A multimillion-dollar deal for the first privately funded state schools in New Zealand has been signed. Not all parents are happy with the economics, but a principal tells Kate Shuttleworth his job is about learning, not earning.
Daniel Birch is enthused. Words like innovation, hub and pathways tumble from his mouth as he talks up the merit of the first privately funded schools in New Zealand.
Multiple teachers will work with large groups of children in open-plan areas surrounded by smaller "breakout" rooms.
Mr Birch will be principal. He was hired before the deal was announced by the Government late last month. Building work began before the announcement too. A board of trustees has been set up and chairman Alan Curtis appointed.
Critics might suggest the vocabulary is more suited to a business conference than a seat of learning - and the head of the consortium behind the project reckons they could earn $100 million from the deal over 25 years.
But Mr Birch says the funding model - known as a public private partnership (PPP) - isn't what excites him about the job, it's the contemporary learning models the board has proposed.
"We're really trying to engage in what 21st century-style learning can be and that's what attracted me."
The schools are being built at Hobsonville Point, West Auckland, part of a development on a former airbase that will house up to 8000 people by 2022.
The primary school will have room for 690 children, and the secondary school, 1500.
The Ministry of Education will own the buildings but will have no responsibility for their design, construction, finance or maintenance.
That responsibility will belong to Learning Infrastructure Partners (LIP), a consortium headed by Steven Proctor, who is from the UK and has been involved with PPPs in his homeland, Australia and South Africa.
After the schools open LIP's duties will include taking care of cleaning, IT networks and maintenance of the buildings and grounds.
Mr Proctor would not say exactly how much the consortium would make but said it could be about $100 million over the course of the contract - $4 million a year.
But in return the PPP procurement model meant the private sector had responsibility for the assets.
"The second biggest estate the Government owns is schools and they have something like a $4 billion to $5 billion leaky buildings problem in schools at the moment.
"All of those schools were procured by the Government - so that's a huge hit to the taxpayer. If they were PPP schools that wouldn't exist - it would be my problem. God help me."
Mr Birch is delighted he won't have to worry about maintenance, which he estimates took up a quarter of his time at state-funded schools.
He wants to spend more time on education. And "innovation" is part of his background - as well as his future.
Hired in March, he came from Christchurch primary Discovery One, a state-funded school set up by former mayor Vicki Buck where children help manage their own learning.
He will adopt a similar tack at Hobsonville, retaining the elements made compulsory by the Government but otherwise asking the community to help develop the curriculum.
"We won't force them to learn about Vikings if they're not excited about it."
Perhaps not unexpectedly the unions are less enthused - and not all parents are convinced.
NZEI president Ian Leckie says schools should belong to their community, not a private company.
"Any school being owned, run or operated for a profit by a company is a major departure from where school community relations currently fit."
And PPTA president Robin Duff said the Government was wrong to cite commercial sensitivity when refusing to reveal the sums involved in the project.
"It is not acceptable for the Government to hand over millions of taxpayer dollars to a private company then allow it to hide from public and parliamentary scrutiny."
Rachel and Joshua Osborne moved to Hobsonville Point with their children, Maddy, 6, and Lewis, 2, last year. Rachel, a stay-at-home mum, isn't convinced by the new model. Maddy, who has autism, is enrolled at Hobsonville School.
"I am sceptical of the idea, it seems like another step down the privatisation path. New Zealand has become quite a difficult place to live," Rachel Osborne says.
She doesn't want to enrol her children at Hobsonville Point but might not have any choice.
"We've been told zoning changes will take a big chunk out of Hobsonville School's zone."
Josef and Stephanie Hargraves moved to the development last year with daughters Kaitlyn, 6, and Sophie, 1. Josef is more positive, although Kaitlyn will stay at Whenuapai School - a primary - for now.
"We're pretty excited about the high school and it seems to be a lot of government departments are going down the PPP avenue. There might be a few issues but long term it will be good because the principals and teachers won't be concerned about the facilities."
It's not hard to see why the Government thinks PPPs make financial sense. It faces a huge bill for maintaining schools, with the total boosted significantly by the cost of leaky building repairs.
They're keen to get on with the job. The Hobsonville Point project has been fast-tracked and doors will open next January.
Associate Minister of Education Craig Foss wouldn't comment on the need for haste, or how much the Government stood to save in repairs.
"I'm confident LIP is up to the task of creating world-class facilities for 21st century learners. This is important because the PPP model transfers all risk on to the private partner."
But economist Gareth Morgan says the Government is hurtling toward a crisis.
He says the lack of funds for school infrastructure is a product of adversarial politics and PPPs are the latest attempt to shift the burden. "They're turning to any other sort of trick to extend the honeymoon."
Close watch on private funding risks
Governments in a more precarious financial position than New Zealand have been reconsidering their love affair with PPPs.
A report by the UK's National Audit Office - the body that scrutinises public spending on behalf of Parliament - said that during the global financial crisis, costs of PPPs - public private partnerships - rose by an average of 7 per cent as credit became more expensive.
The worse case recorded was a scheme to widen the M25 motorway around London that cost the Government almost a quarter more than budgeted.
The UK Treasury has committed to scrutinising all public private deals and is aiming to reduce the cost of existing contracts.
British taxpayers are already locked into enormous payments for 667 schools, hospitals and other public sector programmes.
The report said Britain's liability for PFIs (private finance initiatives) since 1997 could exceed £300 billion ($576 billion).
But the New Zealand Treasury executive who led negotiations for the school PPP contracts still believed it was the best way to fund new building projects.
He said the model allowed quality developments with the private sector taking responsibility.
"Whether they get paid in full for building the school depends on their performance under that contract over the 25-year period."
He would not comment on the value of the asset at Hobsonville Point, nor any savings the Government could make.
- APNZBy Kate Shuttleworth @K8Shuttleworth Email Kate