Thoughts on New Zealand’s School Decile Funding System

New Zealand’s school decile funding system has hit the news again, with Deputy Prime Minister and Finance Minister Bill English making public his opposition during a visit to Taita School outside of Wellington.

The idea of decile funding is sound. It is an attempt to take a proxy for the average level of socioeconomic need in a given school, and then to target additional school funding above the baseline to those schools with greatest need. It is, at its most fundamental, a recognition of the fact that the hardships of socioeconomic deprivation can affect the educational opportunities of students, and that providing equality of opportunity requires a concerted effort to counter the effects of deprivation.

Targeted Funding for Educational Achievement (TFEA) is the primary means by which additional funding is provided to students. For 2016, for instance, a Decile 1A school (the lowest on the decile measure, indicating severe socioeconomic need) will receive an additional $915 of funding per student above the baseline funding that all schools receive per student.

Again, I believe the decile system and TFEA are sound ideas to counter one of the most critical problems a country can face, and to ensure that everyone has an equal opportunity to make of their life what they wish. And yet, when one delves into how they work in practice, it becomes clear that a good idea does not necessarily solve the problem.

1. Only 45% of students of low socioeconomic status (SES) students attend a low decile school.

This is a critical failure of the use of a proxy to make an assumption about all students in a given school. Deciles are calculated using five socioeconomic measures of the geographic area in which a school is located. But within that area, there will clearly be disparities—some students will be severely deprived, while others may in fact not have great need.

Furthermore, the decile funding system does not correlate to school zoning, meaning that students outside of the area used to calculate a school’s decile may attend a low decile school.

And yet the decile system and TFEA treat all students within a school as of the same decile. The statistics show us that the failure of this proxy is stark: over half of students in a school receiving maximum TFEA do not in fact have the lowest level of socioeconomic need. This also means that there are 55% of students with severe deprivation who attend schools receiving less than maximum TFEA.

Deciles target schools as a whole, but students have their own lives and their own stories. Proxies are necessary tools of policy; but the decile proxy is one that is not working.

2. A decile includes 10% of schools, but only 6.8% of students in New Zealand attend a decile 1 school.

Deciles count the number of schools, but schools do not all take the same number of students. Indeed, higher decile schools have higher numbers of students than low decile school. This means that, as above, fewer students receive the TFEA that they should.

To put this another way, Targeted Funding for Education Achievement should in theory reach 90% of students (all students aside from those in decile 10 schools), and yet in practice it reaches 84%. This is another sign of the failure of the proxy to get resources where they need to be.
Those are two data points that to my mind are all that are necessary to show why deciles aren’t working in practice. And yet, of course, part of the bigger debate over deciles has been the stigmatisation of students because of the decile of the school they attend. It is the sad irony that decile funding doesn’t target individual students, and so much of this funding does not reach the students it’s meant for; and yet the stigmatisation of a decile is very much attached to individual students. This stigmatisation can be as harmful as socioeconomic need itself.

The decile system is at once too transparent in the message it sends of students’ backgrounds, as well as too opaque to work correctly. There are better proxies that could be used, especially with the kinds of data collection possible today. But whatever system is designed, it needs to ensure accurate targeting of funding, and it needs to do so without any stigmatisation being attached to schools or students. Opacity is not necessarily a bad thing in this context; and nor could be eschewing labels entirely, instead simply directing actual resources (especially the best teachers) to schools with the highest levels of need.

This is one of the most important problems, and the decile system has been a serious attempt to solve it. But it’s time to try something new.