Annual ECE Data Summary Report 2015

Summarising the results from the June 2015 Annual Census of ECE services. It provides a sector-wide statistical summary of key aspects of the early childhood education sector and the trends over the past decade.

Introduction

This report provides a statistical summary of key aspects of the early childhood education (ECE) sector me ngā kōhanga reo in 2015 and trends over the previous ten years. It summarises the results from the June 2015 annual census of ECE services, and includes data from other sources. ECE census results and the other data are published on Education Counts.

Highlights 2015

Participation

  • There were 198,887 enrolments/attendances in licensed ECE services and kōhanga reo in June 2015, and the enrolment/attendance rate for 0–4 year olds was 63.8%.
  • The enrolment/attendance rate for four year olds was 96.5%, and 16.5% for children aged less than one year.
  • Education and care services had the largest proportion of enrolments/attendances in 2015 (63.1%). Kindergartens had 15.6%, home-based services 10.3%, playcentres 6.3%, and kōhanga reo 4.5% of enrolments/attendances.
  • The average weekly hours of attendance in 2015 was 20.0 over all service types. It was 23.8 hours at home-based services, 22.0 hours at education and care services, 15.7 hours at kindergartens, and 4.5 hours at playcentres.
  • The percentage of new-entrants starting school during the year ending 30 June 2015 who had attended ECE was 96.2%, an increase of 0.3 percentage points from 95.9% for the year ending 30 June 2014.

Services

  • There were 5,272 licensed and certificated ECE services at June 2015. This number (adjusted for mergers) was up 2.3% from 2014. Of these, 4,385 were licensed services (86 services more than in 2014) and 887 playgroups (30 services more than in 2014).
  • In 2015, the proportion of services with waiting times of more than a month was 26.5%, down from 30.5% in 2014. The proportion of kindergartens with waiting times of more than a month remained relatively high at 41.0%.
  • In the year to June 2015 180 new licensed services opened and 54 services closed, a net gain of 126 services. This was the highest gain since 2011.

Languages

  • In 2015 te reo Māori was reported as a language of communication in 3,653 centre-based ECE services, 13 services fewer than in 2014.
  • In 2015 Pasifika languages were reported as a language of communication in 527 centre-based ECE services, 32 services more than in 2014.
  • In 2015 Chinese languages were reported as a language of communication in 396 centre-based ECE services, 5 services more than in 2014.

Teaching staff

  • In 2015 teacher-led services had a total of 28,230 teaching staff. Of these, 15,361 (54.4%) were full time, while 12,869 (45.6%) were part time. 

Government expenditure

  • Annual public expenditure on ECE in the 2014/15 fiscal year was $1,804 million. This was an increase of 4.8% over the 2013/14 fiscal year, or 4.4% after adjusting for inflation.
  • Education and care services accounted for the majority (68.6%) of funded child hours (FCHs) in 2015. Kindergartens accounted for 13.4%, and home-based services for 10.6%. All of these service types had increased their share of FCHs over 2014 levels. The proportions of FCHs accounted for by kōhanga reo and playcentres declined to 5.8% and 1.4% respectively.
  • A measure of the affordability of ECE compares changes in the ECE fees consumer price index with changes in the average household income index (both indices compiled by Statistics New Zealand). By this measure, ECE was 32% more affordable in June 2015 than in June 2007 (before 20 Hours ECE was introduced). This was the same level as in June 2014.
  • Public spending on ECE was 0.75% of GDP in 2015. The combined total of public and private expenditure on ECE in New Zealand as a proportion of GDP ranks highly when compared with other OECD countries and is above the OECD average of 0.84%.
  • Indicative annual ECE subsidy expenditure per enrolled child varied significantly by service type, ranging from $1,065 for children at playcentres to $9,187 for children at education and care services.

Methodology

New collection method in 2014

A new data collection method, the Early Learning Information (ELI) system, was introduced in 2014 for some services, while the remaining services continued to use the RS61 paper collection method. In 2015 more services were migrated onto ELI.

Census data was collected through the Early Learning Information (ELI) system for 3,261 services in 2015 (1,600 in 2014) and through the RS61 paper collection method for 2,011 services (3,556 in 2014).

Figure 1 shows the percentage of services in each service type that returned the annual ECE census via ELI in 2014 and 2015.

Figure 1: Percentage of ECE returns collected through ELI, by service type, 2014 and 2015

The transition between different data collection methods means that data comparisons between the years up to 2013 and the years 2014 and 2015 should be treated with caution. In charts where the new data collection method affects data comparisons the transition is marked with a dotted line or line graphs are interrupted.

Enrolment/attendance

One significant difference between the data collection methods is in enrolment/attendance data. The RS61 collects data on children's enrolments. The ELI system collects data on attendances. Attendance numbers may be lower than enrolment numbers as children may not attend on all the days for which they are enrolled. Average weekly hours of attendance may also be lower as children may not attend for all the hours for which they are enrolled.

Teaching staff

The change to the ELI system has also affected data on teaching staff. ELI collects data on teaching staff who had child contact during the census week, and this includes relieving and temporary staff. This could lead to possible double counting of staff that relieve at more than one service during the census week. RS61 data shows only the numbers of teaching staff scheduled to work at a service during the census week. Numbers of teaching staff from the ELI collection may be higher because of the inclusion of relieving and temporary staff.

Data quality issues

The Ministry has identified data quality issues relating to the characteristics of teaching staff. Since March we have been working directly with ECE Student Management System providers to resolve this issue. Despite this, the issue remains unresolved. The Ministry is working towards a solution for the data quality issues. At this stage we are unable to provide data on the ethnicity, gender and qualifications of teaching staff.

The Ministry has put a plan in place alongside ECE services in 2017 to improve the use of student management systems, and incorporate additional data quality checks, to ensure that future reporting is more accurate and reliable.

Other data sources

This report also uses information from ECE licensing and funding data, and the ENROL system which is used to monitor the school enrolment history of each student in New Zealand.

Participation in ECE

This part of the report shows the numbers and percentages of children who regularly attended an ECE service or kōhanga reo before they started school (prior participation).

It shows enrolments/attendances data and information on average weekly hours of attendance for licensed services, and numbers of attendances at certificated playgroups.

The term enrolment/attendance is used throughout this report because enrolment data is collected by the RS61 method and attendance data is collected by the ELI system.

Prior Participation

Prior participation data is sourced from the Ministry of Education ENROL system. This system is used to monitor the school enrolment history of each student in New Zealand.

There is continuing growth in the percentage of children who had regularly attended ECE prior to starting school (the prior participation rate). Figure 1.1 shows that 96.2% of new-entrants starting school during the year ending 30 June 2015 had attended ECE. This was up 0.3 percentage points from 95.9% for the year ending 30 June 2014, and up 3.0 percentage points from 93.2% for the year ending 30 June 2005.

Figure 1.1 Percentage of children starting school with prior ECE attendance, June 2005-2015

The prior participation rate varies across ethnic groups. For children starting school in the year ending 30 June 2015, prior participation rates ranged from 91.2% for Pasifika children to 98.0% for European/Pākehā children.

Māori and Pasifika children had the highest growth in prior participation rates over the past year. For the year ending June 2015, prior participation rates rose 1.1 percentage points for Māori children, 0.9 percentage points for Pasifika children, and 0.4 percentage points for Asian children. The prior participation rate fell by 0.1 percentage point for European/Pākehā children over the same time period.

Māori and Pasifika children also had the highest growth in prior participation rates over the ten years since 2005; an increase of 7.0 percentage points for Pasifika children and 5.9 percentage points for Māori children.

Figure 1.2 Percentage of children starting school who attended ECE, by ethnic group, 2005-2015

The percentage of new entrant children starting school with prior participation in ECE has increased over the past five years for all school decile groups.

Prior participation rates for children starting low decile schools have seen significantly greater growth compared to the rates for medium and high decile schools. For low decile schools the prior participation rate rose from 87.2% in 2010 to 92.5% in 2015, an increase of 5.3 percentage points. Over the same time period the prior participation rate for medium decile schools increased by 1.1 percentage points and for high decile schools increased by 0.5 percentage points.

Figure 1.3 shows that the gap between the prior participation rates for high decile schools (deciles 8 to 10) and low decile schools (deciles 1 to 3) has decreased significantly, from 11.0% in 2010 to 6.2% in 2015. The gap between the prior participation rates for medium decile schools (deciles 4 to 7) and high decile schools has also decreased, from 2.1% in 2010 to 1.5% in 2015.

Figure 1.3 Percentage of children starting school who attended ECE, by grouped school decile, 2010-2015

Figure 1.4 shows that prior participation rates increase as the school decile grouping moves from low to high for children of all ethnic groups except for children of Asian ethnicity, where the prior participation rate for children who started at medium decile schools was slightly higher than that for children who started at high decile schools.

Differences in prior participation rates across school deciles were more evident for Māori and Pasifika children than for European/Pākehā and Asian children.

Figure 1.4: Percentage of children starting school who attended ECE, by ethnicity and grouped decile June 2015

Enrolment/attendance rates

In this section the enrolment rate is the number of enrolments/attendances as a percentage of the population aged 0-4, after adjustment for the changing age distribution over the years (weighted by each age group's population share in 2015). Population numbers were sourced from Statistics New Zealand.

There were 198,887 ECE enrolments/attendances in licensed ECE services and kōhanga reo in 2015. This is the sum of services' numbers of children enrolled or attending. Children enrolled in or attending more than one service were counted at each service they were enrolled in or attended.

Figure 1.5 shows that enrolment numbers and rates trended upwards to June 2013. The change of data collection method means that the 2014 and 2015 figures cannot be accurately compared with previous year's totals. 

Enrolment numbers grew steadily from 2007 to 2011. While this is likely to be partly driven by growth of the 0-4 year-old population, which grew by around 2% for much of this period, enrolment rates for 0-4 year olds also increased by 1.4 percentage points over the same period.

Between 2012 and 2013 the number of enrolments/attendances increased by 2.2% despite the overall 0-4 population falling by 1.2%, resulting in positive growth in enrolment rates of 2.0 percentage points from 61.8% to 63.8%. Because the 0-4 population and the number of 0-4 enrolment/attendances have changed at the same rate, the enrolment rate has remained at 63.8% for 2014 and 2015

Figure 1.5: Number of enrolments/attendances in licensed ECE services and kōhanga reo, population, and enrolment/ attendance rates for 0-4 year-olds, 2000-2015

Figure 1.6 shows that education and care services made up the majority of enrolments/attendances in licensed ECE services and kōhanga reo in 2015 (63.2%). Te Aho o Te Kura Pounamu (The Correspondence School) had 496 children enrolled in 2015 (0.2% of enrolments/attendances).

The share of enrolments/attendances has grown over time for education and care services and home-based services, but has tended to fall for playcentres, kōhanga reo and kindergartens. The fall in enrolments/attendances for kindergartens since 2008 has largely been driven by a shift from primarily sessional kindergartens to primarily all-day kindergartens. This means that rather than kindergartens having two different sessions of children attending in a day, the majority now have one group of children attending each day for longer hours.

Figure 1.6: Percentage of enrolments/attendances in licensed ECE services and kōhanga reo, by service type, 2005-2015

Figure 1.7 shows that the share of Asian enrolments/attendances increased significantly, by 3.2 percentage points, from 5.7% in 2005 to 8.9% in 2013. Over the same time period the share of Māori and Pasifika enrolments/attendances increased by 2.0 and 1.5 percentage points respectively. By contrast enrolments/attendances of European/Pākehā children fell by 7.6 percentage points from 66.7% in 2005 to 59.1% in 2013.

Figure 1.7: Percentage of enrolments/attendances by ethnic group, 2005-2015 

Figure 1.8 shows that European/Pākehā children made up the majority of enrolments/attendances for all service types except for kōhanga reo where 94.6% of enrolments were Māori. Compared with other service types, playcentres had a high percentage of European/Pākehā children (75.9%), and low percentages of Pasifika (1.6%) and Asian (4.8%) children. Home-based services, on the other hand, had a high percentage of Asian children (18.4%). The proportion of Pasifika enrolments/attendances was similar for education and care, kindergarten and home-based services.

Figure 1.8: Percentage of enrolments/attendances by ethnic group and service type, 2015

The Other/Unknown group for Kōhanga reo includes all ethnicities other than Māori or Pasifika.

Children can enrol in/attend ECE services up to their sixth birthday. ECE enrolment/attendance rates rise with the age of the child until the age of four. Figure 1.9 shows that in 2015, these rates ranged from 16.5% for under-one year-olds to 96.5% for four year-olds

Enrolment/attendance rates grew between 2005 and 2013 for all age groups, with comparatively higher rates of growth for children aged one (7.8 percentage points), and two (8.9 percentage points).  

The change to the ELI data collection method in 2014 means the numbers of enrolments/attendances for 2014 and 2015 are less than they would have been had the change in data collection not taken place. The rates for children aged less than one, however, have continued to increase despite the change in collection method. In recent years the rates for children aged less than one have seen significant growth.

Figure 1.9: Enrolment/attendance rates, by age of child, 2005-2015

For 0-4 year olds of all ethnic groups, the higher the age, the higher that age group's share of total enrolments/attendances was.

Children aged under one make up a comparatively low percentage of Pasifika enrolments/attendances (3.6%), and comparatively high percentage of Asian enrolments/attendances (6.1%) when compared to other ethnic groups.

For the most part, however, the contribution that each age group makes to total enrolments/attendances is similar across ethnicities.

Figure 1.10: Percentage of enrolments/attendances in each age group, by ethnic group, 2015

A greater proportion of licensed places for younger children are available at education and care, home-based, playcentres and kōhanga reo, while kindergarten provision is predominantly for older children.

The percentage of enrolments/attendances of children aged from birth to two years ranged from 8.4% for kindergartens to 64.1% for playcentres, in 2015.

Figure 1.11: Percentage of enrolments/attendances of each year of age, by service type, 2015

The NZ Deprivation (NZ Dep) index measures levels of deprivation in neighbourhoods using a decile system that differs from school deciles. NZ Dep decile 1 indicates the most socioeconomically advantaged areas, whereas NZ Dep decile 10 indicates the most disadvantaged areas.

The service types in high NZ Dep (deciles 8-10) areas that children attend have changed over time. The percentage of enrolments/attendances in high NZ Dep decile education and care services grew from 45.9% in 2005 to 58.3% in 2013. The percentage of enrolments at high NZ Dep decile home-based services also increased, from 7.4% in 2005 to 11.7% in 2013. Conversely, the percentage of enrolments/attendances at high NZ Dep decile based kindergartens, kōhanga reo or playcentres has decreased from 2005 to 2013.

Figure 1.12 Enrolments/attendances in high NZ Deprivation decile areas by service type, 2005-2015

Enrolments/attendances by funding band

One indication of a service's quality is the funding band that the service is on. Teacher-led centre-based services (education and care services and kindergartens) with higher percentages of certificated teaching staff receive higher funding rates. The proportion of teacher-led, centre-based services in the 80%+ funding band has increased consistently since 2005. Playcentres, kōhanga reo and home-based services are funded at either a quality or a standard funding band. Services funded at the quality band meet additional requirements in relation to qualifications, enhanced adult-to-child ratios and the size of the service.

Figure 1.13 shows that the proportion of enrolments/attendances in teacher-led centre-based services funded at the 80%+ rate increased steadily between 2005 and 2013, from 41.4% to 77.0%. The proportions of enrolments/attendances that are in playcentres, kōhanga reo and home-based services on the quality funding band show little change over time.

Figure 1.13 Enrolments/attendances by funding band, 2005-2015

Figure 1.14 shows that the percentage of education and care enrolments/attendances at centres funded at the 80%+ band increased over time for all ethnic groups. Although Māori and Pasifika have the lowest enrolment/attendance rates at centres funded at the 80%+ band, the gap between rates for Māori and Pasifika and the overall rate has decreased over time.

In 2015 the percentage of education and care enrolments/attendances that were at services funded at the 80%+ rate ranged from 98.3% for European/Pākehā to 93.7% for Pasifika.

Figure 1.14 Percentage of education and care enrolments/attendances in services funded at the 80%+ band by ethnicity, 2005-2015

From 2007 to 2013 there was a significant decrease in the proportion of home-based enrolments at services that were funded on the quality funding rate for all ethnicities. This ranged from a 15.2 percentage points decrease for Māori to a 32.3 percentage points decrease for Asian children.

In 2015 the proportion of home-based enrolments/attendances that were in quality services ranged from 10.4% for Asian to 33.2% for Māori.

Figure 1.15 Percentage of home-based enrolments/attendances in quality services by ethnicity, 2000-2015

For all ethnic groups at least two thirds of enrolments/attendances were at teacher-led centres funded at the 80%+ funding band.

The percentages of enrolments/attendances at services that are at either 80%+ or quality funding bands range from 82.8% for Asian to 86.6% for Māori.

Figure 1.16 Percentage of enrolments/attendances in services by funding band and ethnicity, 2015

The share of enrolments/attendances in playcentres, kōhanga reo and home-based services that are paid at quality funding rates differed significantly across ethnic groups, from 9.6% for Asian to 61.5% for Māori.

The large difference between the percentages of enrolments/attendances that are in quality services for Māori and for Asian is due to the different service types attended by each ethnic group. A large proportion of Māori enrolments are in kōhanga reo, which has the largest proportion of quality services, while a large proportion of Asian enrolments are at home-based services which have comparatively lower numbers of services on the quality funding-band.

The proportion of education and care enrolments/attendances in services funded at the 80%+ rate has increased over time for all NZ Dep decile groups. While high NZ Dep decile services have continued to have a lower proportion of enrolments/attendances in the 80%+ funding band, the gap between these services and low NZ Dep decile services decreased between 2005 and 2013.

In 2015 the proportion of education and care enrolments at services funded at the 80%+ funding band was 98.3% for low NZ Dep decile services, 98.5% for medium NZ Dep decile services, and 96.2% for high NZ Dep decile services.

Figure 1.17 Proportion of education and care services in the 80%+ funding band by grouped NZ Dep decile

Teacher-led centre-based services on the 80%+ funding band accounted for a large proportion of enrolments/attendances in 2015.

High NZ Dep decile services had a lower proportion of enrolments/attendances in teacher-led centre-based services than medium and low NZ Dep decile services, and a larger proportion of enrolments/attendances in services funded at less than 80%. High NZ Dep decile services also had the highest proportion of enrolments/attendances at services on the quality funding band (Figure 1.18).

Figure 1.18 Proportion of enrolments/attendances in services that are in 80%+, less than 80%, quality or standard funding bands by NZ Dep decile, 2015

Figure 1.19 shows that the make-up of enrolments/attendances by funding band varied across age groups. The proportion of an age group's enrolments/attendances in services on the 80%+ band increased as age increased. The proportion of an age group's enrolments/attendances in services on the standard band decreased as age increased.

In 2015, just over half of the enrolments/attendances for children aged less than one were in services on a quality or 80%+ funding band. This proportion was much higher for all other age groups, ranging from 75.0% for children aged one, to 91.4% for children aged four.

Figure 1.19 Proportion of enrolments/attendances in services that are in 80%+, less than 80%, quality or standard funding bands by age, 2015

Figure 1.20 shows that the gap between the proportions of enrolments at services funded at the quality rate for children aged less than one year and all other age groups increased between 2005 and 2015. This difference arises because more children aged less than one year were enrolled in home-based services which had a lower proportion of quality centres than other service types.

Figure 1.20 Proportion of enrolments/attendances at services on the quality funding band by age, 2005-2015

In general, the percentage of enrolments that are in quality home-based services varies across age groups for all ethnic groups. The age group with the lowest proportion of enrolments/attendances in quality funded centres are those aged less than one year. The greatest change in proportions occurs between those aged less than one year and those aged one. There are no obvious patterns between age and proportion in quality funded services, apart from enrolments/attendances of Asian children where the percentage increases as age increases.

1.21 Percentage of home-based enrolments/attendances at services on the quality funding band by ethnicity and age, 2015

Average weekly hours of participation

The change in data collection systems means that data comparisons between the years up to 2013 and the years 2014 and 2015 should be treated with caution. This is because hours recorded in ELI are for hours actually attended which are generally lower than hours enrolled as measured by the RS61 collection.

The average weekly number of hours enrolled/attended varies by service type. This is expected due to the different operational structure of each service type. Figure 1.22 shows the average number of enrolment/attendance hours per week rose every year between 2005 and 2013, from 16.7 hours in 2005 to 21.7 hours in 2013. In 2015 the average number of weekly hours a child attended ECE was 20.0.  

In 2015 children spent the longest number of hours a week on average in home-based services (23.8 hours) and the shortest in playcentres (4.5 hours). The pattern over time has not been consistent for home-based services. There was a significant drop in average weekly hours of attendance in home-based services between 2008 and 2009. In 2015 the average weekly hours at home-based services were higher than for education and care services for the first time since 2007.

Children's weekly hours of enrolment/attendance at education and care services grew every year between 2005 and 2013. Average hours at education and care services in 2015 were 22.0.

Average weekly hours of enrolment/attendance at kindergartens have grown significantly since 2007, when kindergartens began changing from sessional to all-day services. The average weekly number of hours at kindergartens increased from 12.7 in 2007 to 16.7 in 2013. In 2015 the average weekly hours at kindergartens were 15.7.

The hours of attendance at playcentres remain constant compared to previous years. The impact of the ELI data system on playcentre enrolment/attendance figures is not yet known as only 5% of playcentres have moved to the ELI system.

Figure 1.22: Average number of hours per week of child attendance, by service type, 2005-2015

Average weekly hours enrolled/attended also varies by age. Figure 1.23 shows that in 2015, it was lowest for under-one year olds (18.1 hours) and highest for one year-olds (21.1 hours). The average weekly hours for two, three and four year olds were 19.4, 19.5 and 20.7 hours respectively.

While under-one year olds now have the lowest average weekly hours, from 2000 to 2007 their average weekly hours were higher than for all other age groups except age one. In the case of three and four year-olds, there was a significant jump in average weekly hours in 2008 following the introduction of 20 Hours ECE.

Figure 1.23: Average number of hours per week of child enrolment/attendance, by age, 2005-2015

The percentage of enrolments/attendances that were for 15 hours per week or fewer decreased from 54.2% in 2005 to 32.7% in 2013. Over the same period the percentage of enrolments/attendances that were more than 15 hours per week rose from 45.8% to 63.3%. The percentage of enrolments/attendances that were for 21-30 hours per week more than doubled from 2005 to 2013, rising from 9.0% to 20.3%.

The percentage of enrolments/attendances for more than 42 hours per week decreased in 2014 and again in 2015. Conversely, the percentage of enrolments that are for between 30 and 42 hours increased in 2014 and again in 2015. This may be because children enrolled for more than 42 hours were attending for less than 42 hours, and this is being picked up as more services report on attendances through ELI rather than enrolments through the RS61.

Figure 1.24 Percentage of enrolments/attendances by number of hours a week, 2005-2015

Figure 1.25 shows that the average weekly hours for children in the North Island is higher than for those in the South Island. Children in the Auckland Region attend ECE for the highest average number of hours, 22.8 hours per week, while children in the Tasman Region attend for the least number of hours, 14.8 hours per week.

Figure 1.25 Average weekly hours by Regional Council, 2015

Playgroups

Playgroup data are analysed separately from licensed services in this report. The annual census is not compulsory for unlicensed services and their trends are less accurate as a result.

Playgroups are groups of parents that meet regularly with their children to facilitate play. They include Puna Kōhungahunga, Pacific Islands early childhood education groups, and community language playgroups.

In 2015, 661 out of 887 playgroups (74%) provided data for the annual census. These playgroups had a total of 17,602 children attending and consisted of 17 certificated playcentres with 230 children attending, 15 puna kōhungahunga with 184 children attending, 32 Pacific Island language groups with 454 children attending, and 597 other playgroups with 16,734 children attending.

Table 1: Numbers of Service Types
Service Type Number of Services
Playgroups 754
Pasifika Language Groups 74
Certificated Playcentres 30
Puna Kohungahunga 29


Figure 1.26 shows that European/Pākehā children made up the majority (67.1%) of those attending playgroups, followed by Māori children (11.8%), Asian children (11.8%), Pasifika children (5.7%), and other children (2.8%).

Figure 1.26: Percentage of playgroup enrolments in each ethnic group, by playgroup type, 2015

Compared with licensed services, a considerably higher percentage of children attending playgroups were aged less than two years (37.0%). Figure 1.27 shows two year-olds made up 29.0% of children attending playgroups, while 0-2 year-olds made up a total of 66.0%.

Figure 1.27: Percentage of playgroup children in each age group, 2015

Services

This part shows the numbers of licensed ECE services, ngā kōhanga reo and certificated playgroups, broken down by service and playgroup type. It also shows waiting times – the length of time a child must wait until a place in a service is available.

This part also shows the proportions of teacher-led centre-based services that are on the 80%+ funding band and the proportions of other service types that are on the quality funding band.

Number of Services

There were 5,272 ECE services in June 2015, up 116 services from 2014. Of these, 4,385 were licensed services, up 86 services from 2014.

Playgroup numbers also increased up 30 services to 887.

Figure 2.1: Number of licensed services and playgroups, 2005-2015


Education and care services constituted by far the largest proportion of licensed ECE services (54.9%), an increase of 6.1 percentage points since 2005.

The market share of home-based services grew from 5.6% in 2005 to 9.5% in 2015. Home-based services still represented a similar share of the market as playcentres (9.7%) and kōhanga reo (10.3%). These service types have fallen progressively since 2005 from a base of 13.4% and 13.9% respectively. The kindergarten proportion of the sector fell from 17.2% in 2005 to 14.9% in 2015.

Figure 2.2: Proportion of licensed services, by service type, 2005-2015

Licensing data

This section uses data from the Ministry's database of licensed ECE services and kōhanga reo.

Annual growth in the number of licensed ECE services

The number of licensed services me ngā kōhanga reo grew by 2.9% between 2014 and 2015 (once adjusted for mergers). This increase represents the difference between the services that opened that year (4.1%) and the services that closed (1.2%).

Figure 2.3 shows positive annual growth in the number of services over the last ten years. Growth was particularly strong in 2009, peaking at 6.9% in September 2009. Since then, annual growth has fallen back to 2006/2007 levels. The increased levels of growth after 2005 and after 2007 followed significant changes to the funding system in both years.

Figure 2.3: Growth in the number of licensed services, 2005-2015 (excluding mergers)


Figure 2.4 shows there were 180 new services and 54 closed services in the year ended June 2015, resulting in net growth of 126 services.

Figure 2.4: Number of new and closed licensed services, 2005-2015


Overall growth was not consistent across all service types. It has been largely driven by growth in the number of education and care and home-based services.

In 2015 the number of education and care services increased by 75 and the number of home-based services increased by 58. The relatively high contribution of home-based services to net growth compared to their market share illustrates a continuing trend. Home-based services, however, are also over-represented in closures, contributing to 24% of service closures, reflecting the flexible nature of this service type.

By contrast there has been little change for kindergartens (up 4 services), and decreases for casual education and care (down 1 service), hospital-based (down 1 service), kōhanga reo (down 2 services), and playcentres (down 7 services). Service growth is likely to have reflected the rising proportion of children attending ECE and doing so for longer hours. 

Location of New and Closed ECE services

Figure 2.5 shows locations of the new services that opened by service type. Half of new services opening in 2015 were in Auckland (91), with a relatively equal mix of education and care (43) and home-based (48) services.

Figure 2.5: Location of new licensed services, by service type, 2015


Figure 2.6 shows the locations of closed services by service type. The largest number of closed services were education and care (26) and home-based (13) services, which were relatively spread out over the country. Of particular note was the closure of four playcentres in Dunedin, where there had been around 17 playcentres consistently since 2005.

Figure 2.6: Location of closed licensed services, by service type, 2015

Waiting times

Waiting times are an indication of the capacity of services to provide ECE to children. Around a third of ECE services have waiting times of over a month. Waiting times increased between 2005 and 2008, indicating growth of demand for ECE relative to actual service provision.

Figure 2.7 shows that between 2005 and 2008 the proportion of services with waiting times of more than a month rose to 46%. Since 2008 this proportion fell by 19 percentage points to 27% in 2015. Education and care services had the largest decrease (26 percentage points) in waiting times since the peak in 2008. The proportion of kindergartens with waiting times remains relatively high; 41% of kindergartens had a waiting time of more than one month in 2015.

Figure 2.7: Percentage of licensed services with waiting times of more than a month, by service type 2005-2015


Waiting time figures vary considerably between service types.

Kindergartens are the only service type where more than half of services report waiting times. However, children are more likely to be waiting over six months at education and care services than any other service type (noting that waiting times for children less than two years in kindergartens are not reported due to small numbers of kindergartens offering places for this age group).

By contrast, few home-based services and playcentres had waiting times for new enrolments. The concept of a waiting list has less relevance for some home-based services. Where there is no available educator or caregiver in a given location, then that child may not go on a waiting list.

Figure 2.8: Waiting times by age group for licensed services, 2015

Operating structure

There are two types of operating structures: all-day and sessional. Services are sessional if they offer sessions of up to four hours at a time. Services are all-day if children can attend for more than four hours or all day. Those services that operate differently on different days of the week are called 'mixed'. Playcentres are sessional, whereas home-based services and kōhanga reo are all-day. The majority of education and care services and kindergartens are all-day services.

All-day services now make up 89.3% of all licensed services, up from 88.3% in 2014 and 66.7% in 2005.

The largest shift in operating structure has been for kindergartens, with the majority now being all-day rather than sessional. Figure 2.9 shows this shift starting after the introduction of 20 Hours ECE in 2007, with the proportion of all-day kindergartens increasing from 12.3% in 2005 to 99.4% in 2015.

Figure 2.9: Proportion of kindergartens by operating structure, 2005-2015

Funding bands

One indication of quality is the funding band that a service is on. A service's funding band determines its rate of government funding. Services with higher percentages of registered teaching staff as a proportion of total funded child hours receive higher funding rates. The proportion of teacher-led, centre-based services in the 80%+ funding band has been consistently increasing since 2005. In 2015, 96.4% of teacher-led, centre-based services were in the 80%+ funding band compared with 43.8% in 2005.

In 2011 there was a change to the upper funding bands for centre-based teacher-led services. Services that had received an 80-99% or 100% funding rate were now funded at the new teacher-led 80%+ funding band. The trend in the percentage of services in different funding bands is shown in Figure 2.10.

Figure 2.10: Proportion of licensed teacher-led, centre-based services by funding band, 2005-2015


Playcentres, kōhanga reo and home-based services have different funding criteria and can receive either a quality or standard funding band, with a higher hourly rate being paid for the quality band. Services on the quality funding band meet additional requirements in relation to qualifications, adult-to-child ratios and the size of the service.

Figure 2.11 shows the proportion of services in the quality funding band has increased from 25.7% in 2005 to 37.2% in 2015. The total has been fairly steady between 2012 and 2015, as an increase in the numbers of both playcentres and kōhanga reo in the quality band has offset a decline in the number of home-based services in this category.

Figure 2.11: Proportion of home-based services, playcentres and kōhanga reo in the quality funding band, 2005-2015

Footnotes

  1. A significant number of mergers occurred following regulation changes that, on 1 July 2011, increased the maximum number of licensed places from 50 to 150 places per service. This resulted in a number of cases where separately-held licences (counted as separate services) merged their licences into a single licence (and service).
  2. The totals in Figure 2.7 are weighted in two ways. First, the contribution of each service type's waiting time is weighted by their share of enrolments in 2015. Second, the overall waiting times used for each service type itself are the age-weighted average of the waiting times for each year of age.
  3. This weighting is done to prevent age groups and service types with few ECE enrolments having an undue effect on the overall waiting time figures. The exception is kindergartens, where only the 3-4 year-old group is included, as the figures for the younger children are distorted by thefact that very few kindergartens accept children before they are three years of age.

Languages used at ECE services

This part provides information on services using te reo Māori and Pasifika languages. Information is also provided on the use of other languages, including Sign, Chinese, South Asian, East Asian, and Southeast Asian languages.

Data on language use in home-based services was collected for the first time in 2015. This data has not been used in the historical comparisons in this section, but is included in a separate section on home-based services.

Services using te reo Māori

The early childhood curriculum Te Whāriki encourages te reo Māori use as an important means of communication.

In 2015, te reo Māori was reported as a language of communication in 3,653 licensed centre-based ECE services me ngā kōhanga reo. This was a decrease of 13 services compared to 2014, and an increase of 626 services since 2005. In 2015, 92% of services reported using te reo Māori as a language of communication, up slightly from 89% in 2005.

Figure 3.1: Proportion of services by the amount of time te reo Māori is used, 2005-2015

The main area of growth was in the number of services reporting the use of te reo Māori for 12-50% of teaching time. This has been offset by reductions in other categories, particularly services that use te reo Māori more than 80% of teaching time.

There was an increase of 43 services reporting the use of te reo Māori for 12% to 50% of teaching time since 2014, and an overall increase of 390 services since 2005. Education and care services were the main drivers behind the increase in the 12-50% teaching time grouping.

Figure 3.2: Proportion of services that reported 12-50% teaching time in te reo Māori by service type, 2005-2015

In 2015 te reo Māori was used for over 80% of teaching time in 467 licensed services. The number of services was similar to that in 2014, when there were 468 services using te reo Māori for over 80% of teaching time.

Apart from kōhanga reo, where te reo Māori is used 100% of the time, 17 education and care services reported using te reo Māori more than 80% of teaching time. Use of te reo Māori was most common at kindergartens; only 16 (2.5%) kindergartens reported no te reo Māori use. Te reo Māori was used between 1% and 11% of the time at 77.8% of kindergartens, 70.7% of playcentres, and 61.0% of education and care services. However, higher rates of use (12% or more of the time) were more common at education and care services.

Figure 3.3: Proportion of teaching time te reo Māori was used by service type, 2015

There were a total of 10,157 enrolments in the 488 services which reported using Te Reo Māori more than 50% of teaching time in 2015, a decrease of 538 enrolments (5.0%) since 2005 and an increase of 151 enrolments (1.5%) since 2014.

Figure 3.4 shows the proportion of children attending services reporting te reo Māori use, by child's ethnic group. Services reporting te reo Māori use for more than 50% of teaching time accounted for 22% of Māori enrolments/attendances.

Figure 3.4: Proportion of enrolments by the amount of time te reo Māori is used and ethnic group of the child, 2015

Services using Pasifika languages

Some services cater specifically to children from Pasifika backgrounds and aim to build young children's knowledge of their own Pasifika language and culture. There is no single Pasifika service 'type'. Rather, Pasifika services can be defined in several ways including the use of Pasifika languages.

In 2015, Pasifika languages were reported as a language of communication in 527 (13.3%) of all 3,653 licensed centre-based ECE services. This was an increase of 167 services (46.4%) since 2005, and 32 services (6.5%) more than in 2014.

Figure 3.5 shows 62 services (1.6%) reported using Pasifika languages between 12% and 50% of time during their formal programme, an increase of 31 services (100%) since 2005, and similar to the numbers reported in 2014. A total of 102 services (2.6%) reported using Pasifika languages more than 50% of the time, an increase of 13 services (14.6%) since 2005 and an increase of 6 services (6.3%) compared to 2014.

Figure 3.5: Distribution of centre-based services using Pasifika languages by amount of time used, 2005-2015

There were a total of 3,192 enrolments in the 102 services which reported using Pasifika languages more than 50% of the time, 913 (28.4%) more enrolments than in 2014 and an increase of 546 enrolments (20.1%) since 2005.

Figure 3.6 shows that Samoan and Tongan were the languages used most at these services: 56 reported using Samoan over 50% of the time; and 24 services reported using Tongan over 50% of the time. The remaining services reported using Cook Island Māori, Niuean, Pukapukan, Fijian or Tokelauan.

Figure 3.6: Number of services using Pasifika languages more than 50% of teaching time, by percentage of time language is used, 2015

In 2015, education and care services made up the majority of the 527 services that reported using a Pasifika language (78.6%), followed by kindergartens (19.2%) and playcentres (1.5%).

Services using a range of other languages

Over the last decade, the use of other languages in the ECE sector has grown. The number of services using Chinese and South Asian languages had the largest growth, up 229 (137.1%) and 146 (115%) respectively since 2005.

The number of services using Sign language has also grown significantly, up 132 (77.2%) over the same time period. The proportion of services using East Asian languages (3%-4% of services) and Southeast Asian languages (roughly 1% of services) have remained relatively unchanged since 2005.

Figure 3.7: Number of services using other languages 2005-2015

Types of services using Asian languages

A Chinese language was used in 396 services (10%), an increase of 229 services (137.1%) since 2005 and 33 services (9.1%) since 2014. Education and care services made up the majority (86.9%) of the centre-based services that reported using a Chinese language, followed by kindergartens (7.8%), playcentres (4.8%) and casual education and care (0.5%).

The majority of services using South Asian and East Asian languages languages reported using them for 1-11% of teaching time, with very small proportions using them for more than 20% of teaching time. Figure 3.8 shows the distribution of services reporting use of an Asian Language

Figure 3.8: Distribution of licensed centre-based ECE services using Asian languages by amount of time used, 2015

Languages in home-based ECE services

2015 was the first year the Ministry collected language use data at home-based ECE services. There was a 90% response rate, with 377 out of 417 home-based services answering the language use questions.

In 2015, of the 262 home-based services that reported using te reo Māori, only 2 services reported using te reo Māori for more than 50% of teaching time.

Of the 46 home-based services that reported using a Pasifika language, 17 (37.0%) services reported using Pasifika languages more than 50% of the time.

Of the 41 (10.9%) home-based services that reported using a Chinese language, 3 (7.3 %) reported using a Chinese language between 51% - 80% of the time and 27 (65.9%) services reported that Chinese was used more than 80% of the time.

Figure 3.9: Distribution of language use by home-based services, 2015

Of the 30 home-based services which reported using a Chinese language for more than 50% of the time there were 2825 enrolments/attendances during the census week.

Footnotes

  1. Te Whāriki: He Whāriki Mātauranga mō ngā Mokopuna o Aotearoa  Early Childhood Curriculum.
  2. For the purposes of this analysis, the ethnicity of each enrolled child has been prioritised. Where children were reported as belonging to more than one ethnic group, the ethnic groups were prioritised in the following order: Māori, Pasifika, Asian, European/Pākehā and Other.

Teaching staff

This part provides information about the numbers of staff with child contact.

New collection method

The key difference between the historic RS61 and new ELI collection methods for staff data is that the RS61 reports the number of 'usual teachers' (the people who would normally be teaching, excluding day-to-day relievers), whereas ELI reports the number of staff that had actual child contact (including relieving and temporary staff). This has resulted in possible double-counting of staff due to relievers that work at more than one service during the census week in 2015.

Numbers of staff with child contact from the ELI collection are likely to be higher than from the RS61 data collection.

The change of data collection method means that the 2014 and 2015 figures cannot be accurately compared with previous years' totals. There are breaks in all graphs affected to highlight this transition to the new data collection method, to indicate that data collected before 2014 cannot be compared to subsequent data.

Data quality issues

The Ministry has identified data quality issues relating to the characteristics of teaching staff. Since March we have been working directly with ECE Student Management System providers to resolve this issue. Despite this, the issue remains unresolved. The Ministry is working towards a solution for the data quality issues. At this stage we are unable to provide data on the ethnicity, gender and qualifications of teaching staff.

The Ministry has put a plan in place alongside ECE services in 2017 to improve the use of student management systems, and incorporate additional data quality checks, to ensure that future reporting is more accurate and reliable

Staff with child contact by service type

In 2015, teacher-led services employed a total of 28,230 staff having child contact hours. Figure 4.1 shows the number of staff across all teacher led service types. Numbers of staff from the ELI collection are likely to be higher because of the inclusion of relieving and temporary staff in data collected through ELI. The increases between 2013 and 2014 and 2014 and 2015 are likely to reflect, at least in part, the increase in the number of services supplying data through ELI.

Figure 4.1: Distribution of staff with child contact by service type, 2005-2015

Full time/part time teaching staff

Of the 28,230 staff with child contact in 2015, 15,361 (54.4%) were full time, while 12,869 (45.6%) were part time. Figure 4.2 shows the number of full time and part time staff between 2005 and 2015.

Figure 4.2: Percentage of full time and part time staff in licensed services, 2005-2015

Government Expenditure on ECE

This part has been added to the census summary report in 2015. It shows trends in government funding for ECE services. It provides a measure of volume in the number of funded child hours (FCHs) broken down by service type. Expenditure on equity funding is shown by service type.

Indicative information is provided on expenditure per enrolled child. This part also shows trends in the affordability of ECE for households.

Annual public expenditure on ECE

Annual public expenditure on ECE in the 2014/15 fiscal year was $1,804 million. This was an increase of 4.8% over the 2013/14 fiscal year, or 4.4% after adjusting for inflation. Annual public expenditure on ECE has increased from $553 million in 2002, an increase of 226% after adjusting for inflation.

Over the same period, price (as measured in terms of annual public expenditure per full time equivalent (FTE) child, or 1,000 funded child hours per year) rose by 62% in 2015 dollars, from $5,838 to $9,473 per FTE. The price per FTE child rose by 83% between 2004 and 2011, peaking at $10,019. After the 2011 peak there was a modest decline, with expenditure per FTE child in 2015 at a similar level to 2009.

Noticeable price increases have occurred as a result of the funding system introduced in 2005, which pays higher funding rates to services with higher proportions of registered teachers, and the introduction of 20 Hours ECE in 2007. Since 2011, however, there has been a reduction in expenditure per FTE child following the replacement of the top two funding rates for teacher-led centre-based services with the 80%+ funding rate, even though total annual expenditure has continued to increase.

Figure 5.1: Annual public expenditure on ECE and expenditure per full time equivalent child (1,000 Funded Child Hours) in 2015 dollars, 2002-2015

Proportion of public education expenditure devoted to ECE

The proportion of public education expenditure devoted to ECE more than doubled between 2002 and 2015, from 6.4% in 2002 to 14.0% in 2015 (see Figure 5.2). This growth reflects successive governments' increased investment in this part of the education sector, as well as population changes. In 2009, even though expenditure on ECE fell as a proportion of education expenditure, it still increased significantly, by $175 million that year.

As a proportion of GDP, overall public expenditure devoted to ECE has also more than doubled since 2002, having increased from 0.33% in 2002 to 0.75% in 2015.

Figure 5.2: Government expenditure on ECE as a percentage of GDP and expenditure on education, 2002-2015


New Zealand's public and private expenditure on ECE as a proportion of GDP was above the OECD average in 2012 (see Figure 5.4 below). New Zealand's expenditure on ECE was 0.96% of GDP compared to the OECD average of 0.84%.

In 2012, 80.3% of total expenditure on ECE was funded from public expenditure. This is similar to the OECD average of 78.4%.

Figure 5.3: Public and private expenditure on ECE as a proportion of GDP for OECD Countries, 2012

Funded Child Hours

Funded child hours are the hours for which a service may claim subsidy funding from the government.

ECE services are eligible to claim the ECE funding subsidy for up to six FCHs per child-place per day, to a maximum of 30 FCHs per child-place per week (i.e. seven days).

Between 2002 and 2015 the number of funded child hours (FCHs) doubled, from 95 million FCHs to 190 million. This reflected both population growth, and gains in the ECE participation rate and the duration of children's participation in ECE.

Initially this increase was due to an increase in the size of the 0–4 population in addition to a gain in participation rates and an increase in the average weekly number of hours of attendance. Between 2011 and 2015, however, the 0–4 population has been in decline and the increase in FCHs has been attributable solely to increased levels of participation.

Figure 5.4: Population of children aged 0-4 and funded child hours, 2002-2015 Funded Child Hours by Service Type

Funded Child Hours by Service Type

Figure 5.5 shows the volume of FCHs by service type since 2002. Education and care services account for the majority of FCHs, and have significantly increased their share of FCHs from 55.7% in 2002 to 68.6% in 2015.

Home-based services have had the greatest growth in percentage terms since 2002. In nominal terms, education and care service FCHs increased by 78m while home-based FCHs increased by 13m.

In 2002, home-based services accounted for 7.5% of FCHs but this increased to 10.6% in 2015.

The annual number of FCHs has been relatively consistent for kindergartens, having increased by only 11.6% between 2002 and 2015, from 22.8 million to 25.4 million. As a proportion of total FCHs, however, the kindergarten share has declined from 24.1% to 13.4% over this period.

The proportions of FCHs claimed by playcentre and kōhanga reo have both declined over this time, with the playcentre share reducing from 3.4% to 1.4% and the kōhanga reo share declining from 8.7% to 5.8%.  

Figure 5.5: Funded child hours by service type, 2002-2015

Funded child hours by funding stream

The overall number of FCHs for children less than two years doubled from 16.5 million in 2002 to 33.2 million in 2015. Despite this increase, the proportion of FCHs that are attributable to children less than two years has remained relatively consistent, at 17.4% in both 2002 and 2015.

Correspondingly, the proportion of FCHs attributable to children aged two years and over (including 20 Hours ECE) has also remained relatively stable since 2002 at 82.6%. The overall volume has doubled from 78.1 million FCHs in 2002 to 157.3 million in 2015. Since the introduction of 20 Hours ECE in 2007, the proportion of FCHs attributable to 20 Hours ECE increased from 38.6% of all FCHs in 2008 to 49.5% in 2015, a total of 94.3 million in 2015.

Figure 5.6: Funded child hours by funding stream, 2002-2015

Entitlement funding

Entitlement funding is paid for the following funding streams: subsidy for children aged less than two years; subsidy for children aged two years and over; and 20 Hours ECE. The funding streams have different funding rates, with higher rates applied for children aged less than two years than for those aged two or over. The 20 Hours ECE funding covers the full average cost of ECE for the first 20 hours of ECE that a child attends per week (also capped at six hours per day) for three, four and five year olds.

The distribution of entitlement funding between service types is quite distinct from the distribution of FCHs. This reflects the differences in funding rates paid to different service types and the different funding rates for the three funding streams.

In nominal terms, ECE expenditure on entitlement funding (under two, two and over, and 20 Hours ECE) has increased from $297.9m in 2002 to $1,560.4m in 2015. Throughout this period, education and care services have received the majority of funding, increasing from 55.0% of total entitlement funding in 2002 to 72.3% in 2015.

Figure 5.7: Percentage of entitlement funding and funded child hours by service type, 2015


Despite accounting for 10.6% of FCHs in 2015, home-based services received 7.4% of entitlement funding. This is in contrast to 2002 when the proportion of entitlement funding that home-based services received, at 8.3%, was higher than the proportion of FCHs the service type accounted for, which stood at 7.5%.

Over this period, entitlement funding for kōhanga reo has more than doubled, from $25.3m in 2002 to $62.5m in 2015. Despite this increase, kōhanga reo makes up a smaller proportion of total entitlement funding, decreasing from 8.5% in 2002 to 4.0% in 2015, similar to the decrease in the proportion of FCHs.

In 2015, kindergartens received more than three times the amount of entitlement funding they had in 2002, at $238.1m and $72.7m respectively. Over the same period, their proportion of entitlement funding has decreased, from 24.4% to 15.3%.

While the distribution of FCHs across the different entitlement funding streams has changed over this time, particularly with the introduction of 20 Hours ECE, the relative differences between funding rates across the service types have also changed. This has had an impact on the relationship between the distribution of FCHs and the distribution of entitlement funding across the different service types.  

Figure 5.8: Entitlement funding by service type, 2002-2015

Effective entitlement funding per FCH

Effective entitlement funding per FCH is defined as the overall amount of entitlement funding divided by the total number of FCHs. The effective entitlement funding measure reveals the differences in funding per funded child hour at different service types and how these have changed over time.

Figure 5.9 shows the effective entitlement funding per FCH for each service type. Note that the effective funding per FCH is dependent on how the FCHs are distributed across the different funding streams (under two, two and over, and 20 Hours ECE) and to funding rate differences based on the proportions of registered teachers (or quality or standard rates for non teacher-led services).

Since the introduction of 20 Hours ECE, the effective funding per FCH has increased for each service type, with effective rates in 2015 ranging from $4.80 per FCH for playcentres to $9.36 per FCH for kindergartens. Compared with values in 2002, playcentres have seen the lowest increase, with effective funding per FCH having increased by 60.1%, whereas the effective funding per FCH for kindergartens has increased by 193.6%. 

Figure 5.9: Effective funding per funded child hour by service type, 2002-2015

Equity funding

Equity funding is targeted funding paid to eligible services in addition to entitlement funding. Its objectives are to reduce educational disparities between different groups in New Zealand communities, reduce barriers to participation faced by those groups that are underrepresented in ECE services and to support ECE services in raising their level of educational achievement.

Equity funding is split into four components. Eligibility for Components A and B of equity funding is based on the service's Equity Index (EQI). Component A provides funding support to services that draw children from low socio-economic communities. Component B provides funding support to services that support children with special needs and children from non-English speaking backgrounds. Component C provides targeted funding to support those services that provide early childhood education in a language and culture other than English (including sign language) during more than half of the formal education and care programme. Component D recognises that isolated services face higher costs when accessing goods and services, and provides additional funding to services with a high isolation index. The isolation index is determined by measuring a service's distance to the nearest towns/cities with population sizes of 5,000, 20,000, and 100,000.

Annual expenditure on equity funding has increased ten-fold since 2002; from $4.7m per year to $46.7m in 2015. However, the proportion of overall funding that equity funding accounts for has less than doubled, increasing from 1.6% to 3.0% during this time.

The distribution of equity funding between service types has also changed considerably over time. In 2002, just over half (51.8%) of equity funding went to kōhanga reo, whereas by 2015 this share had decreased to just under a quarter (24.8%). The proportion distributed to kindergartens has also declined over this period, but to a lesser extent, from 20.6% to 14.1%. Education and care services have seen a large increase in the proportion of equity funding they receive, more than doubling from 22.0% in 2002 to 51.6%. In nominal terms, education and care services received 23 times as much equity funding in 2015 ($24.1m) as they did in 2002 ($1.0m).

Since 2011, home-based services have also received an increase in equity funding, increasing from $169,000 in 2011 to $3.7m in 2015. Up until 2011, home-based services received a relatively consistent proportion of equity funding, at 1.4%, however this has recently increased and home-based services received 7.8% of equity funding in 2015.  

Figure 5.10: Equity funding by service type, 2002-2015


Despite the decline in the proportion of equity funding that kōhanga reo receive, and equity funding accounting for only 2.9% of overall government funding, equity funding accounted for 15.6% of kōhanga reo government funding in 2015. This is a substantial change from 2012, when equity funding accounted for 7.9% of kōhanga reo funding.

The other service type that receives relatively more of their government funding by way of equity funding is hospital-based services, which received 13.5% of their funding from equity funding. Equity funding comprises a much smaller proportion of the overall funding that other service types receive, with values of between 2% and 5% in 2015.

Figure 5.11: Proportion of ECE funding that is equity funding by service type, 2002-2015

Affordability

Whether a family considers ECE to be affordable is largely determined by the cost of the service and the family's income. The affordability indicator measures changes over time for these factors and for their change relative to each other. This will indicate how affordability is changing generally, and also enables an assessment of the impact of policies targeted at ECE affordability and of various factors affecting the costs faced by ECE services.

Information on ECE fees is collected as part of Statistics New Zealand's Consumers Price Index (CPI). Income data (average hourly ordinary-time earnings) are collected as part of Statistics New Zealand's Quarterly Employment Survey (QES). Using these two measures, we can determine how ECE fees change relative to income, and thus how the affordability of ECE changes over time. 

The affordability of ECE improved substantially with the introduction of 20 Hours ECE in 2007. Levels of affordability have largely been maintained since then, with increases in fees being offset by increases in income. Affordability decreased by five percent in the December quarter of 2011 following government funding changes introduced in February 2011. Despite this, the cost of ECE remains 32 percent more affordable than it was prior to the introduction of 20 Hours ECE.

In the year ended June 2015, fees paid by households and average ordinary-time earnings both rose by 2.7%. This meant there was no change to affordability between June 2014 and June 2015.

Figure 5.12: Indices of average ECE fees paid by households, average earnings and average fees relative to earnings, 2005-2015 (Indices based to equal 1,000 in quarter ending March 2005)

Annual subsidy funding per enrolled child

Historically, the Ministry has referred to expenditure on ECE based on full time equivalents, where one FTE is 1,000 hours per year per child. In practice, however, the majority of children attend ECE for fewer than 1,000 hours per year. This section provides figures on expenditure per enrolled child, as this allows us to compare differences across age groups and geographical areas.

The calculation of funding per enrolment is based on the numbers of enrolments/attendances for each age group and service type collected in the ECE census. It is important to note that these values are approximations since funding claims do not specify the age of the children for which they are claimed.

Overall, approximately $7,846 was spent on entitlement funding for each enrolled child in 2015, and a further $235 was spent on equity funding. 

Annual subsidy funding per enrolled child by year of age

Figure 5.13 illustrates how per child enrolment subsidy funding levels vary by age group. This value varies from an overall expenditure of $5,807 per enrolled child aged two years old to $9,189 per enrolled child aged one.

The value of annual subsidy funding per enrolled child is influenced by the funding rates paid for different age groups and differences in the average weekly hours of attendance by age. Equity funding on a per-enrolled child level is relatively consistent across the age groups, ranging between $204 and $259 per year.

Higher levels of subsidy funding per enrolled child are spent on three to five year olds as compared with two year olds as a result of the higher funding rates paid under 20 Hours ECE.

Funding rates are higher for children less than two years of age than for children aged two years. Funding rates for children under two are higher because of the ratio of adults to children is lower than for older children. Children aged one year attend for more hours per week on average than children aged under 1, which accounts for the difference in funding for these two age groups.

The average weekly number of hours attended also varies by age, with the lowest level for children under one (18.1 hours) and the highest for one year olds (21.1 hours) in 2015. The average numbers of hours for two, three and four year olds were 19.4, 19.5 and 20.7 hours respectively.

Figure 5.13: Annual ECE funding per enrolled child, by year of age, 2015

Annual subsidy funding per enrolled child by service type

The value of annual subsidy funding per enrolled child is influenced by the funding rates paid to different service types and differences in the average weekly hours of attendance at different service types. In addition, equity funding provides a significant amount of annual subsidy funding per enrolled child for kōhanga reo.

In general, the highest funding rates are paid to all day, teacher-led centres for children aged under two years, and the next highest for 20 Hours ECE. Average weekly hours of attendance in 2015 were 23.8 at home-based services, 22.0 at education and care services, 15.7 at kindergartens, and 4.5 at playcentres. We have estimated the average weekly hours for kōhanga reo at 29.3 in 2015 as data on weekly hours of attendance for kōhanga reo children are collected differently from other services;

Figure 5.14 shows that annual subsidy expenditure per enrolled child varied significantly across service types, ranging from $1,065 (entitlement funding of $1,034 and equity funding of $31) for children attending playcentres to $9,187 (entitlement funding of $8,995 and equity funding of $192) for those attending education and care services in 2015.

Subsidy funding per enrolled child at kindergarten equates to $7,682 entitlement funding and $213 equity funding ($7,895 in total). Subsidy funding per enrolled child at home-based services equates to $5,629 in entitlement funding and a further $179 in equity funding ($5,807 in total). Children attending kōhanga reo receive a similar amount of total funding ($8,365) to the overall average; however, relatively more of this is equity funding ($1,307).

Figure 5.14: Annual ECE funding per enrolled child, by service type, 2015

Annual subsidy funding per enrolled child by region

Annual funding per enrolled child also varies by region, with services located in Gisborne receiving the most funding per child, on average, at $8,762 in 2015. This is, in part, due to the amount of equity funding that is paid to services in the region, approximately $647 per enrolled child. This is almost three times the average level of $235 spent on equity funding per child each year nationally. At $8,116, Gisborne was the region that received the second-highest level of entitlement funding per enrolled child in 2015, second only to Auckland ($8,322). 

Figure 5.15: Annual ECE funding per enrolled child, by region, 2015


Services in the Tasman region received the lowest level of overall funding per enrolment in 2015, at approximately $6,817 per enrolled child, of which $101 was through equity funding. Marlborough received the lowest amount of equity funding per enrolment at approximately $30.

Overall, approximately 2.9% of subsidy funding is attributable to equity funding. The proportion of overall subsidy funding per enrolment that is equity funding varies considerably across the regions, ranging from 0.4% in Marlborough to 7.4% in Gisborne, as illustrated in figure 5.16.

Figure 5.16: Equity funding as a proportion of ECE funding by region, 2015

Figures 5.17 and 5.18 show how subsidy funding values per enrolled child vary across territorial authority and by local board in Auckland. Across territorial authorities, the annual expenditure per enrolled child ranged from $5,369 in Westland District to $10,504 in Kawerau District. Within Auckland, two local boards have annual values that exceed this, with Otara-Papatoetoe and Mangere-Otahuhu receiving approximately $10,526 and $11,103 per enrolled child respectively.

Only three territorial authorities (Kawerau, Opotiki and Wairoa) received over 10% of funding via equity funding. Within Auckland, the values range from 0% for Waiheke and Devonport-Takapuna, and 0.2% for Upper Harbour, through to 9.1% in Mangere-Otahuhu. The Great Barrier Auckland board is an exception, however, and received only $1,342 in subsidy funding per enrolled child in 2015, of which 19.9% was in equity funding.

Figure 5.17: ECE funding per enrolled child by territorial authority and Auckland local board, 2015

Figure 5.18: Equity funding as a proportion of ECE funding by territorial authority and Auckland local board, 2015


Per enrolment funding also varies across NZ Dep deciles, with services located in areas designated as decile 1 (the least deprived areas) receiving approximately $7,280 per child in 2015, of which $10 (0.1%) was equity funding. On the other end of the spectrum, services located in areas designated as decile 10 received approximately $9,772 per child in 2015, of which $905 (9.3%) was equity funding.  Note that the NZ Dep decile is based on where the service is located and not on the characteristics of the children who attend the service.

Figure 5.19: ECE funding per enrolled child by NZ Deprivation Index, 2015

Footnotes

  1. Source: Education at a glance 2015, OECD Indicator, table B4.1.
  2. The CPI- Childcare and QES indices have been set to equal 1,000 in the quarter ended March 2005.
  3. The minimum ratios are specified in Schedule 2 of the Education (Early Childhood Services) Regulations 2008. In general, centre-based services must have an adult:child ratio of 1:5 for children under two and 1:10 for children two years and over. Home-based services must have an adult:child ratio of 1:2 for children under two and 1:4 for children two years and over (with some exceptions, eg for siblings aged under two).