Changes to school resourcing system in Budget 2010

The Government is committed to raising the performance of New Zealand’s schools. To achieve this, the Minister of Education has committed to direct more funding to the frontline, to reduce bureaucracy and give schools more control over their resources.

The Government has high trust in New Zealand’s schools, and wants to create the right conditions in the schooling system that will enable schools to meet the needs of all their students.

Several changes to the school funding system are being introduced through Budget 2010. Taken together, these changes represent the first steps towards creating a more flexible schooling system.

4% increase to operational funding

In Budget 2010, school operational funding is being increased by 4%. This means an additional $155.9 million for schools over four years. This increase will apply to all components of the operational grant from the start of 2011.

For an average primary school, this will mean an additional $10,700 in operational funding. For an average secondary school, this will mean an additional $26,700 in operational funding.

Quarterly roll counts

From 2011, operational funding for students in years 9 – 13, in all state and state-integrated schools, will be allocated using quarterly roll counts.

This will provide an incentive for schools to improve student retention by keeping students engaged in school, thus helping to improve student outcomes. Improving student engagement in education supports the aims of the Youth Guarantee.

The purpose of this change is to create an incentive for schools to keep students engaged all year. Schools will be funded for the actual number of students they have enrolled during the year, rather than their March roll only. Schools that pick up students during the year will be funded for those students.

The introduction of quarterly roll counts will result in a reduction in expenditure on operational funding of $6 million in Budget 2010. This will reduce as student retention improves. To ensure that school funding increases overall in 2011, a 4% increase is being applied to school operational funding in Budget 2010.

The existing provisional roll process will be used for the first quarter of the year, and roll counts for the other quarters will be taken on the first of March, June and September. The new roll counts will only be used to allocate operational funding.

No change is being made to how schools’ staffing entitlements are calculated.

Cash reimbursements for unused staffing

To ensure all schools receive the resources they are entitled to, schools will receive a cash reimbursement for any staffing entitlement that they haven’t been able to use by the end of the staffing year.

Currently, schools that overuse their staffing entitlement must repay the Ministry of Education for the amount overused. However, if a school uses less than its full entitlement, the amount left over is lost to them.

This change is being introduced this year. This means that schools will receive the first payments in 2011, after the end of the staffing year.

For example, a school with a staffing entitlement of 50 full-time teacher equivalents (FTTE) that has 2 FTTE remaining unused at the end of the year will be receive a cash reimbursement equal to 2 FTTE times the reimbursement rate for that year.

The reimbursement rate for unused staffing will be set by the Ministry of Education at the end of each staffing year.

Cash reimbursements will be limited to a maximum of 10% of each school’s total staffing entitlement.

For example, a school with a staffing entitlement of 50 full-time teacher equivalents (FTTE) that has 10 FTTE remaining unused at the end of the year will be receive a cash reimbursement equal to 5 FTTE (10% of their total entitlement) times the reimbursement rate for that year.

Cash reimbursements will be calculated using a school’s roll-based staffing entitlement, rather than their Guaranteed Minimum Staffing or Assured Staffing, regardless of which is greater.

The Government has invested an additional $10 million per year in Budget 2010 to cover the cost of this policy.

School staffing reductions signalled in Budget 2009 will not be pursued.

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In addition to these changes being implemented through Budget 2010, the Government has also made the following decisions regarding school resourcing that take effect in 2010 to create better incentives and increase flexibility for schools.

‘Heat Light and Water’ funding

In 2010 and 2011, every school’s Heat Light and Water funding will be fixed at the amount it was informed of in September 2009 (plus the 4% increase being applied to all components of operational funding in 2011).

Schools need to be efficient in their energy usage.

Resources to help schools make energy savings are available at www.minedu.govt.nz and www.neri.org.nz/education/energy_efficient_schools.

Some schools could face large increases to their energy costs, for example if new classrooms are added to the school site. The Ministry of Education can provide support for schools in exceptional circumstances. The Resourcing Contact Centre can provide further information.

The Ministry of Education will work with the sector to develop a new approach to allocating this funding to be implemented in 2012.

The Cash for Buildings programme

This year the Government has introduced the Cash for Buildings programme to give schools more flexibility in how they use their property entitlement.

This programme means that schools that are eligible for new property can opt to receive the annualised cash equivalent of the value of that property as operational funding, instead of constructing a new building.

Schools could use this funding to, for example, purchase specialist equipment for trades-related education.

Schools that are entitled to additional property and are interested in opting into this programme should contact their local Ministry of Education Network Facilitator for further information.

Secondary Tertiary Alignment Resource (STAR) – schools to retain discretion about how this is spent

STAR provides schools with additional funding to help them provide access for secondary-level students to courses outside of school.

The previous Government had decided to start delivering STAR funding as a supplementary grant from 2010, but this decision has not been implemented (funding delivered as a supplementary grant can only be used for its stated purpose).

The Minister of Education has decided to reverse the previous Government’s decision.

STAR funding will continue to be paid to schools as operational funding. This Government has high trust in New Zealand’s schools to make the best decisions about how to use their funding to meet their needs of their students.

Schools do not need to do anything differently because of this decision – no changes are being made to STAR funding.