School Property Review

The Government is committed to improving student achievement, and the Ministry of Education is supporting this commitment by building a world-leading education system that equips all New Zealanders with the knowledge, skills, and values to be successful citizens in the 21st-century.

School property supports educational achievement by providing the appropriate physical infrastructure, ICT and environments that support the learning needs of all students. It is assumed that school buildings will continue to be the preferred infrastructure from which education services are delivered.

The Government requires assurance that school property management is currently structured to effectively and efficiently deliver the significant investment in 21st-century schools; including continuing the roll-out of broadband in schools and the use of modern learning environments to support improved pedagogical approaches.

Objective of the review

The objective of this review is to provide advice that helps the Government create a high performing service delivery model for managing school property that ensures: 

• new innovative forms of capital investment that contribute to student achievement and that prolongs the life of school property 
• clarity around the use of depreciation funding and property operating expenditure 
• teaching spaces and associated infrastructure is provided in the right locations for the most efficient whole of life cost.

Current status of the review

Beca Carter Hollings & Ferner Ltd (Beca) was commissioned by the Ministry of Education and Treasury to undertake the first stage of this review. In the process Beca spoke with a number of schools and sector groups.

Ministers have now received Beca's report and have asked for further advice from officials on its recommendations. Ministers will recieve this advice by April 2013.

The Ministry and Treasury will engage with relevant sector groups on any proposed changes.

Background

School property is a valuable and widely dispersed social asset...

The school property portfolio has a book value of $10.1 billion and in the 2011/12 year the Ministry of Education will spend approximately $480 million (from depreciation and the proceeds of asset disposal) in capital. In addition school boards are funded approximately $80 million through their operations grants for minor maintenance works. Capital injections averaging $178 million per annum over the last five years have also been made to the Ministry. In addition, an estimated $60 million annually is provided to integrated schools to maintain their property. 

The state school property portfolio comprises over 2,300 primary, intermediate, secondary, kura and special education schools situated across the length and breadth of New Zealand, including Stewart Island, Chatham Island, Pitt Island and Waiheke Island. The portfolio covers 8,000 hectares of land, and 6.5 million square metres of property. 

Although the Crown owns the school property portfolio, school boards of trustees are responsible for the day-to-day management of this estate. This devolved model is unique and its advantages need to be balanced with the Ministry’s role as the Crown’s agent responsible for the performance of these assets. 

...and there are pressures that will require significant investment over the next decade

The school property portfolio faces multiple funding pressures that will necessitate significant spending over the next ten years. These include: 

• remediation of defective school buildings
• rebuilding Christchurch schools
• earthquake strengthening work
• increasing capacity to manage school-age population increases
• modernising an ageing portfolio (60% of schools are over 50 years old)
• Government’s commitment to investing in infrastructure to support broadband in schools.

The Government is committed to investing in 21st Century Schools...

The Government has committed to investing $1 billion in ‘21st Century Schools’ to address the challenges and opportunities faced within the school property portfolio.

...but needs assurance that management of the portfolio is appropriate.

New Zealand’s school property management arrangements are part of the devolved decision making framework of New Zealand schools that has been in place since the early 1990s. This devolved environment has made it difficult to provide assurance to government that funding is well spent. Setting central priorities and making disinvestment decisions under this arrangement is challenging and it has often been unclear what mandate or support the Ministry has to initiate such processes. 

The commitment to invest heavily in school property provides a timely opportunity to test possible improvements to school property management and to provide a roadmap for change.

Scope of review

The scope of this review is to provide advice about: 

1. How network decisions should be made, ie; investment/disinvestment decisions at the “whole school” level, including:
1. managing demographic bubbles and population shifts, and
2. required building service standards, including the impact of the roll out of ultrafast broadband and the use of modern leaning environments.
2. Who should be responsible for maintaining school property and making “within-school” investment and disinvestment decisions 
3. The financial and non-financial reporting that should be provided to give Ministers and the public assurance that the school property portfolio is well managed. This should include advice on the treatment and management of depreciation funding. 

In providing advice the following questions should be addressed: 

1. What decision making should occur at the local, regional or national level?
2. What institutional arrangements would best support the proposed direction of change?
3. What is the roadmap for change and how can continuity of provision be assured as change is implemented?

Issues not covered by the scope of this review

It is not intended that this review consider the appropriateness of the current school network, (ie, make recommendations to close or open specific schools) or to investigate the current quality or capacity of the network. However, consideration of potential structural or decision-making approaches to improve the ability to make value for money changes to the schooling network is included in the scope of the review. 

The review should not consider the management of private and state integrated school property. There is, however, a need to link in with the review of integrated schools with respect to property management. 

The review should not focus on the role of the first school Public Private Partnership in Hobsonville, except insofar as it provides lessons applicable to the management of the wider school network.

The review is not intended to address the issue of school property ownership, except to the extent that Crown ownership might be identified by the reviewers as an impediment to the achievement of the review objective.