16 December 2004

First results of review of targeted programmes

Co-ordinating Minister, Race Relations Trevor Mallard today released the first reports and results from the government’s review of targeted policies and programmes.

The seven reports include review work undertaken by the Ministry of Health, the Ministry of Culture and Heritage, the Ministry of Education, and the Education Review Office.

The reviews covered a variety of programmes that varied in size and scope, from Maori arts funding to the Population Based Funding Formula for district health boards.

Trevor Mallard said the review processes demonstrated the importance of clear evidence and meaningful evaluation of policies and programmes in government agencies.

“The Labour-led government firmly believes in giving everyone a fair go. Unlike the National party, we are committed to lifting Maori and Pacific Island job prospects, educational achievement and health.

"We will continue to use targeted programmes and policies for specific ethnic groups that prove effective at addressing proven needs, just as we do for other groups of New Zealanders who need specific help, such as the elderly or those in rural communities,” Trevor Mallard said.

"These reviews have confirmed that for most of these programmes, targeting by ethnicity is appropriate, as there is good evidence that this sort of targeting is addressing need effectively. Because of this these programmes will not be changed.

"An example is the Education Review Office’s collection of information on Maori and Pacific student achievement in mainstream schools where this helps improve the quality of information on which school programmes are based.

"In two review areas we have asked for more research to be done, and in one area, change is required."

Change required The review of decile funding for schools has resulted in a change to the current policy, with the ethnicity weighting to be removed from the decile funding formula.

Around 900 schools will be affected by this change. However, additional operational funding will be provided from 1 January 2005 which will ensure that no schools will lose funding. Overall, 2461 schools (98 per cent of all schools) will gain funding. The additional funding is made up of an extra $10.5 million per school year in decile-linked operational funding and a further $16.5 million in per pupil operational funding, which is equivalent to an increase of 3 per cent.

"There is increasing evidence and research that suggests that lifting educational achievement for Maori and Pasifika students is better done through tailored programmes that address certain factors - such as giving teachers the support and the skills to teach students from different backgrounds who have different needs," Trevor Mallard said.

"We are investing in these sorts of programmes already. As well, I am announcing today two new initiatives, worth $11.5 million over three years, that will support more effective teaching. The first will develop, pilot and establish a national approach to training educators who teach teachers. The second will apply recent research findings about what works in the classrooms for Maori and Pasifika students to ten pilot studies involving teachers in clusters of schools. (details attached)

"Similarly, we are removing the ethnicity component from equity funding to community-based non-profit early childhood education services from 2006. Equity funding comprises 2.4 per cent of the funding these services receive. No service will lose money from the change as transitional funding will be provided to services until 2008.

"This is when the formula, along with the decile formula, is scheduled for review and recalculation using 2006 census data."

Further research required The review of public service scholarships targeted at ethnic groups. During the review, the Race Relations Commissioner questioned whether scholarships aimed at increasing diversity in the Public Service meet criteria in the Bill of Rights Act and the Human Rights Act. The report also raises questions about the effectiveness of these scholarships. Ministers have asked for more advice.

The review of the Population Based Funding Formula. The formula aims to fairly distribute funding to district health boards according to the relative needs of their populations. The report found that the ethnicity weighting reflected the higher cost of providing health services to groups with high health needs such as Maori and Pasifika people. However, the scheduled review of this formula has been brought forward with a deadline of 31 March 2006. This evaluation will also consider whether the formula continues to be the most appropriate mechanism for funding and addressing unmet health need.

As part of this, the Ministry of Health will report by 1 December 2005, on how boards are progressing towards addressing unmet health needs of high need population groups and how the ministry will evaluate the effectiveness, including cost-effectiveness, of the District Health Boards' programmes for meeting this need.

Attached Questions and answers Summary of decisions Fact sheet about decile funding, equity funding and the operational funding change Fact sheet about the Effective Teaching projects The review reports and related cabinet papers, and estimated per school funding changes are available on www.beehive.govt.nz/mallard/policy-review/

Questions and Answers

Why were the reviews undertaken? To give ministers and the public an assurance that policies and programmes are targeted on the basis of need, not race.

Who is coordinating the review work? The Ministerial Review Unit, based in the State Services Commission, is managing the review process. Its role is to plan, monitor and co-ordinate reviews of policies and programmes within the public service to ensure they are based on need, not race. The relevant departments undertake the reviews. Departments were asked to identify all policies and programmes according to selection criteria developed by the Ministerial Review Unit.

How were the policies chosen for review? Departments were asked to identify all policies and programmes according to selection criteria developed by the Ministerial Review Unit. On 31 May 2004 the government approved the policies and programmes for the first phase of reviews. A second tranche was announced later in the year.

What about the remaining reviews? The remaining reviews from tranche one are expected to be completed early next year and tranche two by the end of June.

(See next page for summary of decisions)
Review of Targeted Policies and Programmes - decisions

Paper Decision

Provisions of the Arts Council of New Zealand Toi Aotearoa Act 1994 agreed that the provisions of the Arts Council of New Zealand Toi Aotearoa Act 1994 relating to Te Waka Toi and the Pacific Arts Committee are appropriate.
Education Review Office Reviews agreed that the Education Review Office partnerships with iwi are an appropriate way to interact with the school communities in the Far North and on the East Coast, given the high proportion of Maori students with affiliations with local iwi; agreed that it is appropriate to collect information on Maori and Pacific student achievement in mainstream schools where this helps improve the quality of information on which interventions are based.

Te Hiringa i te Mahara (Professional Development Programme for Maori Secondary School Teachers and Teachers of Te Reo Maori) agreed that no change be made to the way the Te Hiringa i te Mahara programme is targeted.
Ministry of Health Review of the Pacific Health and Disability Action Plan agreed to retain the Pacific Health and Disability Action Plan unchanged as a result of this review.
Public Service Scholarships

deferred consideration of the paper pending further advice from the State Services Commissioner and the Crown Law Office and further consultation with the Race Relations Commissioner and relevant agencies.
Ministry of Health Overview Reports; New Zealand Health Strategy; and Population Based Funding Formula

New Zealand Health Strategy: agreed that the Ministry of Health continue to monitor progress in achieving the New Zealand Health Strategy’s goals and objectives and that the Strategy be reviewed, at an appropriate time, with the agreement of the Minister of Health.

Population Based Funding Formula: directed the Ministry of Health: to report to the Ministers of Health, Finance, Maori Affairs, Pacific Island Affairs and the Co-ordinating Minister, Race Relations, by 1 December 2005, on how district health boards are progressing towards addressing the unmet health needs of high need population groups and how the Ministry will go about evaluating the effectiveness, including cost-effectiveness, of the district health boards’ programmes for meeting this need; to report on this work to the Cabinet Policy Committee by 28 February 2006. agreed that the evaluation referred to above form part of a full review of the Population Based Funding Formula, including consideration of whether the formula continues to be the most appropriate mechanism for funding and addressing unmet health need; agreed that the

Ministry of Health, in consultation with other agencies as appropriate, report to POL by 31 March 2006 on the outcome of the review of the Population Based Funding Formula and also on the review of the funding formula for PHOs.
Ministry of Education review of decile funding agreed that the ethnicity component be removed from the schools decile funding formula and equity funding for community-based early childhood education services. Funding to be increased so no school or ece service will lose funding.
Effective teaching projects

Two initiatives are to be established that focus on improving the quality of teaching and thereby lifting the education standards of the diverse range of students in our schools - recognising that students come from different backgrounds and can have quite different needs.

Both initiatives have a research and evaluation component to add to existing knowledge of what works in the classroom for students, and how to strengthen the quality of teaching.

Strengthening In-Service Teacher Education Practice Initiative To raise student achievement there must be a strong focus on teacher education. The initiative, an investment of $9 million over three years, is aimed at supporting those educators who teach the teachers.

It involves the development of a nationally coordinated training approach to support in-service teacher educators who are involved in professional development in schools. The aim is to improve effectiveness of teachers' classroom practice.

A national project manager will work with a 12-person national training team to provide all advisers /facilitators with in-depth training over a two-year period.

The outcome of the project will be a model for the ongoing professional training of new teacher educators, professional development facilitators, and leaders of professional learning within schools.

Quality Teaching Research and Development in Practice Initiative This will apply recent research findings about what works in the classrooms for Maori and Pasifika students to ten pilot studies involving teachers in clusters of schools, at a cost of $2.5 million over three years.

The initiative will apply key research findings from the Literacy and Numeracy Strategy, the Best Evidence Syntheses, the Early Childhood Links Project, Te Kotahitanga and Te Kauhua about what works in classrooms to improve the quality of outcomes for Mâori and Pasifika students.

Ten pilot studies involving teachers in clusters of schools will be set up. The aim is to apply successful strategies related to quality teaching practice, as well as the development of culturally inclusive classroom learning communities and partnerships with families focused on improving student learning.

Recent work with the literacy and numeracy strategies has highlighted the importance of teachers having strong subject and pedagogical content knowledge and the studies will focus on literacy, numeracy, science and social studies.

New school deciles formula and increases in operational funding What are deciles? A school’s decile indicates the extent to which the school draws its students from low socio-economic communities. Decile 1 schools are the 10 per cent of schools with the highest proportion of students from low socio-economic communities, whereas decile 10 schools are the 10 per cent of schools with the lowest proportion of these students. A school's decile does not indicate the overall socio-economic mix of the school or how good a school is.

Deciles are used to provide resourcing to state and state-integrated schools to enable them to overcome the barriers to learning faced by students from low socio-economic communities. The lower the school's decile, the more resourcing they receive.

Deciles affect 15 per cent of the operational funding which schools receive. Non-decile linked components of operational funding are: Base funding, relief teacher funding, per-pupil funding Years 1-6, NCEA grant, property maintenance (including minor capital works), vandalism, heat, light and water, Targeted Funding for Isolation, Maori Language Programme Funding, Secondary-Tertiary Alignment Resource (STAR), English for Speakers of Other Languages (ESOL).

The new decile formula From 1 January 2005 the way that school deciles are calculated will change.

The socio-economic indicator on which deciles are calculated will no longer include a factor based on the percentage of Maori, Pasifika and English for Speakers of Other Languages (ESOL) eligible refugee students.

The removal of the ethnicity factor will mean that the decile rating and/or Targeted Funding for Educational Achievement (TFEA) step for 909 schools will change. [Deciles 1 to 4 are further split into three equal groups for the three Targeted Funding for Educational Achievement (TFEA) funding categories within each of those deciles. Each school is then designated a decile (from 1 to 10) and a TFEA step (from A to Z)]

A change in decile and/or TFEA step will affect schools’ entitlement to three decile-linked operational funding components – TFEA, Careers Information Grant (CIG) and Special Education Grant (SEG).

Calculation of School Deciles From 1 January 2005 deciles will be calculated on the remaining five factors: Household income - percentage of households with income in the lowest 20 per cent nationally. Occupation - percentage of employed parents in the lowest skilled occupational groups. Household crowding - number of people in the household divided by the number of bedrooms. Educational qualifications - percentage of parents with no tertiary or school qualifications. Income support - percentage of parents who received a benefit in the previous year.

Additional operations grant funding From 1 January 2005 additional operational funding of $27 million per year will be provided to schools. This additional funding will: Increase TFEA rates by an average of 6 per cent Increase SEG rates by an average of 8 per cent Increase CIG rates by an average of 10 per cent Increase per pupil funding rates by an average of 3 per cent

This further increase for 2005 means that overall, schools' funding will increase by over $50 million in just one year, which is about a five per cent increase between 2004 and 2005. In 2005, entitlement operational funding will be 13.3 per cent higher in real per student terms than it was in 1999.

These funding increases will mean that 98 per cent of schools, regardless of whether or not changes to deciles will directly affect them, will receive additional operational funding from 1 January 2005.

The combined effect of this policy change and the additional operational funding is illustrated in the table below:

Impact of policy change Funding change Number of schools
No change in decile or TFEA step

Increased per-pupil funding, TFEA, SEG and CIG 1662
Downwards movement of 1 or more deciles/TFEA steps

Increased per-pupil funding, TFEA, SEG and CIG 449
Upwards movement of 1 decile/TFEA step - Increased per-pupil funding Decrease in TFEA, SEG and CIG as a result of policy change offset by rate increases 379
Upwards movement of 2 or more deciles/TFEA steps - Increased per-pupil funding Decrease in TFEA, SEG and CIG partly offset by rate increases Transitional support for remainder of funding loss 29
In terms of decile-linked programmes, schools’ existing deciles will be used until 1 January 2006. This gives schools time to adjust to any change in their eligibility for these programmes. During this time the government will also be able to revisit whether school decile ratings are the most effective means of targeting these programmes once ethnicity is removed from the formula.

Estimated funding changes per school, based on provisional rolls for 2005, are available on www.beehive.govt.nz/mallard/policy-review/

Changes to equity funding of early childhood education services

Equity funding comprises $11 million or 2.4 per cent of funding provided to all early childhood services. It is a targeted funding mechanism for chartered, community-based (not for profit) early childhood services that:

are in low socio-economic communities; may have significant numbers of children with special education needs or from non-english speaking backgrounds; are based on a language and culture other than English, and; are in isolated areas.

Eligibility for the low socio-economic and special needs components is based on the early childhood Equity Index (EQI). This index measures the extent to which an early childhood service draws children from low socio-economic communities.

Ethnicity will be removed from the equity index so it will be re-calculated based on the remaining five factors: Household income – percentage of households with income in the lowest 20 per cent nationally. Occupation – percentage of employed parents in the lowest skilled occupational groups. Household crowding – number of people in the household divided by the number of bedrooms. Educational qualifications – percentage of parents with no tertiary or school qualifications. Income support – percentage of parents who received a benefit in the previous year.

For ECE services with an existing EQI, there will be no change until 1 January 2006. From 1 January 2006 all EQIs for existing services will be recalculated with the ethnicity factor removed.

This policy change will impact on an estimated 160 ECE services, with an estimated 80 services gaining funding.

In reality, no service will lose funding as transitional support of up to $370,000 annually will be provided from 1 January 2006 to 1 January 2008. At this time, the results from the planned reassessment of all EQIs based on 2006 Census data, will take effect. As an evaluation of equity funding is currently underway, no decisions have been made at this stage about the shape of equity funding after 1 January 2008.

For any new community-based ECE services, the change to the way EQIs are calculated will apply from 1 January 2005. The Ministry of Education calculates the EQI for each new community-based service and notifies services that are eligible for such funding.

ENDS

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