Business health check fails to ease ailments

The business health check, stage one of the operational support program offered to preschools on transitional funding, is getting a poor report card from directors who have experienced it, Bedrock Journalist Sue Osborne writes.

The NSW Government scheme aims to assist preschools find ways to improve their business plans to adjust to the new funding model introduced following the Review of NSW Government Funding for early Childhood Education by Professor Deborah Brennan in 2012.

However, directors are reporting they are spending hours explaining how preschools run to business advisors with no background in the early childhood sector.

Funded by the State Government, each preschool is assigned a business advisor from the area’s business enterprise centre, who comes and visits and then writes a report. This is stage one of a two-stage plan which continues into 2016.

The transitional funding for preschools runs out in 2017, and many directors fear they will still be unviable, despite the intervention.

“Really it is just a bit of PR covering up the fact the funding model is unsustainable,” St Stephen’s Preschool Director and IEU ECS Council member Ariane Simon said.

“It’s an enormous waste of time,” she said.

Understanding change

West Albury Preschool Director Jennie Kelly said she was not sure if the program was compulsory or not, but felt that if she did not participate, it might not be well regarded by the Government.

Ariane also said if she didn’t participate “it could be interpreted that we didn’t care about the future of preschools”.

Jennie said: “The advisor who came to us had no understanding of preschools, and did not understand the implications of the funding changes like we do. We had to educate him. He might know about business but he doesn’t know about preschools. We didn’t get one useful thing out of it.

“I was particularly concerned by the suggestion that we review employment contracts for part-time staff. When I asked what was meant by this suggestion, I was told that it makes sense to review staffing as it is our greatest expense, to try to get the best fit for the funding model”.

Jennie said the foundation of the funding model, the Social Economic Index For Areas (SEIFA) was flawed and led to preschools quite close to each other receiving hugely disparate funding levels from government.

The advisor who came to us had no understanding of preschools, and did not understand the implications of the funding changes like we do.

“One preschool could be getting $2000 per child and another $4000 in the same area, which makes it hard to compete,” she said.

“The crux of the problem is that the people who really know how things work, the directors and management committees, are never consulted by the Government.

“The Brennan Review was well intentioned - access and equity for all NSW children. The resulting impact from the Department’s new Funding Model has resulted in NSW having a preschool system that is in complete disarray and far from accessible and equitable for all children. Fees range throughout the state from around $8 per day up to $85 per day, a situation that does not exist in any other Australian state. This is definitely not equity! It is also distressing that despite constant feedback from services, it is falling on deaf ears.”

Specialists engaged

A spokesman for the NSW Education Department said the Operational Support Program assists community preschools during transition to the new Preschool Funding Model.

“The Department is working with the NSW Department of Trade and Investment, which is delivering the first stage of the program – provision of general business advice from a local Small Biz Connect advisor,” the spokesman said.

“For Stage 2, the Department has engaged three early childhood education sector specialists to work with community preschools and provide customised, specialised sector-specific advice and mentoring,” he said.

“This stage focuses on integrating educational objectives with effective business practice to help preschools meet the objectives of universal access to preschools and creating a sustainable sector.

“The Department has an early childhood education and care reference group comprising representatives from the sector including the IEU.

“The Department will share the feedback on Stage 1 of the project with the Department of Trade and Investment.

“It is anticipated that a client experience survey will be conducted at the end of Stage 1 and at the end of Stage 2.

“Most feedback to date indicates that the vast majority of preschools are benefitting from the program.”

No savings

Ariane, whose centre is in north west Sydney, said: “The advisors reported they could find no savings in our business model . . . marketing is our only tool but no one can afford to come anyway.

“They said the government’s funding model was unsustainable.

“We’re losing $5000 next year and $5000 the year after that. We’re not unviable yet but that’s due to good management.

“The only way we can remain viable is to lower the quality of our staff. We have highly experienced qualified staff and we are working towards pay parity.

“This is our strong point. Preschools are focal parts of the community and if it gets out that they are paying staff as casuals or paying poorly it will be bad for them.”

Ariane said she was not looking forward to stage two, as it looked like it would be even more time consuming, and unlikely to lead to any answers.

“We’ll go through all that but if there’s no more money nothing is going to change.”

Hard to compete

Clunes Preschool Director, IEU ECS Council and Northern Rivers Preschool Alliance* member Melinda Gambley also felt obliged to participate in the scheme because she was concerned refusal might jeopardise future funding opportunities.

Melinda said she felt as if she had to push the whole thing forward herself, contacting her business advisor to make an appointment and then, with her administrative officer, spending two hours answering a questionnaire about preschools.

“They had no idea how preschool funding works,” Melinda said.

“The real issue is that the funding model is flawed for rural and regional areas anyway. We have lower populations and there just aren’t enough four-year-olds for us to enrol.

“Preschools that are quite close together are able to offer different fee levels which makes it hard to compete.”

Melinda fears some preschools won’t survive after 2017.

After spending two sessions with her business adviser Melinda said she had to chase up her report which contained a long list of actions she was meant to carry out.

The report highlighted the long serving staff at the centre as a bonus, but did not offer any advice on how to keep paying them.

“Here we are scrapping for money at preschools and here’s the Government wasting money on small business advisors. That money could have been better spent coming straight to preschools.

“This is just skirting around the real issues.”

Waste of time

Mulwala Preschool Director Liz Jessup similarly found the program time consuming and unproductive.

“At the end of the day, if we haven’t got the children we can’t increase our income. Where are we going to get them from?” Liz said.

“We’re right on the border with Victoria and parents can take their children there, where there are no fees. How can we compete with that?

“The advisor recommended that we duplicate our records and store them off site. I couldn’t make him understand that that was time consuming for us to actually do.

“He said our clerical officer could do it. She works one and a half days a week. I don’t know how storing records off site will save us money anyway.

“I believe he was getting $150 an hour and travelling two and a half hours to get to us, yet knew nothing about preschools.

“He was surprised to find out staff spend a lot of time on ‘parenting’ duties like toilet training. He thought it would be more like a school.

“It’s just a shame to spend so much money on this sort of thing rather than give it to the preschools directly.”

*The Northern Rivers Preschool Alliance is a grassroots organisation of local directors of community preschools that meets online and face to face. For more details see or email