School building under cost pressures as extra projects added

A Treasury report showing high cost pressures on rebuilding projects does not mean they need extra funding, the head of the new School Property Agency says.

The latest available quarterly investment report from Treasury to March 2026 put the nationwide school rebuilding programme among the top 10 big government projects under cost pressure by value.

The programme has years to run but by March had already spent $50m over its approved budget of $1.3 billion.

But the head of the School Property Agency, which began work on 1 October, told RNZ that was because extra projects had been added since that budget was set years ago.

This had increased the overall programme cost and was being reported as a cost pressure, chief executive Gus Gilmore said.

But the costs were being met from its baseline maintenance funding "and do not require additional funding".

"We are delivering more projects within existing funding settings."

The agency was set up to take a more commercial approach to building, managing and maintaining school property after a 2024 government inquiry sparked by RNZ revelations of projects gone awry

The Education Ministry still gets to say where new schools are needed.

On top of the maintenance baseline, Budget 2026 put in $100m capital spending and this year $200m in redevelopment projects had been announced, Gilmore said.

"We have also significantly reduced the cost of redevelopment projects through a strong value-for-money approach, including the use of standardised designs and standardised planning processes."

The Treasury report also showed the Christchurch schools rebuild programme was in the top 10 list for delays. However, this was mostly due to delays at about a dozen of the 115 schools around specific environmental issues or specific learning support needs, or rephasing some work.

The government has said its school building changes have saved more than $330m and sped up delivery of new classrooms.

While the March report showed the Education Ministry was one of four big contributors to underspending on capital projects by the Crown - a forecast $1.46 billion was $143m underspent - the report said this was "largely timing related".

Gilmore echoed that, saying the Treasury report was "a snapshot in time" of a changing pipeline.

The quarterly reports are made public months after they are produced.