Fighting for Equity in Education

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The Arms Race Between Elite Sydney Private Schools is Fuelled by Govt Over-Funding

Tuesday March 6, 2018

New figures show that the arms race in lavish facilities between elite private schools in Sydney is being fuelled by more than $150 million a year in government over-funding. Over-funding frees up private income from hefty fees and donations to finance luxurious buildings and facilities in competition with other elite schools. It denies much needed resources for disadvantaged schools facing severe shortages in teaching staff, educational materials and modern classroom buildings.

According to a recent report in the Sydney Morning Herald, seven extremely wealthy Sydney private schools have development plans totalling $365 million, including a $25 million library designed to look like a Scottish castle, a 5-story innovation centre, an orchestra pit, theatres, aquatic centres and other sporting facilities.

The plans look like something from a fantasy holiday getaway brochure. Sleek architect-designed buildings housing state-of-the-art gyms and swimming pools. Multi-tiered recreation spaces that would sit nicely on a Balinese hillside. An orchestra pit and a chapel nested into bushland. A Scottish baronial library.

Commonwealth and NSW Government over-funding of private schools is contributing to this arms race. One form of over-funding is that Commonwealth and NSW Government funding for many elite private schools exceeds their entitlements under Gonski 2.0. Their total government funding exceeds 100% of their Schooling Resource Standard (SRS). Save Our Schools estimates this form of over-funding for 27 elite Sydney private schools at $50.9 million in 2018.

Commonwealth over-funding under Gonski 2.0 means that schools are funded at over the target Commonwealth rate of 80% of their SRS. NSW Government over-funding means that schools are funded at over 20% of their SRS by the NSW Government. Commonwealth over-funding for the 27 elite schools is estimated at $19.1 million in 2018 and NSW Government over-funding at $31.8 million.

These elite private schools also have a more general and lucrative form of government over-funding. They receive Commonwealth and NSW Government funding even though their income from fees, donations and other private income vastly exceeds the base SRS, which is the level of recurrent funding required to support a student with minimal educational disadvantage. They don’t need government funding to provide a fulfilling education for their students, it is a waste of taxpayer funds and diverts much-needed funding from public schools in NSW which are funded at much less than their SRS.

Save Our Schools estimates this over-funding at $154 million in 2015 (the latest available figures) and would be much higher in 2018. It includes the funding over their SRS entitlement under Gonski 2.0.

Over-funding of elite Sydney private schools under Gonski 2.0
Eight elite Sydney private schools are each over-funded by about $2 million or more, including Loreto Kirribilli ($5.8 million), Monte Sant’ Angelo Mercy ($5.6 million), St. Augustine’s ($4.7 millin) and William Branwhite Clarke ($5.4 million) [see Chart 1 below]. Other very wealthy schools that are over-funded include Abbotsleigh ($1 million), Barker College ($2.9 million), Kincoppal ($1 million), Moriah College ($2.4 million) Queenwood ($1.9 million), Reddam House ($1.4 million), Sydney Grammar ($1.3 million) and Wenona ($1.6 million). This over-funding allows a lot of private income that would otherwise have to be spent on recurrent needs to be diverted to capital projects.

All these schools serve highly privileged families and none or very few disadvantaged families. On average, 75% of students in these schools are from the top SEA quarter and only 1% are from the bottom SEA quarter. Several of the most over-funded schools have over 70% of their students from the top SEA quarter and few disadvantaged students [Chart 2].

For example, 80% of students at Loreto Kirribilli are in the top SEA quarter and none are from the bottom quarter; Monte Sant’ Angelo Mercy has 75% of its students from the top SEA quarter and only 1% from the bottom quarter; Barker College has 83% of its students from the top SEA quarter and none from the bottom quarter; Loreto Normanhurst has 74% of its students from the top SEA quarter and only 1% from the bottom quarter; and Moriah College has 73% of its students from the top SEA quarter and only 1% from the bottom quarter. It is a scandal that Sydney Grammar with 98% of its students from the top SEA quarter and none from the bottom quarter is over-funded by $1.3 million.

Many of these elite Sydney schools will remain over-funded under the Turnbull Government’s Gonksi 2.0 funding plan. It will allow them to continue to spend more of their private income on lavish facilities. While Gonski 2.0 purports to end over-funding by capping Commonwealth funding of private schools at 80% of their SRS by 2027, many will remain over-funded because of over-funding by the NSW Government. For example, schools such as Barker College, Loreto Kirribilli, Monte Sant’ Angelo Mercy College and Moriah College will be over-funded by around $3 million a year, unless the NSW Government reduces its over-funding [Chart 1]. Many others will be over-funded by $1-2 million a year.

Many of these schools may be able to devote even more of their private income to capital projects when Gonski 2.0 is fully implemented. Over-funding will increase for 14 of the 27 schools (52%), assuming the NSW Government maintains its share of the SRS funding. For example, over-funding will increase for SCEGGS Redlands by $1.4 million a year by 2027, by $1.1 million for SHORE, and by $0.6 million for Moriah College and Tara Anglican. Over-funding will also increase for wealthy schools such as Abbotsleigh, Barker College, Cranbrook, Kambala, Kincoppal and SCEGGS Darlinghurst.

Over-funding for seven of these schools will increase because Commonwealth funding is currently below 80% of their SRS and is set to increase to 80% by 2027 while NSW Government funding is above 20% of their SRS. These schools are Oxford Falls Grammar, Santa Sabina, SCEGGS Darlinghurst, SCEGGS Redlands, SHORE, St Catherine’s and Tara Anglican.

Despite the planned reduction in Commonwealth over-funding for the other seven schools, their over-funding will also increase because indexation of their SRS will result in greater over-funding by the NSW Government, assuming it maintains its current share of SRS funding. These schools are Abbotsleigh, Barker College, Cranbrook, Kambala, Kincoppal, Moriah College and Wenona.

Elite private schools also receive unwarranted government funding
This is not the only form of government over-funding that fuels the arms race in school facilities. A more general and lucrative form of over-funding occurs because the wealthiest private schools are guaranteed a minimum of Commonwealth and NSW Government funding regardless of the capacity to pay of their school community.

Under the Commonwealth’s current Gonski 2.0 funding arrangements, all private schools receive a base per capita grant from the Commonwealth determined by a measure of the “capacity to contribute” of families in each school. The capacity to contribute is measured by the school’s socio-economic status (SES score). Those with a higher SES score receive less government funding, but all schools, even the most privileged, receive a grant. The most privileged schools are guaranteed a minimum grant of 20% of the base SRS, which is the level of recurrent funding required to support a student with minimal educational disadvantage. They also receive NSW Government funding.

These schools receive government funding even though their income from fees, donations and other private income is much higher than the base SRS. The private income of the 20 of 21 K-12 schools exceeds the average of the primary and secondary school base SRS and it is double or more the average SRS in 14 schools [Chart 3]. The private income of Ascham is three times that of the average SRS and nearly three times for very wealthy schools such as Abbotsleigh, Barker College, Cranbrook, Kambala, SCEGGS Darlinghurst, SCEGGS Redlands, and SHORE. In contrast, many public schools are funded at below the base SRS.

The private income of six elite secondary schools also exceeds the secondary school base SRS. The private income of Sydney Grammar is nearly three times that of the secondary SRS, while that of the Loreto Normanhurst is nearly double the SRS.

Total government (Commonwealth and NSW) funding for 26 of these schools was $154 million in 2015 (the latest year for which these figures are available from My School) and would be substantially higher now. Twenty of these schools had government funding of around $4 million or more [Chart 4]. William Branwhite Clark College had government funding totalling a massive $14.4 million. Barker College, Brigidine, Loreto Kirribilli, Monte Sant’ Angelo Mercy, Santa Sabina and St. Augustine’s were funded at $8 million or more.

This generous funding for schools whose private income vastly exceeds the base SRS compounds their large resource advantage over public schools, which are currently funded at significantly less than their SRS. Public schools in NSW are currently funded at 89% of their SRS. Commonwealth funding is 17.7% of their SRS and is due to increase to 20% by 2027. However, NSW Government funding was only at 71% of their SRS in 2017 (the 2018 figure is not available). If the NSW Government fails to increase its funding share, public schools will be funded at only 91% of their SRS by 2027 while the 27 elite private schools will be funded at average of 128% of their SRS unless the NSW Government reduces its funding share.

Far from saving governments money as private schools claim, funding for elite private schools involves unnecessary costs to governments. Government funding is not needed to provide a fulfilling education for their students, it is a waste of taxpayer funds and diverts much-needed funding from public schools in NSW which are funded at much less than their SRS.

There is no justification for providing millions in government funding to schools that are the preserve of the most advantaged families in NSW. It means less funding is available for schools serving the education needs of the most disadvantaged students, Indigenous students and students with disabilities. It means fewer teachers, fewer support staff, lower salaries, fewer books and less equipment than is needed in schools serving low SES students and other disadvantaged students. That is, less of everything that matters for those who need it most. As an editorial in the Sydney Morning Herald said:

…the next time taxpayers are being asked to accept their hard-earned dollars are being well used by Sydney’s elite schools and their palatial facilities, perhaps a thought should be spared for those less-fortunate students in western Sydney or outback NSW whose future is housed in temporary classrooms that are left to bake in the heat.
There is no arms race to attract parents to public schools. Just the dire need for more resources to transform lives for some of the most disadvantaged and needy students in the state. For this cohort, the prospect of luxury gyms and swimming pools remains a distant dream.

A new approach is needed for Commonwealth and NSW Government funding of private schools. The Commonwealth should end all funding of private schools whose private income exceeds the base SRS. The NSW Government should end its over-funding of all private schools and stop funding the elite schools.

Trevor Cobbold

Charts on Over-Funding of Elite Sydney Private Schools .pdf

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