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The Government will consider creating a new entity to manage the country’s school property portfolio after a ministerial inquiry found the Education Ministry’s management of the portfolio lacked transparency, clarity and efficiency. 

The inquiry, led by former Foreign Affairs Minister and National MP Murray McCully, included scathing criticism of the ministry’s handling of the $30 billion property portfolio and found its ability to deliver cost-effective and timely development lacking. 

The inquiry also warned of a “significant and unsustainable gap” between delivery expectations and available funding given only 153 of the 488 school works projects were fully funded, meaning almost $3b of additional capital funding was needed. 

The inquiry’s primary recommendation was to establish a new entity separate from the ministry to “assume ownership and asset management responsibility for the school property portfolio”. 

“There was a strong consensus that school buildings funded by taxpayers should be simple, functional, cost-efficient and based on repeatable or standardised designs. The ministry’s failure to execute in line with these principles drew strong criticism,” the report says. 

‘Huge loss of confidence in the current system’ 

Education Minister Erica Stanford and Infrastructure Minister Chris Bishop, who are set to speak to the inquiry’s report this morning, agreed the system was inefficient and bureaucratic. The pair will speak at 11.45am - you can watch the live stream here. 

“The gap between what schools were led to expect of delivery compared with the reality of funding available, has resulted in a huge loss of confidence in the current system and uncertainty for school communities,” Stanford said. 

In response to the recommendations, the ministers said decisions would be made next year on whether a new entity was established or a new model still within the ministry was created to manage the portfolio. 

“It’s absolutely essential that we clarify roles and responsibilities for school property management, provide greater transparency around decisions, and bring in disciplined and data-driven oversight of investment and delivery,” Bishop said. 

Infrastructure Minister Chris Bishop will be assessing what new model is used to manage the portfolio. Photo / Mark Mitchell 

• "Healthy, safe, fit for purpose": Long-term plan needed for school property

Other actions the Government had agreed on following the inquiry included instructing the ministry to improve communication with schools, focus on simpler construction processes, and appointing a functional chief executive and independent investment panel to be responsible for school property. 

The inquiry’s report, released this morning, summarised responses from principals, teachers, school board members, property managers, ministry staff and construction sector experts. 

It found schools were “consistently critical of a lack of transparency, unclear prioritisation of projects, and generally inefficient project planning and delivery”. 

It alleged a lack of transparency allowed schools to “jump the queue” and have their projects prioritised. 

“We heard many times that there appeared to be no solid foundation to the ministry’s prioritisation of projects, and that the most effective way to secure funding is to go public through the media or local politicians.” 

It referenced “cumbersome” processes that had led to minor projects that should have lasted two months taking two years to complete. 

The report acknowledged failures on the part of school leaders, noting “some principals and boards lack the inclination or capability to act as custodians of significant Crown assets”. 

A relocation project in Marlborough was referenced throughout the report as an “extreme” example of a “more systemic malaise”. 

The project arose after condition issues were found at Marlborough Boys’ College and Marlborough Girls’ College between 2011 and 2013. 

The cost began near $25 million, but by 2022, it had ballooned to $400m “without robust analysis linking costs to measurable benefits”, the report says. 

“While the ministry decided to pause the co-location project in December 2023, the extended planning and design for the new facilities has been an expensive mistake, with up to $25 million in sunk costs so far.” 

The Marlborough project was one of several examples Stanford cited when announcing the inquiry in February. 

Adam Pearse is a political reporter in the NZ Herald Press Gallery team based at Parliament. He has worked for ��һ�ǿ����� since 2018, covering sport and health for the Northern Advocate in Whangārei before moving to the NZ Herald in Auckland, covering Covid-19 and crime.