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Beyond their educational function, schools are frequently a focal point for community life. We argue that this latter role was compromised in New Zealand by a decade of neoliberal realignments within education policy. During the 1990s the abolition of school zones, the commodification of education, and the drive for efficiency in the allocation of educational resources undermined the place of school in community life. In this paper we explore the impacts of a school closure on an urban neighbourhood in Invercargill, New Zealand. We present and interpret narratives gathered during an interview-based study of the closure of Surrey Park Primary School. Our analysis highlights parents' perspectives on the role of the educational bureaucracy in the closure debate, the ambiguous role assigned to ‘community’ within the restructured system, the impact of the closure for low-income families, and the place of schools in contributing to the neighbourhood social cohesion. Our analysis concurs with international research suggesting that breaking links between schools and communities has potentially significant educational impacts on children.