A new proposed funding scheme for schools and teachers is raising the eyebrows of Rotorua principals, and has already been criticised by both the secondary and primary school union.

In consultation documents published on the Ministry of Education's website, the department proposed a new funding system with "the potential to increase flexibility in schools' use of funding while simplifying funding arrangements".

The change would set a "global budget" for each school, delivered as cash instalments for school expenses, and a credit system for salaries.

Lynmore School principal Lorraine Taylor said there was the potential for principals to be inclined, or feel obliged to employ less experienced teachers at a cheaper rate to "balance the books".


"It could see a rise in the employment of newly qualified teachers which would help them get jobs but it could also mean a fall in the numbers of experienced teachers," she said.

Mrs Taylor said another potential issue could be a stagnation in the workforce.

"Older more experienced, more expensive teachers won't feel confident to change jobs in case they can't get re-employed because they are expensive.

"This would result in less movement between schools of experienced teachers, moving schools often brings new ideas and approaches ensuring schools are constantly revitalised by new and experienced teaching staff."

John Paul College principal Patrick Walsh agreed the current funding model was too complex and inflexible.

"The current proposals might give us more simplicity and flexibility, but won't address the more fundamental issue that the school resourcing pie is too small no matter how you cut it."

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Mr Walsh said more financial training may be beneficial for principals.

"Principals are trained as educators, not accountants.

"While we welcome more discretion, many of us might need further training on financial management to ensure our schools are not disadvantaged."

Rotorua Principals' Association president and Ngakuru School principal Grant Henderson said he felt guarded about the proposal until more details were released.

He said the proposal could be another way of saving money from the Ministry of Education, but said the more that was invested in education, the bigger the benefits would be long term.

NZEI national executive general member Jan Tinetti was wary about the proposals.

"I've looked at the cabinet paper and to me it looks like bulk funding just with another name, and the only difference I can see is that it is coming from the centre rather than coming from the school."

However the documents stated: "This is a significant difference from historical bulk funding proposals which would have seen schools charged the actual salary."

The consultation documents are part of the Government's Education Funding Review, which has also proposed scrapping the decile system and targeting funding to at-risk children.


According to the documents, the proposed changes would mean:

• Principals would determine the split between cash and credit, with the flexibility to make adjustments during the year.
• Unspent credit would be paid out at the end of the year and a process for recovering credit overspends would be established.
• Teaching staff salaries would be charged against the "credit" portion at an average rate.
• Non-teaching staff salaries would be charged against the "credit" portion at actual cost.