NZ introduces network planning in a bid to address ECEC over supply – is Australia next?

From February next year, the New Zealand Government will undertake measures to address oversupply in early childhood education and care services by introducing a concept called network control, which allows the Minister of Education to control where a new ECEC service can be established.

 

Until recently, the Ministry of Education (Ministry) had to refrain from involving itself in locational decision-making leaving providers free to select locations based on community needs, parental demand, land availability, and appropriate Council zonings. Provided the locations were suitable from a child health perspective, the Ministry had no authority over location based decision making. 

 

Some have argued that, as in the Australian context, this has led to an oversupply of services in some areas, while other areas are not well serviced, leaving families with limited options for ECEC, as well as putting pressure on services for enrolments and recruitment, restricting their viability. 

 

Key changes

 

From 1 February 2023, any person or organisation seeking to establish an ECEC service in NZ will need to apply for and obtain a network planning pre-approval. The grant of a pre-approval is required before that person or organisation can apply to the Secretary for Education to be granted a probationary licence to operate a service.

 

Section 17 of the Education and Training Act, and the subsequent amendments to the Act, establish a ‘Planned Network Approach.’ In simple terms, it’s the introduction of a new pre-approval step that providers will need to pass through before being eligible to submit any licensing application. This requires anyone considering starting a new service to submit a pre-approval application to the Ministry where the appropriateness of the location of the service will be subject to:

 

A high-level assessment of the relevant attributes of the area to be served, including (without limitation) the demography of the area, the needs of the communities in the area, the needs of the children in the area, and the availability of licensed early childhood services in the area with different offerings (for example, the provision of te reo Māori); and any statement issued under section 17D that is relevant to the application.

 

Section 17 D

 

Section 17D explains that the Minister, via the Ministry, will create a National Statement that will take a strategic planning approach to network approvals. 

 

The Minister may, for the purpose of providing potential applicants for approval under Section 17 with information about the network of licensed early childhood services, issue one or more statements that set out information relating to the network, at either a national or regional level, including:

 

(a) the Government’s strategic priorities for the establishment of licensed early childhood services; and

 

(b) information about the supply, forecast growth, demand, and need for licensed early childhood services; and

 

(c) any other information that the Minister considers relevant to applications for approval under section 17.

 

What does that mean in practice? 

 

While many anticipated that the National Statement would provide guidance on where the Ministry was seeking to encourage new supply and where it was seeking to prevent a potential oversupply, the actual National Statement has turned out to be more of an application preparation guidance document. 

 

The Statement outlines the purpose of network planning, defines the relevant considerations in assessing an application, details the 11 priority matters, outlines the data applicants should report on, and provides guidance on other relevant matters to consider.

 

When an applicant is preparing a network approval application, they will need to ensure that the proposal is in keeping with the directions set in the national statement.

 

The Statement puts the onus on the applicant to prepare an application that can show, using ECEC planning and demographics data, that there is demand for the specific type of service proposed within a defined area.

 

11 strategic priorities

 

The National Statement identifies 11 strategic priorities that the Government considers should be encouraged to ensure availability within the early learning network. These relate to types of services rather than geographic locations.

 

The strategic priorities are:

 

1. Māori bilingual and immersion services
2. Hapū/iwi-owned services
3. Services with a distinct Māori identity and culture
4. Pacific bilingual and immersion services
5. Pacific language and/or cultural services
6. Language immersion services (non English/Māori/Pacific)
7. Services well-equipped for learning support needs
8. Services well-equipped for migrants and former refugees
9. Services planned to operate on a new school site
10. Organisations funded by Targeted Assistance for Participation (TAP)
11. Wrap around services.

 

Every application will require a lodgement fee of NZ$575 (incl GST).

 

This National Statement was released on 24 November 2022 and can be found here.

 

For a detailed explanation of the changes, please refer to this piece written by Kindello Founder Logan Whitelaw.