Treasury says Govt faces leaky schools headache

Treasury has acknowledged the Government may have a problem with schools plagued by "leaky building" woes.

The Treasury's half-yearly economic and fiscal update, issued yesterday includes new listings of the financial risks the Government faces and these include school property woes.

"As in other areas of the building sector, the school property portfolio has a portion of the building stock built between 1995 and 2005 which is subject to the 'leaky buildings' issues as a result of poor design, inappropriate materials, poor workmanship and deficient building project oversight," the Treasury report said.

The report does not put a figure on the amount of the risk, but several schools have been highlighted in the media as having extensive building problems.

The fiscal update also said there were more pressures on the school building portfolio.

This year's Budget put aside $434 million in capital funding for school property and Treasury said the Government was considering lifting this to $500 million.

But the Education Ministry had advised that an additional $168 million could be needed in the next two financial years to meet roll growth and demographic change.

"In addition, the ministry also advises that the annual property portfolio may increase the depreciation and therefore require funding," the report said.

"The Government is also committed to increasing the range of schools that parents can choose to send their children to, which could potentially increase the level of property funding required."

Putting broadband internet connections in schools could also cost up to $235 million. The Government had committed only $34 million and signalled spending of $150 million.

The report also said that the Government had historically increased school operating grants in each budget.

Other risks facing the Government and identified in the update included:

* A $34 million shortfall in the large budget screen production fund.

* An unquantified amount in sorting out "warranty issues" over the defence force's Project Protector vessels.

* A request from NZ Post for the Government to fund "business expansion".

* Costs of Family Court professional services rising by $23 million.

- NZPA