A new plan to tighten quality controls on childcare centres may force some centres to raise fees and others to close.
Education Minister Chris Hipkins has told Cabinet that increased monitoring, including unannounced inspections of childcare centres, "may result in a reduction of the number of providers, at least in the short term".
"There is the possibility that the recommendations in the draft strategic plan will increase the cost of operating for early learning services, which may result in a reduction in the services available, or some centres passing on this cost through increases in fees to parents," he said in a Cabinet paper.
The plan includes increased staffing for children under 3, higher funding for centres with 100 per cent qualified staff, higher pay for teachers, a ban on new licences for services that have had quality problems, and a requirement to prove a need before opening new centres.
The cost would be around $300 million a year, or up to $3.5 billion over 10 years, but Hipkins has told Cabinet that this would be "subject to the availability of funding".
Non-profit centres such as Kiddy Winks in Manurewa, which already have 100 per cent qualified teachers, have welcomed the plan as a financial relief after plans by Helen Clark's Labour Government to pay more to centres with fully qualified staff were scrapped by Sir John Key's National Government after 2008.
"That would be fantastic," said Kiddy Winks manager Shereen Varma.
"It's been really difficult for us to manage in the last few years, running a very tight budget and doing some fundraising things to keep providing for that extra funding."
But Early Childhood Council chief executive Peter Reynolds, who represents mainly privately-owned centres, opposed the plan for 100 per cent qualified teachers and asked where the extra teachers would come from at a time of teacher shortages.
"The 100 per cent debate removes the opportunity for services to have a mixed teaching team that satisfies the needs of their community," he said.
He said many Pasifika and Māori services, in particular, wanted to employ staff with language and cultural skills even though they might not have teaching qualifications.
The Teaching Council said last week that it would accept a wider range of English language tests from next year, but it has not budged on requiring a level of English that has shut many Pasifika applicants out of teacher training.
The new plan, prepared by an advisory group headed by Victoria University Professor Carmen Dalli, focuses on improving the quality of early childhood services.
It quotes Education Review Office (ERO) findings that 31 per cent of services have "limited or no focus on supporting children's oral language learning" and 44 per cent were only "somewhat responsive in enabling infants and toddlers to become competent and confident communicators and explorers".
To raise quality, it recommends:
• Lifting required staffing for infants under age 2 from 1:5 to 1:4 by 2022, and doubling staffing for 2-year-olds from 1:10 to 1:5 "in the longer term". There would be no change in the 1:10 ratio for children aged 3 and 4.
• A higher funding rate for centres with 100 per cent qualified staff. Hipkins proposes a target that 60 per cent of teacher-led services should have 100 per cent qualified staff by 2022.
• Banning service providers from opening new centres if they have existing centres with provisional or suspended licences or ERO reviews within less than the standard three-yearly cycle.
• A "rigorous programme of monitoring, including unannounced visits by the Ministry of Education or the ERO".
To attract the required extra teachers into early childhood, the plan proposes "improved teacher salaries and conditions" and expanded training scholarships.
Hipkins told Cabinet that the plan would cost $35m a year for the higher staffing ratio under age 2, a further $105m a year to double the staffing ratio for 2-year-olds and $130m a year for "more consistent pay and conditions", plus another $170m over the next 10 years ($17m a year) for all other proposals.
Although Hipkins warned that this could mean higher fees, the plan says: "It is the intention of this draft plan that affordability for parents will be maintained, or improved improved in those cases where affordability is a barrier to attendance.
"The expectation is that for these recommendations to go ahead, additional investment from Government would be required."
The plan suggests limiting costs by imposing tighter controls on the proliferation of new centres, requiring providers to prove that a new service is needed as a condition of getting a licence.
It suggests that the Government should set up three state-owned centres in high-need areas to facilitate wraparound health and social services.
It also proposes "co-designing" new funding models to support ngā kōhanga reo and playcentres.