Financing Elementary Education Kathrin Bock-Famulla 7 th Meeting of the OECD Network on Early Childhood Education and Care Paris, 21st June 2010

Financing Elementary Education

Kathrin Bock-Famulla

7th Meeting of the OECD Network on Early Childhood Education and Care

Paris, 21st June 2010

21. Juni 2010 Page 2

ECEC in the German context

… requiring effective investments in ECEC

Increasing

… demand for institutional EC CARE

… importance of EC

Education

Enforcing

… quantitative extension

… qualitative improvements of the German

ECEC system(s)

21. Juni 2010 Seite 3

Funding structures & mechanisms

Allocation of resources

impact

Structures and

range of services

effect

Professional pedagogical

practicesin

facilitiesaffect

Education and

development of children

Central hypotheses


Basic assumptions and mission of the project

Funding mechanisms and structures govern the quantity and quality of services

Desired ECEC quality should be the main starting point for the design of a funding approach

Heterogeneous educational needs of children require different and diverse educational practices

Needs-based educational practices are based on unequal allocation of resources


Requirements on the funding approach

Politics, administration, providers, centers are tied to defined goals

Transparent criteria are used for determining the budget of each facility

Differences in the funding are based on comprehensible and legitimate reasons

Differences in the center funding on the local level are transparent and well-founded


Project steps

Pedagogical mission and goalsa) Developing an approach of ECEC practice of good quality

b) Defining the pedagogical & supporting activities of ECEC facilities

Quantity and value structure of necessary resources for ECEC facilitiesa) Specifing all relevant human and material resources for ECEC facilities

b) Identifying additional resource requirementsc) Determining operating costs (typical & special cost structures & levels)

Methods and proceduresa) Developing a formula funding approach for ECEC facilities

b) Generating a cost-calculation tool c) Designing a simulation model for testing purposes


The formula funding approach

… can be described as a function of the operating costs of an individual ECEC

facility

… is composed of multiple mathematical formulae by which the financial resources to be made available to an ECEC facility

are calculated

Key components of the formula funding approach

Base rate I… is dependent on the size of the facility (approved slots)

but not dependent on the number of children enrolled

… provides the coverage of fixed costs


1*bx f


Base Rate II

… is dependent on the number of children enrolled in the facility

… provides the coverage of the facility‘s variable costs


c

ccf tabbx *** 21


Base Rate II

… funds are disbursed per child (c) weighted

- by the child‘ s age (ac)

- by the time the child spends in facility (tc)


c

ccf tabbx *** 21


Indicators (i)

… correlating to variations in the intensity of the children‘s and facilities‘ resourcing needs (child-, group- or facility-related)

… that recompense providers for these relative needs


jf

c ccccf iitabbx ***** 21

Formula with child-based & facility-based indicators


Indicators (i)

Child- and/or group-related weighting factors (ic and/or ig)

…represent factors applied to Base Rate II to account for a child‘s individual situation (i. e. migration background; socio-economic background)


jf




Indicators (i)

Child- and/or group-related weighting factors (ic and/or ig)

…represent factors applied to Base Rate II to account for a child‘s individual situation (i. e. migration background; socio-economic background)

Facility-related weighting factors: if

… can be lump sums in addition to Base Rate II funds that reflect local and regional conditions affecting the facility (i. e. in a area of deprivation)


jf




Rent

… as a lump sum r covers the rent and depends on the size of the facility


riitabbxj

fc c

cccf

***** 21


Lump sums

… can create incentives to promote specific government policy objectives, e.g. to stimulate innovation or to foster certain educational programs. One or more lump sums lf are possible.


kf

jf

c ccccftsoperating lriitabbxf

f***** 21cos


Function

… represents the total funding an ECEC facility receives for financing its operating costs


kf

jf

c ccccftsoperating lriitabbxf

f***** 21cos

Main characteristics of presented formula funding approach:

The funding of an ECEC facility shows a - moderate - dependence on the use of its capacities.

Planning reliability for the providers in case of small short-term spare capacities – fundamental to ensure a desired level of quality

Reduced provider‘s total budget in case of long-term spare capacities – calculated resource management for preventing a waste of public funds

(base rate I will be reduced; base rates II will be cancelled



Bertelsmann Stiftung [email protected]

Thank you for your attention!

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Financing Elementary Education Kathrin Bock-Famulla 7 th Meeting of the OECD Network on Early Childhood Education and Care Paris, 21st June 2010