The education minister has warned early childhood education centres to toe the line, following allegations businesses are siphoning off funding intended for teacher pay rises. But that’s only the start of the troubles plaguing the ECE sector, Laura Walters reports

Via a Facebook video recorded in his office, the Education Minister has issued a stern warning to early childhood centres that aren’t passing on extra public funding to teachers.

A $151.1 million funding boost, via a 2.3 percent increase to education and care service rates, kicked in on Wednesday.

Education Minister Chris Hipkins said the funding was specifically for early learning services to improve the pay of up to 17,000 qualified teachers. But it the doesn’t seem everyone has followed the Government’s directions.

Hipkins has issued a clear and direct warning to private owners of early learning centres, after teachers and NZEI Te Riu Roa union raised concerns about centres holding onto the money for things like maintenance and to bolster their bottom lines.

The minister said the purpose of the extra funding was to increase salaries for early childhood education teachers, to address a significant pay gap that had built up over time.

“Our expectation is 100 percent crystal clear. That money is being given, through increased funding rates, to improve the pay and employment conditions of early childhood education teachers.”

“If centres don’t do that, it’s going to undermine the drive towards pay parity….

“Our expectation is 100 percent crystal clear. That money is being given, through increased funding rates, to improve the pay and employment conditions of early childhood education teachers. 

“And if we see evidence it’s going elsewhere then that’s going to be quite a concern to Government.”

The extra funding is being described by Hipkins and NZEI as the first step towards pay parity.

Early childhood education (ECE) teachers have long been underpaid, and paid inconsistently, partly due to a lack of bargaining power and collective agreements and the nature of the privatised model.

In some cases, they are paid 49 percent less than other teachers with the same qualifications and experience.

The increase in funding came with the requirement for all qualified teachers to be paid a new minimum salary of $49,862, to bring them in-line with the bottom step of the payscale for kindergarten and primary teachers.

Because of the private ECE model, the Government doesn’t have a mechanism to pay teachers directly (as the ministry isn’t their employer), therefore the money for pay increases has come through an increase in funding rates to centres.

“This is public money intended to improve the pay of New Zealand’s lowest-paid teachers – it shouldn’t be lining the pockets of private companies, or going towards maintenance.”

In order to get that funding, centres had to commit to paying teachers at least the new bottom rate of $49,862. However, the ministry could not force centres to spend the extra money on increasing salaries of teachers earning more than this, despite the Government clearly earmarking the extra money solely for improving teacher pay.

“To all the ECE services out there: here’s your opportunity to increase your ability to recruit and train teachers by paying them better.”

In May’s sector bulletin, the Ministry of Education said “services considering using the funding increase for costs other than pay, should be aware that this may create more intense cost pressures around staffing for them in future… There is also likely to be close public scrutiny in a post-Covid environment of expenditure of public money intended for pay increases.”

NZEI secretary Paul Goulter said he was worried to hear some employers were planning to spend the money on other expenses, such as maintenance.

“This is public money intended to improve the pay of New Zealand’s lowest-paid teachers – it shouldn’t be lining the pockets of private companies, or going towards maintenance.”

NZEI president Liam Rutherford said the first step towards pay parity, along with the restoration of funding for 100 percent qualified ECE teachers, were big Budget wins for the sector.

And while this was a big first step, there was still a long way to go. He called on the Government to clearly lay out its plan to get teachers in early childhood to pay parity with other teachers.

Earlier this week, the Kindergarten Association also threw its support behind ECE teachers, saying the current situation was unfair.

“Private employers are saying it is unfair that kindergartens get more funding than other services, and that kindergarten teachers are generally paid more and have better employment conditions. We totally agree and support qualified early childhood teachers to be covered by a national collective agreement, just like all teachers in the school sector,” the association said in an open letter.

Tip of the iceberg

Despite the promise of a pay increase, the feeling in the sector remains desperate, with teachers asking for pay and work advice from others on social media. Some said they were “hanging on by a thread”, others had been left in unstable and financially challenging situations as a result of Covid-19.

Rutherford said the pandemic highlighted how broken the early early childhood system is. 

“While teachers in schools had secure employment, many teachers across ECE faced really uncertain times and cuts in pay – and many parts of the for-profit sector are in financial strife despite taking large sums through the wage subsidy and continuing to be funded by the ministry during the lockdown.”

This issue has come to the fore over the past week, and some centres have come under fire for dodgy practices that advocates say will create further instability for teachers.

New Zealand’s second-largest early learning service has been criticised for offering staff a contract that some say is illegal.

Evolve Education, a publicly listed company which owns 128 centres across the country, tried to mitigate the fluctuating post-Covid situation and low attendance rates by offering full time staff a 20-hour contract, with a requirement to be on-call for a further 20 hours, in case they were needed.

Evolve said it was “looking at better ways to engage its workforce to avoid redundancies given a potential deterioration in the economic environment”. Photo: Lynn Grieveson

Evolve claimed $12 million in Covid-19 wage subsidies to pay its almost 1900 staff, and during lockdown announced the acquisition of a further five centres in Australia as part of its recent expansion across the Tasman.

The contract, which did not offer a higher pay rate or retainer fee for on-call staff, was met with a backlash and an online petition opposing the contracts was signed by more than 5000 people.

Evolve chief executive Tim Wong said in a statement that the pandemic had further lowered its projected occupancy rates, so the centre was offering staff different options, which they were not obliged to take up.

Covid-19 has raised a number of issues around inconsistencies in ECE pay and conditions, with some calls to remodel the sector as a state-run system. 

So while some are seeing this as a crisis, others say it’s a ‘crisitunity’ – an opportunity to address the fundamental flaws in the system.

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