Speech on the funding review to the National Cross Sector Forum, Auckland

Tena koutou katoa. Welcome. It’s great to be here with so many people who are working hard to give Kiwi kids the best possible education.

Four years ago, I established the National Cross Sector Forum as a way for key stakeholders to get together and talk about the most important issues in education. I value this forum as a vehicle for me, as Education Minister, to be able to update you on the education work programme, to get your feedback and advice, and for you to interact with the government’s education agencies.

My aim has long been to develop a modern New Zealand education system which places children and young people at the centre of our efforts, and a lot of work is being done to turn that into a reality.

Shortly I’ll explain how the foundations have been laid to ensure a brighter future for our children and younger people, but first it’s important to understand why we need change.

When we came into Government eight years ago the bar was set far too low. Participation in early learning needed to improve. Students were leaving school too early and without the qualifications they needed to be successful.

Achievement rates were very average at 68 per cent, and pretty dismal for Maori and Pasifika. Less than 45 per cent of Maori students were achieving NCEA Level 2. Pasifika students weren’t faring much better.

But today there is genuine reason to be optimistic. For starters, eight years on, children are starting earlier, staying at school longer and leaving with better qualifications.

Overall, more than 38,000 more young people have achieved NCEA Level 2 than if achievement had remained at the level it was in 2008. There has been significant improvement for every population group.

83.3 per cent of our 18 year olds are getting NCEA Level 2. More than 71 per cent of Maori 18 year olds, and over 77 per cent of Pasifika 18 year olds are attaining the qualification.

That is real progress. We know through research and just plain common sense that this means that they will have better opportunities and brighter futures. And it’s thanks to teachers, parents and the students themselves.

But we can’t stop there, pat ourselves on the back and relax.

We now have results, rich data and a strong foundation from which to shift and lift the education system levers to better support our early childhood educators, school teachers and principals to make a sustainable difference.

We need to lift achievement even higher, make sure the changing needs of children and young people are firmly at the centre of everything we do and future-proof for the unknowns of the 21st century.

A major piece of the education work programme that seeks to achieve these things is the funding review.

I think we can all agree that the current education funding system is not as effective as it could be for raising the achievement of every student.

There are those who argue that the answer is to throw a whole lot more money into our education system and that’ll fix it! Well, we have.

This year’s Budget saw Vote Education increase to more than $11 billion for the first time. That is more than we will be spending on police, defence, transport, conservation and foreign affairs combined. We’ve increased funding by more than 32 per cent in schooling and over 100 per cent in early childhood education since 2007/08.

Every extra dollar we spend on education is a dollar less available for health, police, welfare and housing. Education is critical to New Zealand’s future, but there are other priority areas as well.

So firstly, we don’t have an inexhaustible amount of money to pour into the system.

Secondly, we know from evidence that simply increasing how much we spend on education does not automatically result in a lift in achievement. It is the quality of the investment that makes the difference, not the quantity.

We are undertaking a review of the education funding system to make sure that the $11 billion we invest in the system is being spent in the most effective and impactful way for the achievement of children and young people.

Every child is unique and has different needs, which means that every school has different challenges.

Principals and Boards know the learning needs of their students better than the Ministry. So we want a funding system that will give them the flexibility to use funding in ways that will best meet the needs of every kid in their school.

We also want to maintain diversity of choice for parents and their kids by supporting a variety of school options, from state to state-integrated to Maori medium to independent.

Most of all, we want to make sure that funding supports kids to progress and achieve at each year level.

Current funding systems for early learning and schooling have developed incrementally over time, and while some changes have made things fairer, the changes have also made the funding systems more complex and difficult to see as a coherent whole.

I am seeking to develop a funding system that makes the specific needs, progression and achievement of children and young people the currency in education.

The intention is to ensure that each child makes at least a year’s worth of progress against the curriculum. This requires a funding system tailored per-child and young person to the learning expectations at each stage of Te Whāriki, the New Zealand Curriculum, and Te Marautanga o Aotearoa.

Overall, my objective is to develop a funding system that directs resources to the size of the education challenge that early childhood services, schools and Communities of Learning face.

We need a funding system that better supports children and young people at most risk of educational underachievement and where learning support is better targeted to children’s needs.

I also intend to develop a stronger line of sight between funding and children’s progress. That will enable us to invest more effectively in the learning of children and young people and be clearer about the impacts of those investments over time.

This will result in a funding system which would allow parents to be confident that the investment made in learning is working to best effect to ensure that their child makes at least a year’s worth of progress every year.

This will make us more accountable to the tax-payer for every dollar we invest and allow for a stronger argument to be made for increasing the level of funding.

You’ll all be aware that we have recently completed the first phase of the funding review, which was to explore seven elements for change to the system with the sector, and an Advisory Group.

The Ministry of Education and I took the unusual step of inviting sector leaders to be involved in discussions as part of an Advisory Group before the policy development stage of the process.

This was only the second time sector leaders had been involved at such an early stage, which reflects the significance of the review and the Government’s eagerness to work constructively with the sector and get valuable feedback.

I recently reported to Cabinet on the first phase of the review and decisions have been made on the proposals to take forward for further work. The proposals are:

• Determining what’s needed to achieve, and then deliver, a year’s learning progress for all learners, in every year of their education

• Looking at funding each child in early childhood education, rather than the placed-based approach we have now

• Determining the best ways to target funding for disadvantage to learners most at risk of underachievement, based on a risk index which is calculated from government agencies’ data; and testing better approaches for learning support to students with additional physical, intellectual, or behavioural learning needs

• Defining the criteria for small and isolated schools and early childhood services and considering the role Communities of Learning| Kāhui Ako can play in mitigating the impacts of size and isolation

• Considering a new funding formula for independent schools, possibly set at a fixed proportion of the per-child funding amount for state and state-integrated schools

• Looking into changing the arrangements for property maintenance and utilities, to give greater assurance that school property is appropriately maintained and to secure greater efficiencies in utilities expenditure

• Strengthening the line of sight between the investment Government makes in education with the outcomes achieved by children and young people.

Feedback from around 90 meetings the Ministry had with the sector and from the Advisory Group indicated that the sector is not ready for the level of flexibility and accountability that comes with a global budget payment mechanism.

I have therefore recommended, and Cabinet has agreed, that the global budget payment mechanism not proceed. The proposal was an option for better delivery of funding, not determining the level of funding so this decision will not affect the core purpose of the review.

As a first step, a number of topic-specific technical reference groups are being established to provide support in the more detailed design of the proposals being taken forward for further work.

People on these groups will have expertise and experience in curriculum design and delivery and in the measurement of educational progress, as well as wider sector and educational expertise.

The groups include ones on:

• Curriculum-based progress – to advise on what it takes for children and young people to achieve a year’s worth of progress across the curriculum and input into the move to child-based funding in early learning

• Dealing with disadvantage – to input on the best ways to target funding for learners most at risk of underachievement

• Small and isolated – to test the approach to defining small and isolated early childhood services and schools, as well as how Communities of Learning | Kāhui Ako can mitigate the impacts of school size and isolation

• Property – to input on how property maintenance funding could be more efficiently spent to meet the interests of students and staff

• Using data to improve outcomes – strengthening the line of sight between the investment Government makes in education with the outcomes achieved by children and young people.

These groups will start meeting from November.

Work on considering how best to allocate funding to support children and young people needing learning support and on determining a new funding formula for independent schools will be worked through in separate processes. For further work on the independent schools proposal, we first need to complete work in the other proposals first.

I have an open door for those who want to be constructive and understand that working together does not mean that one party does exactly as the other demands; it involves mature discussions, cooperation and respect. I will work with anyone who will focus on creating solutions, and who has the interests of children and young people front and centre.

With that in mind, I will meet regularly with a Ministerial Advisory Group to discuss the work of the reference groups and the proposed new funding components.

The work we are all doing to redesign our education funding system is easily the most comprehensive ever undertaken. It will be challenging and some elements will be easier than others.

I am confident that, with your help, we can have an improved funding system that is more focused on ensuring the progress and achievement of all young New Zealanders in place by 2020.

We owe it to children and young people to get this right. It’s in all of our interests – they are the future teachers, doctors, tradies, entrepreneurs and Prime Ministers of our country.

Thank you for the work you do to provide our kids with a brighter future and I look forward to your involvement in the next steps of the funding review.