Update 3 June 2020

Tēnā koutou katoa

I spent a large part of the day in a Zoom meeting with the Early Childhood Advisory Committee.  I must say it was somewhat disheartening to hear all the other services talking about how they are planning for their futures with the money received in the May Budget, when the future of Playcentre remains under a cloud.  The Education Minister Chris Hipkins spent some time talking to the committee, and it was encouraging to hear him again speak about how the Government wants to see Playcentre survive and thrive.  I was able to question him and asked if he could give us a time frame in terms of a further response from the Government.  Minister Hipkins said he and Associate Education Minister Tracey Martin had been speaking with Ministry of Education officials about what can be done for Playcentre.  It was good to hear that they will be able to come back to us in the next few days.  Like you, I am looking forward to what that response will be. 

Last week, our CFO Marina Cook provided some explanation about Playcentre funding along with some ideas about how Centres themselves could help increase their funding.  As a result of her report, Centres have come back with a range of questions, which Marina addresses here. 

Ka kite anō au i a koutou.

Sean McKinley

What have we requested funding for?

The last week has been all about funding or lack of it and I have found it very informative reading some of your wonderful Facebook discussions.

What I enjoy is that it gives me a real feel for what your questions are and what gaps in information I can help with.

Thanks to one of our active Centre treasurers, Claire Laverty, for her really good conversation starter on 29 May that really got me thinking. In this post I will cover two questions: Do we receive less money and why do we actually need so much money?  In a follow-up post I will discuss how we have determined the 101 Centres that will close if we don’t receive sufficient funding and what does this actually mean?

If you do have any further financial-related questions, please feel free to send me an email [email protected] with your suggestions.

Do we receive less money than other ECE’s?

Generally yes, for the most part other teacher-led ECEs receive higher funding rates especially for 20 hours services at roughly 500% more than Playcentre receives – they also charge parent fees which support their employment.

Playcentre receives only about 0.8% of the total $1.5b annual ECE budget, we have roughly 7% of the children and more than 10% of the physical buildings. Playcentre received on average 12% of the funding of other ECEs per annum per child, we have never asked for 100% but 20-25% would make an astounding difference while still being a fraction of the average.

Our buildings matter

One of our great struggles with our current funding system is that it does not support our large capital assets. Playcentre has a huge number of buildings that provide huge value to not just Playcentre but other community groups that often rent or use these buildings for other purposes. The cost to maintain a building and many of its utilities such as insurance and telecoms are not reduced for the number of hours or sessions children actually attend. These are fixed costs and are a huge drain on our minimal funding. These are also a cost that is not borne by some other ECE providers such as home-based care or creches which often operate pop-up sessions, sometimes even in Playcentre buildings, for a low sessional rent with none of the overheads that come with full-time rent or ownership.

Our low funding especially in our rural areas has resulted over the years in these buildings’ basic maintenance getting behind. Also, changes to regulations have resulted in maintenance no longer being able to being carried out by volunteers through a working bee.  It’s no longer okay for a parent to hop on the roof and do a quick repair with some tin from the farm! Now we are required to have a registered trades person, consents, scaffolding etc often resulting in tens of thousands of costs; these were not considered at the time of our last funding negotiation.

In a further review, we have found immediate property needs for 130 identified rural properties alone – at a cost of $2.77m with a further annual investment of $1.32m required for annual maintenance. Our current 6% of levy budget for maintenance and capital only equated to $637,000 annually to cover not just these buildings but also the further 300 non-rural properties. This is simply insufficient, and we have increased the budget to $1m or 10.5% of levies for 2020-21. However, this increase being funded is still a mere fraction of what is needed and is also funded entirely out of reserves so is not sustainable.

Cost – $2.77m now and a further $1.32m annually

Session Support funding:

We have identified that nearly 80% of our sessions now have at least one paid session support staff. These costs for other ECEs are being funded outside of the bulk funding subsidy. We would like to see Playcentre receive the same privilege with additional funding to cover one paid staff per session to support licensing and management of the centre. We are not asking for paid staff to cover our full ratio or licensing in any way that would remove value of our volunteers or reduce the parent-led character that makes Playcentre so special.

Cost $6.83m per annum.

Inflation adjustment for bulk funding over 14 years:

Bulk funding was last negotiated and adjusted in 2006, 14 years ago and base inflation adjustments have not been made in most of the proceeding years. Had Playcentre’s funding been adjusted in line with inflation it would have increased by a further 33.7%. We have now received a 6% adjustment so have requested the further 27.7% inflationary adjustments be caught up.

Cost: $4.3m per annum

Supporting struggling rural centres:

We have identified that our rural centres are generally struggling more than our city-based centres with lower populations, greater distances and lack of other ECE providers. Funding these Centres on a per child basis is not appropriate. These Centres have current operating deficits that combine $2.42m annually before wages. We have requested a minimum funding model be applied to valuable rural centres that are providing a service to allow rural children to have an ECE provider available.

Cost: $2.42m

Additional heating requirements under Level 2

We have had some comments over the need for additional funding for heating. Sadly, this is not about covering the power bill, but for the Centres that have not got sufficient heating infrastructure or insulation to actually heat the centre to 18 degrees no matter how much power they pumped.  This in turn comes back to delayed maintenance due to lack of funding. Our property team has urgently requested funding to install an additional 107 heat pumps.

Cost: $572,000

Conclusion

Overall, this adds up to a lot of money, just under $15m per year. If we received this additional funding our share of the total ECE budget would increase from currently 0.8% to about 1.7%, which is still only a fraction of the average child spend for other services and would provide safe warm environments for our tamariki, especially in areas of the country where other services don’t operate.  Why should our children miss out just because their parent/caregiver comes along too?