Education Minister Erica Stanford told media those projects will still be built, but they will require funding from future Budgets.

Stanford attacked the previous Government for leaving “a pipeline of unfunded projects”. Stanford said that the Ministry had itself realised there was a problem and begun looking into the matter before the change of government.

The McCully inquiry’s primary recommendation was to establish a new entity separate from the ministry to “assume ownership and asset management responsibility for the school property portfolio”.

This entity would take the form of a “Crown agent, Crown entity company, schedule 4A company, statutory entity, public benefit entity, or state-owned enterprise, based on further advice from the Treasury and the Public Service Commission”. Each of these structures comes with varying degrees of political independence.

Stanford said that this proposal would go to Cabinet in the “coming months”

“There was a strong consensus that school buildings funded by taxpayers should be simple, functional, cost-efficient and based on repeatable or standardised designs. The ministry’s failure to execute in line with these principles drew strong criticism,” the report says.

‘Huge loss of confidence in the current system’

Stanford and Infrastructure Minister Chris Bishop agreed the system was inefficient and bureaucratic.

“The gap between what schools were led to expect of delivery compared with the reality of funding available, has resulted in a huge loss of confidence in the current system and uncertainty for school communities,” Stanford said.

In response to the recommendations, the ministers said decisions would be made next year on whether a new entity was established or a new model still within the ministry was created to manage the portfolio.

“It’s absolutely essential that we clarify roles and responsibilities for school property management, provide greater transparency around decisions, and bring in disciplined and data-driven oversight of investment and delivery,” Bishop said.

Bishop acknowledged other changes to come from the report would be include investment in less “sexy” things like maintenance to ensure the government makes better use of the assets it already has.

“Erica has done the right thing by having a much greater focus on maintenance. We need to be investing much more in maintenance and looking after what we already have,” Bishop said.

Other actions the Government had agreed on following the inquiry included instructing the ministry to improve communication with schools, focus on simpler construction processes, and appointing a functional chief executive and independent investment panel to be responsible for school property.

The inquiry’s report, released this morning, summarised responses from principals, teachers, school board members, property managers, ministry staff and construction sector experts.

It found schools were “consistently critical of a lack of transparency, unclear prioritisation of projects, and generally inefficient project planning and delivery”.

It alleged a lack of transparency allowed schools to “jump the queue” and have their projects prioritised.

“We heard many times that there appeared to be no solid foundation to the ministry’s prioritisation of projects, and that the most effective way to secure funding is to go public through the media or local politicians.”

It referenced “cumbersome” processes that had led to minor projects that should have lasted two months taking two years to complete.

The report acknowledged failures on the part of school leaders, noting “some principals and boards lack the inclination or capability to act as custodians of significant Crown assets”.

A relocation project in Marlborough was referenced throughout the report as an “extreme” example of a “more systemic malaise”.

The project arose after condition issues were found at Marlborough Boys’ College and Marlborough Girls’ College between 2011 and 2013.

The cost began near $25 million, but by 2022, it had ballooned to $400m “without robust analysis linking costs to measurable benefits”, the report says.

“While the ministry decided to pause the co-location project in December 2023, the extended planning and design for the new facilities has been an expensive mistake, with up to $25 million in sunk costs so far.”

The Marlborough project was one of several examples Stanford cited when announcing the inquiry in February.

Adam Pearse is a political reporter in the NZ Herald Press Gallery team based at Parliament. He has worked for NZME since 2018, covering sport and health for the Northern Advocate in Whangārei before moving to the NZ Herald in Auckland, covering Covid-19 and crime.