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Concerns About Financial Viability Of Charter Schools

13 February 2013
Immediate Release

Treasury Raises Concerns About Financial Viability Of Charter Schools

Treasury has advised the Government that its charter school policy poses significant financial risks.

The advice, in documents obtained by NZEI Te Riu Roa under the Official Information Act, says there are financial risks of over-investing in capacity by creating too many schools as well as risks of poor financial management by charter schools.

Under the proposed legislation, charter schools could be run by private profit-driven organisations despite being fully funded by the public purse. There would be no need for them either to be led by professional teachers or to even employ qualified teachers.

NZEI Te Riu Roa and other educators have today presented submissions at the Education and Science Select Committee detailing serious concerns about the impact that charter schools would have on our quality public education system.

But now Treasury documents reveal that the Government’s own advisors believe there are financial risks.

Treasury says that charter schools could pose a risk to nearby state schools if rolls and funding drop as well as risk creating more socio-economic stratification.

“We know that increasing inequality between socio-economic backgrounds of schools is a big risk to a quality public education system. This has been proven overseas and even Treasury raises this as a risk to student outcomes,” says NZEI Te Riu Roa National President Judith Nowotarski.

The Treasury documents report that international experience shows that many charter schools struggle, both financially and over student outcomes, in their first years of operation.

The documents say there would be a need for robust standards and accountability requirements.

“This is ironic because the current legislation would allow charter schools to operate in secret outside the reach of the auditor general, the Official Information Act and other forms of public scrutiny,” Ms Nowotarski says.

The Treasury papers say that charter schools could use existing sites through closing a struggling school or allowing an existing state school to convert to charter school status.

“Once again, we would ask how this would improve student outcomes or contribute to a quality public education system.”

Click here to read: Charter_Schools_select_committee_submission.pdf


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