Children's Services

Serving the needs of children

The once universal ideal of children’s services being part of a local network of community services that linked families and provided a range of services is under serious threat, University of Technology Sydney Professor, social commentator and feminist Eva Cox writes.

Together with other good social policies, the proposed funding of children’s education and care services will be targeted to material gains such as increased GDP.

A series of proposed changes to child care funding eligibility will see the end of services that see themselves as community, targeting the diverse needs of children and family.

The aims of the new child care package is described as increasing the paid work participation rates of ‘mothers’. Subsidies for fees will be paid for defined hours of care needed for employment rated needs. No subsidies will be available for the care of ‘normal’ children whose primary carer is not thus engaged, but there are subsidies for children who need access for remedial purposes which may stigmatise parents as less than competent or children at risk.

Even the latter categories are justified as ensuring these children are more likely to be employable later.

This workplace related focus is out of step with recent research on early learning and policies in most developed countries who are increasing access to early childhood services, eg the UK which has just promised all children from three up, 30 hours of free preschool care because it’s good for them!

Customer parents

Local politics seem to ignore children’s needs, also illustrated by the proposed cuts to paid parental leave. These will restrict parents access with many losing eligibility for more than 18 weeks at minimum pay, abandoning the world minimum standard of 26 weeks, touted by the Federal Government only a few months ago.

At the same time, the funding model will move almost entirely to a so called demand model which subsidises ‘customer’ parents, leaving them find the appropriate services with some limited help from quality controls and rankings. This market model places all pressure on customers as there are no controls to ensure that services are available where needed or offered at affordable prices.

This commercialised model is designed to encourage competition on prices and commercial investment, and has no commitment to equity or care per se.

Cowardly or greedy?

Yet there is very little criticism of the direction of the changes. Maybe too many providers, both commercial and not for profit, are too cowardly or greedy to offer serious critiques of the government’s funding and assumptions.

There has been too little discussion of how the current service model plus new limits may well undermine the professional capacities of teachers and others to be ethical and effectively use their skills. Therefore I am raising the issues so you can decide whether the earlier model is worth fighting for. As someone who has been active in this area for 40 plus years, I think we need to reject the changes.

How did we get here?

Basically, when the Productivity Commission was given the role of assessing the childcare sector, it was obvious that market competition was going to set the criteria. There is therefore no possibility of the inquiry assessing the value of childcare as a community service. This became clear when the final recommendations did not incorporate the needs of the users – children and families – but saw them only as consumers of economic services.

This shift of focus from child needs to just increasing gross domestic production is a serious change. As someone who wanted children’s services that allowed parents to access paid work, I find the switch of focus to just the economic deeply offensive. Justifying some of the costs of care for kids because it releases mothers for paid work is fine – as long as we recognise that children’s services need to prioritise universal access for all the kids that want them.

The Productivity Commission’s report reveals a conflict between benefits for users versus the benefits for investors in childcare. In a free market, these factors too often conflict. That’s why governments should provide and regulate public services for the areas that are inappropriate for markets to provide. Childcare should clearly be one such service and is the reason we have to ignore many of the competition based recommendations in the latest Productivity Commission report. They got it wrong.

We did once have a fairly good model for childcare, which was primarily offered by not for profit community organisations. It was first federally funded in the early 1970s. The planning model, introduced in the eighties, covered the distribution of services. These were funded on the basis of the numbers of children in locations as well as the needs of parents and children for mixes of hours and ages. Their budgets were approved, allowing some flexibility of needs, and fees set on contracts between funder and provider.

At that time, there was no funding for the few commercial services, however, the market model crept in. After funding for fee relief was extended to commercial services in 1991, there were pressures to reduce the planning model and stop direct funding of community based services. This was abolished in 1996. The commercial sector saw opportunities and exploded with cowboy investors like ABC. The move to funding parents through fee relief rather than centres ended this era of careful planning.

The loss of direct contracts and government capital funding meant expansion over the past two decades has been mainly in the commercial area. The result is many more services but not necessarily where needed: there are shortages of services in high cost locations, widely different fee levels, lack of places for higher cost infants. The growth of focus was now on the investment returns for shareholders and property developers.

“The Productivity Commission’s report reveals a conflict between benefits for users versus the benefits for investors in childcare. Ina free market, these factors too often conflict.”

What can we do?

Raising questions on the market model is hard because the government doesn’t support it. It does however, have the capacity to fix the access problems the Productivity Commission report ignores. This alternative is to introduce a hybrid funding model – the reintroduction of partial control over locations and services funding so that defined needs can be met at reasonable costs. This used to be called a planning model, now it’s called a supply model.

We need to ensure that all children are entitled to subsidised access to at least three days a week of care, regardless of parental activities, to retain the community access priority.

We also need to ensure that extra affordable places are available for those under three.

We need to plan so there are services available in all areas where children and families need them.

Community multipurpose services need additional funds, to meet particular needs like those identified by Indigenous communities.

All this means that the market model has to be seriously questioned and controlled. I recognise, however, it would be hard to unwind the involvement by the commercial sectors, which now provides the bulk of services.

However, the government can reclaim control by establishing clear contracts between government and supplier, rather than via the consumer. This means that service funding can be made conditional on more than just meeting Australian Children’s Education and Care Quality Authority (ACECQA) standards. The Productivity Commission has even offered proof that this model of funding has widespread use and effectiveness, quoting an OECD review which concluded that supply-side funding mechanisms may lead to better outcomes for children and families:

“The evidence suggests that direct public funding of services brings more effective governmental steering of early childhood services, advantages of scale, better national quality, more effective training for educators and a higher degree of equity in access compared with parent subsidy models.”

A hybrid model could work like this: the government contracts to pay the service provider an agreed proportion – say 20% – of an approved budget, conditional on the service mix, hours and location. This would separately include eligibility for means tested fee relief, so the government could ensure that the communities’ needs and its own were adequately met.

Services would be guaranteed an adequate return on capital and labour and retain the right to use extra funds and earnings to improve services instead of pay profits. Parents would find the services they need, and funding budgets would ensure extra resources for meeting approved higher costs needs. This model means all win and it will probably cost very little more than the present mess.

And staff could act as professionals, not just creators of profit making enterprises.