It was about this time last year that Education Minister Hekia Parata, in the context of a discussion about decile funding, said she was interested in reviewing the funding system for schools.

Her office subsequently made it clear that any review would not happen until after the election. It’s now six months post-election. Not a peep has been heard.

A review of funding is certainly worth considering. The argument is that the decile system may have unintended consequences, that the decile rating of a school potentially exacerbates socio-economic divides rather than having the desired effect of providing children from educationally impoverished families with more school resourcing.

The decile system was set up 20 years ago in 1995 to attempt to correct socio-economic disadvantage. It recognised that children of wealthier parents are more likely to succeed in school, and so gives schools serving a higher proportion of children from poor backgrounds more funding. Good intentions.

But one argument is that decile provides an inaccurate signal of the quality of a school.

This certainly happens sometimes. An acquaintance of mine who had recently moved to New Zealand has just moved suburbs so he could access, in his words, a “star 10” school for his child. Little did he know, this particular school has been through serious issues over the past few years and ran into financial strife to the point of statutory intervention. But that’s just an anecdote.

The question that needs to be answered in the review is whether, and to what extent, parents are factoring the decile rating over and above everything else they like about a school.

As a parent, you are likely to choose a school on a package of features. Perhaps it has good results, the parents are like-minded, it has a nice community feel, you like the principal, the kids seem happy, it seems safe and you heard from your neighbour that the new entrant teacher is fabulous. It’s a decile 10 school. Did you make your choice because of decile, or is decile simply related to a mixture of all of those other things you might value in this school?

You might mention in passing to a colleague at work that it’s a decile 10 school. It’s easy to conclude from watercooler conversations like these that parents might be making decisions purely on decile. But an alternative explanation is that it’s an easily communicable way of telling your colleague something about all of those other things you are taking into consideration. A quick, easy signal.

In 2012, the Education Review Office removed school decile ratings from its reports, stating “too often it is seen as a rating of the quality of the education which a school provides and this is simply not correct.”

Attracting good-quality teachers

Fair enough but if there is any consideration of removing the decile system based on whether parents use it inaccurately as a signal of quality, better signals of educational quality, for parents to factor into their decisions, should be considered.

But there are more fundamental issues at stake here.

The first is that though decile funding influences schools’ operational budgets, it does little to encourage good-quality teachers to teach in low decile schools.

Why is this fundamental? Because teachers are the most important in-school factor for student achievement, as discussed extensively in The New Zealand Initiative’s series of reports on teacher quality.

In 2013, decile funding accounted for $169 million of the total allocated to schools’ operational funds ($1.23 billion). That’s 13% overall.

But when adding the costliest and most impactful item on the ministry’s balance sheets – teachers ($3.4 billion in 2013) into the mix, it’s more like 3%.

There is a lot of lip service paid to decile funding but, aside from a stipend of $1500 a year to teachers working in “priority staffing” decile one and two schools, decile funding may do little to encourage good teachers to go where they are needed most.

Of course, there are great teachers working in low decile schools but, on the whole, it is reasonable to assume better teachers might gravitate towards higher decile schools. Marie Cameron’s research shows that teachers identified as having promise will tend to move toward schools with good leadership. Why would higher decile schools have better leadership?

Funding or skills?

Because they probably have better governance. And this brings us to the last, often unacknowledged point. If lower decile schools draw students from poorer families (decile is based on parents’ occupation and level of education among other things), then it stands to reason that school boards in higher decile schools will on balance be composed of those with stronger governance skills (there are, of course, many cases of lower decile schools defying the odds).

This then raises new questions. How much does the amount of funding matter? And how much do the skills to put those funds to good use matter?

The decile funding issue is highly complex but, if the minister is considering a review, at least these three questions should be answered.

First, to what extent does the decile rating influence school choice over and above everything else parents value?

Second, are high quality teachers more likely to be found in high decile schools? This is a tricky question but one way to approximate an answer would be to collect data on the number of applicants for teaching positions by decile, assuming that larger pools of potential candidates allow higher decile schools to be more selective about who they choose.

Third, school governance issues must be taken on board. This is even trickier still. The New Zealand Initiative will be investigating this particular issue in forthcoming research on education.