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The Government is taking steps to enhance the charter school model to support school choice and increase innovation.
The Authorisation Board can now offer sponsors of converting schools contracts with an initial term of 20 years, with two 10-year rights of renewal, a move which will give sponsors and their communities more certainty.
Two other changes will be progressed through proposed legislation to be introduced this year.
- Sponsors will be able operate multiple charter schools with only one multi-school contract.
- A pathway for state and state-integrated schools that convert to a charter school to revert back to a state school.
This change aims to provide greater certainty for state schools that want to convert. A charter school that was previously a state school may seek to revert to a state school if its contract is terminated by mutual agreement with the Charter School Agency or the sponsor chooses not to renew the contract. This does not apply to new charter schools.
Multi-school contracts
How will having multi-school contracts improve the charter school model?
Currently, sponsors can operate multiple schools, but only through separate contracts for each school. This is inefficient and does not capitalise on the potential benefits a single sponsor could provide in operating multiple schools under one contract. The proposed changes to enable multi-school contracts aim to:
- lift performance of the system by encouraging collaboration and sharing of best practice across schools within a multi-school contract
- enable sponsors to streamline processes and services across schools to reduce duplication. For example, sponsors could combine corporate functions or share teachers and staff between schools to create efficiencies
- provide greater flexibility for sponsors to decide how resourcing is distributed across schools based on their individual needs
- allow for efficient application and contract management process processes for sponsors with more than one charter school, minimising the administrative burden on the Authorisation Board and Charter School Agency as well.
How will the approval process work for sponsors wanting to operate multiple schools under a multi-school contract?
A sponsor that wishes to operate under a multi-school contract would be approved via a two-tier process, approval of the sponsor and then the approval of establishment of each school separately. If a sponsor wants to open another charter school at a later stage, the sponsor would be able to submit an additional shorter application.
All existing legislative requirements regarding sponsor approval in section 212I of the Education and Training Act 2020 will apply in these circumstances, along with two additional considerations:
- the overall operating model of the cluster of schools including how the sponsor intends to share resources, and
- if applicable, the performance of the school that the sponsor currently is contracted for.
This gives the Authorisation Board more flexibility to decide to decline some of the schools within the proposal if it wishes.
How will the Authorisation Board ensure that schools operating under a multi-school contract are performing well?
Charter school contracts contain requirements for performance reporting, targets and outcomes, and annual self-auditing. Sponsors will need to report on student outcomes (attendance and achievement) for each school. Financial reporting will be at the sponsor level, to show financial health across all the schools within the contract and how funding is being allocated between them.
How will the Authorisation Board be able to intervene in poor performing schools?
The Authorisation Board has a range of interventions they can use if a sponsor isn’t meeting its legislative or contractual obligations. These range from requiring the sponsor to provide specified information or undertake a specified action, requiring a review of the governance and management of the school by the Chief Review Officer, to terminating the contract of the sponsor.
Two additional interventions will be included to give the Authorisation Board more flexibility to respond to performance issues within a multi-school contract. These are:
- removal of a school from a multi-school contract and the closing of this school; and
- removal of a school from a multi-school contract and approving a new sponsor to contract the school.
How will schools in a multi-school contract be funded?
Funding will be calculated for each school in the same way it is calculated for charter schools on an individual contract. All funding will be allocated to the sponsor and they will have flexibility in how this is allocated between schools in the contract, including any amount to be retained for shared services.
Targeted funding, including learning support and capital funding for Ministry-owned property, will continue to be tagged to a specific student or school to ensure funding is used for the right purpose.
Reversion to the state sector
How will providing a reversion pathway improve the charter school model?
Currently, the Minister of Education has absolute discretion over decisions to open new state schools. This means that, if a school were to convert and then wish to go back to the state sector, there is no guarantee their school would be approved to re-open. We have heard from some schools and sector groups that this uncertainty is a deterrent to converting, as it could result in disruption for students, staff and the school community, if they need to move to a new school.
Will any charter school be able to revert to a state school?
Only charter schools which had previously been a state school before converting into a charter school will be able to revert back to a state school. This does not apply to new charter schools.
Schools will only be able to seek to revert if their contract is terminated by mutual agreement with the Charter School Agency, or the sponsor chooses not to renew the contract. It is not a pathway for underperforming charter schools.
By providing a pathway for converted charter school to revert to the state system, will this allow poor performing charter schools to avoid closure?
This proposal is not intended to provide a pathway back to the state sector for underperforming charter schools. Contracts and legislation provide a clear framework for managing performance and the Authorisation Board will intervene where there are performance issues. This proposal will apply to schools that choose to return to the state sector for other reasons.
What are the transitional costs for converted charter schools returning to the state system?
Any costs associated with the closure of a charter school will sit with the sponsor. This includes the cost of their staff becoming redundant, and any other obligations the sponsor is responsible for upon termination of their contract.
All costs of establishing a new state school following the closure of a converted charter school would fall to the Crown. However, these costs are expected to be significantly lower compared to opening a new state school under normal circumstances. For example, ordinarily new state schools receive establishment funding to ensure they are provided with additional staffing and funding for the costs that a school incurs during the establishment period. However, many of the establishment funding components will not be needed as the newly reopened state school would already have been operating as a school.
Will teachers from the converted charter school be able to teach in the new state school?
When a converted charter school closes and re-opens as a state school, the school will revert back to the requirements that exist for state schools. This includes requirements set out in the Education and Training Act 2020 around employing registered teachers and those with a Limited Authority to Teach. There are no exemptions to this for reverting charter schools.
The proposed amendments to legislation will provide preferential status for existing charter school staff to apply for roles at the new state school. This in practice would give existing charter school staff priority for employment, however not all staff may transfer to the new state school because there may be a reduced staffing entitlement or the teachers at the charter school may not be registered teachers. If existing charter school staff cannot be employed at the new state school, the relevant redundancy costs will be met by the sponsor.
Why will charter school staff be given preferential treatment to apply for roles in the new state school?
This will reduce disruption by providing continuity of employment for staff and learning for students, as well as reducing potential redundancy costs to the sponsor.
Extension of initial contract term to 20 years
Why increase the length of the contract?
Increasing the initial contract term from 10 to 20 years will provide greater certainty for sponsors and communities, when entering into a contract. The contract will still have two rights of renewal of 10 years each.
Will all sponsors be offered a 20-year contract?
Only sponsors of converting schools can be offered an initial contract of 20 years. Limiting this only to converted schools ensures a lengthier initial contract term is only applied to schools that are more likely to have an established pipeline of students and broader community support for its ongoing operation.
Whether the initial contract is 10 or 20 years will be on a case-by-case basis. The Authorisation Board will seek the view of the Ministry of Education and ERO, as part of their usual consultation process, on the appropriate contract length.
What will happen if the school is performing badly, and they have a 20-year contract?
The performance management framework gives the Authorisation Board the ability to intervene if there are performance issues in a school. Where there are serious performance issues and the Authorisation Board considers it’s unlikely these will be resolved, they can terminate the sponsor’s contract.