Govt Announces Overhaul of School Property Management Following Ministerial Inquiry Findings

$30 Billion School Property Portfolio to Be Managed by New Entity, Aiming for Efficiency, Accountability, and Value for Money

The New Zealand Government is taking decisive steps to reform the management of school properties, following a Ministerial Inquiry that found current systems to be inefficient and not fit for purpose. The Education Minister, Erica Stanford, outlined a series of immediate actions in response to the report, which will see a major overhaul of the way school property is managed, ensuring that all New Zealand students can learn in safe, warm, and modern environments.

“The school property portfolio is worth $30 billion, and it’s critically important that it is managed properly. This Government is taking immediate action to ensure that all Kiwi kids have access to safe, warm, and dry classrooms,” Stanford said.

Findings of the Inquiry

The Ministerial Inquiry identified serious issues within the Ministry of Education’s current processes for managing the school property portfolio, highlighting bureaucratic inefficiencies, poor governance, and a lack of transparency in funding decisions. The report also pointed to a lack of accountability within the Ministry’s organisational structure, which has contributed to significant delays and cost overruns on school building projects.

One prominent example cited in the report was Kaipara College, where a project began in 2017 but, despite Board approval in 2022 and Cabinet funding in 2023, failed to proceed due to the Ministry’s affordability issues. Many schools reported similar frustrations with long approval processes—some minor projects requiring only two months of construction were stuck in two years of bureaucratic approval. Additionally, 29 projects in the New Schools Programme currently lack construction funding.

Stanford acknowledged that these problems have eroded trust in the system:“We inherited a struggling system with a pipeline of unfunded school upgrades that were overly ambitious and ultimately undeliverable. The gap between what schools were led to expect and the reality of available funding has caused a significant loss of confidence among school communities,” she said.

Key Recommendations for Change

The report made several key recommendations to address the systemic issues within the school property management system, including:

Establishing a New School Property Entity: A new entity, independent of the Ministry of Education, will be created to manage school property and assets. This is intended to streamline operations and provide greater focus on managing the $30 billion portfolio.

Clarifying Roles and Responsibilities: The Government will redefine the roles of those involved in funding, planning, and delivering school property, ensuring clearer lines of accountability and efficiency.

Simplifying the Funding Model: The funding structure for state schools will be reviewed and simplified to ensure a fair and transparent distribution of resources.

Improving Accountability and Transparency: Regular reporting and priority-setting processes will be implemented to promote greater accountability and ensure value for money.

Establishing a Transition Board: A Transition Board and Transition Unit will be established to coordinate the setup of the new property management entity.

Three-Phase Approach to Implementation

The Government will adopt a phased approach to implementing these recommendations:

Phase 1 (Initial Steps): Steps have already been taken, including instructing the Ministry to increase the use of offsite manufacturing solutions. By Q1 2024, over 60% of new classrooms will be initiated using this method, up from 20% in Q4 2023. A value-for-money review has also been completed to ensure more fiscally responsible decision-making going forward.

Phase 2 (Interim Improvements): The Ministry of Education will consolidate its property and network planning functions, while a Functional Chief Executive with expertise in infrastructure will oversee school property management for a two-year period. An independent investment panel will also be established to provide expert advice. These appointments are expected to be completed by the end of 2024.

Phase 3 (Permanent Model): The final phase will involve deciding on a permanent structure for the management of school property, with decisions expected in 2025. The new entity will take over operational responsibility, ensuring long-term improvements in school property management.

Addressing Current School Projects

Infrastructure Minister Chris Bishop reassured school communities that current projects underway will not be disrupted by the reforms. "It’s essential we clarify roles for school property management, provide greater transparency, and apply disciplined oversight to future investments,” Bishop said. “The works and improvements underway across the country will continue as planned while the Government builds a more efficient and sustainable solution for the future.”

The Government’s commitment to overhauling the system is seen as a critical step towards ensuring that New Zealand’s education infrastructure is prepared for future needs, creating a solid foundation for the next generation of learners.