Hon Erica Stanford
Minister of Education
Hon Chris Bishop
Minister for Infrastructure

The Government is taking decisive action in response to the Ministerial Inquiry into School Property, which concludes the way school property is delivered is not fit for purpose.

“The school property portfolio is worth $30 billion, and it’s critically important it’s managed properly. This Government is taking a series of immediate actions so all Kiwi kids can learn in safe, warm and dry buildings,” Education Minister Erica Stanford says.

“The report found the Ministry of Education’s processes for managing the portfolio are bureaucratic and inefficient, its internal governance structures for property investments are not robust, funding decisions lack transparency, and its organisational structure does not provide the right level of focus or accountability.

“For example, work began with Kaipara College on a project in 2017. Plans were endorsed by the Board in 2022, Cabinet approved funding in 2023 before the project was fully designed and consented. Despite this, the project was unable to go ahead due to the Ministry’s affordability pressures. Many schools told reviewers about significant delays in delivery, with predictable impacts on costs. There were examples of minor projects which could require two months of construction work but had approval processes taking two years. It also identified 29 projects in the New Schools Programme have no construction funding.

“It confirmed we inherited a struggling system with a pipeline of unfunded school upgrades that were over scoped and couldn’t be delivered. The gap between what schools were led to expect of delivery compared with the reality of funding available, has resulted in a huge loss of confidence in the current system and uncertainty for school communities,” Ms Stanford says.

The report recommended the Government:

• Establish a new entity separate from the Ministry of Education, to assume ownership and asset management responsibility for the school property portfolio.
• Clarify roles and responsibilities for the funding, planning and delivery of school property.
• Review and simplify the current funding model for state schools.
• Implement clear processes for regular reporting and priority-setting to promote accountability, transparency, clarity of expectations, and value for money.
• Establish a Transition Board and Transition Unit to oversee and coordinate the establishment of the new school property entity.
• Undertake a range of immediate actions during the transition period to simplify the operating model and ensure value for money.

Cabinet has accepted the findings and will take a phased approach to address the recommendations. The three phases are:

Phase 1 – Initial steps have been taken since commissioning the report, including instructing the Ministry of Education to focus on offsite manufacturing solutions and improve communication with schools. In Q1 2024, over 60% of new classrooms were initiated as offsite manufacturing, up from under 20% in Q4 2023. A value for money review has also been completed to ensure a more fiscally responsible approach moving forward.

Phase 2 – Interim improvements including consolidating property and network planning functions within the Ministry of Education as much as practicable, appointing a Functional Chief Executive with expertise in delivering infrastructure to have responsibility for all operational aspects of school property (this will be a two-year appointment). A new independent investment panel will also be established to provide the CE with expert advice on ongoing property decisions and future improvements. Appointments are expected to be completed by the end of the year.

Phase 3 – Determining the new permanent model or entity for operational school property, with decisions expected in 2025.

“Improving education infrastructure is an important part of laying the foundation for New Zealanders to succeed,” Infrastructure Minister Chris Bishop says.

“It’s absolutely essential that we clarify roles and responsibilities for school property management, provide greater transparency around decisions, and bring in disciplined and data driven oversight of investment and delivery.

“We want to reassure school communities that works and improvements currently underway at schools across the country will continue as planned while the Government develops a more efficient and sustainable solution for how we deliver school property going forward,” Mr Bishop says.

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