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SES Funding Arrangements for Non-Government SchoolsOn 11 May 1999, the Minister for Education, Training and Youth Affairs, the Hon Dr David Kemp MP, announced a major reform of Commonwealth funding arrangements for non government schools from 2001. These arrangements are based on a measure of the socioeconomic status (SES) of school communities. Documentation
A list of frequently asked questions are as follows:
Why change the way the Commonwealth funds non-government schools? The Government’s decision to abolish the Education Resources Index (ERI) was based on a major review which found that the ERI was complex – changes to the formula over time had distorted the ERI and made it unworkable; manipulable – schools could be relatively advantaged or disadvantaged depending on their familiarity with the ERI; acted as a disincentive to private effort, for example, income from fetes and working bees could raise a school’s ERI score and result in reduced government funding; and it prevented schools from competing fairly in the marketplace. Schools in ERI categories 1, 2 and 4 have not had real increases since 1985. Schools in ERI category 3 have not had real increases since 1993. The socioeconomic status (SES) funding model is a better way of measuring the ability of a non-government school community – the families of students at the school – to support their school. The SES approach measures the socio-economic status of the parents whose children are enrolled at a school. Rather than asking parents intrusive questions about their income and other personal information the SES model links student addresses with current Australian Bureau of Statistics (ABS) Census data. An SES Index is then applied to obtain an SES score for each school. Schools which draw students from areas of predominantly high SES will receive lower levels of Commonwealth funding than schools which draw from areas of average or low SES. A socioeconomic index can be made up of a number of variables representing various aspects of a person’s social position. The SES Index used for non-government school funding includes only three dimensions – income, education and occupation. SES funding in 2000 dollars is estimated to range from a base entitlement of $693 per primary and $908 per secondary student (for schools with an SES score of 130 or above), through to the maximum funding of $3540 per primary and $4636 per secondary student (for schools with an SES score of 85 or below). How can we be sure that the SES model is better? SES-based methodologies for the distribution of funding have been widely used in education for some time. The particular methodology to be used for the allocation of recurrent funding in the next quadrennium was trialled in 1998 with the help and cooperation of about 90% of non-government schools. This simulation showed that an SES approach is a fairer way to assess a community’s capacity to support its school. A series of validation exercises were carried out using the SES Simulation results against other parental income and wealth measures. The findings of the validation exercises support the view that a Census based SES measure produces a good proxy for parental income, without the intrusiveness and administrative complexity inherent in measuring parental income more directly. What about schools which claim to draw the most disadvantaged students in a higher SES area. Is the SES unfair to them? The SES model provides a good measure of a school community’s capacity to support its school. Analysis of a range of other measures of family income and wealth shows that the SES methodology is a valid measure. Statistically it is likely that a school drawing the most disadvantaged students in a higher SES area will also draw many of its students from lower SES areas. The SES score will fairly reflect the overall SES of its student body. Who will benefit from the new arrangements? Under the SES arrangements funding to non-government schools serving the neediest communities will be significantly increased. Further, schools which extend their services to lower income communities will benefit financially. The new arrangements will give all parents a real choice of schooling options, regardless of their economic circumstances. No school will lose. The Commonwealth accepts that schools operating under previous arrangements should not be financially disadvantaged by the Government’s decision to change the approach to funding. Schools which would receive less funding under an SES measure will have their 2000 funding levels maintained in real terms. These will be termed funding maintained schools. What does this mean for Government schools? Nothing. The SES based funding arrangements apply only to non-government schools. Funding for Government schools is predominantly the responsibility of State/Territory Governments. Commonwealth spending on government schools is at the highest level ever. Every State and Territory has received increased funding every year since 1996 for its government schools. Total funding for government schools in the 2000-01 budget is $2.0 billion. This year the Commonwealth government is spending $402 million more on government schools than in 1996, an increase of 26 per cent. Over the same period the number of students in government schools has risen by 2.3 per cent. Commonwealth spending on government schools will rise by 21 per cent over the next four years and will total $8.6 billion. Will school fees increase as a result of this change? The Commonwealth does not determine school fees, but no school will have their Commonwealth funding reduced as a result of this change. Schools will also have the flexibility to pursue other fundraising efforts without fear of losing Commonwealth funding. How much more will rich schools get as a result of this reform? The base level of funding for schools serving the wealthiest school communities, that is, schools with an SES score of 130 and above and funded on their SES score, has been set at 13.7% of the Average Government School Recurrent Costs (AGSRC). These schools will not get large gains from the changed arrangements above their base level entitlements. The only increase these schools will receive is the difference between minimum funding under the ERI and minimum funding under SES. Of those schools funded on their SES scores, the 67 with the highest SES scores will receive an average per capita increase in 2001 of $43. In 2004 the increase will have risen to $198. Of those schools funded on their SES scores, the 63 with the lowest SES scores will receive an average per capita increase in 2001 of $207. In 2004 the increase will have risen to $966. What do the arrangements mean for new schools which have applied for funding since the Budget announcement? A new non-systemic school which applied for funding for 1999 or thereafter following the date of the Budget Statement announcing the new SES funding arrangements (11 May 1999), and systemic schools other than Catholic which apply for funding after 1 January 2001 will be funded at their SES level. New systemic schools (other than Catholic) which apply for funding between 11 May 1999 and 1 January 2001 are funded at the relevant system level for the remainder of 2000. Will the new funding approach apply to all schools? Catholic systems will be funded on a basis that essentially preserves the equivalent of their current ERI funding category. All other schools will be funded on the basis of their SES scores, except where they would be financially disadvantaged. Schools which would receive less funding under an SES measure will have their year 2000 funding levels maintained in real terms. Why are Catholic systems treated differently from other non-government schools and systems under an SES model? The Howard Government made a commitment in the 1998 election context to recategorise Catholic systems in New South Wales, Victoria, Queensland, South Australia, Tasmania and the Northern Territory, on the basis of need as measured under the existing ERI arrangements. In reforming the funding arrangements for the next quadrennium, the Government will honour this commitment. All Catholic systems will be funded at a level which essentially preserves their current funding entitlements. Catholic systems except the ACT will be funded at 56.2% of AGSRC. The ACT Catholic system will be funded at 51.2% of AGSRC. Why are some schools marked NS in the column where their ERI should appear? These schools don’t have an ERI category because they are new and joined the public funding system after the decision was made to scrap the ERI.
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 Average Government School Recurrent Costs (AGSRC) figures. They will be termed funding maintained schools.
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