A Tauranga principal says school funding should be about learning - 'not about the size of your house”.

This is the belief of Otumoetai College principal Dave Randell in response to recent media speculation about the demise of the school decile system.

Education Minister Hekia Parata is reviewing the education funding system. Photo: File

Recent media reports suggest a new system based on a student's chance of failing in education is currently in the works.

Dave is pleased the decile system, which he describes as being "outdated", is now under review.

'There is an imbalance in that system,” he says. 'It is based solely on the socio-economic index and assumes that low income means higher needs.”

His experience as a school principal has been different.

A school can drop a decile or two and lose a lot of funding, but it is also possible to gain money, he says about the current system.

There is some correlation between the aspirations for education and socio-economic factors, but what is really at issue for him are the learning needs of students and how to deal with those needs.

David says his school has a wide range of students from various deciles.

'A high decile student can still struggle, because they have ADHD, are dyslexic or have Asperger's. I still get students with a reading level of an eight or nine-year old,” he says.

Something needs to be done, but Dave doesn't know what the answer is, only that the learning needs of each student should be central – not where they live or how little or how much the parents earn.

Education Minister Hekia Parata has promised to deal with the blunt instrument of education financing, the ‘poorly targeted decile funding,' as she called it.

Motive for this change is the realisation that students' academic results drop as a school's decile rating comes down. The minister has said the system has been under review for a while.

A new proposal is now under way to fund education based on a student's risk of failure, using individual student data.

This means schools will get more money for students who, through circumstances outside their control, fall into one of four risk categories.

This includes: having a parent who has been in prison, if they or a sibling has suffered child abuse, if their family had relied on a benefit for a long time or if the child's mother had no formal qualifications.

It is expected this system would cover as much as a third of all school-age children and a child only needs to meet one of the four criteria to qualify.

In case of a school having more than their fair share of such at-risk students there would be more funding. But the new system, if it happens, will not affect the number of teachers a school can have.

According to the Ministry of Education's website, deciles are a measure of the socio-economic position of a school's student community relative to other schools throughout the country.

'For example, decile 1 schools are the 10 per cent of schools with the highest proportion of students from low socio-economic communities, whereas decile 10 schools are the 10% of schools with the lowest proportion of these students.”

A school's decile also does not indicate the overall socio-economic mix of the school or reflect the quality of education the school provides.

'Deciles are used to provide funding to state and state-integrated schools to enable them to overcome the barriers to learning faced by students from lower socio-economic communities. The lower the school's decile, the more funding they receive.”

Deciles are recalculated after each census, the ministry says. The system was first implemented in 1989.