Australia's largest public school system has received “record funding” but will seek more after principals were told hundreds of millions of dollars worth of accumulated funding is no longer available.
NSW Education Minister Prue Carr told a budget estimates hearing on Tuesday the decision had been made to ensure unspent funds were spent on teaching and learning, rather than being saved up for bigger projects.
“The accumulated bank balance is actually the sum of lost learning,” she said.
A Department of Education briefing to Education Secretary Murat Dizdar in January, seen by AAP, said the cumulative consolidated fund balance of previously unspent funds stood at $394.6 million and was available for schools to use until the end of 2025.
However, the funding was frozen in 2024.
NSW Acting Deputy Minister for Schools Infrastructure Lisa Harrington said funded projects were being delivered by the end of 2023.
He told Tuesday's budget council that there are about 2,000 projects, some of which are up to five years old.
Carr said principals were dipping into funds because they were short-staffed, couldn't afford to hire teachers and enrollment was declining.
“Unfortunately, this impacts how much funding is allocated to public schools,” she said.
The education minister announced on Tuesday that the number of teaching vacancies has fallen to below 1,700, a 24% decrease compared to the third term of 2023.
Carr said increasing teacher pay, reducing administrative burdens and improving job security and conditions had encouraged teachers to stay in their jobs and reduced resignations and retirements.
Mr Carr said the “record funding” given to state schools was being spent differently than under the previous coalition government, which also acknowledged the funding model was not working.
The committee's chair, Abigail Boyd, said headteachers had reported being “struggled” by the funding freeze and were relying on donations from parents.
Carr said project contracts already signed would be honoured and the decision to centralise decision-making would allow principals to focus on running their schools.
“We need a centralised system of support for principals so they can do that rather than running around looking for money here and there,” she said.
The Local Schools, Local Decisions programme, introduced in 2012, gave principals more power to make decisions about their schools.
The previous coalition government announced the plan would be “fine-tuned” in 2020.
An evaluation later that year found that the program had not resulted in improvements in student achievement and that there was limited information about how the funds were spent.
The fund freeze comes after a teacher pay increase and leaves several states at odds with the federal government over school funding.
Mr Carr did not want to prejudice the negotiations but told the committee they were ongoing and NSW would not sign any agreement that would treat public school students unfairly.