Mapping Funding and Regulatory Arrangements Across The Commonwealth and States and Territories Jack Keating Peter Annett Gerald Burke Clare O Hanlon

Transcription

1 Mapping Funding and Regulatory Arrangements Across The Commonwealth and States and Territories Jack Keating Peter Annett Gerald Burke Clare O Hanlon June, 2011.

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3 Table of contents Executive summary... 6 Introduction... 6 School provision... 6 School resourcing... 6 Funding and resourcing models... 6 Equity and need... 7 Other allocations... 7 Non-government school allocations... 7 Trends and conclusions... 7 Part A. Synthesis Report Introduction Method School provision in Australia Overview of school education funding Funding and resourcing models Equity and need Regulation Trends Conclusions Australian Government Introduction Underpinning legislation and agreements Budget allocations for government schools Commonwealth own purpose expenses (COPEs) Student assistance Government support through the tax system... 40

4 A summary of Australian Government funding for equity Appendix 1: Commonwealth Government Funding of Non-Government Schools Appendix 2: Roles and responsibilities under the National Education Agreement New South Wales Overview Government school funding Non-government school (NGS) funding Victoria Overview Government school funding Non-government schools (NGS) funding Queensland Overview Government school funding Non-government schools (NGS) Funding Western Australia Overview Government school funding Non-government schools (NGS) funding South Australia Overview Government school funding Non-government schools (NGS) funding Tasmania Overview Government school funding Non-government school (NGS) funding

5 Australian Capital Territory Overview Government school funding Non-government school (NGS) funding Northern Territory Overview Government school funding Non-Government school (NGS) funding Part C. Other Sources

6 Executive summary Introduction The mapping of school funding in Australia has been commissioned by the Victorian Department of Education and Early Childhood Development on behalf of the Ministerial Council for Education, Early Childhood Development, and Youth Affairs. The information has been sourced in materials provided by the relevant National, State and Territory agencies, information located on the internet and through interviews with relevant personnel in each of the state and territory agencies. Draft descriptions of school funding regimes for the National, State and Territory governments were provided to the relevant agencies for verification. School provision School provision is distributed across three school sectors in Australia government, Catholic, and independent that have different characteristics, including different resourcing systems. All, however, operate within the requirements and procedures laid out in the education acts of the respective state and territories. As well all operate within the initiatives and associated requirements of the Commonwealth Government and the National Education Agreement. School resourcing The vast majority of Australian schools have mixtures of state and territory and Commonwealth and private funding. The balance between these three sources varies across and within systems, with government schools receiving the bulk of state government funding, Catholic schools being the main recipients of Commonwealth funding, and independent schools having the highest levels of private revenue although this varies significantly depending on the individual independent school. Overall levels of resourcing have had different patterns of increase and stability over the past two decades. Recently they have been influenced by the substantial inputs of the Commonwealth Governments payments under the Building Education Revolution and the National Partnerships Programs. These payments are in addition to its recurrent and capital grants, Special Purpose Programs, and own purpose expenses and taxation exemptions. Funding and resourcing models The delivery of publicly funded resources to schools can be characterised into two methods. One is a central resource allocation model that allocates staff and other resources including school consumables through various formulae. The other allocates a budgetary amount, also based upon formulae, which can be spent on resources at the discretion of the schools. There is a general tendency for government schools to approach the first method and for independent schools to approach the second, with Catholic schools being mostly budgetary based, but with some central allocations. Systemic schools within the independent sector may also utilise the first model. Across the government school systems all systems have a mixture of central resource allocation and budget based methods. However, two states Victoria and Western Australia with its recent initiative of independent public schools have moved substantially towards a budget based model. As well several other states and territories South Australia, the ACT and Tasmania are moving in this direction. All systems use a variety of formula for base allocations of resources plus resources allocated upon the basis of school enrolment numbers. Various weightings and multipliers are added to the base and the capitation formulae for various needs, programs and initiatives. 6

7 Capital works expenditure typically is through three means. Major capital works are located as discrete items within state and territory budgets; education departments and their regional offices hold amounts of funds for minor upgrades and repairs on a discretionary basis; and school resource allocations include some expectations for facilities maintenance and ICT hardware. Equity and need There is a variety of student and school needs recognised through Commonwealth and state funding formulae. They include those of the need for all communities to have access to schools, the needs of different groups of students, and the needs of different types of schools and school circumstances. The total allocation of resources for these needs across Australia is quite substantial, and most of these allocations are through the base and capitation formulae for the main resource allocations. Other allocations Public expenditure on schooling is also realised through a number of allocations outside of the schools. They include central services and resources, student transport, the cost of state agencies, and taxation and other concessions. Non-government school allocations Commonwealth payments to non-government schools are through several means, including the block funding to the Catholic systemic schools. The subsequent allocations to individual Catholic schools through the eight Catholic Education Commissions varies, but is mostly weighted towards higher need schools with low levels of fee income. The allocation of state and territory recurrent funds to non-government schools are through different combinations of set percentages of the state or territory Average Government School Resource Costs (AGSRC), specific allocations in the state or territory budget, or as set levels with forms of indexation. Capital grants are minimal and there are various smaller grants and interest subsidies. Trends and conclusions There is a broad tendency to move decision making about the allocation of school budgets to the school level. This is not a universal tendency, but most systems recognise the importance of some flexibility in resource use. Associated with this trend is an emerging governance regime of greater transparency about student outcomes and school performance. All schools are now subject to the publication of sets of student outcome data and systems are moving towards the ability of parents and other school community members to access information about other aspects of school quality and performance. They also are subject to more systematised and tiered forms of school improvement regimes. This trend however is within a school resourcing system that recognises the diversity of needs within Australian schooling. These needs apply to communities, schools and students, and systems have responded with a wide range of innovation and allocations. 7

8 Part A. Synthesis Report 1. Introduction The Melbourne Graduate School of Education has been commissioned by the Commonwealth-State Relations Division of the Victorian Department of Education and Early Childhood Development, on behalf of MCEECDYA to map the range of funding types, systems, processes for indexing and review, conditions and regulations, metrics used for weighted formula, and associated legislation foundations for state and territory and national funding systems. The project has been commissioned through MCEECDYA in the context of the work of the MCEECDYA process to realise the commitment under the National Education Agreement to review funding and regulation across government and non-government schooling sectors, for which the Australian Government Review of Funding for Schooling is an input. Part A provides an overview of the whole study and Part B reports on the funding and regulation systems in the Australian government and in the eight states and territories. 2. Method The mapping has been conducted through a number of activities: - The Commonwealth-State Relations Division of the Victorian Department of Education and Early Childhood Development prepared a set of research questions that was distributed to appropriate personnel within each of the state and territory and the Commonwealth education departments. The set of research questions requested information on the legislative, regulatory and accountability and school improvement frameworks for school funding and resource allocations within their jurisdictions. The responses to these questions, including some discrete documents and web links were sent to the researchers for analysis. - These responses together with documentation that could be accessed through the web and other sources were used to write draft descriptions for each of the eight jurisdictions. These drafts were then forwarded to the nominated personnel in each of the respective education departments with requests for them to be checked for accuracy and completeness. - Face to face meetings were arranged in all states and territories. The meetings provided more detailed explanations of the funding systems, clarified some of the inaccuracies in the draft descriptions and explored the contextual factors, philosophies and strategies that underpin the funding systems, and explored likely and possible future directions. - Following these meetings the descriptions were redrafted and condensed into a standard format and were also forwarded to the respective agencies for checking. These documents have provided the basis for the synthesis report. The synthesis provides: - A brief overview of school education provision in Australia; - An overview of national and state and territory funding systems for government and non-government schools; - An analysis of different funding and resourcing models used in the government sector with minor comment on nongovernment models; - A note on needs and equity funding; - An overview of regulation - The identification of trends in funding systems; and - Some conclusions. 3. School provision in Australia The Australian Constitution under section 92 locates the responsibility for education with the state governments. Subsequent legislation by the Commonwealth has located a similar responsibility with the territory governments. 8

9 However, under section 96 of the Constitution the Commonwealth is able to provide grants to the states on such terms and conditions as the Parliament thinks fit and it uses this power to tie some grants to its policies. This section thus allows the Commonwealth to fund government and non-government school education through the states. In 2010 as shown in Table 1 there were nearly 3.5 million full time enrolled students in Australian schools, with approximately 65 percent of enrolments in government schools, and 69 percent of primary and 60 per cent of secondary. Since the late 1970s there has been a fluctuating but steady drift of enrolments from government to non-government schools, at an average annual rate of about 0.4 percent. Table 1 Full-time school enrolments, Australia 2010, '000s Government Catholic Independent Total Primary school Secondary school Total Source: ABS Schools Australia Cat No These broad distributions hide more diverse patterns across states and territories and regions. While Australia has eight identifiable government school systems, with the systems of the six states having been in place for well over a century, the non-government sector is more varied in its structures and governance. Catholic schools maintain about 20 percent of all enrolments, with some small variations across the states and territories and are formed into multiple systems within their state and territory Catholic Education Commissions and dioceses based Catholic Education Offices that are responsible for the internal distribution of most state and Commonwealth funds to their schools. Within the Independent sector there are several other subsystems or smaller systems of schools, such as the 'groupings' of Anglican and Lutheran schools. All or most independent schools within states and territories have a relationship with government in terms of registration and some small capital allocations. However, for most public funding the schools within the independent sector are essentially individual entities. Government policy over the past decade in particular has emphasised the social and economic imperative of all students having the right of access to quality schooling. At the same time all Australian governments have recognised and state and territory governments have embedded in legislation the right of parents to choose the school for their children. 1 This choice is realised through the option of non-government schooling (and an increasing albeit minimal pattern of home schooling) and the option of enrolment in a non-local government school if places are available. 2 The patterns of demographic and market change create a major dynamic that effects the school funding systems of the state and territory governments and to an extent account for some of the differences in the resourcing and funding models that have evolved across the states and territories. Governments and their education departments and non-government school systems, especially the Catholic Education authorities, have to cope with different and shifting concentrations of educational need and schools with growing and declining enrolment numbers. The challenge of shifting enrolments has capital investment implications as new schools to serve new and growing populations are needed, as well as the challenge of closing schools and attempting to recoup some capital costs. It also has recurrent resourcing implications as the bulk of school provision costs are staff costs. All systems have the challenge of locating appropriate and adequate levels of staff in all of their schools without incurring major budget overruns. The manner in which systems deal with these challenges influences the characteristics of their resourcing systems. 1 See education act links in Part 3/Other Sources. 2 Ditto 9

10 The structure of Australian schooling is relatively homogeneous. In most cases it consists of primary schooling of 7 levels (kindergarten/preparatory/reception 6) and six years of secondary education However, there are some significant exceptions that include: - Recently pre-school education has been included within the education department responsibilities and in some cases, such as WA, NT and the ACT, within primary schools. 3 - Three states, WA, SA and Qld, extend primary schools to year 7, and have five levels of secondary education, although there is consideration being given to aligning with the other states to achieve national consistency. - Three jurisdictions, Tasmania, the NT (also includes Year 10 in its senior secondary colleges) and the ACT, have separate senior year colleges, and all other states have different structures for some schools across the three school sectors. They include K/P 8/9/10/12 schools, and different types of specialist schools. Within secondary schooling different models include multicampus schools, senior colleges and specialist colleges but also include educational precincts that combine elements of TAFE and higher education with schooling. Different funding models have evolved for these innovations. Universal provision Each of the state and territory education acts indicates some responsibility for the provision of schooling for all students. All state that schooling is compulsory within specified age brackets (mostly 5-17), and indicate in various ways that schooling is free, although most specifically state that schools can charge a small levy, but that the failure to pay this levy cannot restrict the education provided. Only the state and territory school systems therefore carry the responsibility for ensuring that all students are delivered schooling, notwithstanding the allowance for home schooling which appears to be growing in most if not all jurisdictions. This responsibility is carried for all communities and families, including the very remote, and all students including those with significant disabilities and those with behavioural management needs. The National Catholic Education Commission has stated its objective of offering the Catholic community and the people of Australia an educational foundation for life (and) contribute significantly to the development of the Australian community. 4 The planning criteria and processes for establishing, expanding and closing Catholic schools vary across the eight systems. However, with an enrolment share of approximately 20 percent across primary and secondary education sectors, and the presence of Catholic schools in large and medium population centres and in many small rural towns, the sector has a role in the universal provision of schooling. The sector also accepts a responsibility to provide schooling to diverse groups of students, including indigenous, new arrival and disabled students. Independent schools with approximately 14 percent of enrolment share have a less even distribution with a greater concentration within the capital and regional cities. Independent schools are mostly autonomous in decisions about their location and enrolment practices. Some sub groupings or systems, such as the 150 Anglican schools have an organisational structure that endeavours to establish a sense of common purpose among Anglican Schools throughout Australia. 5 The Anglican schools have had an objective of establishing more low fee schools and of providing schooling for indigenous students. There also are 85 independent Lutheran schools that are represented by Lutheran Education Australia. 6 However, while independent schools exist in most major population centres the sector has little capacity for collective planning of provision. Social and geographical patterns of provision across the three sectors vary and are dynamic. Details of these patterns can be observed in the ABS data and are reflected in various studies. 7 The different 3 WA includes provision of 15 hours per week for 3 year olds in kindergarten that is located within primary schools. 4 NCEC (2010) Australian Catholic Schools Why We Have Them? What They Aim To Achieve? 5 Australian Anglican Schools Network 6 Lutheran Education Australia: 7 Watson, Louise and Ryan, Chris (2009) Choice, vouchers and the consequences for public high schools: lessons from Australia, Australian National University. 10

11 responsibilities of the three sectors and their enrolment patterns have an impact upon the economies of their schools in regard to scale, location, and student needs. There is some variation in these factors across the states and territories, with location-related costs being greater in the states and territories with large numbers of isolated and in some cases very isolated communities. Broadly the government systems face diseconomies of scale and locational cost because of their obligation to provide schooling for all communities, and greater needs costs because of their enrolment profiles. The pressures of the demographic and student needs demands and the ways in which state education departments have responded to them historically and currently have influenced the characteristics of the government school funding models and to a lesser extent the Catholic school models. 4. Overview of school education funding Both levels of government contribute capital and recurrent resources to government and non government schools. Private income is received in all sectors. Table 2 provides a rough approximation of the percentage distribution of sources of funds for the different school sectors. Table 2: Approximate income of schools by affiliation, Australia, 2008 Calendar year, per cent All nongovernment Government schools Catholic Independent schools Fees and charges Private donations and income Total private income 5* State government grants Australian Government grants 12** Total income Source: Estimates based on data in MCEECDYA 2010 National Report on Schooling in Australia 2008, Productivity Commission 2011 Report on Government Services * This is an unverified estimate. My Schools data will provide more accurate calculations in the future; ** Australian Government grants are for government schools normally represent 10 percent of income. However National Partnership Programs have increased this level to approximately 12 percent, and it is anticipated that this will revert to 10 percent at the end of these programs. State and territory and Commonwealth funding allocations are outlined in their respective budget papers. The Commonwealth allocations are detailed in Part B. However, these figures are not comparable as the respective budget papers report expenditure items in different ways. Across the three school sectors there are different configurations of school systems for funding purposes. All government schools within each of the eight states and territories are under the direction, management and funding systems of their state and territory education departments. With minor exceptions all public funds are through their state education department allocations, which include Australian Government recurrent and capital allocations, National Partnership allocations and the underpinning payments through the Grants Commission. We have not attempted to aggregate and compare these allocations. Commonwealth Commonwealth funding support for schools is provided in two main ways. - First, there is general revenue assistance to states, which is primarily the allocation of the GST revenues. States and territories can use these funds for any purpose. The GST allocations to the states are based on relativities estimated by the Grants Commission which aims to equalise the capacity of the states to provide a standard level of service for their activities including education. - Second, the Commonwealth contributes specifically to school education in line with the National Education Agreement, through the Specific Purpose Payments (SPP) and National Partnerships 11

12 (NPs). It provides additional funds in other ways, notably for student financial assistance, some funding under what is called Commonwealth own purpose expense and a range of tax concessions. Commonwealth payments for schools under the SPP and NPs provide for somewhat over 10 percent of all the funding of government schools, over approximately 30 per cent for independent schools, and over 50 per cent for Catholic schools. Broad details of Commonwealth funding for school education are included in Part B and are detailed in the 2011 Productivity Commission s Report on Government Services. 8 The Commonwealth funds provided under the SPP for government schools include recurrent and other funds previously provided separately including capital funds and funds for other specific purposes. Funds for non-government schools under the SPP are allocated under the Schools Assistance Act and the separate arrangements for capital and targeted programs have been continued. All funds are channelled through state and territory governments. For non-government schools capital grants are distributed by specially established Block Grant Authorities (BGAs) with separate ones for Catholic and Independent schools in the states and joint ones in the territories. Across the non-government sectors the Australian Government recognises system funding arrangements for co-operating groups of schools. For approved systems the Australian Government funding that each school attracts as a result of its SES score (or other criteria for programs other than general recurrent grants) is received by the system authority (e.g. Catholic Education Commissions) in each state/territory. This block funding is then distributed to schools in the system according to system priorities. Funding for non-government schools under the Schools Assistance Act includes recurrent grants, targeted grants and capital grants. Recurrent grants occupy the largest share of the non-government schools budget from government sources and are distributed through the SES model. Under this model, 52 per cent of schools are funded through the standard application of the SES model, 40 per cent through funding maintained arrangements and 8 percent through funding guaranteed arrangements. The indexation of Australian government and non-government school recurrent grants is based on the Average Government School Recurrent Costs (AGSRC) which measure the average cost of educating a student in a government school 9. As mentioned capital grants for government schools have been merged with recurrent and previously targeted funds into the SPP but separate capital and targeted programs have been maintained for nongovernment schools. The capital funds provided in these ways has been dwarfed by the recent investment through the National Partnership on Building Education Revolution (BER). The BER consists of the Primary Schools for the 21 st Century; Science and Language Centres for secondary schools, and the National School Pride program. In addition there is the Trade Training Centre investment. Other National Partnership programs have required the states and territories to work collaboratively across the three school sectors, and develop implementation plans. These include programs for early childhood education, improving teacher quality, low SES school communities, literacy and numeracy, and Indigenous early childhood development. States and territories have signed bi-lateral agreements with the Commonwealth. States and territories have undertaken different innovations in meeting their requirements. South Australia has established a National Partnership Council across the three sectors. New South Wales has similarly established cross-sectoral committees to guide the development, implementation and evaluation of a range of integrated strategies and initiatives. Victoria and Queensland have integrated the three Smarter Schools National Partnership areas (low SES, literacy and numeracy and teacher quality) into a series of initiatives. Tasmania has established a number of strategies that the three sectors have variously opted into. WA has established a range of strategies that participating schools can opt for See: data/assets/pdf_file/0019/105292/013-chapter4.pdf 9 Note that targeted programs for non-government schools are indexed by the AGSRC Index which reflects changes in state government funding whereas the AGSRC includes both state and Commonwealth funding. 10 Information of the state agreements and strategies can be found on the following websites: NSW:

13 The Commonwealth also provides substantial funding through its Own Purpose Programs, student assistance, and taxation concessions. Its equity and needs based payments included in the programs listed are substantial. They include the weightings for non-government school recurrent funds, some elements of the of the government school recurrent grants, several of the National Partnership Programs and student support programs. State and Territory State and territory recurrent funding for government schools is through budget allocations to state and territory education departments. The quantum of these allocations is effectively determined by the various resourcing formulae that have been developed, and continue to be developed across the government school sectors. In all cases recurrent funding for non-government schools is also through the same education departments. Each state/territory provides funds to non-government schools. The amount of assistance and the process used to determine this assistance vary greatly. The most significant forms of funding are recurrent grants with other support for students with disability; travel; and capital assistance including interest on approved borrowings. In relation to recurrent grants the quantum of funding for non-government schools is a percentage of government schools costs in Western Australia, Tasmania, New South Wales, Queensland and Northern Territory. In Victoria the recently elected State Government has indicated there will be a link with government schools costs whilst for South Australia and the Australian Capital Territory the amount is based on the previous year s quantum with any change the result of negotiation with Government. The total level of financial support provided by state/territory governments to non-government schools varies. Allocations to non-government schools come through the state and territory budgets. Most states and territories (NSW, Queensland, WA, Tasmania, ACT and NT) include specific estimates of allocations within their budget papers. Victoria and South Australia incorporate these allocations within their department budgets. Capital allocations for government schools are incorporated into the departmental budget allocations and distributed either through the allocative formulae for schools or as discretionary allocations by the education departments. Major capital works allocations are within state and territory annual budgets. Specific allocations to non-government schools are minimal, and in several cases non-existent. They are distributed to schools either on the basis of individual school applications or through application and agreement with the Catholic Education Commissions and offices and the independent schools associations. Special purpose, targeted and other program payments are distributed to government schools either through the resource allocative formulae or through other means administered by the education departments and their regional offices. Payments that are available to non-government schools are mostly through their collective agencies. In some circumstances they are through direct payments to schools. Indirect allocations such as school buses and student support are distributed to government and nongovernment schools and students through a variety of means, including services provided through other state departments. These allocations also include the costs of state and territory government agencies, including statutory authorities. Overall patterns of government payments for school education are detailed in the 2011 Productivity Commission Report on Government Services. 11 Vic: Qld: WA: SA: Tas: 11 Op. cit. 13

14 Private Private recurrent revenue for government schools has been estimated by McMorrow (2010) 12 as contributing approximately 5 percent of the recurrent costs of government schools. No reliable national calculation is yet available, although it will soon be through the Australian Curriculum, Assessment and Reporting Authority (ACARA) reporting of school revenue for government schools on the My School website. However, upon the basis of the consultations with the state and territory education departments the 5 percent estimate appears to be relatively accurate. Although, there is considerable variation among schools within states and across the states and territories, ranging from 2 percent or lower in Western Australia and Northern Territory to about 6 to 7 percent in Victoria. 13 Private revenue includes both voluntary fees and funds raised through other means. It does not include charges for excursions, study trips and other specific activities. All states and territories address the question of voluntary fees within their legislation. Some states such as Tasmania and Western Australia specify that the Director General or a school principal may charge a fee, which in some cases are specified amounts. However, all of the Acts specify either that schooling is free or that a student should not be denied an education program because the payment has not been met. The rate of realisation of the fee appears to vary across states and territories with some states allowing schools to actively pursue the payments from parents. All states and territories recognise the variable capacity of parents to pay the levies. Of interest is that there appears to be little link between the specificity of the legislation and the quantum of revenue. Victoria has a relatively circumspect allowance for voluntary fee s in its legislation and appears to have the highest revenue. While Tasmania and WA that are more specific about the right to set and collect a fee they have much lower revenue levels. Private revenue varies enormously in non-government schools ranging from close to zero to over $20,000 per student. Schools are relatively autonomous in setting fee levels and the measures taken to realise the fees. The Catholic systemic schools have more even patterns, although there is considerable variation influenced by the location of schools. The National CEC has indicated that a small percentage (10-15 percent) of Catholic school revenue should be through parent contributions, which is much lower than the average reported percentages shown in Table 2. Given its low levels private revenue can be used to meet both recurrent costs and capital costs. In government schools the use of private funds for capital costs mostly would be for equipment and minor upgrades. The average percentage distribution of sources of income for non-government schools was shown in Table 2. Tax deductions or concessions may be available for capital purposes only. A considerable proportion of the private income is listed as donations. These concessions must be voluntary. Details of the public and private revenue of individual schools are reported through the My School website. School income is reported on this website under the following headings: - Australian Government funding; - State/Territory Government recurrent funding; - Fees, charges and parent contributions; - Other private sources. 5. Funding and resourcing models The bulk of school expenditure is on school staff, which is mostly teaching staff. The ratio of nonteaching to teaching staff is increasing but the salary and associated costs of teachers account for the bulk of the expenditure costs of Australian schools, government and non-government. Costs of schooling include school based costs (staff, capital and consumables) and system costs. School funding models relate to the delivery of resources and services used by schools. They vary around the following mechanisms: 12 McMorrow (2009) Reviewing the evidence: Issues in Commonwealth funding of government and non-government schools in the Howard and Rudd year, University of Sydney. 13 The Victorian estimate is derived from earlier work on government school resourcing. 14

15 - The allocation of school staff can be either employed and paid for through a central system, or employed and paid at the school level from the school budget. - The allocation of non-staff resources can be through a centralised function that delivers materials and services to schools, or through their purchase by schools from a school budget. - Resources for students and communities that have greater needs can be allocated to schools by a central agency or be purchased by schools through allocations to their school budgets. - Targeted programs can be delivered through the allocation of specific resources to schools or through budgetary allocations. - State wide services can be delivered by central agencies on a planned basis or purchased by schools or parents through budget or allowance allocations. These variables mostly are around the: - Location of the budgetary allocations (centre, school, parent), and - Location and decision making processes for the purchase of the resource, including capital works. Effectively the interactions between the five mechanism and the budgetary and decision making locations define a school funding model. This applies to all three school systems. As would be expected the model for independent schools approaches a more distinct and consistent type, as most of the budgetary allocation and the decision making processes are at the school level. By contrast the models for the government sectors are more varied and more complex because of both the more varied locations of budgets and decision making processes and the more varied student and community needs across the sector. Catholic school systems tend to be located between these two types. A rough typology across the three school sector for resource allocation methods is indicated below. Government Catholic Independent Staff allocation Central and school School based and some School based based central Non staff resources Central and school Mostly school based School based based Needs based resources Mostly central Mostly school based School based Targeted programs Central and school Mostly school based Mostly school based based State/nation wide services Central and some school based Central and school based Central and school based These typologies should be seen as crude as they hide considerable variation, especially across the government school systems and to an extent across the Catholic school system. There also is variation across types of school staff and types of resources, such as major and minor capital works. Broadly: - The government systems are highly varied and relatively dynamic at this point in time, especially in their methods of allocation and decision making processes for school staff, which occupies the bulk of all school budgets; - The Catholic systems while less centralised than most government systems, do maintain a degree of centralisation, such as the planning of new schools and some allocations; - The independent schools, including the independent systems, are essentially autonomous entities, and this autonomy is restricted mainly through funding rules and reporting and accountability requirements. Constraints Apart from the constraints of government and department allocation processes and reporting and accountability requirements school funding and resourcing systems are subject to the restraints of some legislative requirements and enterprise bargaining agreements (EBA) and rulings relating to staff working conditions and modes. All government school systems are subject to EBA and associated requirements. Catholic schools EBAs tend to follow governments school EBA outcomes, especially in regards to 15

16 teacher salaries. Salaries and conditions across the independent sector are more varied and modern awards prevail in the absence of an EBA which also tends to follow the benchmarks of the government sectors. Other constraints are government and sector policy priorities. For example, state governments in NSW, Victoria, SA, Qld, and the ACT have all taken policy positions on school size limits or reductions, mostly in the early years (P/K-3), which have an impact upon resource allocation systems. Government systems The bulk of this report concerns the resource allocation methods for the eight government school systems. The study has not investigated the processes for the multiple Catholic systems and the individual independent schools, beyond the allocative and associated accountability systems of the nine governments. Each of the government school systems have evolved over a period of more than a century. They are all based upon the responsibility of a single education department (under various and changing titles) having the responsibility to deliver schooling of an adequate quality and probity for all communities. All have evolved from centralised models that appointed, employed and in various ways supervised school staff and allocated or delivered other resources to schools within common regulations regarding school calendars and hours. More recently there have been greater pressures upon the centralised system to devolve decision making to the school level. All government systems retain some centralised characteristics that include: - The salary fixing and conditions systems (with different degrees of flexibility) for staff, especially teaching staff; - A principal position of specified designation for different types of schools; - Centralised employment and payment of teaching staff; - Major capital works and infrastructure; major repairs; - ICT infrastructure and networking. The devolution can include one or all of the following: - The configuration of school staff, including leadership positions apart from the principal; - Selection of school staff, including the principal; - The allocation of allowances and some leadership positions: - The introduction of a budgetary approach to school resourcing, including work cover/insurance costs, rather than a staff allocation approach; - The partial or full devolution of non-teaching staff appointments, configuration and allocations to the school level, within a budgetary model; - The devolution of the purchase of other non-staff resources (utilities costs, consumables, and some capital works costs) to schools. Across the Australian states and territories there are examples of recent, current and anticipated changes in these directions. Given that the main funding costs in schooling are staff costs, the main variable across the different systems is what might be described as: - A central resource allocation model: where staff are allocated to the schools upon the basis of different formulae, and the cost variation that arises from different salary classifications of teaching (non-leadership) staff are carried by the centre or system; and - A budgetary model: where schools are allocated a budget upon the basis of different formulae and staff is effectively purchased within the budget, with a capacity to vary the numbers and configuration of staff within this budget. 16

17 There are further variations within these models related to: - Schools capacity to use the non-teaching budget allocations to employ teaching staff and vice versa, and/or the non-staff allocations to employ staff and vice versa. - The designation of leadership positions ranging from consistent central formulae for all leadership positions to non formulae apart from the principal position. - The on-costs of teachers, including long service leave and work insurance The degree of responsibility for minor capital works, maintenance and upgrade that is located at the school level. - The selection processes and locations of decision making in appointments of school personnel. There is a general tendency for school systems to merge towards particular types based upon the broad dichotomy of central allocative and budgetary models. The budgetary systems tend to allow more variation across the configuration of school staff, flexibility between staff and non-staff budgets, and greater autonomy over staff appointments. However, all of the state and territory systems maintain systemic responsibilities. That is they must provide resources, not just budgets, for all schools and communities. This responsibility arguably has increased with the recent emphasis within government policy frames of quality education for all, and the implementation of programs including those under the National Partnerships that target particular communities and attempt to reduce gaps between levels of educational outcomes. Changing school demographics also create resource pressure mainly in the form of excess staff in schools with declining enrolments. Historically government school systems have managed both of these sets of demands through staff allocation models, promotions systems and occupational sponsorship (studentships) systems. The promotions systems have weakened under the demand for systems that are based upon quality rather than time and location and studentships have all but disappeared with the growth in the supply of trained teachers. However, resource allocation models continue to exist in a major form in states such as NSW and Queensland, and in a minor form in the state with the most devolved system, Victoria, through the continuance of some teacher transfer function, albeit a minimal one. There are, therefore tensions with both resource allocative and budget allocative models. The budget allocative models do provide schools with the budget related to their needs but may not take sufficient account of the needs of hard to staff high need schools. Where enrolments are declining there is the potential for cost overruns due to staff excess numbers. These weaknesses can be addressed through contract and other short term teacher appointments and incentive payments for the hard to staff schools. The central staff allocative models typically lead to greater real budgetary allocations in low need schools, as these schools typically have profiles of older staff near the top of the salary scale, and give schools less flexibility and autonomy over the configuration and quality of their staff. The tensions within and between these two broad models are significant for schools and are reflected in the fact that most systems have either changed or are changing their resourcing models. The changes are mostly towards budgetary models, but officials across the school systems are aware of the tensions within this model. The one exception to this trend is in the area of ICT where several systems have recentralised aspects of their networking and resource allocations. The tensions within and between the models are exacerbated by significant community and school demographic changes. The existence of population growth centres and corridors within and near the major cities and the corresponding decline in rural and some regional areas is placing pressures upon systems to establish new schools, but maintain the existing rural and regional schools, and manage the associated staff allocations. As well, most of the school systems have reported demographic trends, 14 E.g. Victoria is the only state or territory that locates this responsibility at the school level, with some limited central cover for cost overruns. 17

18 especially across their secondary schools, of intensifying concentrations of high need schools that have high resource demands and high staff turnover rates. Below is a crude typology for each of the states and territories against the five areas identified above. 18

19 NSW Victoria Qld WA SA Teaching staff Non teaching staff Non staff resources Needs based resources Targeted programs Staff allocations based upon state wide formulae Funding built into resource package and allocations apart from some leadership positions determined at school level from school budget Staff allocations based upon state wide formulae at three levels: central, regional and school. Schools have some flexibility at the margins. Two systems: Staff allocations based upon state wide formulae; and Independent public schools: School based configuration within school budgets Formulae driven staff allocations plus capitation Mostly through central allocations School based appointments through school global budget. Combination of central and school based employment. Mostly through staff allocations at a regional level based upon state wide formulae. Some capacity for school level employments from school grant and other sources. Allocated through various school support staff formulas. Funding is not transferred to schools and the personnel are paid centrally. IPS: budgetary model consolidated as one line budget. Mainly as formula driven staff allocations (Tier 1) and Mostly allocations based upon state wide formulae and central payments, but with some school based purchases. Funding built into resourcing package and allocated at school level, but with some formulae based resource allocations or central payments. School Grant including core grant calculated through formulae against multiple purposes. School grant derived from multiple formulae. Most costs are paid by the centre, but with variable levels of autonomy on allocations for mainstream and IPS schools Mostly budgetary allocations included in base, capitation, Mostly built into staffing allocations plus multipliers and weightings for school grants. Funding built into school budgetary formulae, but with student needs being assessed as a school quantum or as individuals according to different programs. Mostly allocations located within the staffing and grant allocations to schools that are administered at the central and regional levels. Bulk of allocations through the multipliers and weightings for staff, school grant and other allocations. So different levels of autonomy for mainstream and IPS schools Mainly through staff allocation formulae, plus Mostly through central allocations Mostly built into resource package but with audit and accountability requirements 25 targeted programs that combine staff allocations through formulae adjustments and grants. Same formulae but some variations in autonomy in internal allocations and use across 2 school types. Mostly through budget allocations 19

20 based budget allocations some special allocations (Tier 2) with capacity to use grant allocations. program and discretionary allocations, but paid centrally. range of grant funds for target populations. but with some adjustments to staffing formulae Tas Combination of mostly centralised and school based, with a broad movement of decision making to the school level. Allocated model through formulae that give different weightings for different school types. Grant based resource package based upon different formulae for different components. Different weightings in the staff allocations (educational needs index, distance, size and small school) and through different resource package allocations Combinations of staffing and budgetary allocations. ACT Staff allocations based upon minimum executive staff plus points system derived from per student funding and targeted funding formulae. Capacity for school to use cash resources to increase staffing. Likely movement towards a budgetary model. Primarily provided by points derived by per student funding and targeted funding formulae. Minor allowances provided through site allocations. Capacity for school to use cash resources to increase staffing. Mainly through School Based Management payments and various target funding formulae. Mainly by staffing allocations provided by specific funding formulae. Notable SCAN (student profile) for students with disabilities. Some centrally managed programs. Largely as staff allocations through changes to staffing points and through centrally managed programs. NT Central staff configuration and appointment system. Combination of central allocations and appointments from school budgets. Funding met centrally based upon historical usage plus school based grants. Combinations of staffing formula, NT Government grants and Commonwealth grants and programs. Staff allocations plus Territory and Commonwealth programs. 20