The differences in nursery schools, a test case for fiscal federalism

Nursery schools have always recorded the greatest disparities between the North and the South and small and large municipalities. We want to analyse the current situation and the latest methodological innovations in allocating resources in this area.

Extending early childhood services is strategic for the country.

The first issue concerns the long-term effects of the educational offer. The scientific literature has acknowledged that the first 1,000 days of a child's life are the most decisive for his subsequent development (Istituto Degli Innocenti 2020). In this phase, the foundations for any subsequent learning are laid. Secondly, nursery schools also represent one of the first occasions for minors to socialise outside the family of origin and grow playing in contact with peers and educators.

1.29 billion euros is the total historical expenditure for nursery schools in the municipalities of regions with ordinary statutes in 2017.

Furthermore, we should consider the role of early childhood services in reconciling family and working times and supporting female employment. In fact, due to social stereotypes, childcare and domestic activities weigh far more often on women. Here more information on nursery schools

These reasons have led to a progressive improvement of the childcare network. Given the considerable inhomogeneity of this service on the national territory, we want to analyse these gaps and explain how the fiscal federalism system aims to reduce these inequalities by introducing service objectives.

The many gaps of the country

Our country is progressively complying with the European objectives in this area. However, wide gaps remain in the provision of early childhood services. Only a minority of regions in the Centre-North have reached the standards set at the EU level; in the south, this service is much more inadequate.

The data collected by SOSE for fiscal federalism allow investigating these gaps in the regions with ordinary statutes.

The first gap emerges in terms of diffusion. The percentage of 0-2 aged users of the service offered by the municipality (through its structures, agreements, or vouchers) show profound differences between the Centre-North and the South.

In Tuscany and Emilia-Romagna, the service covers, on average, more than 20% of minors; the share drops to 5% in the South and below this threshold in Campania and Calabria.

The offer of nursery schools in the municipalities of the Centre-North.

Percentage of nursery school users out of the total population aged 0-2 years (2017)

SOURCE: openpolis elaboration on SOSE database (last updated on Monday 15 March 2021)

Another gap is between large (where the service is usually more structured) and small municipalities. Under 3,000 inhabitants, average municipal coverage does not reach 10%.

8% is the share of the nursery school users under 3 years of age in municipalities between two thousand and three thousand inhabitants.

The profound differences in the provision of the service

In some regions, such as Calabria, Marche and Basilicata over 50% of users attend private nursery schools operating within the public education system, while they are less than 20% in Piedmont and Liguria. In the municipalities of these two regions and Molise, Puglia, Lombardy, Veneto and Campania, a share of users higher than the Italian average in the Regions with Ordinary Statutes access the service through vouchers.

Another decisive gap in the provision of the service is the share of canteen users, numerous in the municipalities of the Centre and North-East, but much fewer in the south.

In central and north-eastern Italy, over 80% of the nursery school users benefit from canteen service

Percentage of nursery school users who benefit from canteen service (2017)

SOURCE: openpolis elaboration on SOSE database (last updated on Monday 15 March 2021)

The wide gaps between municipalities are also the result of stratified differences over time. In some areas of the country, the development of nursery schools and early childhood services

began decades ago, with pioneering educational experiences. In others, early childhood services have historically been limited.

The challenge for fiscal federalism in the coming years will be to reduce these gaps.

The importance of this service in the child's growth and the incentive for employment makes its improvement throughout the national territory an unavoidable issue, which has led to the introduction of service objectives in this sector, and, in general, a methodological review of standard expenditure needs to improve the current inadequate offer.

The methodological review of the standard expenditure needs

The first aspect to be mentioned is the introduction of the service objectives for municipalities' social care services and nursery schools by the 2021 budget law.

On the one hand, the minimum thresholds by the number of inhabitants allow determining the allocation of resources according to an equalization system and strengthen the approach introduced in 2019 to prevent the definition of standard expenditure needs equal to zero for municipalities having no nursery schools in their territories.

See the 2020 update of Standard Expenditure Needs (only Italian)

Municipality’s size	Minimun Value	Mazimum value
Up to 5.000 inhabitants	7,69%	28,88%
Between 5.001 and 60.000 inhabitants	7,75%	28,88%
Between 60.001 and 100.000 inhabitants	7,81%	28,88%
Between 100.001 and 250.000 inhabitants	9,25%	28,88%
Over 250.000 inhabitants	16,71%	28,88%

At the same time, the resources of the municipal solidarity fund for social care services and nursery schools were increased to € 300 million per year.

In addition, the 2022 Budget Law introduced some significant changes. It provided for the allocation of resources to the municipalities of the Regions with ordinary statutes, Sicily and Sardinia, to increase the number of places available in nursery schools up to the minimum level of 33% of the residents aged 3-36 months within 2027 (including private schools) for each municipality or municipal district. In particular, 120 million euros for 2022 (+20 million compared to current legislation), 175 million euros for 2023 (+ 25 million), 230 million euros for 2024 (+ 30 million), 300 million euros for 2025 (+ 50 million), 450 million euros for 2026 (+ 150 million) and 1,100 million euros per year from 2027 (+800 million).

The increase of the municipal solidarity fund to achieve service objectives in social care services and nursery schools

The annual increase of the municipal solidarity fund following the introduction of the service objectives (2021-30)

SOURCE: openpolis elaboration on 2021 budget law data (last updated on Friday 1 January 2021)

These interventions can be considered a first step towards the introduction of the Basic levels of service (the Italian acronym Leps), aiming to standardise the provision of services directly connected to civil and social rights, These services must be guaranteed throughout the national territory and, since the 2001 reform, the Constitution assigns the task of defining them to the central government. See: Basic levels of services (only Italian)

Another innovation of this year is the methodological update of the standard expenditure needs for nursery schools. On the one hand, the database to estimate the coefficients has been extended to more years (2013-18) to make estimates more reliable but, above all, to grasp the management and structural changes of the service provided by municipalities over time.

The 2021 update allows to better define users and other aspects such as labour costs and the size of the structures.

Nursery schools, most municipalities do not reach the standard expenditure

In the next few years, it will be possible to monitor the effect of the service objectives, the increase in the resources of the Municipal Solidarity Fund, and the methodological reviews.

Historical expenditure exceeds the standard in less than one municipality out of 5.

However, the 2017data allow reconstructing the differences between the historical and standard expenditure of the municipalities in regions with ordinary statutes. 82.4% of Italian municipalities have a historical expenditure lower than the standard one. It means that most municipalities spend less than the expenditure estimated based on demographic, social and territorial characteristics.

This situation can have multiple interpretations: greater efficiency in offering those services, the choice to prioritise other functions instead of nursery schools or even a lack of the necessary resources to guarantee an adequate level of services. The fiscal federalism system will intervene to prevent this situation by implementing service objectives in the coming years.

In over 80% of municipalities, the historical expenditure for nursery schools is lower than the standard one.

Historical expenditure and standard expenditure for nursery schools, in the municipalities of the Regions with ordinary statutes (2017)

SOURCE: openpolis elaboration on SOSE database (last updated on Monday 15 March 2021)

Currently, in the South and North-West, municipalities with historical expenditure below the standard are 85%. The share is lower - but still a majority - in north-eastern Italy (76.4% of municipalities spend less than the standard) and central Italy (73.7%).

Small and southern municipalities offer fewer services, with the widest gap between historical and standard expenditure. Overcoming this gap is the challenge of the next few years for the local financial system.

The expenditure levels for nursery schools in the municipalities of RSOs. Per capita historical expenditure and standard expenditure for nursery schools in the municipalities of the regions with ordinary statutes (2017)

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To find out the historical expenditure and the standard expenditure of your municipality, click on the Search ...... and write the name of your municipality. You can change the table's order by clicking on the column header.

 

SOURCE: openpolis elaboration on SOSE database (last updated on Monday 15 March 2021)