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Non-Government Schools and the Quality Schools package

As a result of the recent passage of the amendments to the Education Act 2013, changes to Commonwealth funding arrangements have come into effect from the beginning of 2018.

Under the previous arrangements, individual schools’ proportions of Commonwealth funding are based on historical funding patterns. This resulted in some schools, that served the same type of students, receiving different shares of Commonwealth funding depending on their state or territory.

The new funding model aims to transition all schools to a set share of Commonwealth funding for the same students over a set period of time.

For government schools, the Commonwealth share has been set at 20% of their SRS, and for non-government schools the Commonwealth share has been set at 80% of their SRS.

For Independent schools that were funded below 80% of their SRS, the Commonwealth share will transition up to 80% of their SRS over six years, with those schools each year receiving an additional one-sixth of the ‘gap’ between their current Commonwealth entitlement and 80% of their SRS entitlement.

Independent schools which were funded above their 80% Commonwealth share will transition down to 80% over ten years. Unlike the previous funding model which has no school losing funding in real terms, under the new arrangements some Independent schools will receive less funding growth than they would under the previous model. A small number of schools that are transitioning down to 80% of their SRS will lose funding in real terms over the course of their transition.

Schools in school systems will continue to be treated as a single entity. All schools will be allocated the same Commonwealth starting share (the average of the system) and the system will either transition up over 6 years or transition down over 10 years. The only non-government school system that was above its Commonwealth share of SRS is the ACT Catholic system. All other non-government school systems are transitioning up to 80% of their SRS.

To help support the ACT Catholic system and some Independent schools, the Government has announced a range of transition adjustment funding to assist schools transitioning down to maintain their financial viability over the course of the transition period.

The Government has estimated that over the ten-year transition period, Australian Government funding to government schools will grow by on average 5.1% per annum, Catholic systems on average 3.5% per annum and Independent schools on average 4.1%. These differential funding transitions reflect the different average starting points for the various sectors (higher for Catholic systems, lower for government and Independent schools) in their transition to their SRS entitlement.

Apart from the changes outlined above, the fundamentals of the model remain the same. The calculation of each schools’ SRS funding entitlement will remain very similar to the current calculation, but with some changes as follows:

 

Additional changes to the current model

Rebasing of the SRS

The new SRS funding model recalculates the SRS amounts for primary and secondary schools to update the costs of schooling. The recalculation has resulted in the primary SRS amount of $10,953 growing by 6.23% from 2017 and the secondary amount of $13,764 growing by 1.5% from 2017. This will have a significant effect on the relative amounts schools receive for primary and secondary students between 2017 and 2018.

Indexation

Under the new funding arrangements there will be just one indexation rate: 3.56% from 2018 to 2020. Then, from 2021 indexation will move to a floating measure of 75% Wage Price Index and 25% Consumer Price Index, with a floor of 3%.

Capacity to Contribute settings

The Capacity to Contribute (CTC) settings for the SRS funding model are used to determine how much the base funding component of the model is discounted based on a non-government school community’s capacity to contribute to the costs of education. These settings will continue to be based on the measure of socio-economic status (SES).

The previous SRS Funding model included a ‘curve’ to the primary CTC line, resulting in schools between SES 108 and 122 receiving a higher per capita amount for primary students than for secondary. Under the new model, from 2018 the ‘curve’ has been adjusted so that no primary students receive more funding than secondary students.

 

New ‘Capacity to Contribute’ settings (based on re-based 2018 SRS)

Removal of Student Weighted Average SES

The previous SRS funding model allowed school systems to use a student weighted average SES score for the entire system. Where this was not financially beneficial to systems, they could choose to stay with schools’ individual SES scores to calculate CTC for the system.

Under the new funding arrangements, all systems will have their CTC based on their individual school SES scores. However, the student weighted average SES will remain in place for 2018 pending the outcomes of the Review of the SES methodology.

Students with Disability Loading Settings

For 2018, significant changes have been made to the Student with Disability loading settings for with the introduction of a differentiated loading based on the Nationally Consistent Collection of Data on School Students with Disability (NCCD) data collection.

The proposed changes will have a significant impact on individual schools’ funding entitlements.

 

Comparison current and new SWD loadings

2014 to 2017 loadingsLoading to be used from 2018
186 per cent for students with a disability
attending a mainstream school
Primary
• Supplementary 42 per cent
• Substantial 146 per cent
• Extensive 312 per cent
223 per cent for students with a disability
attending a special school
Secondary
• Supplementary 33 per cent
• Substantial 116 per cent
• Extensive 248 per cent

Primary loading percentages are higher than secondary so that once the different primary and secondary SRS amounts are factored in, the loadings will be similar for primary and secondary.

As this collection has not previously been used for funding, the Commonwealth will incorporate the collection into its current data collection audit processes, as used for the Non-Government School Census.

State-Territory Maintenance of Effort and State Share

State and Territory governments will be required to maintain their share of funding for both government and non-government schools. State and Territory governments will also be required to fund a set share of the SRS which will be agreed with the Commonwealth.

 

National School Resourcing Board

The government has also established a National School Resourcing Board. The Board’s role is to review and recommend improvements to the way Commonwealth school funding is distributed across Australia. It consists of nominees from all sectors, operating as an independent body advising the Commonwealth Minister for Education and Training. The Board’s first priority is a review of the SES score methodology and current arrangements for determining the capacity of non-government school communities to contribute to the operational costs of their school.

 

State & Territory national and bilateral agreements

In order for Commonwealth funding to flow to schools, state and territory governments are required to sign both national and bilateral agreements with the Commonwealth. As these agreements are not intended to be finalised until mid-2018, state and territory governments were required to sign interim agreements with the Commonwealth to enable funding for both government and non-government schools for 2018.


This article originally appeared in the ASBA Associate, November 2017 issue. 

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