NSW schools had money taken from them. Now we know how much

Half a billion dollars has been ripped from individual public schools this year, according to the NSW opposition, after the Department of Education reallocated millions of dollars in unspent funding principals had accumulated, and slashed operating budgets.

Documents obtained by opposition education spokeswoman Sarah Mitchell show that schools had accumulated more than $350 million in unspent funds before the Department of Education in April ordered the money be returned.

Principals had to absorb a $148 million funding cut while accumulated funds disappeared from their accounts earlier this year.Credit: iStock

Under funding changes announced in 2021, principals were told they needed to spend any accumulated money they had saved in their budget under the department’s carry-forward policy, in a bid to make sure taxpayer funds were used on the students they were intended for. The previous government gave them until 2025 to spend the previously accumulated money.

When the Herald revealed in May the cash had disappeared a year earlier than planned, the Department of Education declined to say exactly how much money schools had lost.

A briefing note shows that three months earlier, in January of this year, schools had $395 million in unspent funds.

A Department of Education spokesman said by April, those funds stood at $376 million when the decision to move the accumulated balances back to the department was made.

Opposition education spokeswoman Sarah Mitchell said schools have been left to make impossible decisions after the money was taken away.Credit: Rhett Wyman

The loss of funds is in addition to a 1.25 per cent cut to individual schools’ budgets, or about $148 million across the board, flagged in April, due to multiple years of fewer public school enrolments.

Education Minister Prue Car last year awarded NSW teachers a historic $10,000 a year pay rise and vowed the resulting higher wages bill would not affect what happened in schools.

Mitchell said the minister had refused to be transparent about how much money public schools had ripped out of their budgets.

“Instead of being trusted to spend that money on better outcomes for their students, principals were blindsided by the sudden decision to freeze this budget allocation midway through the year,” she said.

“This means schools have been left to make impossible decisions when it comes to staffing, student resources and capital projects. We know that in some instances, schools have been shortchanged by hundreds of thousands of dollars.

“When you add this budget freeze to the $150 million that was taken from school bank accounts earlier this year, it’s more than half a billion dollars in funding cuts. The minister needs to explain to school staff, students and parents how she can justify these cuts at a time when our students need more support than ever.”

Car said she believed the money should be spent in the classroom where it has the most impact on student outcomes.

“Our government is prioritising hiring more teachers and has redirected record education funding towards the classroom,” she said.

Under the previous government’s controversial reform called Local Schools, Local Decisions, the bulk of the state’s multibillion-dollar school budget was transferred from the Department of Education and given to principals to enable greater autonomy.

“Unfortunately, under the former government’s failed Local Schools Local Decisions policy, these unused funds in school accounts didn’t reach the classroom because schools couldn’t fill teacher vacancies,” Car said.

“The former government began to undo their mess and we are finishing the job.”

There are now 1698 vacant teaching positions across NSW public schools, a 35 per cent drop compared to the same time in 2022.

A separate freedom of information request found some schools had small amounts of funding unspent, while others had hundreds of thousands. Davidson High had accumulated $322,755, Killarney Heights High had $633,000 and Northern Beaches Secondary College Manly Campus had $530,000 in unspent funds.

Principals had previously said stripping the unspent funding from school communities was doubly unfair as those were the same schools that had failed to spend the money on teachers due to statewide staffing shortages.

A Department of Education spokesman said: “We need to prioritise teaching in classrooms and ensure every available dollar is spent on better teaching and learning outcomes.”

The funding changes come as NSW, along with other states, had locked horns with federal Education Minister Jason Clare, who has given state education ministers until September to sign on to a new school funding deal or risk losing an extra $16 billion over 10 years.

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