Charter Schools – what’s the real cost?
Have your say, write a submission today.
Below we unpack the latest Charter School model. Before we get into it we want to encourage you to write a submission. This legislation, for unexplained reasons, is being pushed through under urgency.
Submissions close on 25 July 2024. Click this link to go to the submission page.
Both NZEI Te Riu Roa and PPTA Te Wehengarua offer guides for how to write a submission.
Consider in your submission asking for the following safeguards:
No existing school may be considered for or converted to a charter school unless conversion is fully supported by the majority of staff and whānau
Public information must be made available on each successful and unsuccessful application for charter school status. The information must provide a clear picture of the curriculum, student wellbeing support, expectations of parents, and likely financial contribution expected from parents, allowing public scrutiny
Charter schools must provide informative annual reports to parents and the public
Government must commission independent evaluation by educational researchers, including analysis of educational provision, student achievement and wellbeing, and costs
The Office of Auditor General should investigate and report on how well the charter school experiment has met its stated aims, any costs to the rest of the education system, and the appropriate and effective use of public funds.
Charter Schools – what’s the real cost?
At present there are two categories of schools in New Zealand: state and private. The Coalition Government is proposing to (re)introduce a third type, called charter schools, and to significantly expand the third type by now allowing state schools to convert to charter school status.
Our schooling system is under-resourced. It has been for too long, putting great pressure on school leaders, teachers, and teacher aides1. The latest OECD economic survey report identifies other major challenges that come with having such devolved schooling and curriculum systems: (i) inadequate central support; (ii) inadequate regional support; (iii) inconsistent spread of best practices between schools. As a result, teachers and schools are left over-stretched to enact policy2.
These are the major problems the whole system faces, yet the Coalition Government’s response privileges charter schools, an experiment that may – or may not - benefit just a very small number of our 798,000 students in the state education system3. It is an ideological experiment with little robust evidence to back it4. The fact that charter school systems have been established and grown in other countries is not proof that they work better than existing systems, only that politicians and their lobbyists believe they will. Proponents claim that charter schools are about giving families greater ‘school choice’ but New Zealand already has 14 different school types and structures, including private and homeschooling options5.
Ironically, our schooling system already allows for the creation of designated special character schools where groups of parents propose them and they offer an education that is significantly different from what is already on offer locally.
Special character schools are publicly owned, publicly governed and publicly funded. Charter schools are designed to be privately owned, privately governed but publicly funded. They represent a significant transfer of public assets to the private sector, in other words, a form of privatisation of public schooling.
$153 million has been allocated to provide a new government authorising agency and support for 50 charter schools: a cost of $3.05 million per school. These schools are also likely to be small, with higher per-student funding, resulting in a higher hidden cost at other schools’ and students’ expense.
At the same time, only $67 million has been given to provide professional development for the inclusion of structural literacy in all the country’s 1,935 primary schools.
The Ministry of Education’s curriculum section is woefully under resourced for the wider ongoing design, resources, and professional development work needed to ensure that the current curriculum changes will improve teaching and learning.
Charter schools come at others’ expense, and with considerable uncertainty that they will all improve their students’ learning. Overseas experience suggests that when charter schools fail their students, families and communities, it is the state school system that is left to pick up the pieces.
A particular concern is that the proposed legislation was developed without the routine sector and stakeholder prior consultation6. It has then been introduced under urgency with no stated reason, a short window for submissions, rushed policy development, and seeking public submissions when substantial aspects of the operational policy are still not publicly known such as the funding model.
Given the highly controversial and divisive nature of charter schooling, and the commitment of a future Labour-led government to repeal this proposed legislation, the process has all the hallmarks of rushed education law, and bad education policy making.
What’s different about charter schools?
No requirement to reflect local tikanga Māori, mātauranga Māori and te ao Māori, or to take reasonable steps to make instruction in tikanga Māori and te reo Māori
Every state school is required by law to be responsive to Māori throughout their plans, policies and curricula. However, as the Ministry of Education has pointed out to the government, there is no specific Te Tiriti o Waitangi provision in the proposed legislation7. This exemption for charter schools would be a breach of the rights of Māori tamariki and rangatahi. In 2023, 25% or 203,900 school students were Māori. This figure is projected to grow to 30% by 20408.
In 2010, the National-led government endorsed the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP). Then Minister of Justice Simon Power said in the House that The Treaty of Waitangi “establishes a foundation of partnership, mutual respect, co-operation, and good faith between Māori and the Crown. It holds great importance in our laws, constitutional arrangements and the work of successive governments.”9
Article 8 of UNDRIP requires states to prevent any action that has the aim or effect of depriving indigenous peoples of their integrity as distinct peoples, or their cultural values or ethnic identities10. New Zealand is also a signatory to the United Nations Convention of the Rights of the Child (UNCRC). Article 30 states that a child who is indigenous shall not be denied the right, in community with other members of his or her group, to enjoy his or her own culture, to profess and practise his or her own religion, or to use his or her own language11.
Ministry of Education briefing notes to Minister of Education Stanford in January 2024 stated that “Evidence shows that for Māori to enjoy and achieve education success as Māori, education provision needs to respond to learners in the context of their whānau, have identity, language and culture at the centre, support high expectations and a strong sense of belonging, and Māori need to be able to exercise their agency and authority in education.”12
Without a specific Te Tiriti o Waitangi provision, the proposed legislation threatens the rights and obligations of all school children and their families, both tangata whenua and tangata tiriti.
Bulk-funded.
Teacher salaries are the largest component of annual government funding to schools. Teacher salaries in charter schools are not paid separately under bulk funding but as part of an overall ‘cashed up’ funding allocation. Bulk funding of salaries is claimed to give charter school sponsors and chief executives flexibility to use any salary savings elsewhere, but it also means that they alone are fully responsible for ensuring a balanced budget.
A key issue here is whether the salaries component is to be based on: (i) actual teacher salaries, (ii) average teacher salaries or (ii) top of the teaching scale salaries. The government attempted to introduce bulk funding or direct resourcing of teacher salaries several times in the 1990s. At first based on actual salaries, then salaries plus a top up, the entitlement was eventually calculated at the top of the salary range (the ‘fully funded option’) as an incentive for boards to participate13. Funding average teacher costs means that schools only gain financial flexibility over time by having to change to a mix of cheaper and more expensive teachers, not necessarily appointing the best available applicant to every vacancy. Funding actual teacher costs means that schools only gain financial flexibility by getting teachers to do extra, unpaid work, or having the work of teachers done at lower cost by unqualified staff, or unpaid by families.
Able to employ staff who are not registered teachers.
This means classes of charter school students under the everyday charge of someone in a permanent position who has a limited authority to teach (LAT) but is not qualified and does not have a practising certificate. This is quite different from having additional adults with particular expertise and knowledge assisting children’s learning under the direction of their fully qualified and certified classroom teacher, as already happens in many state schools.
And of course, this supposed flexibility for charter schools does not just mean an increase in unqualified teaching staff. One of the characteristics of English academy schools, academy chains of schools in particular, is the growth of ‘executive’ positions and, with these, executive salaries that often greatly exceed those paid to state school equivalents14. This is money that would be more productively spent for students.
Able to engage in site based bargaining of salaries and conditions
This has significant cost and inefficiency implications because each such school will need to purchase its own HR and other employment services and indemnity insurance. At present, the Ministry of Education undertakes periodic collective bargaining with the teacher unions, which provides for consistency, fairness and transparency across the system as a whole.
The Ministry of Education has pointed out to the government that the charter school initiative will be subject to New Zealand’s obligations to effectively implement International Labour Organisation (ILO) conventions and free trade agreements with the EU, among others, including, specifically, recognition of the right to collective bargaining15.
Able to design their own curriculum
But one of the major challenges facing the country at present is that every school in the country has to more or less reinvent the wheel with its own curriculum, teaching, and assessment resources.
If ‘structured instruction’, a ‘knowledge rich curriculum’, a prohibition on mobile phones and other curriculum mandates are claimed to be good for children in state schools, why will they not apply to charter schools? Conversely, why will state schools not enjoy the same curriculum flexibility as charter schools?
Run more on a business model
The charter school ‘business model’ means a sponsor employing a chief executive, and no formal requirement for local community elected parent involvement in governance through a board of trustees. Experience with the English academy ‘chain’ or Multi-Academy Trusts system suggests that local democracy suffers when parents do not have meaningful decision rights: whether a charter school should be established or a state school converted in the first place, how it should be governed when it is, and whether parents can choose to return to the centrally governed state school system16.
Able to charge parents additional fees
This provision is nominally related to property costs but also other costs. This may be a particular issue for smaller schools of the sort that were seen in the previous attempt to establish Kura Hourua. Small schools struggle to get the economies of scale that much larger schools enjoy.
Able to set strict rules for both parents and students that enable them to be covertly selective of who they take or retain.
The proposed legislation permits a sponsor to refuse enrolment to anyone who does not accept the ‘special character’ of the charter school. Yet we know that in order to meet their contracted achievement targets, some American charter schools have been criticised for their cumbersome enrolment policies, authoritarian student conduct codes, strict requirements for parent/caregiver supervision of homework, longer school days and school years, grade/year retention policies for students who do not reach standard, and discouragement of students who are neurodiverse or who have significant additional learning support needs17. Families who will not or cannot comply end up returning to the state school system.
Able to be run for profit
Sponsors seeking to profit from charter schools will be able to do so without being required to make any private equity investment of their own. Sweden, for example, introduced a school voucher system and restructured its schooling in the 1990s to permit corporate chains and other private providers to compete with state schools. Today, the unintended educational effects of the market changes and associated reforms include a high proportion of untrained teachers, commercial sensitivity determining the information that schools are prepared to release publicly, and profit-taking prioritised over the quality of teaching, learning and education facilities. Sweden’s Pisa achievement has also plummeted18.
Perhaps as a direct consequence of New Zealand’s international free trade obligations19, there appears to be nothing in the proposed legislation on New Zealand charter schools that would prevent an overseas private equity firm, for example, from opening or taking over charter schools in New Zealand, as is the current situation in Early Childhood Education. Yet international free trade rules do allow governments to retain public policy safeguards so it is a concern that the proposed legislation does not signal an intention in this respect.
Able to avoid community and public scrutiny
Under the proposed legislation, the contract with the sponsor takes precedence over community and public scrutiny. Charter school sponsors will not be subject to the Official Information Act or Public Service Act. It is unclear whether the Ombudsmen Act will apply to sponsors.
The Bill of Rights Act will apply to sponsors and those working in charter schools. Both the Ombudsmen Act and the Official Information Act will apply to the Charter School Authorisation Board.
It is unclear what level of scrutiny the Education Review office will have in reviewing charter schools. For example, existing ERO review of private and independent schools is strictly limited to ensuring that the school meets the criteria for registration as a school.
While charter schools will have set achievement targets, the fact that they also have 10-year renewable contracts means that the targets are not going to have real weight.
Converter charter schools
In this first phase alone, 35 existing state or state integrated schools are expected to ‘convert’ to charter schools, with applications starting in July 2024. Some schools identified as failing will also be converted. How these are identified is still opaque; as is how much say these school communities and staff will have. The proposed legislation enables the Minister to direct state school boards to apply for conversion to a charter school.
How successful can such conversions be, without the sustained additional support and expertise needed, and not provided for in the charter school model? This mix of sponsored and converter academy schools, and local authority maintained schools has existed since the early 2000s in England. The National Foundation for Educational Research (NFER) notes that it is very difficult to compare the performance of the three types of schools they analysed. The NFER concluded that evidence comparing academy and local authority schools is mixed but on the whole there is no substantial difference in performance20.
Some state school leaders will be attracted by the notion of ‘freedom’ from central bureaucracy. But freedom alone is not enough to ensure wise decision making, high staff calibre, and engaged students. Equally, if central government and Ministry bureaucracy is the issue, why not simply free up all state schools from the ‘red tape’, rather than just the charter schools?
Existing staff transfer on their existing salaries and conditions, but new staff will have salaries and conditions set by the charter school sponsor. One can foresee tensions with this, particularly where charter schools lack experience of site-based negotiation of employment conditions and employment law, for example.
Converting schools can continue to use their government property and buildings. They will be responsible for their maintenance, but there is nothing to guarantee that if they falter or fail, that they hand back the property and buildings in good shape. This is another likely hidden cost, as are the procurement processes in charter schools21 and management fees for reconverting charter schools to state schools22.
A related problem is that the proposed legislation provides for conversion from state school to charter school but not the reverse. If parents decide in their children’s best interests that they want their local community school to revert back within the ten years of the contract, with or without the support of the sponsor, there is no mechanism for them to do so. Indeed, with no requirement in the proposed legislation for parent representation on charter school boards, it is unclear what meaningful decision rights parents will have.
New charter schools
15 new schools are expected to be funded in the charter school model. They are likely to be specialists in some form, such as catering for neurodiverse students, those with a particular career or discipline interest. There is some appeal here for Māori, Pasifika, and other ethnic and linguistic groups who find the current curriculum unsupportive. There will also be interest from organisations that chafe against their members’ children’s inclusion in mainstream education.
The new schools will find their own teaching and learning spaces. Many charter schools overseas ‘free ride’ public spaces and venues such as libraries, museums and sports fields to compensate for their lack of facilities.
They are expected to be innovative. However, evaluations of the previous attempt to establish Kura Hourua showed little evidence of innovation in curriculum, teaching and learning23. Decisions made about these new schools will need to be carefully made: is the innovation soundly based? Are the values of the school consistent with legislation on human rights including children’s rights, the rights of indigenous peoples and the rights of persons with disabilities?
Should we expect charter schools to do better than our existing schools?
Not as a group. The research on charter schools in the U.S.A. shows little difference as a whole. Some low performing schools in England that were taken over by academy trusts have actually fared worse than others that remained with their local authority. Sweden’s effective ‘voucher’ scheme that encouraged state-funded corporate for-profit schooling providers has failed families and students24.
It is claimed that state systems will learn from successful innovations in charter schools. Yet, if there has been innovation in charter schools or taken-over schools, it hasn’t been transferred to mainstream schools. Innovations can be very staff-specific, or too dependent on particular resources or circumstances to transfer well.
The accountability of charter schools for their students’ learning and wellbeing has to be clear, together with public reporting of relevant information about the use of their public resourcing.
The 2023 OECD Economic Survey of New Zealand noted that charter schools needed clear safeguards: ‘experience from different countries indicates that the impact on equity and educational quality of publicly funding private providers is influenced by the institutional arrangements surrounding them (OECD, 2017). It is important regulation prevents undesirable outcomes for equity such as greater segregation through allowing the school to select students based on academic achievement or reduced professionalism by allowing unregistered teachers’ (p.117) 25.
It is also important that this experiment is independently and rigorously evaluated.
Tomorrow’s Schools Independent Taskforce (2109). Our schooling futures: Stronger together. Whiria ngā kura tūātinitini. Ministry of Education; Pūaotanga Independent Review Panel (2021). Pūaotanga Realising the potential of every child An independent review of staffing in primary schools. NZEI; Bourke, R., Butler, P., & O’Neill, J. (2021). Children with additional needs. Report to The ACCORD. Final Report. Ministry of Education; Teaching Council of Aotearoa New Zealand (2023). Snapshot of the teaching profession in Aotearoa New Zealand 2023. The Council. Education Review Office (2024). Ready, set, teach: How prepared and supported are new teachers? The Office.
OECD (2024). OECD economic surveys 2024: Executive summary. OECD.
Ministry of Education. School rolls.
Problems with CREDO’s charter school research: Understanding the issues. National Education Policy Centre (NEPC) CREDO report makes overstated claims of charter school gains. NEPC.
Ministry of Education. Types of schools and year levels.
Ministry of Education. Departmental Disclosure Statement. Education and Training Amendment Bill.
Ministry of Education. Departmental Disclosure Statement. Education and Training Amendment Bill.
Ministry of Education (2024) Briefing note: Māori education overview. BN-1321550
Ministerial statements: UN Declaration on the Rights of Indigenous Peoples - Government support. Hansard Debates Volume 662, Page 10229.
United Nations Convention on the Rights of the Child.
Ministry of Education (2024) Briefing note: Māori education overview. BN-1321550.
Cross, B. (2002). Bulk funding: A retrospective. A paper for the Education International Conference (New Zealand).
Belger, T. (2021). The emerging ‘super league’ of academy trust CEO pay. Schools Week.
Ministry of Education. Departmental Disclosure Statement. Education and Training Amendment Bill.
West, A., & Wolfe, D. (2018). Academies, the school system in England and a vision for the future. London School of Economics.
Weiner, K., & Mommandi, W. (2021). Why charter schools are not as public as they claim to be. The Conversation; The Center for Learner Equity (2021). Enrollment of students with disabilities in charter and traditional public schools. Technical Brief 1. The Center.
Wilborg, S. (2014). The big winners from Sweden’s for-profit ‘free’ schools are companies, not pupils. The Conversation; Iselau, G. (2022). The Swedish school system: its problems and possible solutions. European Educational Research Association; Kornhall, P. (2020). Sweden: A failure in market-based education. Save Our Schools Australia.
Ministry of Education. Departmental Disclosure Statement. Education and Training Amendment Bill.
NFER (2017). Academies and maintained schools: What do we know? NFER.
Office of the Auditor general. Part 3: Good procurement processes were not followed.
MartinJenkins and Associates Ltd (2018). Multi-year evaluation of Partnership Schools Kura Hourua, Summary of findings across years. Ministry of Education.
Kornhall, P. (2020). Sweden: A failure in market-based education. Save Our Schools Australia.