Govt can’t afford to stop funding private schools - yet

Analysis: The visceral response to James Shaw’s $11.7m cheque for the Green School shows New Zealand has strong feelings about private school education. Laura Walters looks at whether NZ is ready to give up private schools and whether we can afford to

The debate over the Government’s decision to fund Taranaki’s Green School raises a range of questions about what the country values in its education system, what Kiwis see as fair and equitable, and how we define public good.

The visceral response could be interpreted as support to phase out public funding for private education, or the phasing out of independent schools altogether.

But the state has been putting millions towards private schools for years, and never provoked this level of outrage. Even taking into account the current sensitivity around public spending, due to the Covid-recession, it’s hard to understand why this specific funding allotment induced such a strong response.

AUT senior lecturer Ruth Boyask says the numbers already show New Zealand does not value private education as much as other countries with similar education systems. Fewer than 4 percent of New Zealand school students attend private schools, compared to about 7 percent in England and 16 percent in Australia.

Many of the school and union leaders who criticised the decision cited equity as their reason for opposition to this investment in a private school.

Boyask said that might suggest New Zealand is more acutely sensitive to fairness than other countries.

“But I have some reservations given that similar outrage is not stimulated when mainstream, publicly funded schools do not distribute fairly the good of education amongst all students who attend them.”

New Zealand has one of the least equitable education systems in the world, with one of the world’s largest gaps between the top achievers and bottom achievers (who are disproportionately Māori). Despite extensive reporting on the country's unfair and inequitable system, there is very little public outrage.

More likely, it is a reaction against exceptionalism, Boyask says.

The past term of government has shown the country knows there is something broken in the education system. Bold moves to cut National Standards and close Charter Schools, along with some of the largest overhauls of the education sector in decades - the Tomorrow’s Schools review and the Vocational Education overhaul - show there is a desire for change in pursuit of something better.

And while the Green School saga may present an opportunity to take a closer look at the place of private schools in the country’s education system, it has also shown New Zealand isn’t in a position to do away with the private schools - just yet.

The vision is a public system where there is enough capacity, ample funding, and an ability to be flexible, innovative, inclusive, and equitable.

On August 26, Associate Finance Minister and (importantly) Green Party co-leader James Shaw announced the Government would give $11.7 million of its shovel-ready Covid stimulus package to Taranaki’s Green School.

He said the work would help increase the school’s roll to 250, create 200 construction jobs and millions into the Taranaki economy each year - largely from families willing to pay the school fees of between $16,000 and $43,000 a year.

The funding the school applied for would be largely paid out as a loan, with just 25 percent coming in the form of a grant.

The response was outrage. There was little discussion about the potential economic benefits, or the school’s ethos. 

Instead there was anger from his own party that their co-leader went against party policy to phase out public funding of private schools. This led Shaw to make a private apology to members, followed by a public apology delivered to the press.

Then there was the anger from school leaders, unionists and parents that the state would give millions to a private school against a backdrop of public schools lacking funding to fix their too-small, too-cold and too-damp buildings.

There is a string of reasons this particular funding wouldn’t have gone to a state school: the money wasn’t from an education fund, it was part of an infrastructure-focused fund; this project was ‘shovel-ready’ when many state school projects are not; the majority of the money was being given as a loan; and the Government has a separate $400m school property investment fund as well as a 10-year property plan focussed on state schools.

But in the left-wing utopian vision of the state school system, private schools, including exceptional ones like this, would not have a place; they would not be needed.

The vision is a public system where there is enough capacity, ample funding, and an ability to be flexible, innovative, inclusive, and equitable. But this does not reflect the current reality.

Recent analysis from NZIER, which builds on a report from MartinJenkins in 2017, not only makes the case that New Zealand needs to publicly fund private schools, but argues the government should increase its funding to make sure private schools remain viable.

Currently, the Government doesn't have the spare cash to absorb private schools into the system as state-integrated schools. Alternatively, it doesn't have the capacity or the spare cash to absorb 30,000 students into the state system.

The Government gives independent schools funding on a per student basis. This subsidy comes from a government allocation, which was set at $47.8m in 2020. The allocation is capped, regardless of roll growth, and the per-student subsidy is set by dividing it by the number of students.

This year, private schools will receive an average of $1556.32 per student from the government.

The pot of money allocated has remained relatively unchanged over the past decade, since a modest hike in 2010.

Green Party co-leader James Shaw has done more than his fair share of grovelling over the $11.7m in funding given to Taranaki's Green School. File photo: Shane Cowlishaw.

Meanwhile, funding of state and state-integrated schools in 2019 was an average of $8475 per student. This includes property and operational funding as well as teachers’ salaries.

In 2019, private school per-student subsidies, operational and salary costs were funded at 19 percent of the equivalent funding for state and state-integrated schools.

Essentially, the Government saves money by keeping private schools open.

Willing parents pay the majority of the cost of the schooling, while also supporting the public education sector through their taxes.

NZIER’s 2020 report, commissioned by Independent Schools of New Zealand, says if all the students who attended private schools in 2018 went to state schools, it’d cost the Government $174m in just teacher salary costs and operating expenses.

There would be a further cost for maintaining and modernising buildings if independent schools became state-integrated.

A 2017 economic analysis by MartinJenkins found independent schools also raise $64m in tax revenue each year. Remember, the Government currently spends just $47.8m a year on private schools.

MartinJenkins estimated independent schools also contributed $697m to GDP.

If the Government stopped funding private schools, and they were no longer financially viable, the schools could become part of the public system as a state-integrated school, where the Government would be forced to fund them at much higher levels, given the average per-student rate at public schools is more than five times that of independent schools. 

This issue was raised as one of the main objectives for maintaining government funding by a government advisory group in 2016.

And if schools shut, the state system would not have the capacity to accommodate these extra students.

The NZIER report said the Government could keep independent schools’ doors open by making funding more consistent over time and relative to state and state-integrated schools funding. In the interests of the Government wanting to keep its funding commitments low, the report recommended benchmarking funding against what an efficient state or state-integrated school spends on each student.

On the face of it, the Greens’ policy of phasing out funding for private schools may make sense, and fit with the current public sentiment. But if that phasing out happens before the public system is ready, not only will it cost the taxpayer hundreds of millions more each year, but there will not be the capacity to accommodate the extra 30,000 kids currently in the private system.

“Green School is about altruism, philanthropy, caring for our environment and, most of all, doing what is great for many kids. It should be a state school."

Aside from the fact the Government cannot fiscally afford to do away with private schools, there is also a question over whether the public system is able to cater to the needs of those currently looking to independent education.

And whether independent schools make education more or less equitable.

Many opposed Shaw's $11.7m cheque based on the idea public funding was used to make an elite school bigger and better.

But as Malcolm Bell told Stuff, Green School is only a private school because the state wouldn’t fund it.

“Green School is about altruism, philanthropy, caring for our environment and, most of all, doing what is great for many kids. It should be a state school,” the former teacher, unionist and Beehive senior advisor told Stuff.

Bell says he has always believed the state should allow, and invest in, entrepreneurial enterprises in education (and everything else for that matter).

This belief aligns with another Green policy, which says the party supports flexibility in the education system for diverse types of education, provided the core curriculum is delivered.

This would appear to be a statement in support of the Green School, which does deliver the core curriculum as part of its learning.

But flexibility, innovation and experimenting with different types of learning and teaching are limited within the state system. There is not currently the capacity, resourcing, or ability to include this approach at public schools.

In a report on schools for the future, the World Economic Forum claims the philosophy of Green School is founded in global citizenship and sustainability, with a strong ethos in business sustainability.

Independent schools are not just those that aim to provide a traditional, elite education, such as Christ’s College or St Cuthbert’s.

Private schools also cater to a range of needs not currently met in the state system, and provide families with choice.

And with scholarships and government funding, those who are not classified as the country's top earners can access a different type of education for their children.

For instance, Summit Point has developed a curriculum tailored to dyslexic learners so they can learn key numeric and literacy skills faster. And Ambury Park Centre provides horse riding therapy for children with physical, emotional, psychological and intellectual disabilities.

There are also schools that cater to students who come from disadvantaged backgrounds, such as Dilworth. Or those recovering from traumatic experiences or addictions, such as Odyssey House School.

The NZIER report says with very little government funding, independent schools develop different learning techniques, which the Government can then adopt and roll out when independent schools have ironed out the kinks. It could be seen as low-cost R&D.

Independent schools also provide competition for state and state-integrated schools. This competition adds impetus for the state school network to improve.

"I think the conversation needs to start by recognising that in a complex, multi-faceted world we need more than one kind of schooling."

It’s hard to quantify exactly what public good the private school system delivers, and whether it helps deliver equity through tailoring approaches to those with different needs.

Boyask says a large part of understanding the extent of public good lies in identifying the public. 

This is a nuanced and complex issue, she says. Contemporary views of publics are that they are multiple and fluid, even within a single nation. 

For a simple example, what is good for Pākehā students may not be good for Māori. In this case there is a plural public.

But this becomes more complex when identities are constantly challenged and recreated.

“While there is a lot of political theory on modern day publics, I don’t think we in education yet understand them well enough to say what is in their interests.

“But I think the conversation needs to start by recognising that in a complex, multi-faceted world we need more than one kind of schooling,” she says.

The difficult part for the Government is establishing different kinds of schooling in a way that is equitable across different publics, and unfortunately most of New Zealand’s experiments with different forms of schooling so far, like private and partnership schools, have not started from a principle of equity - quite the opposite.

And while New Zealand continues to grapple with the idea of what equity in schooling actually looks like, and how to deliver equitable education, the default reaction is often: private = different = bad, public = same = good.

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1 comment

John Holley
Systems Advisory Services
11 September 2020
What is missing here is the massive inequity that exists between state/integrated schools and private schools. (and high decile and low decile schools for that matter) One only has to walk around the schools and see the stark difference.

The Govt (this one and the previous one) have all the evidence on the growing inequity and the resulting outcomes. As I have posted on Twitter: "We also know by the longitudinal data that the MoE/TEC/IRD has is that school decile predicts: success at NCEA, tertiary destination and likely pay for a job type."

So the real issue in NZ education is not private versus public, but one of equity.


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