Private School Funding Figures are a Shambles

The official figures on government funding of private schools are a shambles. Even the Australian Curriculum, Assessment and Reporting Authority (ACARA) is confused. Its latest National Report on Schooling in Australia presents two contrasting sets of figures on private school funding.

One figure gives government funding of private schools as $6,850 per student in 2008-09 while another says it was $8,461 in 2009 [see Table 1 below]. One series has private school funding increasing by 9% between 2005-06 and 2008-09 and the other shows an increase of 33%. One series says the dollar increase was $563 per student and the other says $2111.

One series has government funding of government schools increasing by much more than government funding of private schools while the other shows private school funding increasing much faster than government school funding.

These are huge disparities. It is incumbent on ACARA to explain and resolve these differences. It is highly irresponsible to publish such widely differing figures and not resolve them or suggest which are the more reliable. Informed debate is impossible when one official data series shows government funding for private schools has increased by nearly four times that shown in another official data series. It is time for a reliable and consistent data set on private school funding.

Disparities in private school funding data
The text of the National Report on Schooling (NRS) 2009 says that total government funding of private schools in 2008-09 was $6,850 per student (section 8.2, figure 8.2). This and the figures for preceding years are sourced from various issues of the Report on Government Services (RGS) published by the Productivity Commission.

However, a different figure is given in the statistical appendix to the report. Here total government funding of private schools for 2009 is given as $8,461 (table 41). Thus, there is a difference of $1,611 per student between the two sets of figures [Table 1 below]. This disparity is not noted or commented on in the report.

The NRS also says that government funding of government schools is increasing faster than government funding of private schools. Figure 8.2 in the report shows that government funding of government schools increased by $2,301 per student between 2005-06 and 2008-09 compared to $563 per private school student. Government school funding increased by 20% compared to 9% for private school funding.

However, this trend is reversed in the figures published in the statistical appendix of the 2006 and 2009 reports. According to these figures, government funding of government schools increased by $2,301 per student between 2006 and 2009 compared to $2,111 per private school student. Government school funding still increased by 20% but private school funding is shown as increasing by 33%. These figures are sourced from the Ministerial Council for Education, Early Childhood Development and Youth Affairs.

Further investigation also shows that the disparity between the two series exists for both Australian Government and state/territory government funding, especially in the case of Australian Government funding [Table 2].

In contrast to the figures on private school funding, the government school funding figure is consistent. It is given as $13,544 per student in both the text of the report and the statistical appendix. However, it should be noted this figure over-estimates government school funding in comparison to private school funding because several items included in government school funding are not included in private school funding. These include the user cost of capital, payroll tax and subsidies for student transport.

The user cost of capital (UCC) is largest of these items. It was $1,953 per student in government schools in 2008-09 and increased by 32% from 2005-06. When the UCC is excluded, government funding of government schools increased by 19% between 2005-06 and 2008-09. In this case, the dollar increase in funding for private schools is higher than the increase for government schools – $2,111 per student compared to $1,829.

Sources of the disparities in private school funding figures
Part of the explanation of the differences is that the RGS series is based on financial years and the NRS series on calendar years. Average private school funding for 2008-09 in the NRS series is $7,791 per student [Table 3 below]. This reduces the initial disparity with the RGS figure to $941 per student. The dollar increase from 2005-06 to 2008-09 is reduced to $1,637 per student and the percentage increase to 27%. However, this adjustment still leaves large differences between the two series.

The adjustment also creates a further anomaly. The NRS includes government capital funding while the RGS series excludes it. However, the conversion of the NRS series to financial years results in the RGS (recurrent) funding figure for 2005-06 to be higher than the NRS (recurrent + capital) figure – $6,526 compared to $6,154 per student. This indicates another incompatibility in the two series.

Australian Government capital funding of private schools has become quite significant in recent years. It increased from $239 to $848 per student between 2005-06 and 2008-09, an increase of 255%. State and territory capital funding figures are not published separately, but are likely to be small.

When Australian Government capital funding of private schools is included the RGS figure for private school funding is increased to $7,692 per student in 2008-09 [Table 3]. This reduces the disparity with the NRS figure to only $99 per student. However, this adjustment also increases the disparity for 2005-06 from $133 per student to $372 per student, with the RGS figure being the largest.

A large difference remains for the increases in government funding between the series. The NRS shows an increase of $1,637 per student, or 27%. The RGS shows an increase of $1,166 per student, or 18%.

Thus, the inclusion of capital expenditure in the RGS series reduces the disparity in the dollar and percentage increases between the two series by about half.

Another source of difference between the two series is in the enrolment figures used to estimate per student funding. The RGS figures include enrolments of overseas students who are not funded by government while the NRS figures exclude overseas students. This means that the RGS government funding figures are under-estimated because it uses a higher enrolment figure to estimate per student funding.

Enrolments of overseas students are not published in either the RGS or the NRS, but a time series is available from Australian Education International. It shows that total enrolment of overseas students in Australian schools was 27,842 in 2008-09 [Table 4]. However, these figures do not distinguish between enrolments in private and government schools.

If 75% of overseas students are enrolled in private schools, total government funding of private schools is increased to $7,830 per student in 2008-09, $139 per student more than the NRS figure [Table 2]. Obviously, this difference would be reduced if there are less than 75% of overseas students enrolled in private schools, but would be increased if there are more.

This adjustment for differences in enrolments used to estimate per student funding has little impact on the increase in government funding from 2005-06 to 2008-09 in the RGS series. The increase is raised slightly to $1193 per student, which also represents an increase of 18% and which is well below that of 27% shown in the NRS series.

While the figures for 2008-09 resulting from the above adjustments are similar in both series, there is a large difference in the 2005-06 figures which causes the large disparity in the funding increases measured by the two series. The above adjustments only reduce the initial disparity in funding increases by about half. The remaining disparity is unexplained.

Thus, on the adjusted figures, the NRS series shows a much larger percentage increase in government funding for private schools over government schools (27% compared to 19%) and the RGS series shows a similar increases for private schools and government schools (18% compared to 19%).

Inconsistency with SES funding increases
There is also a major anomaly between the increases in Australian Government funding for private schools shown in the RGS figures and the annual supplementation of private school funding under the SES funding arrangements. The increases in Australian Government expenditure on private schools in the RGS are much less than the increase in the annual supplementation provided according to increases in Average Government School Recurrent Costs (AGSRC).

AGSRC is used as the benchmark for annual increases in Australian Government general recurrent funding of private schools under the SES funding model. Private schools are funded at varying percentages of AGSRC. All schools, except a small proportion categorised as “funding guaranteed”, receive annual percentage increases in per student funding in line with the percentage increase in AGSRC.

SES funding per student for private schools provided through annual supplementation linked to AGRSC increased by 17% for primary schools between 2005-06 and 2008-09 and by 13% for secondary schools [Table 5]. Overall, the increase in annual supplementation was nearly double that shown by the RGS figures.

This disparity is perplexing. It is just not possible for private schools to have received a lower increase in Australian Government recurrent funding than that shown by the increase in AGSRC apart from for the small number of funding guaranteed schools which do not receive AGSRC increases. Other forms of recurrent funding are only a very small proportion of total recurrent funding – recurrent funding through the SES funding arrangements accounts for about 98% of total recurrent funding for private schools by the Australian Government. Thus, there are no other sources of Australian Government recurrent funding that are large enough to dilute the impact of supplementation based on increases in AGSRC.

Conclusion
These inconsistencies in the official figures on government expenditure on government and private schools need to be resolved. They hamper informed public debate and create much confusion about trends in government expenditure on schools. They must be cleared up. The Australian Government should commission the development of reliable and consistent data on government funding of private schools.

In the meantime, it is more appropriate to use the NRS figures for several reasons. First, the RGS figures are incomprehensible because Australian Government recurrent funding of private schools is estimated as increasing by about half the rate of AGSRC, the benchmark used to provide annual supplementation to private schools under the SES funding model. The funding subject to this supplementation accounts for nearly all Australian Government recurrent funding of private schools.

Second, the NRS figures include capital grants to private schools and therefore provide a more comprehensive estimate of government funding of private schools. Australian Government capital grants to private schools have increased rapidly since 2005-06.

Third, as the NRS figures include capital grants to private schools they are more comparable with the government school expenditure figures, which include capital expenditure by way of depreciation. However, it must be noted that there are several other incompatibilities between the figures on government funding of private and government schools. The figures on government school funding include the user cost of capital, payroll tax and school transport, all of which are not included in government funding of private schools.

Trevor Cobbold

Tables on Government Funding of Private Schools

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