Hon Steve Maharey
Minister of Education

19 December 2006 Media Statement

Review shows schools managing finances well

A Ministry of Education review of schools' operational funding released today shows schools are managing their finances well, says Education Minister Steve Maharey.

The year-long review, which reflects input from nine education sector groups, looks at how schools manage competing demands on their operational funding, given changes in education funding over the last decade. The review recommends further areas of work which will be undertaken in collaboration with sector groups.

"The review finds that most schools are in a satisfactory financial position and managing their resources effectively," says Steve Maharey.

"Under Labour, funding for schools has increased from $3.8 billion a year in 1999 to around $5.6 billion this year, an increase of 22 percent in real terms.

"The review identifies pressure areas for schools, including changing expectations on schools, specific cost pressures such as ICT and support staff, and some gaps in the financial and strategic expertise of school managers and trustees."

Steve Maharey says an Education Review Office Report on Schools' use of Operational Funding, also released today, reinforces many of the key findings in the Ministry's review.

"Both reports show schools are managing their resources effectively, but find wide variation in spending on overheads and teaching and learning, and wide variation in the ability of schools both to plan and manage their finances strategically.

"They also show that locally raised funds have increased in line with increased government funding, but remain relatively stable as a proportion of total funding for schools."

Steve Maharey says the Ministry's review group has agreed on areas of further work in response to the findings, including work to enhance management capability in schools, simplify financial reporting, and reduce compliance. The group will report to him early next year on the scope and details of this work.

"We recognise that there are pressures for schools and we will continue to engage closely with the sector on these issues. The process to date has been collaborative and constructive and we will continue to work with the sector in this way.

"While there are always pressures on school funding, we need to ensure schools are supported to manage their resources as effectively as possible to meet the learning needs of their students." He said any decisions around additional funding for schools would be need to be considered as part of the 2007 Budget.

ENDS

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