 2016 Budget. Instead of fully increasing operational grants to all schools, funding was instead targeted to support ‘at risk’ students. Students at risk were those whose parents had been on benefits for 75% of the first five years of the student’s life or 75% of the last five years. The 2016 Budget allocated $43.2 million over four years to 150,000 targeted ‘at risk’ children through TARF.

Outgoing Education Minister Hekia Parata has backed a proposal to replace the current decile system with a predictive risk modelling (PRM) system that individually targets ‘at risk’ students. This approach aligns with the Government’s new Social Investment model. PRM was originally developed for use by the Ministry of Social Development in relation to preventing child maltreatment. The latest reports suggest Ms Parata is hoping to have sign-off for the new system before she exits her role in Parliament.

A major flaw in the TARF approach is that the ‘at risk’ criteria aimed at identifying the most ‘vulnerable’ children exclude many children who are experiencing severe material hardship. These children are also known to be at increased risk of poor educational outcomes, but will not benefit from TARF because they do not meet the criteria. Another major flaw is that the TARF model is based on contextual or household risk indicators, not specific indicators of a child’s educational need. A third major flaw is that the decile system is used to additional “Vote Education” resources to the most disadvantaged school communities.

Professor John O’Neill, CPAG education spokesperson says that, “Abandoning decile based resource allocation without a sufficiently precise and educationally valid replacement is like throwing the baby out with the bathwater.”

“It is important to provide a solution to funding more comprehensively across the board, and not simply rob one educational funding pot to pay another.”

The overall picture shows New Zealand schools are being funded inadequately per student across the student’s 13 years at school, receiving around 40% less funding than other OECD countries such as Finland, Denmark and Ireland, whose schools rank among the highest for educational achievement. It stands to reason that better funding will significantly improve the opportunities for many children.

The New Zealand Treasury's analysis has also shown that basing Government educational funding solely on the risk of not having a successful life outcomes is too unreliable. In contrast the indicators used to allocate Targeted Funding for Educational Achievement (TFEA) are strongly correlated with actual educational underachievement: low-income households, low skill parental employment, household crowding, lack of parental qualifications, parents receiving income support.

“In this context, any funding targeted at children deemed to be at risk of educational underachievement must be additional to TFEA, not instead of it,” says Professor O’Neill.

CPAG says that a successful funding model would retain the principles of the current decile funding system, with an increase in overall per-student spending for all schools, while incorporating the new targeted funding model as an additional support for learning. This would provide Government with some assurance that it was 'targeting' its limited additional funding support to both educational and contextual support needs of children.

Furthermore, addressing individual need must come at a familial level. Family income needs must be addressed urgently, and all schools must have the necessary provisions so that children living in material poverty have a greater chance of receiving the all the resources, support and expertise they need to help them achieve by the time they leave school.