Funding cut 'blows Gonski out of the water'

THE NSW government has flagged cutting $67 million a year in public funding from Catholic and independent schools.

THE NSW government has flagged cutting $67 million a year in public funding from Catholic and independent schools from next year, in a provocative move on the eve of the first ministerial talks to overhaul the funding system.

The decision threatens to derail the implementation of the Gonski model for school funding, as NSW has been one of the biggest supporters of the reforms, and comes only days after Julia Gillard's education crusade speech.

Independent and Catholic school officials first learnt of the plans from NSW Education Minister Adrian Piccoli on Tuesday, the day after the Prime Minister's speech, and were briefed by the state Treasury and Education departments on Wednesday.

Education ministers will this afternoon start negotiations over the introduction of the Gonski model, and how to fund the extra $6.5 billion a year the review says is required to lift educational standards.

The decision suggests NSW is cutting education spending in the government sector by a larger amount than envisaged.

Non-government schools receive the bulk of their public funding, about 75 per cent, from the commonwealth with states and territories providing 25 per cent of the grants to independent and Catholic schools. Under NSW legislation, state funding of non-government schools is set at 25 per cent of the money spent in the government sector, with non-government school grants worth $915.5m in 2011-12 -- with the budget forecasting it to be $960m this financial year. Cutting non-government funding by $67m implies a proportional cut in government school funding in the order of $250m.

Mr Piccoli has committed the state government to making the spending cuts outside the school gate, to ensure teachers and other services in schools are untouched.

Instead, the department has sought to find savings by cutting jobs in the department's head office and regional offices. Mr Piccoli last night said "no decision has been made about how savings will be achieved in the education portfolio", but The Australian understands an announcement is planned for next week, with the Catholic system treating it as a fait accompli, and the state's bishops set to decry the cuts to be released today.

The Australian has been told the cuts spare schools that specialise in teaching children with disabilities and learning disorders, and will be implemented as a sliding scale, with the richest schools losing more than poorer schools.

The Catholic system expects to lose about $24m in funding, with the rest being cut from the budgets of independent schools, and schools will have to look at raising fees to make up the shortfall.

A senior non-government sector official said the decision "blows Gonski out of the water from a NSW point of view".

"The Prime Minister, and Tony Abbott, can't say anymore that in 2014 all schools in Australia will be better off than they are now because non-government schools in NSW clearly won't be," he said.

The Association of Independent Schools of NSW and the NSW Catholic Education Commission refused to comment.