Hon Nikki Kaye
Associate Minister
of Education
Hon Maurice Williamson
Minister for Land Information

3 September 2013 Media Statement
School property changes free up funds

Associate Education Minister Nikki Kaye says a change to the way education property is disposed of will free up money to reinvest in new school property faster.

“In the past two years $26.3 million has been netted from the sale of surplus property,” Ms Kaye says. “This change means we’ll be able to reinvest that money faster in other school property priorities such as modern learning environments and upgrading essential infrastructure.”

The Ministry of Education will now work with Land Information New Zealand (LINZ) to manage disposal of property no longer required for education purposes. There is a provisional agreement that responsibility will move to LINZ for management and disposal of these properties.

“LINZ expects to cut disposal times by six to 12 months, as it’s the agency with the greatest understanding of moving properties through the complex processes required by the Public Works Act,” Ms Kaye says.

“So where there’s a former school or school housing that is no longer required this will improve and speed up the disposal process.

“I have been worried about the potential risk when properties are left vacant for long periods of time, including security issues and vandalism.

“Communities don’t want buildings vacant for long periods of time. They want good quality public facilities that are used as much as possible,” Ms Kaye says.

Land Information Minister Maurice Williamson says any disposal of Crown-owned land must meet a number of statutory and government policy requirements, such as the Public Works Act 1981.

“This ensures the interests or rights that parties, including other government agencies, former owners and iwi, may have in the land are appropriately addressed. Today’s announcement means Education properties that are no longer required will progress through this process faster across the country,” Mr Williamson says.

The Crown Land Centre of Expertise operated by LINZ aligns with the Government’s overarching goal of creating a better public service, and contributes to economic development by enabling Crown agencies to manage and utilise their assets more effectively.

NB: FAQs attached

FAQs – school property disposal

1. How much school property is considered surplus?

The book value of assets in disposal as at 30 June 2013 is $65.9 million.

2. How much did Ministry of Education net from the sale of surplus property in the past couple of financial years?

• 2011/12 - $7.2 million

• 2012/13 - $19.1 million

3. What happens to the money?

Sale proceeds are directed towards other school property priorities which are:

• health and safety projects

• essential infrastructure

• the creation of modern learning environments that support improved student outcomes.

Funds may also be used to support discretionary projects that are of benefit to the wider schooling network.

4. What are the plans for disposing of surplus school property in Christchurch?

i. What happens to the land and buildings after a school is closed or merged with another school on another site?

The Ministry decides whether it needs the land for another education purpose or if it is surplus to education requirements (if it is surplus it is entered into the property disposal process).

ii. What happens to the property while it is in the disposal process?

The agency who owns the land continues to be responsible for it until it is disposed of.

Leasing of surplus school sites by community groups and other parties (as a caretaking arrangement pending disposal) is encouraged for security reasons and to offset operating costs.

Community groups and other parties must use the property for the purposes of education or the fostering of community and social services.

The Ministry’s lease has standard terms and conditions that include the group maintaining the property, buying public liability insurance, insuring the buildings, and agreeing to remove themselves from the property on three-month’s notice.

Community groups are required to take over the sites as is and pay all operating costs (i.e. rates, look after the grounds, maintenance etc). In return a nominal rental is charged.

iii. If the Ministry allows its surplus sites to be used by community groups while the site is in disposal, why are there so many derelict school sites around attracting vandalism?

Buildings that are not used by third parties are maintained by the Ministry.

An independent organisation is employed to manage the upkeep of the property until it is disposed of. We ensure the buildings are secured, maintained in a useable state and any vandalism is fixed promptly.

Derelict schools sites are those sold to another party that is no longer maintaining the property.

iv. Why doesn’t the Ministry keep hold of its land “just in case”?

In some cases, we hold back closed schools because we want the property for a future education use.

Where this occurs we encourage community groups or other interested parties to lease these sites in the interim.

If we no longer need the land for educational purposes, then under the Public Works Act 1981, we must enter it into a disposal process.

v. What happens when land owned by government departments is disposed of?

Once a Crown-owned property is declared surplus, the disposal process is largely determined by the requirements of the Public Works Act 1981 and related government policies. There are four sequential steps that the Ministry follows:

• If required for another public work the property is transferred to the government department or territorial local authority wanting to use the land.

• If not, then if the land was gifted, it must be offered to the previous owner(s) at nil value but they must pay for any Ministry-funded improvements (buildings).

• If not gifted it may have to be offered back at current market value for sale to the previous owner (or their successors).

• If the land is not required to be offered back to the previous owner, or the previous owner declines to purchase the land, it must be considered for use in a Treaty settlement. This occurs in two ways:

o where a Treaty settlement has been reached, the land must be offered to the relevant iwi before it can be put on the market. For example, under the Ngāi Tahu Claims Settlement Act 1998, Ngāi Tahu has a right of first refusal overall surplus Crown land within their area of interest. This includes any surplus Christchurch/Canterbury schools.

Community groups are required to take over the sites as is and pay all operating costs (i.e. rates, look after the grounds, maintenance etc). In return a nominal rental is charged.

iii. If the Ministry allows its surplus sites to be used by community groups while the site is in disposal, why are there so many derelict school sites around attracting vandalism?

Buildings that are not used by third parties are maintained by the Ministry.

An independent organisation is employed to manage the upkeep of the property until it is disposed of. We ensure the buildings are secured, maintained in a useable state and any vandalism is fixed promptly.

Derelict schools sites are those sold to another party that is no longer maintaining the property.

iv. Why doesn’t the Ministry keep hold of its land “just in case”?

In some cases, we hold back closed schools because we want the property for a future education use.

Where this occurs we encourage community groups or other interested parties to lease these sites in the interim.

If we no longer need the land for educational purposes, then under the Public Works Act 1981, we must enter it into a disposal process.

v. What happens when land owned by government departments is disposed of?

Once a Crown-owned property is declared surplus, the disposal process is largely determined by the requirements of the Public Works Act 1981 and related government policies. There are four sequential steps that the Ministry follows:

• If required for another public work the property is transferred to the government department or territorial local authority wanting to use the land.

• If not, then if the land was gifted, it must be offered to the previous owner(s) at nil value but they must pay for any Ministry-funded improvements (buildings).

• If not gifted it may have to be offered back at current market value for sale to the previous owner (or their successors).

• If the land is not required to be offered back to the previous owner, or the previous owner declines to purchase the land, it must be considered for use in a Treaty settlement. This occurs in two ways:

o where a Treaty settlement has been reached, the land must be offered to the relevant iwi before it can be put on the market. For example, under the Ngāi Tahu Claims Settlement Act 1998, Ngāi Tahu has a right of first refusal overall surplus Crown land within their area of interest. This includes any surplus Christchurch/Canterbury schools.

o alternately, where a settlement has yet to be reached, the Office of Treaty Settlements will consider whether to purchase the land for use in a future settlement.

• If the iwi does not elect to purchase a surplus school, or it is not required for a future settlement, then the property would be placed on the open market.

vi. Does the Ministry get any money for selling its land?

Yes.

Regardless of who the land is transferred to, it is transferred at current market value, meaning that the value of the land is established by a valuation and it is transferred at that price.

If the land was gifted to the Crown then it must be offered to the previous owner(s) at nil value, but they must pay for any Ministry-funded improvements that have been made (buildings).

vii. If the disposal process takes so long and is so complex why have such a process and why not just sell the land to the highest bidder?

Disposal of Crown land must follow the requirements of the Public Works Act 1981 and related government policies outlined above (point ‘v’). These requirements ensure that the range of interests that people may have in the land are considered before Crown agencies can dispose of land. This includes the potential to use this land for other government purposes, previous owners who gifted, or had their land acquired for works such as schools, and iwi interests through the Treaty settlement processes.

o alternately, where a settlement has yet to be reached, the Office of Treaty Settlements will consider whether to purchase the land for use in a future settlement.

• If the iwi does not elect to purchase a surplus school, or it is not required for a future settlement, then the property would be placed on the open market.

vi. Does the Ministry get any money for selling its land?

Yes.

Regardless of who the land is transferred to, it is transferred at current market value, meaning that the value of the land is established by a valuation and it is transferred at that price.

If the land was gifted to the Crown then it must be offered to the previous owner(s) at nil value, but they must pay for any Ministry-funded improvements that have been made (buildings).

vii. If the disposal process takes so long and is so complex why have such a process and why not just sell the land to the highest bidder?

Disposal of Crown land must follow the requirements of the Public Works Act 1981 and related government policies outlined above (point ‘v’). These requirements ensure that the range of interests that people may have in the land are considered before Crown agencies can dispose of land. This includes the potential to use this land for other government purposes, previous owners who gifted, or had their land acquired for works such as schools, and iwi interests through the Treaty settlement processes.

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