Annual Report 2016 - Part one

Section 19B reports

The Vote Education Section 19B Report in Relation to Non-Departmental Appropriations for the year ended 30 June 2016 was presented to the House in accordance with section 19B of the Public Finance Act 1989 on 20 October 2016.

Vote Education Section 19B Report [PDF, 329 KB]

Parts 2 and 3 of the Annual Report 2016

Download the full Annual Report 2016 to view:

  • Part 2 — Statements of service Performance
  • Part 3 — Annual financial statements.

Annual Report 2016 [PDF, 1.2 MB]

Amendment to the report

Since being tabled, the Statement of Cash Flows has been amended for a minor editorial error.

The education system is relevant and reaches all children and students

New Zealand needs an education system that meets the needs of our increasingly diverse population and unique cultures. Education must be accessible and relevant to all, and flexible enough to accommodate different aspects of learners’ needs throughout their lives.

  • Improving education system performance
    • New Zealand has a strong well-integrated education system with many successes. However, this system is characterised by relatively high levels of disparity. At every stage, the system is less successful for Māori and Pasifika students, learners with special education needs, and people from low income families.

      International studies have shown that achievement in New Zealand is more closely linked to economic and social factors, such as parental education and skills, than in other countries.

      International studies also show that achievement for Year 5 students in maths and science declined in the decade following the early 2000s. Similarly, 15-year-olds did not do as well over this time as they had previously done in these subjects or in reading.

      We are intent on getting the system working to deliver better outcomes for all students, from entering early childhood education (ECE), through the schooling system, to achievement at the highest levels of tertiary education. We are also seeking to ensure New Zealand remains internationally competitive.

  • Improving participation in quality ECE
    • Participation in quality ECE has positive, long lasting associations with students’ literacy, numeracy and social skills, and these impacts can be seen up to 16 years of age.

      The Government has set a Better Public Services (BPS) goal to increase participation, with a target that in 2016, 98% of children starting school will have participated in quality ECE.

      The participation rate1 has been steadily increasing since 2012 and we are very close to the December 2016 target of 98% nationally. Several Ministry education regions reached the 98% target during 2015/16.

      Interim targets are plotted on a trend line of linear progression towards 98%, which gives the impression that change will be cumulative (each quarter building on the results of the previous quarter). However, a completely different group of children starts school every 12 months. Achieving a high rate of prior participation for one group does not guarantee the same rate in the next, which means we need to accomplish more each year for every successive group of children to keep the rate increasing. Our work towards the 98% goal has therefore focused on achieving sustainable social change so that the majority of families and whānau demand and engage with early learning.

      The number of children not attending ECE before they start school is small. Weekly snapshots toward the end of 2015/16 indicate that we are closing the gap to reach 98%.

      For example, the weekly rate reached 97% or higher for 4 weeks during May and June 2016, including 97.3% for the week at the start of Term 2.

      Overall we were less than 850 children short of the target for the year ending June 2016.

      Indicator 1 Increase participation in early childhood education (ECE)

      Better Public Services: Supporting Vulnerable Children, Result 2

      Graph showing indicator 1: increasing participation in early childhood education (Better Public Services: Supporting Vulnerable Children, result 2) from 94.4% in 2010 to 96.6% in June 2016, with a December 2016 target of 98%.


      (All numbers %)June 2015June 2016Change (% points)December 2016 target
      All 96.2 96.6 ↑ 0.4 98.0
      Māori 94.0 94.9 ↑ 0.9 98.0
      Pasifika 91.2 92.7 ↑ 1.5 98.0
      Decile 1-3 schools 92.5 93.7 ↑ 1.2 98.0

      Reaching the target has become more challenging as we seek to engage those at the margin and it is not something we can achieve alone. We are connecting with the hardest to reach children and their families, who often need the most complex interventions for ECE to become a feasible option. Where families are not ready to engage with ECE, we are connecting them with suitable support from other agencies.

      Much of the gain to date has been from targeting Māori, Pasifika and low income communities which had the largest number of non-participating children. We continue to focus on lifting ECE participation in these priority groups.

      For 2015/16, we used core funding to continue the successful Participation Programme to raise participation by low socio-economic, Māori and Pasifika children and their whānau/families who have not engaged in early learning. As at 30 June 2016, over 15,500 children have been enrolled through Participation Programme initiatives.

      During 2015/16, 1,974 licensed ECE services received professional development support through the Strengthening Early Learning Opportunities (SELO) programme. This resulted in 82% of services participating, demonstrating a positive shift in practice.

      We have worked with early learning providers, iwi, Māori organisations and Pasifika churches, as well as other government and non-government agencies on various initiatives, to improve participation including:

      • identifying and supporting over 150 3½ and 4-year-olds who were not attending any form of early learning through the Puna Kainga programme
      • identifying and working with 50 early childhood centres across the country with capacity to take more children to increase enrolments using a quality improvement approach
      • working with schools to ensure accurate data collection at the enrolment process
      • initiating a referral process from Well Child providers with one District Health Board in Auckland and one in Hamilton
      • supporting local health initiatives that impact on regular attendance and participation in early learning.
      1 The participation rate is calculated as a percentage of the total number of children for whom attendance is reported, rather than the total number of children starting school (including those for whom attendance is unknown).
  • Improving student-centred pathways across the education system
    • The education system needs to encourage student-centred pathways across the system – clear options for getting from each stage  of learning to the next and helping all New Zealanders to be successful in their lives and careers. A student-centred pathway provides continuous learning, progression and choice.

      We are working to ensure the education system is coherent, encourages collaboration and supports continuity of learning across transitions.

      Communities of Learning | Kāhui Ako have been introduced to help achieve more student-centred pathways through the education system and into future work and life. Communities of Learning | Kāhui Ako are groups of schools, kura and ngā kōhanga reo ECE services that come together to raise achievement for children and young people, including creating pathways for students from early learning through primary and secondary school then into tertiary education and work. As reported later in this section, we are also updating the Education Act 1989 and reviewing funding arrangements to support Communities of Learning | Kāhui Ako in their focus on achievement.

      During 2015/16, we also undertook a review of the careers system. Our two Ministers announced that Careers New Zealand will become part of the Tertiary Education Commission (TEC) in a reform package designed to deliver better and more consistent careers information for school students. The TEC is best able to work with tertiary providers and employers so that they in turn can provide better careers information to schools, and coordinate with schools on the skill needs of the labour market.

      The TEC will take responsibility for providing a seamless flow of high-quality careers and training information to students at school, tertiary education and through to employment. The change will consolidate  the information that users of careers services need in one place, enable better integration of the online careers planning tools currently offered and establish clear lines of accountability for the delivery of careers information services.

      To support decision-makers we are publishing school leaver destination information for each school as part of the 2016 Public Achievement Information release.

      We have established smoother pathways from school to work, further study and training, by providing a wider range of learning opportunities, making better use of the education network, and creating clear pathways from school to work and study with initiatives such as Youth Guarantee and Secondary Tertiary Programmes (for example Trades Academies). We are also providing students and their family and whānau with the information they need to make informed decisions on transitioning into tertiary education. This work is being progressed through the Tertiary Education Strategy 2014- 2019 outlined on pages 31 to 39.

  • Modernising legislation and governance arrangements
    • A high-performing education system needs the right legal framework and governance arrangements. The Education Act 1989 provides the legal framework for the education system and sets out the roles, responsibilities and powers of Crown entities and independent statutory bodies in the education sector.

      Updating the Education Act 1989

      We undertook an update of the Education Act 1989 (the Act) to support the development of a 21st century education system focused on achievement and learner progress.

      During late 2015, we consulted with stakeholders to get their views and inform the update of the Act. This included over 120 national and regional workshops and hui as well as online and targeted consultation.

      Over 1,800 formal written submissions were received. In early 2016 we held further targeted consultation with the sector on two of the proposals.

      The feedback received helped to inform the development of papers we provided to the Minister of Education seeking Cabinet approval for policy proposals and the issuing of drafting instructions. The Education (Update) Amendment Bill was introduced to Parliament on 22 August 2016 and amends the Act to make the achievement and learning of children and young people central to the ECE and compulsory schooling parts of the Act.

      We expect the updated legislation to be considered by the Education and Science Committee through the rest of 2016 and the start of 2017, and to come into effect in the first half of 2017.

  • Updating the funding systems for early learning and schooling
    • We are also reviewing the funding systems for 0 to 18-year-olds, aiming to ensure they better support student achievement and learning pathways for all children and young people. The early learning and school funding systems set out how, and how much, we allocate to providers of education for children and young people through grants, staffing and property.

      We undertook policy work to understand the current funding systems and options for change, which enabled Cabinet to approve engagement on high-level directions for change in April 2016. These changes are designed to create funding systems that are more student-focused and better target resources to students most at risk of under-achievement, while retaining a viable network of providers throughout New Zealand.

      We have been working with the education sector on the details of the review. An Advisory Group of education sector leaders was established to work on the details of the review from May to August 2016. Alongside the Advisory Group, we have been talking to the wider education sector, and will continue to engage with them as we test a number of possible directions for change, recognising the implications for the sector.

      This is a complex project and we expect working through the process of engagement, design, decision-making, operational planning and implementation to take us through to 2019. The changes to the system are intended to be in place prior to the next decile review due in 2020.

  • Championing 21st century practice in teaching and learning
    • Education must deliver the skills and knowledge which children, young people and adults need to thrive in 21st century New Zealand and a global economy.

      Supporting the establishment of the Education Council of Aotearoa New Zealand

      The Education Council of Aotearoa New Zealand (the Education Council) began operating on 1 July 2015 as an independent body. It has been established to provide stronger educational leadership and lift the status of teaching as a profession. We signed a Memorandum of Understanding in December 2015 and have provided funding and other support for the Council in carrying out its leadership and statutory functions.

      We worked with the Education Council on a proposal to establish a statutory competence authority to consider complaints about teacher  competence. This will formalise competency assessment processes, and will be more efficient for  the Council and more robust for teachers. We are also exploring the transfer of Professional Learning and Development (PLD) responsibilities to the  Education Council, which would further build its role in supporting the profession.

      Improving professional learning and development

      High-quality teaching and leadership are the most important in-school factors that support the achievement of learners. While the workforce is highly regarded internationally, ongoing professional development is essential. Investing in the profession raises the quality of teaching and provides opportunities to improve educational outcomes. We have been working with sector representatives to redesign the PLD system based on changes approved by the Government in 2015. The changes are aimed at making centrally-funded PLD more effective by focusing on three areas:

      • leadership – a blended package of support for school leaders and specifically for aspiring principals, beginning principals, and those with more experience
      • networks of expertise – professionals supporting professionals in a range of subject specialties
      • national priority outcomes – science, maths, literacy (reading and writing) and digital fluency.

      The Ministry is running an open tender process for the delivery of centrally-funded PLD services in 2017.

      Existing PLD contracts will continue until December 2016. Between now and then, the Ministry will be working to ensure that new contracts, reflecting the new priorities and the focus on Communities of Learning | Kāhui Ako students need help the most, will be in place when the new system comes into effect from Term 1 in 2017.

      Teaching and Learning International Survey (TALIS)

      97% report that they had participated in at least one professional development activity during the 12 months prior to the survey

      12 years Principal experience and  26 years Teaching experience

      92% completed university or other equivalent higher education

      88% TALIS average
      97% Australia
      98% Singapore
      79% Finland

      9 years TALIS average
      8 years Australia
      8 years Singapore
      11 years Finland

      21 years TALIS average
      27 years Australia
      15 years Singapore
      17 years Finland

      91% TALIS average
      100% Australia
      93% Singapore
      96% Finland


      Improving STEM skills and competencies

      We know that STEM education (science, technology, engineering and mathematics) contributes to building creativity, curiosity and innovation, which are critical for economic growth. STEM skills underpin the development of new practices and technologies, the application of existing technologies and the development of new, high-value products and services. We are working to ensure the education system recognises the importance of STEM learning and capability.

      We have delivered the education aspects of the initial 3-year plan of action for the Science and Society National Plan A Nation of Curious Minds: Te Whenua Hihiri i te Mahara through:

      • teachers in industry pilots – providing teachers with practical information to help them support students transition from school to work, apprenticeships or further study
      • science skills in education – improving the relevance and delivery of PLD opportunities for science teachers in Years 1 to 8, especially those outside of the main areas
      • a review of the content and positioning  of digital technologies in the national curriculum with a Ministerial decision in July 2016 to explicitly strengthen digital technologies within the Technology Learning Area by 2018. This will provide a digital technologies learning pathway for every child in every school.
      • encourage young women to pursue science and technology careers by engaging with women in STEM careers  to showcase the breadth and diversity of opportunities available within a uniquely New Zealand environment.

      With the initial plan of action finishing in June 2016, work has begun to ensure that the next iteration of our wider STEM strategy reflects the developments since 2014, including consideration of how to use Communities of Learning | Kāhui Ako for better delivery of STEM participation and achievement, a stronger focus on regional delivery and STEM-focused learning pathways for all our students.

  • Building flexible and modern infrastructure
    • We provide or facilitate the provision of school property, transport and technology to ensure schools have the infrastructure they need for a 21st century learning environment.

      Maintaining and developing the Crown’s property portfolio

      We manage the Crown’s second largest social asset property portfolio, with a carrying value of $14.6 billion. During 2015/16, capital expenditure of $731 million was spent on maintaining and/or upgrading the school property portfolio. This included the provision of new schools and additional classrooms to cater for those areas with growing school rolls. In addition, non-departmental capital expenditure was spent on the school support project, and school furniture and equipment.

      We continue to replace, renew and rebuild school infrastructure. As at 30 June 2016, the New Schools and Kura Programme included 64 projects:

      • two new schools
      • three Stage 2 and Stage 3 new schools
      • six kura and wharekura
      • 16 major redevelopments
      • 37 new land acquisition/designation projects for school sites, 11 of which are for the Christchurch Schools Rebuild (CSR) programme.

      Construction is continuing at four schools as part of the Ministry’s second Public Private Partnership (PPP2). Three of the schools are to be delivered in December 2016 and the fourth in December 2017. Procurement is progressing for the Ministry’s third Public Private Partnership (PPP3), which will see the delivery of six schools. All six are planned to be open in 2019.

      We have improved our management and monitoring of the school property portfolio. A Treasury review of our asset management maturity rated the Ministry at an intermediate level. Identified areas for improvement included property condition assessment and risk management methodologies, and increasing resources to directly support schools in improving their operational asset management.

      We continue to support the provision of flexible learning spaces that can better support a range of teaching and learning practices.

      Contributing to the Canterbury rebuild

      The Government is investing $1.137 billion in rebuilding, remodelling and renewing schools in the greater Christchurch area over 10 years, as well as investing close to $400 million to help rebuild tertiary provision in Canterbury. Through the CSR programme, 115 schools in the greater Christchurch area are undergoing redevelopment ranging from repairs to relocating and building new schools.

      Since securing the funding for the programme in November 2013, the Ministry has designed and built seven schools, 11 schools were in construction and 34 were in design as at 30 June 2016. Overall, approximately 37% of funds were committed against an expected 35%, as the programme was slightly ahead of schedule as at 30 June 2016.

      Every 6 months between 6 and 10 schools enter the property programme. The last of the schools will enter the programme by July 2020.

      Investing in digital infrastructure

      With the Government’s introduction of a fibre network across the country, we set out to ensure that every student in every school had access to quality ICT infrastructure and high-speed broadband. By partnering with the Ministry of Business, Innovation and Employment and Crown Fibre Holdings, we have improved the digital infrastructure.

      By 30 June 2016, the total number of schools on the Network for Learning was 2,369 schools out of 2,446. By the end of 2016 all 2,446 schools will be able to connect to the managed network.

      The provision of wireless network upgrades to schools that received their upgrades prior to 2010 continues and will be completed by the end of 2016. Upgrades have been provided to 400 schools and a further 35 will benefit from the project by the end of the calendar year.

      In April 2016, provision was made for the 390 schools upgraded between January 2010 and August 2012 to receive a wireless network upgrade. These schools will be completed by December 2017.

      Delivering an accurate payroll service

      The Ministry meets its obligations to provide the education payroll under a service agreement with Education Payroll Limited (EPL), a Crown-owned company established in October 2014. The payroll is the largest in New Zealand and one of the top 10 in Australasia. It pays around 90,000 teachers and support staff in approximately 2,500 schools every fortnight. EPL has focused solely on providing school payroll services and is expected to deliver an accurate, reliable payroll service.

      Through its first full year of operation, the Ministry and EPL have worked together to stablise payroll processes, reduce risk and provide a better experience for schools. EPL’s key performance indicators have been met, and there have been improvements in key areas such as the End of Year/Start of Year (a typically busy time of year for schools with high volumes of payroll instructions to be processed over a short period of time).

      The Ministry has been working with EPL on their strategic review to set the direction for the long-term sustainability of the company and the services it provides. This work will culminate in a detailed business case for shareholding Ministers in 2016/17.

      Supporting the sector with their health and safety responsibilities

      The Health and Safety at Work Act 2015 came into force on 4 April 2016. We have provided extensive support and guidance to the sector to enable it to meet the changes, as well as improving the Ministry’s own health and safety systems.

      Support for the sector included the production of tailored practical guides (one for schools and one for ECE services) with sample policies and tools. We delivered 76 health and safety workshops to board of trustee chairpersons and school principals, which were attended by over 2,600 people. Our sector-facing health and safety website has had over 160,000 views and we have added a new ‘Health and Safety’ landing page for school property-related health and safety matters. We also have a trained senior advisor in each region to provide ongoing support to schools and ECE services.