Education Minister Erica Stanford, speaking alongside Prime Minister Christopher Luxon at the weekly post-Cabinet media briefing, said the government had inherited a school property system "bordering on crisis".
"Within weeks of forming a government, the Ministry of Education had already paused 20 building projects and informed me that there could be up to 350 projects in various stages, from design through to pre-construction, where expectations far exceeded what could be delivered," she said.
"There have been a number of cost escalations and some schools expecting exciting, bespoke building projects that are not able to be delivered on."
She announced an inquiry would be set up - with a lead reviewer and review team to be appointed immediately - tasked with reporting back in three months.
"There is a clear need to review the school property system to evaluate the sustainability and efficiency of current arrangements and ensure we can deliver the school property our children deserve, while protecting taxpayers from further inefficiencies and poor value for money," she said.
Stanford said some of the projects were weeks away from shovels in the ground, but "funding available hadn't been managed well enough to meet what schools understood had been approved".
One example was the Te Tātoru o Wairau Marlborough schools co-location project, she said, "which had years of cost escalations with construction estimates of up to $405 million, despite originally only having $170 million allocated by Cabinet in 2018".
Luxon said the halting of the classroom builds was "in no way related to any cost savings initiatives for the upcoming Budget, we've not made any cuts to school property since we came to government".
However, Labour leader and former education minister Chris Hipkins - in a statement - said National's announcement was a "desperate attempt to create an excuse to cut much-needed school building projects".
He said National was choosing to prioritise tax cuts over classrooms for children.
"Everyone will remember children learning in damp, mouldy classroom and schools with no space and no funding under National, who were comfortable with kids being taught in gyms and hallways. We don't want to go back to that," Hipkins said.
"Labour upgraded every school in the country through the School Investment Package. We built thousands of classrooms and added urgent temporary teaching spaces as rolls grew.
"The school upgrades announced by our government were made on Ministry of Education advice and were based on condition assessments. The process for school building work was changed under the last National government and we continued the approach they put in place.
"Cost escalations in the building sector have been a fact of life. National were told before the election they hadn't allowed enough for cost escalations in their fiscal plan and chose to ignore that and claim tax cuts were affordable. They aren't and now it looks like kids will be the latest to pay the price," he said.
The announcement of an inquiry follows reports by RNZ which revealed major projects at 20 primary schools and colleges - some of the roughly 300 new classrooms promised in last year's Budget - had been put on hold.
Stanford said the schools were all in different phases of their builds, and it was difficult to have a good view of what had been promised.
The pipeline of projects the government was unable to deliver on "runs into the billions," she said, and the cost of redesigning and rescoping would be a lot less, compared to the bespoke rebuild and upgrades the previous government promised.
Stanford said she had evidence that former education minister Chris Hipkins had known about the financial problems the entire time.
In the case of Marlborough, the ministry had decided to pause the project, she said.
She said Hipkins appeared to have allowed them to design whatever they wanted, and there was no one telling the schools to "pull up" and that there was too little funding.
Asked if the government could guarantee the schools would all get the classrooms they need, Stanford said the priorities needed to be reviewed.
