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QPEC Update: NZ’s Charter Schools Small and Expensive

QPEC Update: NZ’s Charter Schools Small and Expensive

NZ’s charter schools are proving to be small and expensive, according to figures obtained under the Official Information Act.

“The 1 March roll returns confirm a total of only 367 students were enrolled in the first five charter schools, which makes this an expensive experiment”, says QPEC Chairperson Bill Courtney.

“In contrast to their small size, there is a high level of cash funding, as detailed payments obtained under the Official Information Act show quite clearly.”

Over $6 million has been paid out to the sponsors of these schools in one-off, non-recoverable Establishment Payments.

In addition, the regular Operational funding is proving to be higher than local State schools in the same area.

“If the purpose of charter schools was to create alternatives in places such as South Auckland, then the funding comparisons need to be fair.

Our point is simple: if the government is prepared to throw that much funding at charter schools, then why aren’t they prepared to do the same for ALL the children of South Auckland? Give them all a chance!”

Small Size

The first five charter schools commenced operation this year. Sponsor contracts and the Roll Returns as at 1 March 2014 (released on the Education Counts website) reveal the following:

SchoolEstablishment Payment
Minimum Roll
Actual Roll
@ 1 March
South Auckland Middle School$1,019,53390120108
Te Kura Hourua ki Whangaruru$1,379,150*7112863
Te Kura Hourua O Whangarei Terenga Paraoa$1.880,6935030050
Rise Up Academy$391,9455010042
Vanguard Military School$1,611,534108192104

* The Whangaruru school also received part of its operational property funding in advance to assist with property development.

So, to date, the Ministry of Education has paid a total of $6.28 million in one-off Establishment Payments to the Sponsors of the schools. Costs have also been incurred, no doubt, inside the Ministry to assist the schools to open.

Based on the 1 March roll returns, two schools have opened at or above the contractual Guaranteed Minimum Roll for 2014 while three are below.


A significant proportion of the Operational funding for each school comprises Base Funding and allowances for Property and Insurance, to ensure the schools are viable. These figures are based on the Maximum Roll for each school, i.e. what is estimated as necessary to fund the schools as they grow towards their target roll.

The “Per Student” and the “Centrally Funded” components of the Operational Payment are based initially on the Guaranteed Minimum Roll and will vary in future as the school roll changes.

The following breakdown of the annual Operational Payment for 2014 paid to each school has been obtained from the Ministry of Education under the Official Information Act.

SchoolProperty / InsuranceBase FundingCentrally FundedPer StudentOperational
Payment ($ p.a.)
$ per student based on 1 March Roll
South Auckland Middle School303,684571,44824,840440,9721,340,94412,416
Te Kura Hourua ki Whangaruru111,574997,04419,596380,3471,508,56123,945
Te Kura Hourua O Whangarei Terenga Paraoa737,936
Rise Up Academy91,236145,85613,800233,552484,44411,534
Vanguard Military School518,396997,04429,808578,5562,123,80420,421

State School Funding

Comparisons between the funding model for charter schools and the funding for State schools are not straightforward. Differences arise in how several of the component parts of the funding model are treated.

Charter schools receive all of their funding through a “cashed up” approach, where every component is paid in cash direct to the Sponsor on a quarterly basis.
State schools receive their funding in various ways, with only the Operations Grant paid directly to the school as a cash sum. In addition, each State school receives a Teaching Entitlement, based on its size and roll. Boards of Trustees employ the principals and teachers, who are paid through the centrally operated payroll system but with their costs charged back against the Board’s accounts.

Funding for property maintenance is paid in cash through the Operations Grant but funding for property development and capital works is funded centrally through an allocation set every 5 years for each school.

It is possible to make a direct comparison between one of the charter schools, The Rise Up Academy, and local state schools. Rise Up is a Year 1 to 6 primary school located in Mangere and its funding can be compared to the other local state primary schools in the Mangere / Otahuhu area.

The following table shows the detailed information shown for each school on the Education Counts website, under the information tab “Find A School”.

SchoolDecileRollOperationsTeacher SalariesTotalFunding per student
Jean Batten2450838,4901,976,0402,814,5306,255
Mangere Bridge4388498,8681,555,8672,054,7355,296
Mangere East1513852,4292,064,5442,916,9735,686
Mountain View2280559,7731,308,0061,867,7796,671
Nga Iwi1423738,3611,841,1372,579,4986,098

This table does not include capital property funding or the access that State schools would have had to Centrally Funded services, such as Resource Teachers.

But it must also be noted that State school property expenditure will be on assets that the Crown owns and retains after development. Boards of Trustees have significant influence over how this property development takes place at their school, but in the end, the asset is on the Crown balance sheet and not that of the Board of Trustees.

Bill Courtney
12 May 2014

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