The Labour Party says Education Minister Hekia Parata's consideration of performance funding in schools could lead to the most radical shakeup of education in a generation.

Ms Parata has revealed that she is looking to fund schools according to the progress their pupils made.

In an interview with the Herald on Sunday, she described the existing regime, in which schools in deprived neighbourhoods were paid more, as a "blunt instrument".

The Ministry of Education was calculating new decile rankings for the nation's 2500 schools from last year's quake-delayed Census.


Ms Parata agreed that schools in some gentrified areas, especially in Auckland, could lose hundreds of thousands of dollars, while others would gain similar amounts.

Ms Parata said the current funding system was unsatisfactory: "I think we need to be looking for something else."

Labour's education spokesman Chris Hipkins said that the shakeup could have the potential to rob thousands of New Zealand children of their potential.

"Taking money from schools that are struggling and giving it to ones that are already doing well is only going to exacerbate the problem.

"Like George W Bush's 'No Child Left Behind' policy, it will widen the gap between schools and rob hundreds of thousands of kids of their best shot at education."

He said that a child's achievement depended on a wide range of factors including whether they were living in a cold, damp house and whether their parents were educated and had time to spend with them.

"The whole notion that schools should be funded based on 'performance' is fatally
flawed. For starters, there are no reliable means of measuring it."

He added: "In secondary schools, funding based on student achievement will incentivise schools to push kids into less challenging credits that are easier to attain rather than extending them and pushing them to achieve their full potential."

Education unions said Ms Parata had assured them she was only exploring funding options and she would go into more detail next year.