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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
21. Juni 2010 Seite 4
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
21. Juni 2010 Seite 5
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
21. Juni 2010 Seite 6
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
21. Juni 2010 Seite 7
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
21. Juni 2010 Seite 8
1*bx f
Key components of the formula funding approach
Base Rate II
… is dependent on the number of children enrolled in the facility
… provides the coverage of the facility‘s variable costs
21. Juni 2010 Seite 9
c
ccf tabbx *** 21
Key components of the formula funding approach
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)
21. Juni 2010 Seite 10
c
ccf tabbx *** 21
Key components of the formula funding approach
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
21. Juni 2010 Seite 11
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Formula with child-based & facility-based indicators
Key components of the formula funding approach
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)
21. Juni 2010 Seite 12
jf
c ccccf iitabbx ***** 21
Formula with child-based & facility-based indicators
Key components of the formula funding approach
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)
21. Juni 2010 Seite 13
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Formula with child-based & facility-based indicators
Key components of the formula funding approach
Rent
… as a lump sum r covers the rent and depends on the size of the facility
21. Juni 2010 Seite 14
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***** 21
Key components of the formula funding approach
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.
21. Juni 2010 Seite 15
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Key components of the formula funding approach
Function
… represents the total funding an ECEC facility receives for financing its operating costs
21. Juni 2010 Seite 16
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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
21. Juni 2010 Seite 17