Sunday, 16 April 2017

School Funding: dumping the derided decile funding system for the questionable 'Predictive Risk Index' funding method

Decile ratings as the funding mechanism for schools is on the way out.

That was the exclusive headline on Tuesday the 11th April from Newshub’s Patrick Gower.  I just happened to be leaving work when the alert popped up on my phone.  I had an immediate sense of dread, especially when I saw a new phrase: ‘Predictive Risk Index’.

This new phrase, ‘Predictive Risk Index’, is of course part of the National led government’s theory of social investment - identify who is most at risk, and then target the minimum amount of money at them.  Sounds great in theory, but, like everything this government has done (or attempted), it is a theory that can be likened to a can of worms.

What is social investment?

This is from the Treasury website:

Social Investment is about improving the lives of New Zealaners by applying rigorous an evidence-base investment practices to social services.

It means using information and technology to better unerstand the people who need public services and what works, and then adjusting services accordingly.  What is learnt through this process informs the next set of investment ecisions.

Much of the focus is on early investment to achieve better long-term results for people an helping them to beme more independent.  This reduces the number of New Zealanders relying on social services and the overall costs for taxpayers.

Social Investment puts the needs of people who rely on public services at the centre of decisions on planning, programmes and resourcing, by:
  • Setting clear, measurable goals for helping those people;
  • Using information and technology to better understand the needs of people who rely on social services and what services they are currently receiving;
  • Systematically measuring the effectiveness of services, so we know what works well and what doesn’t;
  • Purchasing results rather than specific inputs, and moving funding to the most effective services irrespective of whether they are provided by government or non-government agencies.
The way in which these principles are implemented will vary, and may include:
  • a particular focus on vulnerable or high-risk groups;
  • investing up-front to support people most at risk of poor outcomes later on in life;
  • greater input from outside the public sector in analysis, innovation and service provision;
  • working with local organisations to commission services within communities;
  • new citizen-centre services that cut across existing departmental service channels; and
  • interacting with each household through a single trusted relationship.

So how did we get here?

This is an except from a previous blog post of mine called How does child poverty affect access to education and success in achievement for New Zealand children? which I wrote for a Master’s paper last year.

The decile funding system was put in place in 1995 in an effort to fund schools equitably.  The range decided was 1-10, with one being the lowest, due to the highest degree of socio-economic disadvantage, and receiving significantly more funding per child than a decile ten school.  The decile ranking of a school factors in household income, parental educational qualifications and occupations, household crowding, income support payments and ethnicity of a small geographic area, or ‘mesh-block’, in the school community (Harrison, 2004).  There was a variety of reasons behind this initiative, such as a decile ten family having more opportunity to access educational learning in alternative ways compared to the opportunities afforded by a decile one family.  It was also considered that the decile ten schools had more ability to maximise effective fundraising measures from their community in comparison to a decile one school.

The impacts of this system included what is commonly called white flight – parents moving their children from low socio-economic schools as they believe the decile level could be a stigma and may mean the education provided at a low decile school wasn’t adequate (Gordon, 1997).  This changed the nature of communities as parents who could afford to would purchase or rent homes in communities with schools with higher decile ratings, ghettoising many areas as low socio-economic communities.
Education reforms in the 1990s entrenched many families with limited resources into the cycle of poverty generation after generation.
So essentially the National government of the 1990s initiated decile funding, which stigmatised schools in low socio-economic areas, and in combination with their other policy of getting rid of school zones, caused white flight from these schools meaning many communities were no longer a broad cross section of society.

In September last year I published another blog specifically about the actions taken by NZEI and PPTA in response to the School Funding Review and the threat of Global Funding.  In this blog Global Funding - Bulk Funding in fancy dress - why it’s a bloody bad idea I explain how the School Funding Review Advisory Panel were never given an opportunity to come up with solutions to improve how schools are funded fairly and equitably.

The eighteen members of the Education Funding Review Panel went into the first meeting expecting a blank slate and the ability to brainstorm proposals.

What they got was a wad of paper on the table by the Ministry of Education representative who said "This is what we will be looking at. That is the proposal."

The Education Review published the following in September last year:

Six out of seven of the School Funding Review proposals will go forward for further work following the Funding Advisory Group's report on the proposals. The unpopular global budget proposal was rejected by the group, following intense opposition from teachers who feared a return to the days of bulk funding.

The six proposals the majority of the Group agree should proceed for further work are:
  • Taking a per-child approach to funding
  • Additional funding for those most at risk of underachievement
  • Supplementary funding for small and isolated schools
  • Proposals over the way property funding is delivered
  • Better accountability for student achievement
  • Supporting a diversity of education options

Education Minister Hekia Parata says she was ‘not surprised’ by the Group’s recommendation that the proposed global budget not proceed to the next stage of policy development.

“The Group’s report, and together with feedback from around 90 regional meetings with teachers and principals, will help inform my report to Cabinet on the options to take forward. The insight from staff right on the frontline of education is invaluable”, says Ms Parata.

“I want to make sure that we take the time to get these vitally important decisions right. That is why our timeline for implementation at the earliest would be 2019.”

Where are we now?

So it appears, under the Social Investment model that the second option, additional funding for those most at risk of underachievement, has been chosen.  This is the model that was also applied to the School Operations Grant in the 2016 Budget.  Instead of schools getting a 1% increase to their Operations Grant as had been applied in the last few years (not even covering the cost of inflation), schools would receive extra money according to the children who had been identified as being at risk, and the schools would not be told who the at risk children were.

This, below, comes from the official government website, Education Counts, and is the government’s explanation of the funding for children at risk in the education part of Budget ‘16 (please read with a critical eye):

Budget 2016 uses a Social Investment approach to direct an extra $43.2 million, over four years, to about 150,000 children and young people identified as being at most risk of educational underachievement. These students are those, aged 5 to 18, whose parents have been on benefits for 75 percent of the first five years, or 75 percent of the most recent five years of the students’ lives.

These students have been shown by our research as one of the most at-risk groups in our education system. For example young people who, for an extended period have lived in a benefit-dependent family, have only a 48 percent chance of achieving NCEA Level 2 by age 21. By contrast, 73 percent of the general population with have this qualification by the same age. This research also shows that young people without NCEA Level 2 have more chance of ending up on a benefit, or in the justice system, than those with the qualification.

This additional funding is an investment into schooling where it is most needed. The funding will go to schools, regardless of their decile rating, based on the estimated number of students they have from long-term welfare dependent families. Schools have the flexibility to use this extra funding to support all of their students most at risk of educational underachievement.

This increased funding to schools with children from long-term welfare-dependent families is instead of a universal increase in school operations grant funding. Overall, this new funding approach provides more funding to low decile schools compared to a universal increase of the same amount.

The $43.2 million in increased funding for schools with these children is in addition to the $1.38 billion in operations grant funding that all schools will continue to receive in 2016/17. Operations grant increases have run well ahead of inflation in recent years. Cost adjustments have seen schools’ operations grant funding rose by over 15 percent from the 2010 school year start to the 2015 school year end. By contrast, CPI inflation rose 9.6 percent over the same period.

And that is how we have gotten to the ‘Predictive Risk Index’.

As if deciles weren't already stigmatising enough, what will a 'Predictive Risk Index' be for schools and students?

I'm just so disgusted in this move by the government.

Below is the text from the Newshub 11th of April 6 o’clock news piece (hopefully the video is within the link):

The decile system, which is currently used to decide school funding, is to be scrapped, with an alternative called the 'Predictive Risk Index' lined up to replace it.

It will track individual at-risk students and then use that information to target funding directly to schools.

Under the decile system, schools are ranked from one to 10 based on the socio-economic status of their communities, which determines funding.

But under the Predictive Risk Index, individual students are deemed "at risk" after being assessed by Government data and a school's funding is based on the number of students it has with risk factors.

"This is very much going to be a much more specific approach than the decile funding allows," Education Minister Hekia Parata told Newshub.

The Government will use its pool of data to identify students from families on a benefit, with brothers or sisters who have been victims of abuse, or parents that have been in prison.
But privacy has sprung out as an obvious concern.

"The technology is there, and there is no intention to identify - in fact we will ensure that children aren't identified, that their privacy is protected," Ms Parata said.

The Primary School Teachers Union is worried it could shift the stigma from schools onto students.

"In the past we've had stigmatising of low decile schools, will that mean that individual children will be stigmatised?" NZ Educational Institute President Lynda Stuart told Newshub.

Another concern is that while some schools could gain funding, others will lose it.

"I certainly think that some schools could be at risk of losing funding," Ms Stuart said.

Ms Parata said whether schools could lose funding is something "for the future" - but her political future is limited as she retires as Minister in three weeks.

Her goal is to get this signed off as her last project.

Hekia Parata steps down from her role as the Minister of Education on Monday 1st of May, with Nikki Kaye expected to take up the reigns.  Ms Parata wants to have this new funding system signed off before she leaves.  That is alarming in itself.

Patrick Gower did point out that ‘Predictive Risk Index’ is a title the government itself does not see as voter friendly.  He said to expect this to be renamed.  But to rename it will be like putting a dress on a pig and slapping some lipstick on it - it is still a dubious way to fund schools.

What do the people think?

I posted the Newshub piece in three different teacher/education forums on Tuesday and the responses from teachers and parents are still coming in.  They are horrified.  Any comment that may be deemed remotely supportive is an outlier.

The general concerns people have are:
  • that individual children could be stigmatised even though schools technically won’t be told who the target students are;
  • if the funding is targeted to at risk students and the schools are not told who those students are, how are they supposed to help those targeted students;
  • If the funding is targeted to at risk students, who are also usually the most transient students, what happens if the funding ‘follows’ the student;

I have included the comments teachers and parents have made, warts and all, so you can see what the people who work in the system think of this proposal:

On the surface, it sounds pretty ineffective. I bet they have worked out that the govt will save $X. I can't see how this can direct funding for extra assistance in a meaning flu way. Like getting $19.00 a student a year ????

And what if it's meant to follow students? So many of these kids are the transient kids. What a nightmare!

Yeah - if a school is funded for a kid, puts s programme in place with that funding [with others] and then that kid moves away and the school loses that funding.... so now the school has to reduce or downsize the programme - yes a flipping nightmare. And one of the side effects will again be the insecurity for Teacher Aides.

I don;t understand how they can use this 'tool' in this way. PRM is meant to be used to try and target children that may be abused - not for funding of schooling. How will this work when kids move around from school to school so much

As a teacher at a decile 1B school, l have never been a fan of the decile system. It places a stigma on schools and students, who are low decile. Schools already receive funding per student. Targeted student funding is probably not a bad idea. School funding is allocated quarterly anyway. Implementation is probably the main concern and the lack of consultation with educators(nothing new). Maybe they need to broaden the criteria to include students with learning disabilities and special needs? Orrs funding is really hard to qualify for and l have seen so many students over the years failed by the education system. There needs to be an intermediary agency that links the information between schools, ministries and other agencies to target students at risk from becoming a negative statistic.

Patrick Gower's piece on the news as now been added. He says that the name "Predictive Risk Index" is an issue for the government and needs a make over. Just like IES, they think putting the pig in a new dress and slapping some lippy on is going to make it more palatable to the masses.  (Yep, this is my comment).

The government's sole purpose is to spend less money. This is just another way to do it. Their 'at risk' children criteria is slim and does not cover the many many children out there who also need a great deal of support.

I wonder if school will then be expected to transfer any remaining funds from the massive payout to the next school

Especially as it states that they will anonymise the children involved - how will schools know who to pass funding on for anyway !! I can see it getting very messy !

Exactly. Imagine the nightmare of trying to keep a budget, programmes and support staffing on track.

We all know that so-called digital privacy is a joke!! What about schools that have wonderful parents / whanau who are in low-paid jobs, but because they parent successfully, their children are not deemed 'at risk' . No funding there, then! What is happening to the education system in our country???????? We are stressing our teachers, planning to exorbitantly increase registration fees, forcing MLE / ILE / FLS onto many, regardless of mutterings of discontent from around the world on this system

Typically National. A badly thought out initiative that will be rolled out so Hekia has the limelight, but before the kinks are ironed out. We will be paying (literally and figuratively) for this for years to come. It's the Novopay of school funding and the National Standards of curriculum reporting.

But since the funding is to be for specific children, one assumes that when these children change schools (as children who meet this criteria are likely to do - beneficiaries/ parents in prison these families are transient by nature) that the funding will go with them. What a nightmare to police! And probably will impact the benefit to the child of the said funding, due to admin costs associated with changing schools and setting up whatever support is required.

Interesting they are putting money into 'supporting' children who are disadvantaged socially, but where is the funding to help children with suspected learning difficulties who require outside assessment for confirmation of specific difficulty (eg dyslexia, auditory processing)? Which, with a diagnosis starts the ball rolling to get the supports in place so these children can achieve at their optimum.

"in fact we will ensure that children aren't identified, that their privacy is protected," Ms Parata said.

Sounds like the start of a bad Tui ad...

MSD data breach anyone??

What happens to those students who aren't identified through the new system as being at risk? Not all family violence is recorded, not all family members have the same surname so how will the system pick up a parent in prison unless it is "advertised" by the family etc. There will be a lot less "decile 1" schools in NZ with this system, so lots of money will be saved.

Doesn't this feel like an equilibrium system with a really low bar?

"You have at risk youths. Here's some funding".
"Oh you have less at risk youths. Take less funding".
"You've had to cut some programmes because of less funding? And you have at risk youths? Have some funding".

To summarise...

I really think Hekia Parata has failed the standard again.  I believe she missed a golden opportunity last year when she set up the School Funding Advisory Panel.  She had eighteen of the best people in one room to come up with some worthy systems for funding our compulsory education system and she dumped preconceived ideas upon them and stymied their creativity - just like National did when they dumped National Standards over the top of our awesome New Zealand Curriculum Document.


Gordon, L. (1997). ‘Tomorrow’s Schools’ Today: School Choice and the Education Quassi-Market. In Olssen, M., & Matthews, K. M. (Eds.). Education policy in New Zealand: The 1990s and beyond. (pp. 65-82.  Palmerston North, N.Z.: Dunmore Press.

Harrison, M. (2004). Education matters: Government, markets and New Zealand schools. Wellington: Education Forum.


  1. An excellent perspective on RPI (or should that be RIP - maybe the ministry got it wrong!) The MOE always runs a top down model and always will. Their idea of consultation is different from ours as teachers. This is nothing short of a hatchet job done to school funding once again. How can schools budget for staff if funding is shifting with a child? Where is the job security for our TA's? Also if a child/family moves (and the funding drops), then it becomes obvious who the funding was attached to. So much for confidentiality. I say RIP RPI before you disadvantage schools further.

  2. Hi Melanie..oops meant PRI not RPI. The RIP stills stands though!!