Heat, light and water operational funding

What is the additional heat, light and water funding for?

In Budget 2019 and 2020, $11.5m per annum was approved to support schools manage their heat, light and water (HLW) costs. It is a fund aimed at easing the burden of power and water costs that have had an impact on some schools.
How did this problem come about?

Since 2010, inflationary increases have exceeded annual funding increases for HLW which schools have received through their operational grants. The greater usage of digital devices in schools, increasing power prices and aging infrastructure (equipment and buildings) has meant that the fixed funding model for HLW has not kept pace with these changes. HLW funding can be a driver of financial difficulty for schools. The funding of HLW is being considered as part of the school property reform, a longer-term piece of work involving data gathering on actual expenditure.

How will schools get their funding?

Eligible schools will automatically receive a funding increase. The additional HLW budget will be based on the financial reporting data. An average of three years HLW expenditure including the CPI increase will be compared with the current allocation. If the average expenditure is higher, the school will receive a new HLW allocation. Using a three-year average will ensure we will calculate the need of additional funding as accurately as possible.
How many schools are eligible?

Based on historical data approximately 1,500 schools have been exceeding their HLW funding allocation. More than 120 of these schools have received an increase in their HLW allocation in the 19/20 financial year. Nearly $2 million has already been allocated to schools from the total $11.549 million.

Can ineligible schools request additional funding if they think they should have received it?

If you think your 2021 funding allocation is insufficient, you can still apply for a review of HLW in exceptional circumstances, for example, if your school adds new classrooms.

Is the Ministry of Education rewarding schools with an ineffective budgeting and penalising those who are essentially more careful?

There are a range of factors that impact the cost of heat, light and water. We have looked at the schools’ financial information to assess where the greatest need is. Each school has different priorities and will approach budgets in different ways. Although the funding formula applies to every school equally, funding levels differ according to a wide range of factors, including student numbers, learning needs of students, age and type of school.

Is this a short-term response to a serious long-term problem?

A more comprehensive solution to property management, energy and water funding is being developed and will be rolled out. The first step in this solution was made when more than $1 billion was allocated to school property over the next ten years. Although this funding is mainly for new build, some funding will be made available to upgrading property and in some cases energy efficiency measures.

How does this relate to the energy efficiency trials?

Through a scheme known as Te Haratau we are running energy efficiency trials in 56 schools to understand how schools use energy and steps we can take to support them to be more energy efficient.

Some of these schools appear very energy efficient and could be great examples to learn from, whereas others appear less efficient but perfect for testing different solutions. The learnings from the trials will inform our Environmental Action Plan (EAP), and support schools to make practical changes. Eventually, these initiatives will save schools money as well as being environmentally conscious, ticking the boxes for operational efficiency and sustainability.

What are you doing to help schools reduce their energy consumption long-term?

As part of Te Rautaki Rawa Kura we are developing an EAP for the school property portfolio to understand how our work impacts the environment and actions we can take to reduce these impacts. One of the three goals of EAP is improving operational efficiency across the portfolio, specifically energy consumption. Energy efficiency varies across schools – some schools have used their own funding to make energy efficiency improvements (for example, removing their coal boiler).

We have limited information on schools’ energy usage. We have started getting access to schools’ electricity data through the Te Haratau programme as the first step to understanding energy consumption. By the end of the pilot we had access to over 800 schools’ data (33% of schools) and were able to benchmark a school’s consumption against similar schools.

As part of our EAP, we will build a stronger understanding of how schools use energy, how we can empower schools to understand and reduce their energy use and identify how we can invest in energy efficiency across the portfolio.


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