Dr Sarah Alexander: Where did the 20 free hours of early childhood education go?

"All 3, 4 and 5-year-olds can get free early childhood education for up to 6 hours a day, up to 20 hours a week" – this is what is stated on the NZ Government's website. But 20 hours of early childhood education is not fees-free for all eligible children.

The maximum 20 hours fee reimbursement per child per hour paid to services is: kindergartens $12.10, childcare and learning centres $11.43, and home-based agencies $9.27. It can be lower for centres that don't have 80 per cent or more of their teachers qualified and for some home-based agencies.

It is argued in the sector the 20-hour funding rates do not reflect the real costs of providing a child's early education. To break even or turn a profit, two loopholes in the scheme are available for service operators to exploit.

First, they can set a minimum number of hours of attendance. So to get 20 free hours a parent may have to sign up for 21, 25, 30 or more hours a week and pay for the hours over 20 whether used or not.

Secondly, services are permitted to set an "optional charge". It may be as a low as a couple of extra dollars a week or up to $80 or more. The optional charge should be for the cost of extras above the normal things involved in providing childcare and education, such as field trips and cooked lunches.

For home-based education, the carer's hourly rate may be higher than the 20 hour funding rate that the agency receives. Parents may be asked to help make up the difference.

So families using early childhood centres and home-based services can end up paying substantially to access their 20 hours free.

For a long time families who are paying for access to 20 hours early childhood education have been questioning why they should pay. It's a discussion that's surfaced on the My ECE website and among visitors to My ECE's Facebook page.

One person commented, "I am in the process of enrolling my 4 year old with a home-based provider who offers 20 hours. She will be attending 18 hours a week (six hours a day, three days a week). But I have been told her fees will be $90 a week, because the provider charges $10 an hour?"

Another person said, "One centre charged $220 if your child attended full-time but that cost only dropped to $190 once they turned three and received 20 hours. The small print stated the extra fees were to cover such things as the council rates on the building and insurance. So the 20 hour ECE only saved you $30!!"

Optional charges tend to be treated as fees. As one person explained, "We put 'we do not charge an optional donation' on our fees schedule and enrolment form because it not optional. It is a fee and must be paid."

But some services manage to scrape by without optional fee charges. One said, "I do home-based care and had a family who got the 20 hours free and only paid $4.50 for additional hours. I'm a qualified teacher, but don't charge the earth as I want to stay competitive with local centres."

Is relief on the way?

Labour promised in its 2017 election manifesto that it would "put the 'free' back into the policy of 20 hours free early childhood education". Although it has moved immediately to introduce fees-free tertiary study for the first year, it appears in no rush yet to follow through on its commitment to 20 free hours of early education.

There is concern Labour won't move to close the loopholes. It was Labour back in 2005 that first put forward the 20 hours free policy to enable universal access for 3- and 4-year-olds regardless of a family's ability to pay.

But Labour gave in to political opposition from lobbyists and when the policy came to be implemented in July 2007 it was open to privately-owned services as well and allowed operators to charge optional fee top-ups. So in practice 20 free hours has never really existed.

To be true to their pre-election promise to put the 'free' back into the 20 hours policy, Labour will have to first backtrack on allowing optional charges, and ensure funding is increased sufficiently so the quality of education does not drop.

But in the face of opposition from operators to enforce completely fees-free, will it do so? It's time for Labour to make good on its promise of 20 hours free and parents and the early childhood sector expect this to happen.

• Dr Sarah Alexander is a researcher and chief executive of ChildForum which provides advice and support to early childhood services.