Changing the decile system

Reflecting on Education Review's biggest topics from the past 20 years


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The decile system is older than Education Review. Indeed, deciles have been around for some 25 years, however, schools had their deciles recalculated in 2014 for possibly the last time, as the system is due to be replaced with a new funding mechanism. A funding review is underway.

DecileA school decile is a rating of one to 10 that indicates the proportion of its students who come from the poorest, lowest-skilled and least-educated 20 per cent of households – but tells us nothing about all the other families at that school. The decile system aims to level the playing field by providing extra funding for schools with high numbers of disadvantaged students to reflect the higher costs of educating them. Decile 1 schools get up to $905 per student, while decile 2 schools get around half that, decile 3 schools up to $350 and decile 10 schools no extra funding at all.

In 2012, the Education Review Office (ERO) made the decision to scrap decile ratings from its school reports. Dr Graham Stoop, ERO’s chief executive, says the decision was made in an effort to “correct the stereotype that a school's decile equals performance”. The Ministry of Education supports ERO’s stance.

But concerns went deeper than that. Many felt – the Education Minister included – that deciles were not an accurate way to determine the level of funding a school should receive.

Deciles were widely acknowledged as a crude indication of need: not all children in low-decile schools are poor, and high-decile schools have poor kids. Secondly, a school’s socioeconomic mix directly impacts on its capacity to attract ’locally raised funds’ – which include school donations, fundraising and fee-paying international students. A high-decile school might have to ‘request’ high annual donations to offset their lack of decile funding, while a mid-decile school might suffer at both ends; not only do they attract less decile funding, but they miss out on programmes aimed at low-decile schools, including social workers in schools and initiatives like Duffy Books and KidsCan food.

The funding review began in earnest this year. Seven proposals have been put forward. One of these was a global budget initiative, which the teacher unions pounced on, describing it as a return to the days of bulk funding. The unions banded together and organised a nationwide rally against the proposal. Following the protests and feedback from the Funding Review Advisory Group and 90 consultative meetings with the sector, the Education Minister took the global budget proposal off the table.

A recent targeted funding increase suggests the Ministry’s funding review is likely to take a more targeted approach, to better suit the needs of individual students and to make use of the sophisticated data now accessible to the government. The Education Ministry has worked with the Ministry of Social Development (MSD) to identify students at risk of underachievement and allocate more funding for their schools. While unions agreed with the move towards targeted funding, they felt the extra funding was still not enough.

The next steps of the funding review will look at what funding is needed to deliver a year’s progress in the curriculum for all learners and that needed for each child in early childhood education. It will look at determining the best ways to target funding for disadvantage to learners most at risk of underachievement. It will consider a new funding formula for independent schools and take into account the challenges faced by small and isolated schools. It will also look at potentially changing the arrangements for property maintenance and utilities. 

On top of these next steps for the funding review, the Ministry will also aim to “strengthen the line of sight between the investment government makes in education with the outcomes achieved by children and young people”.


More coverage in Education Review:

Decile analysis:

Rethinking deciles:

More targeted approach signaled:

Global budget off the table:

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