Why did the Government persist with its deeply unpopular plan to increase classroom sizes for so long? Political editor Audrey Young explains

It wasn't until two days after the Budget that National Cabinet ministers in Auckland started to realise the backlash against their education changes was serious.

They were attending the party's northern regional conference at Waipuna Lodge in Mt Wellington.

On the way in, they had passed John Minto et al, protesting as usual. As John Key noted at the time, the protesters couldn't stay for lunch because they had another protest to go to outside Mt Eden Prison.

What Key and his cohort didn't expect was the rumbling of protest on the floor of their own conference - an unmistakable anxiety about what the changes to class ratios meant for schools.


One delegate was especially disturbed at a notice that Murray's Bay Intermediate School on the North Shore had sent home to parents on Friday afternoon.

It was written by principal Colin Dale, a self-declared centre-right thinker, and it was headed "Budget Deceitful and Bad for Our Students".

"It was suggested that a small increase in class sizes could be tolerated in return for an improvement in educational quality," it said.

"Rather than receiving a small adjustment in staff, the staffing of all intermediates and schools with Year 7 and 8 students across the country has been slashed. Some schools will lose seven or eight teachers. We will lose [more than] six teachers. This was not signalled prior to the Budget and was not part of the announcement."

The only people more surprised at the Budget outcome than the intermediate schools were the Cabinet ministers who had signed off on the policy without realising its effects.

It seems they ticked it off at a Cabinet meeting chock-a-block with Budget items and were satisfied by assurances that 90 per cent of schools would barely feel the difference.

Delegates to the conference initially directed their questions to Steven Joyce.

They should have gone to English who had been laying the groundwork for changes to the ratios since 2009.

He has made no secret of his frustration that so much of the growth in Vote Education was swallowed up by automatic increases under the funding formula rather than discretionary decision.

In letters to the previous Education Minister Anne Tolley, English began raising questions about pressures on roll growth and staffing entitlement.

Nothing was done in the first term but the message that teacher quality mattered more to student achievement than class size was successfully seeded.

Hekia Parata is a political protege of Bill English. She first stood for National in 2002 under his leadership, quit the party after Don Brash's Orewa speech, then stood again successfully in 2008.

The National Party delegates who raised questions were told to raise them with Education Minister Parata at her break-out session.

She was in a typically bouncy mood at the conference. After the difficulties her predecessor, Tolley, faced with the education sector bedding-in national standards to primary schools, Parata had worked hard to be respected. She was touted as a potential future leader.

On that Sunday morning she could easily have felt that any disgruntlement over the class ratios had been confined to rude press statements by union leaders and concerns by polite professional groups.

By Tuesday the smile had vanished from her face.

Parata's attempts over several days to reassure parents, teachers, colleagues and conference delegates that things would not be as bad as they seemed on paper had failed to quell concerns. Her explanation that a greater drive for teacher quality was a worthwhile tradeoff for minor increases in class size was drowned out.

The fact that there would be a working party and extra funding to help the 244 worst-affected schools transition over four years didn't wash.

Nor did the claim that "provider" intermediates that lost automatic funding for technology staff would be able to get it back if contributing schools bought their services.

She repeated her assurances that 90 per cent of schools would lose less than one full-time teacher or even gain a teacher, but her credibility was undermined when neither she nor the ministry would tell schools how they would be affected until September.

By Monday Key and and the Cabinet realised they were in serious trouble.

One of the worst affected schools was Albany Junior High, in Key's electorate, and two, Murray's Bay Intermediate and Northcross Intermediate, were in Murray McCully's electorate.

English's Budget plan was going off the rails. It was no longer the penny-pinching Budget that ended tax refunds for paperboys or slowed the rising threshold for aged residential care.

It was the Budget that could see cuts to frontline staff expressly contrary to National Party promises.

At caucus the next day Key was able to assure MPs who had been lobbied by teachers, parents, and sector groups that help was on the way. That afternoon he announced that schools would lose no more than two teacher entitlements over three years rather than the seven, eight or nine staff they feared.

At Murray's Bay Intermediate Dale had received 163 messages of support for his first newsletter and two against. He sent out a second newsletter headed "Progress with Budget Cuts Protest".

"We are making progress but we are still applying all the pressure we can to help the Minister of Education understand the profound innate problems in her recent decision to change the formula to schools," he wrote. "In my view we must continue to protest and we have a very powerful list of actions should we be ignored."

Exactly when during the process Parata realised what the huge impact would be on intermediate and middle schools she is not willing to say.

But incredibly the Cabinet learned about it only after she had made her pre-Budget announcement in a speech to a business audience in Wellington on May 16.

There were nine days between her announcement and the actual Budget.

Gary Sweeney, the principal of Pukekohe Intermediate, and president of the Association of Intermediate and Middle Schooling, read the pre-Budget release on the May 16.

It set out the new ratios for Years 1 to 13 but it made no mention of the one teacher to 120 students ratio that intermediates got for technology teachers in Years 7 and 8, so he emailed Parata's office that night to ask what had happened to it.

He received a call the next morning from one of the ministerial advisers to say he would have to wait until Budget Day, when he was invited to a briefing in Parata's office.

In the meantime he, like most other principals, assumed his school would be part of the lucky 90 per cent. Commentators were praising the Government for their strategy in getting the bad news out of the way earlier.

It became clear to schools only on Budget Day that the 1-to-120 ratio for technology teachers had been assigned to individual children in contributing schools rather than to the intermediate or technology centres providing classes - and what a devastating affect that would have.

It took a few days for that to become widespread knowledge.

No one is willing to say it was an error. But principal Colin Dale says McCully had admitted as much.

Parata is not willing to say when she knew that intermediates would be so badly affected, possibly because any answer would be embarrassing.

If she knew about it earlier and did not inform her Cabinet colleagues, that would show unforgivably poor judgment.

If she didn't know about the consequences of her own policy, that would show dismal oversight by her, plus incompetence or stealth by Education and Treasury officials, and more likely all of the above.

Despite her refusal to answer, it has become clear from her public comments which it was.

She did not know the effects before she announced the ratios on May 16. However, she found out before Budget Day because she was forced to defend at her post-Budget briefing.

She was effectively forced by former Education Minister and Speaker Lockwood Smith to admit that she had not asked for a list of all 2436 schools and how they would be affected to present to Cabinet.

She has also said the Government never intended such extreme results. And she has refused to say she was happy with the Ministry of Education's modelling - rather saying they had all learned lessons.

By the end of last week it was evident that the mitigation measure announced on Tuesday had had no effect.

The issue was gaining momentum as time went on, not losing it.

Support partners United Future's Peter Dunne and the Maori Party's Tariana Turia were voicing concerns. The media was having a field day.

The public seemed unaffected by the backdown to limit the damage to schools - the issue had been elevated to a matter of principle and pragmatism wasn't cutting it.

The Prime Minister left for Europe on Thursday, the day Parata faced a noisy demonstration at Paremata, her home patch.

On Thursday and Friday senior ministers Joyce, Brownlee and English, were discussing whether to abandon the policy or to make a further backdown - to alleviate the cause of the policy distortion, the technology teachers' allowance.

English was not convinced it should be abandoned as this would put the issue off-limits for years to come. Budget backdowns can weaken a Finance Minister as George Osborne is finding out in Britain, with his third this year.

Ministers went into Queen's Birthday Weekend with the issue unresolved.

With Key away, English chaired Cabinet on Tuesday this week. He agreed to meet Sweeney beforehand to hear first-hand the concerns of the intermediate principals.

That day more debate was had. There were three options: hang tough and let it die down, make more changes to the policy, or abandon it.

Tuesday was the G7 meeting, a coalition of education sector groups uniting in their demands for a reversal of the policy. It was no day for a backdown by Government.

They did what most governments do when in doubt - do some polling - and decided to revisit the issue later in the week.

Parata headed north to Tolaga Bay on Wednesday to watch the passage of Venus across the face of the sun.

Key received the polling results in London on his Wednesday. They showed that the messaging around teacher quality resonated strongly, leading to the conclusion that the policy could have been accepted if it had been done properly.

But the polling also showed a huge depth of feeling against the changes.

Brownlee headed down to Parata's office for a 10am conference call with Joyce, who was on his way back from Tolaga Bay, English, en route to Whakatane, and Key, who had recently arrived at his hotel in Hamburg.

Unless they backed down, the meeting concluded, they would be fighting it forever, and destroying the prospects of a promising and important minister.

The decision was obvious and it was announced by Parata at 2pm.

Murray's Bay principal Colin Dale sent out his third newsletter on the subject soon afterwards headed "Government hears our Concerns".

This time he wrote: "I am delighted to inform you that all the staff and Board of Trustees at Murray's Bay Intermediate applaud the Government's decision to keep the student teacher ratios as they are at present ... They have listened and acted appropriately."