Labour leader Chris Hipkins said art was not allowed on the walls at PPP schools. The Ministry of Education says this is not the case. Photo / Mark Mitchell
Labour leader Chris Hipkins said art was not allowed on the walls at PPP schools. The Ministry of Education says this is not the case. Photo / Mark Mitchell
Finance Minister Nicola Willis accused Labour of using “false facts” about public-private partnership (PPP) schools.
The Ministry of Education confirmed no ban on artwork and light bulb costs are covered.
Labour’s Barbara Edmonds argued PPP maintenance is cumbersome, but expansions were honoured to avoid higher costs.
The Government is hitting out at Labour for what it said are misleading attacks on public-private partnership (PPP) schools, with Finance Minister Nicola Willis alleging Labour has used “false facts” to claim PPPs enforce a ban on putting children’s art on the walls and charge exorbitant costs to change lightbulbs.
One of the schools in question - along with the Ministry of Education - has confirmed there is no ban on hanging artwork in PPP schools and the cost of changing light bulbs is included in maintenance contracts and not charged to the school.
Two schools have said, however, that maintenance can be more cumbersome than under a fully public model, although it came with the benefit of being looked after by the private provider, allowing the school to focus on teaching.
Finance Minister Nicola Willis said Edmonds had been “talking out both sides of her mouth”, acting supportive of PPPs in front of business audiences, while attacking them in mailers to the party base.
“It seems that the more craven politician in her is intentionally trying to confuse this partnership approach with Labour’s bogeyman of privatisation. It’s disappointing because we are genuine and our efforts to get some bipartisan consensus on infrastructure, delivery,” she said.
“Be wary of any politician who grabs a false fact to try and establish their case. If that’s the best that Chris Hipkins can come up with, I’d suggest that people should question his motives here.”
Back then, Edmonds said that while Labour reserved the right to “disagree on specific projects”, the party “welcomes this framework” and that it “outlines clearly how governments of all stripes should think about PPPs as a procurement method”.
Throughout Thursday and Friday at the conference, as Labour allies in the union movement attacked the Government’s pivot to PPPs, Labour’s position hardened.
Edmonds said Labour would not be ripping up contracts signed by the current Government if it took office, however, she said that on “core public infrastructure like schools, hospitals, prisons, and critical infrastructure such as the ferries – we say no to PPPs”.
Art at Haeata School. Photo / Supplied
No, artwork is not banned in PPP schools
On Monday, Labour Leader Chris Hipkins said he had been told artwork might not be allowed on the walls of PPP schools.
“I visited a school a couple of weeks ago, I don’t want to name them because I don’t want to be unfair on them, but they were told that they’re not allowed to put kids’ artwork on the walls because that is part of the PPP contract,” Hipkins said.
Sam Fowler, head of property at the Ministry of Education, told the Herald that this was incorrect and “schools are able to display children’s art on the walls at Public Private Partnership schools”.
The Herald put this to Labour, who directed the Herald to the school in question, Haeata School in Christchurch. Labour said the school told Hipkins there were rules around artwork, but the school ignored them and put up artwork anyway.
When the Herald approached the school, its principal said there was no ban on putting art on the internal walls of buildings (there may be rules about external walls, although her statement did not mention this).
Haeata’s principal, Peggy Burrows, told the Herald the college was allowed to put “student work and art on the internal walls of our buildings”.
Burrows ended up defending the model, saying “the PPP model definitely allows the principal and teachers to get on with the job of teaching rather than attending to building maintenance”.
She said the service was “excellent” and her “only reservation is that often maintenance and projects are more expensive to manage than if they are operations funded with a principal overseeing the work”.
She added that the time spent on property issues by the board and staff was “significantly reduced” which was a “huge plus”.
“The PPP model definitely allows me as a school principal to concentrate on helping my students rather than working on the day-to-day maintenance of the buildings,” she said.
Art at Haeata School. Photo / Supplied
Changing position on light bulbs
In New Zealand, a popular model for PPPs has been for a private provider to build an asset and maintain it for 25 or 30 years (although the asset remains in public ownership).
Labour attacked the maintenance aspect of this, particularly in relation to schools with Edmonds saying on Friday, “during our time in Government, schools were not happy with the cost to change a light bulb”.
“Because it was done through a third party to those that owned the property. So for them, they could have had their own caretaker change it for probably a tenth of the price,” she said.
However, when the Herald checked with the Ministry of Education, it said that there was no additional charge to schools for replacing light bulbs.
Fowler told the Herald, “maintenance tasks such as replacing light bulbs are included in the facilities management services for Public Private Partnership schools”.
“The Ministry pays an annual fixed fee directly to the private sector partner to maintain all the school’s buildings, facilities and grounds so there is not an additional cost for changing a light bulb,” Fowler said.
In a Newsroom story, a spokesperson for Edmonds said the light bulb example had been given “anecdotally”.
Newsroom reported that it appeared to stem from a 20-year-old story from the UK about light bulbs and PPPs, which actually related to the cost of changing a light switch, rather than a light bulb.
When asked by the Herald about the light bulb anecdote Edmonds cited the principal of Rolleston College who said “negotiation issues … made it difficult to do basic maintenance”.
“Rolleston College noted that basic tasks, including things like lighting maintenance, were more difficult compared to their old model where they could just let the caretaker of the school know and they’d fix the issue quickly.
“The fact remains that the PPP model for schools generally ends up costing more and that maintenance costs and a lack of flexibility in those models have been issues raised by schools,” she said.
That anecdote appeared to come from stories in the Herald and RNZ. Rolleston College principal Rachel Skelton has said that her school was built to “high specs”.
In a non-PPP school, Skelton told the Herald, “you’d probably talk to Bob the caretaker and say, ‘Hey Bob, can you please do X, Y and Z for me’”.
But at Rolleston College, any unforeseen jobs or variation to the maintenance contract between the Ministry of Education and private investors can lead to drawn-out negotiations.
Rolleston College has not mentioned “lighting maintenance” in its public statements.
A Labour spokesperson said this was “anecdotal”, but confirmed that Rolleston College had confirmed to the party “lighting maintenance” had been a problem.
Labour agreed to expand PPP schools, but says this is the right, bipartisan, thing to do
The Government is also arguing that Labour was happy enough with the PPP model when it was in Government to fund expansions to six PPP schools.
According to figures supplied by Minister of Education Erica Stanford’s office, beginning in 2019, Wakatipu High School, Rolleston College, Hobsonville Pt Primary School, Ormiston Junior College, Te Uho o te Nikau Primary School and Matua Ngaru School had business cases or budget bids for funding approved for expansion.
The Government argued that at each point, the expansion could have been procured as a fully public project, had Labour seriously objected to the PPP model.
Edmonds argued this was not the case and said the schools are evidence of what Labour was saying at the conference, which is that the party would not rip up contracts begun under National.
“These were contracts started by National and continued under Labour. That’s exactly what we’re talking about when we say we won’t just rip up contracts started by the previous Government.
“My understanding is that these six schools were in high-growth areas and were started with long-term contracts, which we said we would honour. If we expanded the school under a Ministry of Education contract, it still would have required a variation of the initial contract because the expansion still interacts with the original building.
“In other words, we would have needed to pay for a variation of the PPP contract plus the build costs, which would have been even more expensive.
“For Erica Stanford to suggest that we could have simply done the build without any variation in the contract is disingenuous.”
So where does Labour actually stand?
New Zealand has so far experienced two main kinds of PPPs. One, which the Government wants to use on the expansion of Christchurch men’s prison, is an agreement to build and maintain an asset for a period of 25 years. This is a popular style of PPP which is often used on roading projects, which involve building and maintaining the road for a certain period.
Other PPPs can involve a private firm running the service too.
In both cases, the asset remains in public ownership for the length of the contract. Even when the Government procures a non-PPP project, it pays private sector firms to build it.
Edmonds confirmed she was against both the build and maintain, and the build and operate model for PPPs.
Labour would not even use a PPP for the construction of these projects, let alone a contract for building and operating the project – which is far more common.
While Edmonds refused to be drawn on specific projects or even specific kinds of projects (“It all depends where the risk falls, what the benefits are to New Zealand,” Edmonds said at the conference), what appears to be the case is that Labour is opposed to almost all PPPs unless the contract has already been entered into by the current Government when a future Labour administration takes office.
This may even be a hardening position relative to the last Labour Government, which left open the door to PPPs in the area of transport and even selected a PPP model for delivering the Auckland Light Rail scheme before it was scuppered by NZ First.
The main issue with PPPs is the cost. A private provider will charge a margin over and above the Government borrowing rate, to deliver and maintain a service.
This means the Government must question whether that additional margin is delivering anything it could not deliver itself – this was the central question posed in the November PPP document Edmonds and the Government signed.
If the PPP can deliver better more transparent maintenance and a commercial discipline that brings the project in on time and on budget, then the PPP framework would suggest the Government should support it.
If the PPP cannot deliver anything the Government could not deliver itself, then the framework would suggest it is a waste of money.
Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.
