State funds boost commercial part of industry

State-funded early childhood education for 20 hours a week has dramatically boosted the predominantly commercial all-day childcare industry.

All-day childcare centres and home-based services have increased their share of all 3- and 4-year-olds in preschool care and education from just under half to almost three-quarters (72.2 per cent) in the first two years since the former Labour Government offered 20 hours of "free" early childhood education in July 2007.

"Sessional" centres, mainly kindergartens and playcentres which traditionally took children for only three hours a day, have seen their share plunge from just under half to just over a quarter (26.2 per cent).

The result is the opposite of former Education Minister Trevor Mallard's original goal of reining in the rapid growth of commercial childcare by funding community-owned centres.

His initial plan, unveiled in the 2004 Budget, would have restricted the 20 hours "free" education to centres that were both community-owned and teacher-led. But the plan was attacked from the start by the Early Childhood Council, representing mainly for-profit centres, and Prime Minister Helen Clark announced three weeks before the 2005 election that the "free" policy would be extended to all teacher-led centres regardless of ownership.

Playcentres and most kohanga reo were left out because they are led by parents, not professional teachers.

The policy switch has also multiplied the scheme's costs, from a 2004 estimate of $52 million a year to an actual cost in this financial year of $549 million. This made it a prime target of the recent Brash report on catching up with Australia, which condemned "the middle-class churn involved in universal early childcare subsidies" and recommended reversing all subsidy increases since 2005.

Dr Anne Meade, a veteran educationalist who chaired the working group that drew up a strategic plan for early childhood in Labour's first term, says the effect on kindergartens was unintended.

She says the policy grew out of mounting evidence of the advantages of early childhood education for later success in school and beyond.

Mr Mallard said in 2004 that the initial 20 hours for 3- and 4-year-olds was "a step towards free early childhood education for all under-5-year-olds". It was a logical extension of free education from age 5 upwards for every child "whether rich or poor".

The policy has succeeded in boosting preschool enrolments of 3- and 4-year-olds from 93.7 per cent in 2007 to 96 per cent last July.

Contrary to the Brash report, this was not mere "middle-class churn". Three- and 4-year-old enrolment rates rose from 77.3 per cent to 84.1 per cent for Maori, from 50.9 per cent to 56.5 per cent for Pasifika children and from 71.2 per cent to 80.2 per cent in Manukau.

Dr Meade believes the scheme has changed the whole mindset of poorer families.

"For the general public, because this looks like it's universally available early childhood education, they think that it must be a really good thing to do," she says.

But Early Childhood Council president Margie Blackwood says it would have been better to raise the Work and Income subsidies rather than give 20 "free" hours to everyone.

"Growth in early childhood availability has not been focused on those neighbourhoods in greatest need, and there is currently over-provision in some suburbs."