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Government education funding comes up short

13 September 2004

Research shows government education funding comes up short

A study into school finances has found effective schools could not continue to provide students with their current standard of education if they relied on government funding alone.

The three-year study is funded by the New Zealand School Trustees Association (NZSTA) and is being independently conducted by the New Zealand Council for Educational Research. The study examines the financial management of 18 effective New Zealand schools. The report released today documents findings from the first year of research.

NZSTA President Chris Haines says the research examines the use of government operational funding and locally raised funds to meet student needs.

“If the Government wanted evidence of schools struggling to provide quality educational outcomes on existing operational funding levels, they’ve now got it. It’s time for them to sit up and take notice of what schools are telling them,” he says.

“The clear answer is for the Government to commit to a significant increase in operational grant funding to ensure that the high standards of education expected by both the Government and communities can be achieved.”

Chris Haines says the schools involved in the study had robust financial management, but that generally the standard of education delivered in the school was dependent on the funds each school was able to raise from non-government sources.

“Schools are far more reliant on non-government sources of funding now than they were when schools were decentralised with the introduction of community governance in 1989.

“This independent research backs up what NZSTA and schools have been telling the Government for some time now – that operation grant funding is not keeping up with the cost of delivering high quality education.”

Chris Haines says the research also shows that schools in the study were responding to the Government’s call to customise teaching more closely to individual student needs, rather than taking a “one size fits all” approach to education.


2/Funding research

“However, the work the schools were doing in this area were increasingly reliant on non-government funding, and this points to the need to re-look at staffing and school funding formulas in terms of Government expectations”.

“For example, all schools involved in the research employed more teaching staff than their government staff entitlement allowed. The cost of these extra staff on average absorbed a third of each school’s operation grant”

“In addition every school said that good administration staff were essential to the healthy financial management of their school, yet the increasing cost of school support staff places significant pressures on each school’s operation grant.”

The study notes that support staff costs have risen faster than inflation, for which operational grants are adjusted, leaving schools with less and less money to go around despite schools running budgets on “thin margins” and therefore taking a necessarily conservative approach to financial management. Chris Haines says the research shows that while the Government sees the growing role of Information Communication Technology (ICT) in education as a priority, this was an area significantly at risk if schools’ non-government sources of funding dried up.

“The study authors raise a valid point when they ask why students should be negatively affected by changes that just happen to impact on the school they attend. Even the most conservatively managed school can be caught out by unexpected roll changes, particularly in more lightly populated regions.

One of the key drivers to a school’s financial health was roll size and stability, and one principal involved with the research commented that schools were now taking the risk of correctly estimating rolls, rather than the Government.

“In most countries, schools are funded by a combination of both government and community resources. However, as the study authors have identified, in New Zealand the pendulum is in danger of having swung too far one way.”


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