Plan in place for privately built school

The Government plans to announce the construction of a privately built school in this year's Budget, papers released under the Official Information Act show.

However, it will not yet say which schools are being considered for a public-private partnership (PPP).

Education Minister Anne Tolley signalled last year the Ministry of Education was exploring PPPs to build new schools, using private-sector capital.

The papers show the ministry and Treasury have well-advanced plans for the construction of a trial PPP school, with others to follow if the first is successful.

The ministry spends $500 million a year on school buildings, and must build three new secondary schools over the next four years to cater for growth.

The papers say that Treasury believes construction worth over $50m is suitable for a PPP. The average secondary school costs about $70m.

Officials have asked several major contractors to tender for the first project.

They have advised the Government that using PPPs for school buildings is still "high risk" because of the potential for litigation or opposition from the education sector.

The reports say that while PPPs have been used in some countries, New Zealand neither has suffered from underinvestment in school property nor has it had the same demand for new-school expenditure as Australia has.

Under the plan, a private company will build and own the school, but the Crown will own the land and its board of trustees will retain governance and operational responsibility.

However, the papers show, the school's owners could use the school outside normal school hours and that school boards of trustees would have to negotiate an "occupancy agreement" with the private owner.

The ministry has advised the Government the plan may not be popular with the teacher unions and school boards.

It says it should ensure that media coverage "explains that a PPP is an alternative way to procure and maintain new school property; it is not a step towards privatisation, or a threat to the responsibility of boards of trustees for the operation of a school".

The New Zealand Educational Institute has signalled its opposition to PPPs, while the Principals' Federation wants more information.

A spokesman for Tolley said yesterday the Government was still at "stage-one business case" level, but was using specific projects to see whether PPPs offered value for money.

"At this early stage, we're not prepared to divulge which projects are being used – we'll be in a position to do so if the stage-one business case suggests that the PPP project should proceed further," the spokesman said.

- © Fairfax NZ News