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22 July 2005 Bulk-funding: time to get back
to the future ‘Bulk-funding’ –
it’s a phrase that strikes a strong note in education circles;
and, after being proposed as a policy again by the National Party
recently, has elicited much criticism from the usual suspects. But
why all the fuss? Education Minister Trevor Mallard
told rural principals last month that their schools would suffer
under such a system. He went so far as to warn rural communities
of “the disaster that bulk-funding would be to their schools.” Bulk-funding simply means the government
gives each school a lump sum to spend as they want on teaching staff;
and, despite the criticism, mainly from teacher unions, the evidence
suggests New Zealand’s 1990s experience with bulk-funding was
largely positive for schools. Two studies carried out in the
late 1990s – one surveying bulk-funded schools, the other analysing
school spending patterns – found a vast majority of respondents
expressed strongly favourable views about their schools’ participation
in bulk-funding. They reported positive outcomes,
including increased flexibility (especially in staffing matters),
financial advantage, the ability to self-manage and improved teacher-student
ratios. In one, fully 94 percent of respondents
felt their schools had been mostly advantaged, and 80 percent indicated
their schools would prefer to continue with bulk-funding. Since, under bulk-funding, schools
receive the money to pay teachers’ salaries, instead of being
provided with payment ‘credits’, they can determine their
own staffing structures within their budget. Commonly, critics says that schools
can’t be trusted to use that money ‘wisely’ –
they would use it for the wrong things or boards would not be sufficiently
competent to take on additional responsibilities. So what did boards do with bulk-funding’s
additional funding and flexibility? Install pokie machines? Hardly! More than 80 percent of bulk-funded
schools surveyed used the money to hire extra teaching staff and
over half made changes to the way they allocated their budgets,
with most saying they put more money into staffing matters, that
is: teachers, teacher support and professional development. A related criticism is that bulk-funding
leads to widening gaps between ‘rich’ and ‘poor’
schools; that only schools in leafy suburbs would be able to take
on the greater management responsibilities. But the evidence is that bulk-funded
schools were drawn from across the socio-economic spectrum: schools
from the bottom three deciles made up around 36 percent of all bulk-funded
schools. Earlier this year, the secondary
school teachers’ union said the reintroduction of bulk funding
would see parents pay more school fees and force schools into high-risk
ventures such recruiting international students. Their argument conveniently ignores
that these activities are already happening. Since bulk-funding’s
abolition, parental fees and contributions have increased by 35
percent to over $200 million annually; and the number of international
students has increased from 5,000 to around 17,500, generating an
extra $85 million annually. Despite the union’s vocal
opposition to teacher salary bulk-funding, it is interesting to
note that, in 2005, schools are already bulk-funded in many areas,
and on this unions are silent. The operational grant that all
schools receive is bulk-funding for their day-to-day running. Schools
often complain that their grants are not big enough but they do
not complain that they get grants. In fact, they value the freedom
to spend them as is most fitting for the school. Schools are better off if they
have flexibility in spending as opposed to having money ‘tied’
to certain expenditures. It seems that is only because teacher unions
have a vested interest in how teachers are paid that they make noises
about bulk-funding. Indeed, even on teacher salary
bulk-funding they keep mum, when it suits. National education spokesman
Bill English points to a 2000 report, ‘Bulk Funding: A Retrospective’
that says under the Labour Government ‘an individualised, bulk-funded
solution... is to continue’ and that Trevor Mallard insisted
the ‘flexibility’ that bulk-funded schools had come to
expect had to be retained in some form. The solution was to ‘allow
schools to continue the practise of employing teachers from the
operations grant...’ Mr English argues that the report
shows Labour and the PPTA did a deal behind closed doors to allow
schools to keep some of the benefits of bulk-funding, while both
continued to publicly bag it. Mr Mallard and his union allies
are not the only ones to see good things in bulk-funding, although
others don’t hide their approval. A 1999 study from the Education
Review Office, for example, noted the office was satisfied with
the performance of a greater proportion of bulk-funded schools than
centrally-resourced schools and that, by 1999, the boards of bulk-funded
schools were operating better than centrally-resourced school boards. Bulk-funding was never a fringe
activity, either. At its cancellation, more than 30 percent of schools
– with over 40 percent of teachers and students – were
bulk-funded. While some see such self-management
as something to be feared, it is nothing more than the management
freedom already enjoyed by government departments and most of the
education sector, including tertiary institutions, private schools
and early childhood centres. Schools are also hampered by too
much regulation, covering all facets of school operation: curriculum,
enrolments, staffing, school operation and school governance. The existing degree of regulation limits schools’ ability to organise themselves in the most effective way to meet students’ needs. Centralised, one-size-fits-all regulations, whether about class size or teacher pay, cannot possibly allow funding to be targeted as well as decisions made by education professionals locally. The sector is far more regulated
than just about any other in New Zealand. This is particularly true
in the area of utmost importance to good education outcomes –
staffing – and is of concern given the importance of teachers
and school organisation to students’ academic performance. Recent evidence suggests that US
charter schools – which have greater managerial autonomy than
regular public schools (including freedom from teacher union contracts)
– are having a positive impact on education outcomes for children
in those schools. It also shows that competitive pressures from
charter schools push regular public schools to lift their game. Governing and managing a school
– as with any organisation – is hard work. Hiring and
firing staff, managing property, balancing the books all take time
and effort. And schools, as with any other business, will sometimes
get things wrong. That is to be expected. But they also get many things right.
And the gains from self-management need to be weighed up against
its costs. The secondary teachers’ union
has argued that the National Party proposals would create ‘divisions’
between schools and communities. The experience with self-management
suggests that the policy divide is not between left and right, Labour
and National, or rich and poor. Rather, the divide is between those
who cling to an archaic, industrial-age view of the school sector
and those who desire a modern education system that meets the needs
of communities and treats teachers and principals as professionals. Bulk-finding and school self-management are very much in the latter camp. And the evidence is that it worked. Norman LaRocque is policy advisor to the New Zealand Business Roundtable. For more information, contact: Norman LaRocque Web: www.nzbr.org.nz |