Value-for-money reviews of school property
Earlier this year, we reviewed our school property projects to identify ways to achieve better value for money (VfM). This process has now been completed.
About the reviews
We reviewed 352 Ministry-led projects across 305 schools and kura in pre-construction. Pre-construction includes all projects up to the point where a construction contract has been signed.
The reviews looked at cost efficiencies, need and timing for delivery of projects.
The review process did not apply to school-led projects.
Why we reviewed Ministry-led projects
The cost to build a classroom has increased significantly over the past few years. We need to bring costs down and make sure we’re achieving good value across all projects in our programme.
With such high demand for new school property across the country, the more cost efficiencies we can achieve on individual projects, the more we can deliver across the country to the benefit of all ākonga | students.
Achieving better value for money
Achieving better value for money means:
- focusing on the core infrastructure issue that the project is intended to resolve
- looking more closely at improving existing spaces instead of building new
- considering the impact on our environment when we replace and build (construction is our second highest carbon emitting activity)
- greater use of standardised and repeatable designs, including standardised colour and fabric palettes, and more use of offsite manufactured buildings.
All Ministry-led school property projects will need to demonstrate value for money as part of business-as-usual delivery.
The review process
Some projects needed a deep dive while others needed a lighter touch, depending on the stage the project was at.
Planning
Projects in planning are in the early stages. The need for a project has been identified, but the options to meet this need still have to be investigated and a way forward agreed.
This means:
- identifying whether remediation rather than replacement is the better solution
- making sure the scope or scale of the project aligns with the issue the project is intended to resolve
- exploring the use of modular offsite manufactured buildings or a repeatable/standard design.
Design and tender
Projects in design or tender are further down the track and planning has been completed. In these instances, the review is needed to confirm that the planned approach is still the right one.
This means:
- reconfirming that the project scope is the correct one
- investigating whether a modular or standardised solution could be used instead, or parts of the existing design could be changed to reduce costs (for example, using a different material)
Following the review process and Budget 24 outcomes, school projects were prioritised based on greatest need and funding allocated either for construction, design and/or planning.
Learn more about Budget 24 outcomes.
Review outcomes
Of the 352 projets, 252 will proceed with planning, design or construction activities as planned or with changes. Projects funded for planning and design will need to seek further funding approval to proceed to the next stage. For most projects this will mean being prioritised for investment through the Budget 25 process.
100 projects will not proceed at this time. These projects will be reconsidered for investment as part of the Budget 25 process. 110 projects are proceeding with changes. Of them, 62 are growth projects and 48 condition projects. Changes made include removing non-essential scope and/or changing the delivery solution to a simpler, repeatable, or modular solution.
More detail is in the table below:
| Value for Money Review and prioritisation outcome | Growth projects | Condition projects | Total |
|---|---|---|---|
| Proceed as planned - construction funding | 45 | 44 | 89 |
| Proceed as planned - design funding | 14 | 10 | 24 |
| Proceed as planned - planning funding | 22 | 4 | 26 |
| Proceed as planned - no funding required 24/25 | 3 | 0 | 3 |
| Proceed with changes - construction funding | 27 | 30 | 57 |
| Proceed with changes - design funding | 19 | 13 | 32 |
| Proceed with changes - planning funding | 16 | 5 | 21 |
| Proceed with changes - no funding required 24/25 | 0 | 0 | 0 |
| Will not proceed at this time - no funding required 24/25 | 88 | 12 | 100 |
| Total | 234 | 118 | 352 |
These 252 projects form part of a wider investment programme. There are over 150 projects in construction and other projects being delivered through programmes such as Ngā Iti Kahurangi, the coal boiler replacement programme, seismic remediation programme, water services, learning support property modifications, and the weathertightness programme.
Coal boiler replacement programme
How much we saved
The forecast cost of the 352 projects that were subject to a value-for-money review was about $4.6bn. The review has yielded about $2bn of forecast savings by:
- removing non-essential scope or changing the delivery solution to a simpler, repeatable, or modular solution to reduce cost, accelerate delivery and achieve procurement efficiencies
- deferring 100 lower-priority projects to future financial years.
How we prioritise
We prioritise our major projects (redevelopments, roll growth and new schools) so that funding is directed to where it is most needed.
Application of a national prioritisation framework means we have a consistent and transparent process for evaluating the relative priority of projects across the motu.
Redevelopments
Ministry led, school property projects are prioritised by demand and deliverability:
- Demand, or need, relates to the condition of the asset.
- Deliverability, or readiness, is about how quickly a project can enter construction. For example, a building may be prioritised due to its condition, but the project will only be funded for construction if it can move into construction before the end of the next financial year.
Projects that are not prioritised for construction funding in 24/25 will be reconsidered the following year. Until then, funding may be allocated for short term mitigation or to continue planning or design so projects can be shovel ready for next year or a future year.
A demand ranking is based on the following criteria:
- Priority 1: Compliance triggers, for example, earthquake-prone remediation legislation, building legislation or council requirements.
- Priority 2: Health and Safety (for example, mould or weathertightness issues).
- Priority 3: Benefits of investing – how many years would investing extend the life of the asset.
We also consider property usage. Does the school still need the building? If a school has surplus space or a declining roll then a redevelopment project gets a lower priority weighting.
Roll growth and new schools
Prioritisation of roll growth projects and new school builds seeks to address immediate capacity and overcrowding risks as well as evaluating the impact of future growth on school property. We use data and other evidence to analyse current and projected rolls, and the impact of additional students on the surrounding network of schools.
We consider non-property solutions, such as amendment enrolment zones before deciding on additional property as a solution.
For all Ministry-led school property projects, we also consider the best use of the property. Construction is the Ministry's second highest carbon-emitting activity, and we need to consider the impact on our environment. Reconfiguring existing spaces to increase available teaching space will have a far smaller impact than a new build. Equally, continuing to build on constrained sites reduces usable outdoor area for recreation and outdoor learning.
More information
Learn more about the benefits of offsite manufactured buildings for new spaces:
Offsite manufactured buildings for new spaces at schools
Learn more about repeatable designs:
Standard property solutions for schools
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