Executive Summary

In March 2018, the Government introduced Targeted Funding for Disadvantage (Targeted Funding).  This is a new funding stream for early learning services (services) with high proportions of children from disadvantaged backgrounds. 

Targeted Funding is similar to Equity Funding Component A (Equity Funding) in its intent. Equity Funding is a funding stream aimed at reducing educational disparities between different groups of children.  It supports services to reduce barriers to participation for groups underrepresented in early learning and raise their children's level of educational achievement.

To ensure that Targeted Funding will be effectively used, the Ministry of Education (the Ministry) conducted a pre-implementation evaluation.  The evaluation was conducted through interviews with early learning services, organisations and associations around New Zealand, as well as with staff in regional Ministry offices and the Education Review Office (ERO).  

The evaluation looked at how services use Equity Funding to support children from disadvantaged backgrounds and the current issues limiting its effectiveness.   It explored the challenges (financial and non-financial) that services faced when working with children from disadvantaged backgrounds.  The evaluation also highlighted the ways in which services plan and report on Equity Funding and how the Ministry can support the effective use of Targeted Funding. 

The findings from this evaluation informed the development of guidelines and reporting requirements for spending Targeted Funding.  These have been provided to early learning services, organisations and associations who are receiving Targeted Funding. 

Challenges of working with children from disadvantaged backgrounds

Services highlighted a number of challenges that they face when working with children from disadvantaged backgrounds and spend Equity Funding in response to these challenges.  It is likely that any additional funding that they receive through Targeted Funding will enable them to extend their current responses to the needs of these children and their families and whānau.

The most common challenge services faced is that children often arrive at the service without their hygiene, nutritional and health needs met.  Other issues included challenging behaviour and delayed language development.  Services reported a lack of engagement by parents, families and whānau in their child's education.  This meant that the learning needs children had were less likely to be addressed, and that children's learning was not prioritised at home. 

In addition to this, services noted that families had limited transport options to and from the service, which adversely affected attendance.  Services also reported that there were higher levels of drug use and alcohol, inadequate housing and higher levels of transiency for families and whānau from disadvantaged backgrounds.

Spending Equity Funding

Services reported that they can accurately identify children from disadvantaged backgrounds, however, they do not always spend the funding on individual children. Services primarily spend Equity Funding on initiatives that increase participation and meet the basic needs of children.  This includes providing transport, removing or discounting fees and providing food and resources. After they felt that children's basic needs were met, services use Equity Funding for educational experiences for the children and providing additional staff members. 

Planning and evaluating the use of Equity Funding

The evaluation highlighted that minimal planning and evaluation occurs for Equity Funding.  Services reported that the current guidelines provided by the Ministry were adequate and the system for reporting on the use of Equity Funding was simple.  Almost all services did not internally review Equity Funding spending or report to the community or parents, families and whānau on how they were spending the funding. 

Understanding how services use Equity Funding gives insight into the benefit this funding has for children and the potential issues limiting its effectiveness. The interviews indicated that if given guidelines for spending Targeted Funding, services are willing to spend within these and report on how they have spent it, and why.

The effect of organisational arrangements on Equity Funding

The interviews indicated that there are differences in the way services use Equity Funding.  All Kindergarten Associations and half of the early learning services that exist under wider organisations pooled their Equity Funding. Services with access to pooled funding reported increased access to resources and expertise, less financial strain and felt better supported to handle the needs of this group of children than services who did not. 

Stand-alone services reported that they had control over how their funding is spent, however they described greater resource constraints than the services under organisations and associations who pooled funding. This indicates that organisational structure can impact on how Equity Funding is used and the capacity a service has to meet the needs of children from disadvantaged backgrounds.

Suggestions to support the effective use of Targeted Funding 

This evaluation revealed ways to support the early learning sector to use Targeted Funding to support children from disadvantaged backgrounds.  These included the provision of guidance and best practice examples, using funding to improve readiness for school, improving the planning and reporting requirements, and smoothing fluctuations in the amount of funding services receive.