Early Childhood Education (ECE) initiatives

Details of the main Early Childhood Education (ECE) initiatives announced by the Government in Budget 2013.

Early Childhood Education 98% Participation Funding

Operating funding
  • 2013/14 $23.859m
  • 2014/15 $20.960m
  • 2015/16 $18.488m
  • 2016/17 $17.228m
Four Year Total $80.535m
The Government has set a Better Public Service target for ECE: in 2016, 98% of children starting school will have participated in quality early childhood education.

The Government is committing a total of $80.535 million over four years for costs directly associated with achieving the 98% participation rate. ECE services enrolling children attract subsidy funding which results in higher costs for Government. We have estimated that the cost of this additional participation will be approximately $56.535 million over four years.

We recognise that the majority of children that are currently not participating, and their families and whānau need some extra support before they can access ECE. An additional $24 million (over four years) will be used to:
  • Support action groups in high priority communities by: 
    - Establishing key relationships with community organisations and non-government organisations
    - Drawing on partners from outside the Ministry (who have knowledge, expertise, and resources that we do not have) as well as contributing Government support ($2 million a year)
  • Trial new outcomes-based purchase agreements with large providers. These agreements will give large ECE providers responsibility, and incentives, for raising participation in targeted areas.

$56.535 million over four years of this total funding has been set aside as a contingency.
Increase to Early Childhood Education Equity Funding

Operating funding
    • 2013/14 $10.071m
    • 2014/15 $10.209m
    • 2015/16 $10.409m
    • 2016/17 $10.574m

      Four Year Total $41.263m
Equity Funding is the Ministry’s main targeted Early Childhood Education (ECE) funding stream. It goes to ECE services that provide ECE to children from our poorest communities and to ECE services that provide ECE in a language other than English. An increase is being made to current levels of Equity Funding targeted to components which address socio-economic status, special needs and languages or culture other than English.


We expect that services receiving Equity Funding will use increased funding to:

  • Increase the enrolment and participation of children from priority groups
  • Keep ECE fees low for priority families to support their participation
  • Encourage and support family/whānau to actively engage with the early learning outcomes of their children
  • Improve language acquisition.
Early Childhood Education Cost Adjustment

Operating funding
  • 2013/14 $9.390m
  • 2014/15 $9.539m
  • 2015/16 $9.750m
  • 2016/17 $9.916m

Four Year Total $38.595m
This funding provides a 2% cost adjustment to the non-salary component of all ECE funding rates.

ECE services will receive extra funding of between $0.01 and $0.08 per funded child hour. The average increase amounts to around 5 cents per child funded hour which means, for example, a service with 50 children would have increased annual funding of around $3,000.

We are providing a small adjustment to the non-salary component of the ECE funding rates as this allows us to also provide an increase to Equity Funding.
Early Childhood Education Service Performance Fund

Operating funding
  • 2013/14 $3.030m
  • 2014/15 $3.030m
  • 2015/16 $3.030m
  • 2016/17 $3.030m

Four Year Total $12.120m
This funding will be used to identify poorly performing ECE services (services with governance and management problems, difficulty delivering quality of teaching and learning experiences or that are not responsive to the identity, language and culture of their communities). The Ministry of Education will work with these ECE services to identify areas for development, and contract appropriate expertise to address these development needs.

This is supporting the achievement of the Better Public Services 98% target for ECE by ensuring that existing and newly established services providing ECE to our vulnerable communities operate sustainably.
Forecast Changes – Early Childhood Education

Operating funding
  • 2012/13 $35.166m
  • 2013/14 $36.328m
  • 2014/15 $25.366m
  • 2015/16 $24.488m
  • 2016/17 $51.065m

Four Year Total $137.247m
Demand driven expenditure within Early Childhood Education is forecast twice every financial year. Demand for ECE can change as a result of many contributing factors, such as parent preference for ECE, labour market participation, and the accuracy of population projections. The forecasts take account of those factors and forecasts costs expected from the number of children anticipated to participate in ECE, and the number of hours they will be in ECE for.

In the 2012/13 year these forecasts have been higher than expected.

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