Over-Funding Bonanza for Melbourne’s Most Privileged

The current funding model for private schools is delivering millions of dollars in over-funding to many of Melbourne’s most privileged families and schools. In 2010, 20 primary and secondary schools in the eastern suburbs were over-funded by $39 million. Their total funding was nearly double that warranted by their assessed socio-economic status.

Schools were over-funded by up to $4,000 per student (see tables below). Many primary schools in Camberwell, Deepdene, Hawthorn, Kew and Toorak were over-funded by more than $3,000 per student. Their actual funding was over twice their assessed SES (socio-economic status) funding rate.

Among the secondary schools, Loreto Mandeville Hall in Toorak was over-funded by $3,927 per student while Genazzano Fcj College in Kew was over-funded by $3,642 per student and St.Kevin’s College in Toorak was over-funded by $3,358 per student. Many other secondary schools in the eastern suburbs were over-funded by over $2,000-$3,000 per student. The total funding for many was 2-3 times more than their assessed SES rate.

The over-funding is the result of a “no losers” guarantee provided by the Howard Government when the SES funding scheme was introduced in 2001. Under the scheme, recurrent funding for each private school is determined by the socio-economic status of families of students enrolled at the school. However, the “no losers” guarantee ensured that no school lost funding in joining the scheme. Schools which were receiving more funding than warranted by their SES score were allowed to keep it. They are called “funding maintained” schools.

The “no losers” guarantee has ensured that the designation of the current funding arrangements for private schools as ‘funding according to need’ is a complete misnomer. Only half of all private schools in Australia are strictly funded according to their assessed SES score. About 50 per cent of private schools and about 60 per cent of private school students are over-funded. The total over-funding is about $700 million a year and much of it goes to higher SES schools.

The top 10 over-funded primary and secondary schools in Melbourne are all Catholic schools. The Catholic Education Commission claims that it does not distribute the funding as allocated by the Federal Government and that it re-distributes some funding from its higher SES schools to lower SES schools.

To the extent this is true it is an admission of the failure of the SES model. The whole rationale for the SES model was that it would allocate funds according to need; that schools most in need would receive the largest grants. Yet, the largest private school sector in Australia says that this is not the case and that it uses its block control over the funds to distribute them to its schools on a different basis than the allocation determined under the SES funding arrangements.

However, there is good reason to question the Commission’s claims as they appear to be rebutted by a recent report of the Australian National Audit Office. The report says that its analysis “found that systemic schools with low SES scores (that is, schools servicing low socio-economic communities) receive less Australian Government general recurrent grants per student from their school systems than if they were directly funded under the SES arrangements…” [p.22].

To support its claims, the Commission should publish the funding formula it uses to re-distribute government funding to its member schools and publish federal funding allocated to each school. It is incumbent on the Federal Department of Education to ensure that systemic schools actually distribute their funding in a manner consistent with the needs-based principles underpinning the SES funding scheme.

This is another issue that should be investigated by the Gonski committee review of school funding.

Trevor Cobbold

Top Over-Funded Schools in Victoria - 2010

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