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CHOICE AND EQUITY: FUNDING ARRANGEMENTS FOR NON-GOVERNMENT SCHOOLS 2001 - 2004STATEMENT BY This document is also available in PDF
format INTRODUCTION This Ministerial Statement announces new funding arrangements for non-government schools, to apply for the next funding quadrennium 2001-2004. These arrangements will give low income families even greater access to the schools of their choice, encourage greater private investment in education and provide higher levels of funding for the neediest school communities. The right of Australian parents to choose the most appropriate schooling for their child has been recognised and encouraged by the Howard Government and already demonstrated by the abolition of the New Schools Policy. Educational choice in Australia is expressed in the capacity of parents to choose between schools in the government sector or to select and/or establish a non-government school. As there is a public benefit in the schooling of every child, it is appropriate that a public funding contribution be made on account of each child. Parental choice has promoted quality in schooling, and ensures that Australian children receive an education which reflects the values of their community. Non-government schools are a living reflection of the breadth of our community. Parents at all income levels should have a realistic capacity to choose their child’s school. Accordingly, the Government is committed to needs-based funding for non-government schools. Many in the non-government school sector have repeatedly voiced their strong dissatisfaction with the current funding system, based on the Education Resources Index (ERI), indicating that the ERI is a complex, inadequate and unfair means through which to gauge a school’s capacity to generate funds on its own behalf. It is not considered a sound basis on which to calculate the level of Commonwealth funding required. The Commonwealth Government has responded to these concerns by reviewing the ERI, and has consulted widely to determine a more equitable funding mechanism. As a result of this review the ERI will be abolished as the basis for needs-based funding, and replaced with a measure of the socioeconomic status (SES) of school communities. The Commonwealth welcomes the willingness of parents to invest in the education of their children. Currently parents provide about $2 billion annually to schools in addition to funding provided through governments. New funding arrangements for non-government schools will remove the current disincentives to school communities to maximise their investment in their own school. For too long, school communities have been restrained by the present funding system. At the same time, to ensure that parents at all income levels have greater educational choice, the Government has decided that funding to non-government schools serving the neediest communities should be significantly increased. Further, under the new arrangements, schools which extend their services to lower income communities will benefit financially. These reforms are evidence of the Government’s commitment to provide all students with access to a quality education, to raise education standards and to enhance parental choice in schooling. This statement outlines details of new funding arrangements for non-government schools for the 2001-2004 quadrennium. [top] REVIEW OF THE EDUCATION RESOURCES INDEX (ERI) Since 1985, the ERI has been used to assess need by measuring a school’s capacity to generate funds on its own behalf. With changes and accretions to the funding system over time, the ERI no longer has credibility as a fair measure of need. Some of the problems of the ERI are detailed in the Schools Funding: Consultation Report, a report on issues raised in submissions and consultations with the non-government sector. From 2001, the Government has decided on a new approach to assessing the need of non-government schools for Commonwealth recurrent funding, replacing the ERI with a measure of the SES of school communities. The methodology for this approach is explained in the Schools Funding: SES Simulation Project Report. A report by the Steering Committee for the Simulation Project on a socioeconomic status (SES)–based model for recurrent funding of non-government schools, included in the 1999-2000 Budget package. This report presents the results of a simulation exercise, conducted during 1998 with the full cooperation of the non-government sector peak bodies, which tested the validity and feasibility of an SES approach. The SES approach is a more transparent and objective measure, based on independent data that are consistent for all schools. The new funding approach will take effect from 2001 for non-government schools and systems currently in receipt of Commonwealth funding. Non-government schools applying for Commonwealth general recurrent funding for the first time after this announcement will also be assessed according to an SES measure of need. The key principles that underpin the Government’s policy for Commonwealth funding of non-government schools are that:
[top] SES-BASED ASSESSMENT PROCEDURES An SES approach to school funding involves the linking of student address data to the latest Australian Bureau of Statistics (ABS) national Census data (currently 1996), to obtain a measure of the capacity of the school community to support its school. The approach requires minimal information from schools. The residential addresses of all currently enrolled students (addresses only, not names) is all the information that schools will be asked to provide. This information will be sought in February/March 2000, although schools will be advised, in advance of this date, of the format for the presentation of addresses and details of the processes which will apply for data collection from schools, sampling of addresses, and geocoding. Privacy and Confidentiality The collection of address data without student names will protect the privacy of students, their families and the schools they attend. At no stage are socioeconomic data, or Census data, linked to an individual student or his/her family. ABS data specifically prohibit identification of individuals’ details. Geocoding of Data Following a check to ensure that schools’ address lists are accurate in terms of both format and student numbers, sampled addresses will be geocoded. Geocoding is the process of matching addresses to the correct ABS Census Collection District (CD). This will involve an automated process, for the majority of addresses, and a manual process to geocode the remaining addresses. Application of the SES Index Following geocoding, each school’s community will be defined in terms of the CDs from which it draws its students and the percentage of students from each CD. Schools’ SES scores will then be calculated as a weighted average of the dimension scores for the school’s CDs. The SES index that will be used to calculate schools’ scores comprises the dimensions Occupation, Education and Income (½ household income and ½ family (with children) income). In order to calculate schools’ SES scores, data from the Census will be analysed using a recognised statistical technique known as principal components analysis to produce a score for each dimension for every CD in Australia. The dimension scores will then be combined to produce a score based on the SES index for each CD. SES-based Reassessments Data from the ABS Census generally become available two years after the Census. The next Census will be taken in 2001, allowing a reassessment of schools’ SES scores in 2003 for the next funding quadrennium. In general, there is little change on key indicators within most geographic areas, or in the relativities between areas, between Censuses. Changes in schools’ SES scores from one Census to the next are therefore likely to be minimal. A funding system based on the Census will provide stability of funding for schools while at the same time providing the flexibility to respond to changing socioeconomic circumstances, whether these occur rapidly or over a longer period of time. [top] SES FUNDING ARRANGEMENTS The main features of the new SES funding arrangements for non-government schools for the quadrennium 2001-2004 are:
Funding – 2001-2004 The increased funding to schools will be phased in over the quadrennium. Schools’ entitlements will be calculated on the basis of their SES score and their increased funding will be phased in, at a rate of 25 per cent of the increase each year, so that by 2004 schools will be funded at their new level. Security of Funding No school will be financially disadvantaged by the move to the new funding system. Schools that would otherwise have their funding reduced under the new arrangements will have their year 2000 per capita entitlements maintained, with the year 2000 dollar rates adjusted annually in line with the most recently agreed AGSRC figures. School Systems The Commonwealth currently recognises 27 non-government school systems for general recurrent funding. Under the ERI, a system’s funding level is derived from the enrolment-weighted average of the individual ERI scores for each school in the system and each systemic enrolment attracts the same per capita grant. Under the new SES-based funding arrangements, Catholic systems will attract funding on a basis that essentially preserves in real terms the per capita equivalent of their current funding categories in the year 2000. All Catholic systems except in WA and the ACT were recategorised to category 11 in 1998 under the ERI and the Government is committed to honouring this 1998 election commitment. The WA system has been funded at category 11 since 1985 and the ACT system has continued to be funded at category 10. For the quadrennium, this means that all Catholic systemic schools (except in the ACT) will be funded by the Commonwealth at an SES score of 96. ACT Catholic systemic schools will be funded at an SES score of 100. All other systems will be funded on the basis of the aggregate entitlement of their individual member schools. Individual systemic schools will have their funding entitlements assessed in the same way as independent schools and will be funded according to their individual SES scores. Individual schools within systems which would be financially disadvantaged by moving to SES-based funding will have their year 2000 per capita funding entitlement maintained in real terms in the same way as individual independent schools. Commonwealth general recurrent grant payments in respect of systemic schools will continue to be made to system authorities. The Commonwealth expects that within systems, recurrent funds will be distributed differentially according to need. The current provision for system authorities to draw on a percentage of their total Commonwealth general recurrent funding for system administration purposes will continue. Further details of systems’ funding, including guidelines to apply to the formation of school systems, will be determined in consultation with the non-government school sector. New arrangements in this regard will be advised to the sector before the commencement of the 2001-2004 quadrennium. New Schools Transitional arrangements will apply to non-government schools applying for Commonwealth general recurrent funding for the first time. For applications lodged after the date of this announcement, new non-government schools will have their entitlement to Commonwealth general recurrent funding assessed according to an SES-based measure of need. For the remainder of the current funding quadrennium (1999 and 2000), new non-government schools will be required to provide to the Department of Education, Training and Youth Affairs the residential addresses of students enrolled at the school (addresses only, not names of students), so that an SES score can be calculated. New schools’ SES scores will be used to determine their initial funding which will be based on one of the current twelve funding categories. New schools’ SES scores will be recalculated using current enrolment data each year for the first three years of a school’s operation, to ensure that the score reflects actual enrolments. Applications for funding of new systemic schools, schools formed as a result of a funded school amalgamating with another school, and schools formed as a result of a funded school separating into two or more schools, will be handled under the current funding arrangements for the remainder of the quadrennium. Appeals Process All non-government schools and systems will be able to seek a review of their funding level under the new SES-based funding arrangements. Schools may seek a review if they consider that:
In all of the above cases, the school’s original score would be recalculated. If the original assessment was based on a sample of addresses rather than the total school population, the reassessment would be based on the total school population. [top] Changing the basis of non-government school recurrent funding requires corresponding changes to funding for students with disabilities. At present, the level of funding is linked to the ERI funding category of schools. For the 2001-2004 quadrennium, a new approach will be developed in a budget-neutral way, in consultation with the non-government school sector. [top] SHORT TERM EMERGENCY ASSISTANCE (STEA) Schools experiencing severe financial hardship or facing problems of viability during the remainder of the current quadrennium or in the early stages of the 2001-2004 quadrennium, will be able to apply for assistance under the STEA Programme. Additional funding for STEA has been allocated to assist schools experiencing difficulties. [top] ACCOUNTABILITY Accountability arrangements for all Commonwealth school funding will be strengthened in the 2001-2004 quadrennium with an increased focus on learning outcomes as a condition of Commonwealth funding. New agreements to be developed between the Commonwealth and non-government school authorities will take into account the revised national goals for schooling, national targets embodied in these goals and national benchmarks in key learning areas. These agreements will be developed in consultation with non-government school authorities. |
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