Vote Education - Supplementary Estimates of Appropriations 2007/08

Details of Projected Movements in Departmental
Net Assets#

Ministry of Education

Information Supporting the Supplementary Estimates Vote Education #

MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister of Education (M26), Minister for Tertiary Education (M68)

ADMINISTERING DEPARTMENT: Ministry of Education

MINISTER RESPONSIBLE FOR MINISTRY OF EDUCATION : Minister of Education

Part 1 - Summary of the Vote#

Part 1.3 - Trends in the Vote

Summary of Financial Activity

Part 1.4 - Reconciliation of Changes in Appropriation Structure#

From 1 January 2008 a new funding system was introduced for the tertiary sector. Three new appropriations have been created to enable differentiation between purposes of funding for the direct costs of teaching and learning, and the costs of capability development and research.

The three new appropriations are:

• Tertiary Education: Student Achievement Component (Non-Departmental Output Expense)
• Tertiary Education Organisation Component ? Capability Fund (Non-Departmental Other Expense)
• Tertiary Education Organisation Component ? Performance Based Research Fund (Non-Departmental Other Expense).

Funding for these has been drawn from the following Non-Departmental Other Expenses:

• Tertiary Education and Training
• Capability Development Funds
• Performance Based Research Fund.

The table above is based on the funds that were transferred from 1 January 2008.

Grant funding incurred for the tertiary sector for the first six months of 2007/08 remained in the original appropriations as well as several programmes that were not incorporated in the new Student Achievement Component and Tertiary Education Organisation Component. The remaining amounts are to be transferred to other appropriations in 2008/09.

Explanations of the reasons for changing the appropriation structure are noted in the details of each appropriation in Parts 2-6.

Part 2 - Details and Expected Performance for Output Expenses#

Part 2.1 - Departmental Output Expenses#

Interventions for Target Student Groups (M26)

Scope of Appropriation

Reasons for Change in Appropriation

This appropriation will increase by $21.377 million to $213.873 million for 2007/08. The increase in appropriation is mainly owing to:

• changes to cost allocations between output classes ($16.485 million increase)
• a transfer from Departmental Output Expense School Property Portfolio Management for the increased cost of Ongoing and Reviewable Resourcing Schemes and the Schools High Health Needs Fund ($5.907 million increase)
• a transfer to 2008/09 owing to delays in the development of a screening tool for the Tackling Disruptive Behaviour initiative ($800,000 decrease)
• a reduction in services provided to third parties, principally assessments for the Independent Circumstances Allowance for the Ministry of Social Development and specialist educational assessments for the Accident Compensation Corporation ($399,000 decrease)
• a transfer to 2008/09 owing to delays in the professional development programme for additional early intervention specialists ($200,000 decrease).

School Property Portfolio Management (M26)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation will decrease by $44.045 million to $1,116.188 million for 2007/08. The decrease in appropriation is mainly owing to reduced capital charge as a consequence of:

• the downward revaluation of school sector property ($22.742 million)
• the reduction in funding required for the 2007/08 schools accommodation business case ($2.063 million)
• lower than expected property expenditure ($6.454 million), withdrawals and other timing changes ($2.343 million)
• savings to be used to offset the cost of School Decile Recalibration Transition ($2.947 million)
• a transfer to Departmental Output Expense Interventions for Target Student Groups for Ongoing and Reviewable Resourcing Schemes and the Schools High Health Needs Fund ($5.907 million)
• changes in cost allocations between output classes ($1.189 million).

Strategic Leadership in the Sector (M26)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation will increase by $1.140 million to $34.580 million for 2007/08. The increase in funding is mainly owing to changes in cost allocations between output classes ($1.190 million).

Strategic Leadership in the Tertiary System (M68)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation will decrease by $7.394 million to $17.089 million for 2007/08. The decrease in appropriation is mainly owing to a combination of:

• changes in cost allocations between output classes ($6.153 million decrease)
• a transfer to Non-Departmental Output Expense Developing Strategic Coherence Across the Tertiary Sector, for the development of an adult literacy assessment tool for adult literacy, numeracy and language ($1.293 million decrease)
• support for the Centre for New Zealand Studies in London ($255,000 increase)
• provision for a project on employment outcomes of tertiary education ($150,000 increase)
• a transfer of funding to outyears as a result of delays in ensuring the research strategy for upskilling the workforce fully aligns with the strategies of the interagency programmes ($200,000 decrease).

Support and Resources for Education Providers (M26)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation will decrease by $20.711 million to $66.578 million for 2007/08. The decrease in funding is mainly owing to:

• changes in cost allocations between output classes ($14.298 million)
• a transfer to 2008/09 after delays with the school payroll project while the Ministry investigates outsourcing options ($3.925 million)
• a reduction in capital charge following delays in capital expenditure related to the schools payroll project ($1.404 million)
• a reduction in funding after a change in the scope of the enrolment management systems integrated solution ($987,000).

Support and Resources for Teachers (M26)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation will decrease by $4.898 million to $60.942 million for 2007/08. The decrease in appropriation is mainly owing to a combination of:

• changes in cost allocations between output classes ($3.126 million decrease)
• a reallocation of savings to other education priorities ($1.700 million decrease)
• a transfer of funding to 2008/09 owing to the next phase of the project to improve the capability of in-service teacher educators being delayed ($350,000 decrease)
• a transfer of funding to 2008/09 owing to delays in the analysis and reporting from Māori medium work for the Quality Teaching Research and Development in Practice project ($169,000 decrease)
• an increase in funding for a new bonded scholarship for school teacher recruitment to replace and encompass existing scholarships and allowances ($675,000 increase).

Support and Resources for the Community (M26)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation will increase by $7.026 million to $21.592 million for 2007/08. The increase in funding is mainly owing to changes in cost allocations between output classes ($7.091 million).

Part 2.2 - Non-Departmental Output Expenses#

Intended Impacts, Outcomes and Objectives#

Centres of Research Excellence (M68)#

Scope of Appropriation

Reasons for Change in Appropriation

This appropriation will increase by $1.698 million to $24.539 million for 2007/08. The increase reflects renegotiated funding agreements with the Centres of Research Excellence after the 2006/07 selection round.

Curriculum Support (M26)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation will increase by $375,000 to $69.068 million for 2007/08. The increase in appropriation is mainly owing to:

• a reallocation of funding from Non-Departmental Other Expense Secondary Education to Curriculum Support for the Artists in Schools programme ($600,000 increase)
• a transfer from Non-Departmental Output Expense Professional Development and Support to redistribute savings agreed to in Budget 2007 ($250,000 increase)
• a transfer from Benefits Expense Mapihi Pounamu and Non-Departmental Other Expense Primary Education support students whose enrolment exemptions have been declined during 2007/08 to help them stay engaged in schooling ($210,000 increase)
• a reprioritisation of savings to Non-Departmental Output Expense Quality Assurance ($703,000 decrease).

Developing Strategic Coherence Across the Tertiary Sector (M68)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation will decrease by $575,000 to $28.869 million for 2007/08. The decrease in funding is mainly owing to:

• a transfer to Non-Departmental Output Expense Tertiary and International Advisory Services after a change in the distribution of costs resulting from the revision of the structure of the Tertiary Education Commission ($2.000 million decrease)
• a transfer from the Ministry of Education for Tertiary Information Review ($800,000 increase)
• a transfer from Non-Departmental Output Expense Training for Designated Groups to help Industry Training Organisations ensure that training, developed through pilot literacy and numeracy projects, meets quality assurance standards ($500,000 increase).

Management of Grants and Contracts (M68)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation will increase by $140,000 to $14.049 million for 2007/08. The increase is owing to additional administration related to the Centres of Research Excellence after the 2006/07 selection round.

Professional Development and Support (M26)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation will decrease by $9.457 million to $110.953 million for 2007/08. The decrease in funding is owing to:

• a transfer to 2008/09 owing to delays in implementing the Diploma in Specialist Subjects (Secondary Teacher) Division II qualification ($7.364 million)
• a reprioritisation of savings to Non-Departmental Output Expense Quality Assurance ($907,000)
• a transfer to 2009/10 owing to an extension of the Te Kotahitanga programme ($440,000)
• a transfer to 2008/09 owing to delays in the development of a screening tool for the Tackling Disruptive Behaviour initiative ($285,000)
• a transfer to Non-Departmental Output Expense Curriculum Support to redistribute part of the savings agreed to in Budget 2007 ($250,000)
• a transfer to 2008/09 owing to delays in Te Reo Tikanga Māori programme ($200,000).

Provision of Information and Advisory Services (M26)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation will increase by $527,000 to $26.373 million for 2007/08. The increase in funding is to provide more migrants with tailored career planning assistance in order to match the skills and talents of migrants to the needs of the labour market.

Qualifications Support Structures (M26)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation will increase by $40,000 to $6.239 million for 2007/08. The increase in funding is mainly owing to a transfer from Vote Foreign Affairs and Trade for support for negotiation of international agreements ($34,000).

Quality Assurance (M26)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation will increase by $815,000 to $10.335 million for 2007/08. Funding was increased to allow for additional full-time moderators for the National Certificate of Educational Achievement ($1.610 million) offset by funding carried forward to 2008/09 owing to delays in the development of the quality assurance framework for the tertiary sector required for specifying system requirements ($795,000).

School Transport (M26)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation will increase by $4.074 million to $131.248 million for 2007/08. The increase in funding is mainly owing to:

• Directly Resourced Services - improvements made to the funding model to address the discrepancies between Daily and Directly Resourced funding rates and to resource improvements in safety standards as well as to reflect historical levels of cost ($2.999 million increase)
• Special Needs Taxi Service - recent re-tendering of contracts resulting in an overall increase in costs as well as other movements in prices during the year ($1.632 million increase)
• partly offset by lower than expected demand for Conveyance Allowances and Direct Services ($586,000 decrease).

Supporting Parenting (M26)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation will decrease by $511,000 to $18.849 million for 2007/08. The decrease in funding is mainly owning to:

• a reallocation of savings to other education priorities ($600,000 decrease)
• partly offset by a strengthening of community-based child and family services under the Pathway to Partnership plan ($149,000 increase).

Crown Contribution to Atihau-Whanganui Incorporation Negotiation Costs (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This is a new appropriation in 2007/08 only.

Crown Residual Liabilities (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

Part of the unspent balance from 2006/07 was carried forward into the 2007/08 year to settle anticipated residual liabilities.

Government Superannuation Fund and National Provident Fund Cost of Living Indexation (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

The actual implementation of the increased annual cost of living adjustment will not occur until the 2009/10 financial year. However, accounting rules require the increase in the Crown's liability to be recognised in 2007/08 when the Government approved the change in policy.

GSF Authority - Crown's Share of Expenses PLA (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

The increase in custodial, investment and administration costs is a result of the transition from passive to active management of global equities following changes to New Zealand tax legislation.

GSF Unfunded Liability PLA (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

The increase reflects marginal changes to forecast assumptions, other than actuarial gains and losses, in the Crown's liability to the Government Superannuation Fund and the specified superannuation contribution withholding tax on employer contributions by the Crown.

Maui Gas Contracts (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

The budget was increased due to increased demand for gas.

Unclaimed Money PLA (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

Payment of unclaimed money was less than forecast.

Unclaimed Trust Money PLA (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

A separate appropriation for unclaimed trust money was established during 2007/08.

Urban Rail Development MYA (M31)#

Scope of Appropriation and Expenses#

Reasons for Change in Appropriation#

During 2007/08, $25,000 was transferred from the National Rail Network Improvements appropriation to the Urban Rail Development multi-year appropriation above, to provide additional funds for the upgrade of the Wellington urban network.

Wellington Railway Station Expenses (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

An expense transfer was made from 2006/07 to 2007/08 for additional depreciation on Stage 2 capital improvements that have now been completed.

Part 6 - Details and Expected Results for Capital Expenditure#

Part 6.1 - Departmental Capital Expenditure#

The Treasury - Capital Expenditure PLA (M31)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

This appropriation was formerly disclosed in the Treasury's Statement of Intent as forecast capital expenditure.

Part 6.2 - Non-Departmental Capital Expenditure#

Intended Impacts, Outcomes and Objectives#

Equity Injection to ONTRACK (M31)#

Scope of Appropriation

Reasons for Change in Appropriation

Part of the equity budgeted for in 2006/07 was not required and was therefore transferred to 2007/08.

Industrial Research Limited Equity Injection (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This is a new appropriation established in 2007/08.

International Financial Institutions PLA (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

The only call for capital in 2007/08 was for New Zealand's membership of the Multilateral Investment Guarantee Agency. No further calls on capital are expected in 2007/08.

Landcorp Protected Land Agreement (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This is a new appropriation established in 2007/08.

Loans to ONTRACK (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

Addition loan funding of $40 million was provided in 2007/08 for land purchases which was partly offset by a net transfer of $16 million to 2008/09.

Purchase of Toll NZ Ltd's Rail Business and Associated Costs (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

In 2007/08 a one-off provision was made for the purchase of Toll NZ Ltd's rail and related business, and associated costs.

Suspensory Loan to Invercargill Airport (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This loan was not required in 2006/07 and was therefore transferred to 2007/08.

Taitokerau Forests (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

Part of the loan was not required in 2006/07 and was therefore transferred to 2007/08.

Timberlands West Coast Ltd Equity Injection (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This was a new appropriation established in 2007/08.

Wellington Railway Station Upgrade (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

Part of this budget was carried forward from 2006/07 as the upgrade project has continued into 2007/08.

Wellington Regional Council Loan (M31)#

Scope of Appropriation#

Reasons for Change in Appropriation#

Part of the loan was not required in 2006/07 and was therefore carried forward to 2007/08.