‘Lack of clarity’: Private school funding rules updated to spare government a legal headache

Plunge pools and land banking are out the window, with private schools to be given clearer directions on how to use – and not abuse – taxpayer money.

The King's School at North Parramatta is one of 23 schools subjected to Section 83C investigations.

Private schools will be given clearer directions on how to use – and not abuse – taxpayer money, under proposed reforms to the Education Act that the government hopes will head off plunge pools and extravagant land banking before they become an expensive legal headache.

Changes to the enforcement of Section 83C of the Education Act, which prohibits the Education Minister from providing “financial assistance to … a school that operates for profit”, will see the government pursue ‘less costly remedies’ to possible breaches.

New guidelines will be developed to ensure Catholic and independent schools know exactly how they can spend their money without breaking the law, and oversight will be transferred from the Department of Education to the NSW Education Standards Authority, the state’s school regulator and curriculum reform body.

The reforms come as the NSW government hands down the findings of its review into the effectiveness of Section 83c, led by independent reviewer Professor Tom Alegounarias.

The former head of NESA’s predecessor, the NSW Institute of Teachers, Professor Alegounarias said one of the “overarching” problems with Section 83C was “a lack of clarity”.

King's School team competing in the Princess Elizabeth Cup at the Henley Royal Regatta in the UK. The school was declared non-compliant after flying the headmaster’s wife to the event. Picture: Henley Royal Regatta 2022

“What we had, until now, was school boards and regulation on the one hand, and legal action on 83c on the other … and it was costing the public too much money and schools too much time,” he said.

School boards will also have legal responsibility for publicly defensible spending, and won’t be able to “claim they’re not aware of their responsibilities” in the future, he said.

Former NESA chair Tom Alegounarias led the review. Picture: NESA

Investigations by the Non-Government Schools Not-for-profit Advisory Committee, of which there have been 23 in total, were found to be “excessive” in taking an average 15 to 18 months to complete.

When schools are declared non-compliant, subsequent court proceedings – launched either by the Department to recoup funding or by the schools themselves – have resulted in “a lot of public money” being drained by legal fees, Professor Alegounarias said.

“There’ll be a more explicit hierarchy of responses appropriate to the action, so if it’s a small transgression, then there’ll be a call to the school and a cautionary letter … and if it’s a substantial issue, there’ll be a formal declaration by the committee,” he said.

It was under Section 83C that The King’s School was declared ‘non-compliant’ for flying its headmaster and deputy headmasters’ wives to a rowing regatta in the UK, and was previously ordered to halt planned construction of a plunge pool in the headmaster’s residence for the same reason.

The Lakes Christian College in Castlereagh was also declared non-complaint after a Section 83C investigation.

Similarly, The Lakes Christian College near Penrith was ordered to repay $3.8m in government funding over the purchase of two parcels of land adjacent to the campus through a trust.

Education Minister and Deputy Premier Prue Car said “it is in everybody’s interests for the rules to be clear” and welcomed the review’s recommendations.

“It is important that the public have confidence that taxpayer funds are being used appropriately for the education of students,” she said.

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