Charter school funding is higher - as most have suspected

Admission up North shows that Charter school funding is higher - as most have suspected

Radio NZ ran a story last week with the startling admission that funding for two Whangarei based charter schools was about to fall as they converted into Designated Character State schools from 2019.

The revelation will not be a surprise to opponents of the charter school initiative, as it has been clear from the outset that the original funding model was based on bold assumptions that have simply not come to pass.

Here are the statements in the Radio NZ article attributed to Raewyn Tipene, CEO of the He Puna Marama Trust:

“We won't be able to fund them [staff] all. That's a fact: the funding won't allow for us to have all the teachers we're eligible for, plus the support staff we are used to having.”

"We will just have to work out how best to do with less."

Unfortunately the piece did not clarify how much the funding was expected to fall by when they convert.

He Puna Marama, as Sponsor of the two charter schools, will receive nearly $4 million this year for the two schools: $3,074,521 for the secondary school and $883,073 for the primary school. These figures are published on the Ministry of Education website and are based on the projected opening rolls. Actual quarterly payments could vary depending on the student rolls as the year progresses.

The article stated that Te Kāpehu Whetū (the educational unit of He Puna Marama Trust) employed 26 staff for its 190 students, according to Mrs Tipene, who said: "That is a higher teacher to student ratio than a state school would have. A number of those staff are not trained teachers, they are mentors who support our senior students."

Under the contracting out theory of the charter school initiative, the Sponsor may deal with the funding it receives in whatever way it feels is appropriate. So they can hire more teachers, more support staff, mentors etc. if they wish. Charter school supporters claim this bulk funding approach is one of the main features of the initiative. But the real issue has always been the quantum of funding they are receiving and not just how it is delivered.

Charter school supporters have hidden behind the narrative that the Ministry tried to make the original charter school funding model produce a level of funding that was “broadly comparable” to that of a “similar” State school. But this modelling approach was flawed from the outset.

First, making comparisons with State school funding is problematic, as State schools have many different sources of funding. The modelling had to try and reduce all of these to a simple approach that could be written into a commercial contract.

Second, State schools’ property is provided by the Crown but charter schools need to rent (or buy) their premises. So how this component was cashed up has caused problems from the outset, especially if the charter school did not reach the maximum roll on which the property funding was based, or took a long to get there.

Third, it also ignored the reality that the choices parents make are “local” and not “comparable”. So the problems with the original funding policy mean that the early charter schools have enjoyed far more funding than the local schools they were set up to compete against.

Save Our Schools NZ analysed the 2015 financial statements of South Auckland Middle School and compared these to Manurewa Intermediate. What we saw was that SAMS received funding per student of $11,740 after paying the cost of the premises it rented from the Elim Church. In contrast, Manurewa Intermediate received $5,907 in Teachers Salaries and Operations Grants funding per student, with its premises provided by the Crown.

This means the charter schools have been able to offer advantages such as hiring more teachers, which reduces class sizes, hiring more support staff, such as mentors and community liaison staff, or offering support to parents by way of free uniforms, free stationery and so on.

The National government changed the charter school funding model in 2015 but the revised model applies only to charter schools which commenced operations in 2017 and 2018. The government is therefore locked in by contract to the original funding model for the early schools.

A paper from the Ministry of Education to Bill English and Hekia Parata, dated 30 April 2015, set out the key problems with the original funding model and the proposed solution, which was based on:

“Moving to a true “per-student” funding model rather than a “per school” model;

Ensuring that the property funding flow is aligned with the current enrolment”.

The impact of the change in funding model is clear when we look at the funding for the closed First Round school, Whangaruru, in 2015 (its second year of operation) compared to that for the new Third Round school, Te Aratika, in 2017.

In 2015, Whangaruru received operational funding of $412,148 per quarter, or $41,215 per student p.a. based on 40 students. In the 4th quarter of 2017, Te Aratika received quarterly operational funding of$126,580, or $15,343 per student p.a. based on 33 students.

So two “similar” schools – in this case small secondary schools – have received vastly different amounts of funding per student under the two funding models.

The initial policy mistake of fully funding the cost of creating and operating small schools has meant the charter school initiative has cost the government more. This is why Bill English and Hekia Parata changed the funding model – over 3 years ago!

Whether this additional cost has paid off is arguable, as the formal evaluation failed to draw any meaningful conclusions as to the impact of the initiative.

But either way, one could just as easily assert that the Government should be prepared to invest more and help all students who need more support, not just those in an ideologically motivated experiment.

ENDS

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