Partnership schools haven’t been around for very long but a number of them are already facing the challenge of demand exceeding supply due to their outstanding results and popularity. Yesterday I chatted on the phone to David Seymour about the challenge that these successful schools are facing.
One of the things we discussed reminded me of a choice I was given as a child. I wanted two things but was told I could only have one. I had to ask myself which of the two was the most valuable.
Imagine that a rich relative has given you two choices:
1.The ownership of a house valued at $500,000 for the rest of your life that is built on land belonging to your relative that you are never allowed to sell. If your family grows and needs more space the relative will either rebuild the house to suit you or build a second house on the section.
2. A weekly income from a Trust fund equivalent to the average rent charged on a $500,000 house in the same area that will be adjusted annually to reflect inflation.
Number one is a good deal where your housing needs are being taken care of by your relative.The downside is that although the house is an asset belonging to you it would be dead capital and you would have no choice over where you live.
Number two would give you more flexibility as you do not have to rent a $500,000 house. You could rent a $300,000 house and use the excess income for other things. The downside is that if your needs change it is up to you to find extra money.
The reason I have used the above analogy is because the original purpose of Act’s policy regarding Partnership schools was to give them the liquidity of cash to spend how they chose instead of dead capital assets like State schools have. To work out the numbers they asked themselves how much it would cost an average school to rent their buildings if they didn’t already own them. They then divided that by the number of students using the buildings in order to come up with a per student funding formula for Partnership schools.
David Seymour believes that education professionals are the people who should be making the decisions on how money should be spent on students. He believes that giving professional educators autonomy leads to better performance which is why he supports the Partnership model.
What Mr Seymour doesn’t believe in is what he calls “double dipping.”He recognises the very real challenges that successful Partnership schools are facing now that demand outstrips supply but he doesn’t believe that it is fair or equitable to give them one-off lump sum cash grants for purchasing, refurbishing or building property. He believes that lump sum cash grants for a property are a benefit of the State school model and flexibility and cash liquidity are a benefit of the Partnership school model. Partnership schools may want both but Mr Seymour says that their contracts say that they can only have one.
Not everyone in the PSKH community agrees with Mr Seymour’s perspective of the situation.Some feel that the two models are not financially equitable because of the many state schools who receive large cash injections for future growth. They feel that the property component is only comparable to State schools for maintenance and that new teaching space is a different issue entirely.
So how are Partnership schools going to fund growth if they cannot get lump sum cash grants like State schools do? The Partnership Authorisation board has stated on their website that they should…
partner with community organisations, iwi, businesses, philanthropists and other third parties for additional resourcing.They will need to find partners, sponsors.
..Sponsors may need to look at securing additional resources to avoid the need to shift as rolls grow, and to provide a buffer against roll fluctuations.
Vanguard Military school which was one of the first Partnership schools had a five-year plan right from the start.They see their school as a business. When they expand to another campus in the future they realise that they will now need to attract investors in order to make it financially possible.It will be difficult and they will need to sell themselves and their track record if they want to achieve their 5-year goal.
An added challenge for new Partnership schools is that they are being offered a lower level of funding at the start than the first ones back in 2013. Partnership schools had an average of approx 1.3 million, to begin with in round one but now new schools get around 400 thousand to start up with. This has discouraged some of the schools who had hoped to have multiple sites in the future. One person, I spoke to said that this lower level of funding means that it is no longer possible to start a new school without getting investors or sponsors involved.
The lower start-up amount may possibly be the reason why five schools were authorised to start in 2014,four in 2015, none in 2016 and two in 2017.
*UPDATE I received a clarification from David Seymour’s office regarding the above sentence.
For schools starting in 2016, there were no applications as there was never any application round.
For schools starting in 2017, there was actually an increase in application numbers: 26 applications, compared to 19 in the previous round.
The road ahead is not going to be easy. Partnership schools have the benefit of flexibilities and freedoms but cannot go cap in hand to the government because their roll has increased and they need more space. If disaster strikes and their buildings burn down or need to be strengthened or fixed, the buck stops with them.