Stop wasting money

A new report commissioned, and part funded by the Local Government Association, has found that ‘middle tier’ oversight functions for academies cost some 44% more than for local authority maintained schools. The research was carried out by Sara Bubb Associates, and the team conducting the study involved some senior figures from the world of academia. The full report can be accessed from: http://sarabubb.com/middle-tier/4594671314

This study published shortly after the call for evidence by the Confederation of School Trusts (see earlier post) shows that the overall costs for middle tier functions within the academy system in 2016/17 was £167.05 per pupil compared to £115.71 for the local authority system. It is worth pointing out that the two do not share a common financial year, and that some of the disbanded local advisory and professional development functions may have been taken up by MATs. However, neither of these points would be likely to fully explain the difference between the two amounts.

By my calculations the figures in this report suggest that saving of some £300 million might be made if the ‘middle tier’ was rationalised and local authorities were charged with oversight of all schools; perhaps with regional boards to allow for the economies of scale that this report points out are missing from the current academy sector at present.

The authors of the report call for an urgent review of the middle tier system in the light of international best practice. It is generally acknowledged that England has some of the most centralised public services; schooling is no exception to that state of affairs. The authors also recommend an evaluation of the cost-effectiveness of the multi-academy trust model, and I would add of standalone academies as well. The authors also want to see greater efficiency, fairness and transparency in funding the oversight of England’s school system. The DfE has gone some way since the data used in this report on at least facing up to the high salaries that were being paid in some parts of the academy system, but have not yet tackled the underlying issues identified in this report.

The DfE has also undertaken some work to drive down costs for schools, emulating, for instance, TeachVac’s free national vacancy site with a version of their own. However, the have failed to take on board advice in the 2016 White Paper that might have clarified some of the ‘middle tier’ functions, such as in-year admissions once again becoming the responsibility of local authorities. That isn’t just a cost matter, but also one of fairness for pupils compelled to change school during the school-year. As I have pointed out in the past, children taken into care and moved away for their own safety from their previous home often find some schools reluctant to admit them, even if they have places available.

Perhaps any new regime at Sanctuary Buildings after the new Prime Minister enters into office will use this report as the basis for a fresh start. However, I am not holding my breath. In the meantime, reports such as this one that highlight the amount of money being spent unnecessarily are to be welcomed.

 

 

 

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1p on Income Tax for Education?

Are school underfunded? To politicians the question is probably more one of, ‘do parents perceive schools as being underfunded and will that affect how they vote?’ Despite a campaign ahead of the 2017 general election on this topic, my sense was that education wasn’t a major topic during that election. Would it be now? Has the growing campaign by some schools to ask parents for cash to fund their running costs pushed the issue up the political agenda for any post-Brexit era?

My genuine answer is that I am not sure. We have been here before. As this blog has pointed out in the past, the post-1979 period was one of financial hardship for public services that last through most of the 1980s. Indeed, I have looked back at my 1986 book on ‘Schools in London’s Commuterland’ to find that even then some schools in Surrey were asking parents for sum like £5 per term or £14 for new pupils.

Throughout the early 1990s the Liberal Democrats had a well-known policy of ‘1p on Income Tax for education’. The policy attracted voters, and was based upon a feeling that schools were under-funded. Could it be revived on the basis that the government has pledged more cash for the NHS, but not for education, and it seems likely that the present financial support from the public purse will not be sufficient to fund increases in all public services at present levels of taxation.

The alternative to public funding, schools going cap in hand to parents, lacks any real support for a social justice agenda. Parents in my Division in North Oxford, where I am the county councillor, can certainly afford to part with a small sum from their disposable income for the school their child attends. The same isn’t true for many other parts of the city, where parents live on much narrow margins between income and expenditure.

If you believe, as I do, in the philosophy that a state education system should provide a standard of education necessary to create a high level of outcomes for all pupils, encouraging parents to pay towards a school’s funds creates an unfair advantage for those with the cash to help.

The funding debate is often mentioned in relation to the issue of staffing. Ever since schools gained control of their budgets in the 1990s, head teachers and governing bodies have been free to decide how to reward teachers in a system where central direction and control has become increasingly weaker.

Few now understand that the Group Size of a school once controlled not only the head teacher’s salary, but also the number of promoted posts a school could deploy. As a result, since school control of budgets came into force, the government has only ever funded schools on the average cost of a teachers: schools with lots of young teachers often did well, but those with lots of teachers on the top of the pay spine and with TLRs had a salary bill in excess of what their funding would be each year. Should these schools be allowed to top up their funding from parents? Then there is the question of reserves. Any parent asked for cash should require the school to display their latest set of accounts so the actual financial position can be determined.  Finally, ought there to be benchmarks in terms of issues such as pupil-teacher ratios and class sizes that identify funding levels. But, there is still the issue of how to compensate for the fact that older more experienced teachers cost more than younger less experienced ones?

One solution is to even out the costs by increasing the CPD allocation to young teachers so the actual cost of a teacher to a school is the same wherever they are in their career.

More or less: which way for the future?

The BBC has recently run an interesting piece about the relationship between class sizes and teachers’ salaries, based upon some OECD data. The article headed ‘when class sizes fall so does teachers’ pay’ is an interesting thesis. https://www.bbc.co.uk/news/business-47281532 However, how does it relate to the first law of economics that when there is a shortage of supply, and demand remains consistent, either the price will rise or substitution will take place?

The nightmare scenario for government is that facing the secondary sector in England at present. Pupil numbers are on a rising curve, at least until the middle of the next decade. This means more funding will be required, even if the unit of funding per pupil falls in real terms. At the same time, there is a labour shortage that is growing worse in some parts of the curriculum.

Hence, demand for more cash for schooling since, as the BBC pointed out, it is a fact of school life that staffing costs, and especially the cost of teachers, consumes the largest part of any school budget. However, schools are competing with other government services for cash and it seems likely that in England, however hard the teacher associations press their case, the cash needed for the extra pupils will come before any significant uplift in funding per pupil.

So, to that extent, larger classes is one way to fund better pay for teachers. However, most schools, and especially secondary schools, are constrained about how far class sizes can be increased, due to the physical nature of their buildings and the dependence on a classroom based building model.

In England, there may be the space to increase pupil-teacher ratios, perhaps back to where they were around the turn of the century, but that is likely to come from altering contact ratios – the amount of time teachers spend in the classroom – as much as from increasing class sizes. The trade-off of worsening contact ratios will almost certainly be a rethink about workload, since making the job of a teacher look even harder won’t help recruitment into the profession.

There is one helpful point for the government in England, but probably not for parents, and that is the fact that in England children have no right to be taught by anyone with knowledge and training in the subject they are teaching. Indeed, in extremis – nowhere defined except in very vague terms – children can be ‘taught’ by those with no background knowledge or training in what they are asked to teach. So long as there are enough people willing to be teachers, then pay can be kept under control. And, as everyone knows, there are plenty of arts and social science graduates for whom a teaching salary can still look attractive.

Today The Pearson Group published its annual results. Might their experience point to another way forward? The substitution of capital – in the form of IT and AI – for labour? So long as the learner is engaged, as there are in higher education, this may well be part of the way forward. But, for those that see schooling as a struggle between the generations, rather than the development of future wealth and happiness, the physical presence of a teacher overseeing learning has much to recommend it.

Who that teacher might be, and how well they will be paid, will, I am sure, still feature large in the future debates about the economic of education.

 

System autonomy or a system for the future?

Hard on the publication of the report from the social Mobility Commission, headlined in the previous post, comes a report from the Centre for Education Economics, the re-named CMRE or Centre for Market Reform in Education. This is a body that avowedly believes in market solutions to improving education. Their report is entitled ‘Optimising Autonomy; a blueprint [sic] for reform. http://www.cfee.org.uk/sites/default/files/Optimising%20autonomy%20-%20Web%20.pdf?utm_source=CMRE+News+and+Events&utm_campaign=15cd691116-The+Centre+for+Education+Economics&utm_medium=email&utm_term=0_9bd023bfaa-15cd691116-92109333

Now, generally I find the former CMRE view often too market orientated for my taste, but this new report by James Croft bears reading as it makes some interesting observations. I remain un-reformed in my view that if the democratic process has a place in education at a national level then it also has at a more local level. This report does at least recognise some role for local authorities, but it might be better if they were to have worked through case studies of what can actually happen. How much might bussing in rural areas cost to achieve greater parental choice and is it worth the expenditure. A key question surely for a centre concerned with economics one would have imagined.

I also conclude that if competition was such a good idea then large retail chains would not impose the discipline that they do on their stores. I think, more important, as I have said at two different conferences this week, is the issue of technological change and our approach to education. The ‘free marketers’ have become too obsessed with the ‘wrong’ question of parental choice and have missed the issue of how education should respond to a changing environment and what the consequences are for the system as a whole.

Before 1870, England assumed that parents that wanted education would seek it out and pay for it. With the advent of greater suffrage and votes for all came the thinking about educating the electorate and a necessity for State intervention; something many other countries had already embarked upon. Parents often now choose to rectify the deficiencies of the State system through paying for private tutoring and home schooling is on the increase.

I think a centre dedicated to education economics might well look beyond the issue of for profit or not in schools and widen the debate into ‘for profit’ activities in education and how we achieve the aims of social mobility discussed in the previous post. Especially, what part will changes in technology play in the future shape of learning for our citizens and their families?

The general election was a good example of backward thinking, with the debate largely about selective education. Why should the State pay for this form of education over any other. Again, an interesting question for economists to discuss. I suspect the return on State investment is much greater with non-selective education across all government services. But such a calculation is notoriously difficult to undertake effectively.

I am interested to know where Labour stand in the debate on the politics and economics of schooling. As a left-winger for most of his career, does Mr Corbyn want to see a return to full State control and is that local or national. After all, Labour nationalised the NHS in the 1940s, so presumably is comfortable in keeping schools out of local democratic control?

 

Counting the Pounds

In a couple of weeks the Cabinet member with responsibility for schools in Oxfordshire will be asked to revoke a decision by a maintained school to open a sixth form. Had the school been an academy it could just have decided not to run any post-16 courses. The reason given for the application to revoke the change of status is that the school cannot operate a viable sixth form with the present level of income it would generate from likely pupil numbers. Presumably the school didn’t want to cross-subsidise a sixth form from revenue received for younger pupils: a position I applaud. Assuming the decision is approved, pupils will still face the need to change schools at sixteen and will continue to have to pay for their transport that has up to now been free because they either walked to school or were bussed by the county council.

This change of heart for financial reasons set me wondering about the economics of School Direct in London. With income for next year fixed at £9,000 per trainee on fee based routes, how likely is it that schools are going to be able to cover their costs?
A cohort of 20 trainees paying fees would bring in £180,000 to run the course, but let’s assume a school has recruited three trainees in each of five subjects bringing in £135,000. Now how you spend that money is critical. But, assuming that a head of department in each subject provides 20% of their working week (about 20% of teaching time per week) in each subject to work with trainees. This would come to just over £60,000 if the heads of department are on the top of the upper pay band and also receive a middling TRL and taking into account the recent increases in National insurance and pension contributions schools have faced . In some subjects the TRL will be less, but in Science, mathematics and English it would be more. Now, also assume there is a course leader to do all the recruitment and the rest of the teaching and administration for the course on a similar salary of £60,000 including on-costs. This takes the teaching staff costs to £120,000. Add in £20,000 for administrative staff. After all, it is not economic to use a teacher to do the paperwork. Then there is another £10,000 for marketing, resources and miscellaneous costs and the total comes to around £150,000.

Now, I suppose you could reduce the time for the course leader and farm out some of the teaching to a university with lower salary costs because they are located outside of inner London and can spread their overheads across a larger number of trainees. However, university central overheads can be higher than those in schools – Vice Chancellors earn more than head teachers – so there may not be as much of a saving as would be hoped for by taking this option.

Possibly the course doesn’t need a full-time admin person and the marketing budget can go. Perhaps, you can reduce expenditure to around £120,000, but what sort of preparation would you be offering trainees? Even so, there is little margin for error. If even one trainee either doesn’t turn up or leaves very soon after the start of the course, then the school might have a shortfall to cover from its other income.

I should be interested to hear from schools how they are managing in London on this level of income? Clearly, outside of London, the lower salary costs might make it more likely schools can operate effectively at this level of income, even with smaller numbers of trainees. However, as London needs the largest number of new teachers each year, despite Teach First, the economics of teacher preparation in the capital must be a matter for concern.

Education markets and teacher quality

When I studied economics at the LSE nearly half a century ago markets were relatively simple affairs used to help regulate supply and demand through the mechanism of price. A shortage of supply forced up the price and that resulted in new entrants to the market and eventually the price came down. In labour market economics some saw wicked employers tried to find ways of holding down the price by controlling wages and working conditions and others warned of dastardly trade unions trying to force up wages through all means at their disposal. How times have changed.

Yesterday I listened to a fascinating debate about labour markets and teacher quality. The lecturer’s thesis seemed to be that even though we had difficult ‘ex-ante’ deciding what was a good teacher, good teachers were really the only thing that mattered in improving pupil performance; so all would be well if we could somehow harness market economics to handling the issue of improving teacher quality.

The thesis is interesting, especially in view of the previous post on this blog about teacher supply. The lecturer didn’t discuss whether there is a hierarchy of markets that will address issues in a particular order. If there is, I would content that markets will address any shortage issue before quality issues and only then deal with matters such as equality and other government desired outcomes.

If I am correct, then there is little practical point talking about teacher quality until the market has dealt with the supply problems.  Now the Right in society has an answer to that problem: let anyone become a teacher. In view of the lack of ‘ex-parte’ evidence on what makes a good teacher this is a seductive theme. However, I would argue that the school system in England has been trying that approach for many years by allowing anyone with QTS to teach any subject and, for instance, letting PE and music teachers teach mathematics but overall the policy doesn’t seem to have improved outcomes. But, would say the defenders of the  ‘all may be teachers’ policy, it is because these are poor teachers. The best teachers of PE and music are no doubt teaching PE and music.

In the end the discussion last night about teacher quality came down to the –X- factor. What is it that makes a good teacher rather than how markets can help achieve improved teacher quality? There were some in the audience that no doubt would have been happy with the definition of a teacher from the 1840s offered by the National Society that:

It is not every person who can be fitted for the office of schoolteacher. Good temper and good sense, gentleness coupled with firmness, a certain seriousness of character blended with cheerfulness, and even liveliness of disposition and manner; a love of children, and that sympathy with their feelings which experience alone can never supply – such are the moral requirements which we seek in those to whom we commit the education of the young.

Although they might not be bothered about the need for ‘a love of children’.

I am also reminded of the more recent quote from the Newsom Report previously quoted on this blog that:

“In the primary and secondary modern schools teaching methods and techniques, with all the specialized knowledge that lies behind them, are as essential as mastery of subject matter. The prospect of these schools staffed to an increasing extent by untrained graduates is, in our view, intolerable.”

It is just as intolerable today and I speak as someone that started their teaching career as an untrained graduate in an inner city comprehensive school.

Of course we must strive to identify and improve teacher quality, but no teacher means there is no quality to measure and that is the fundamental problem facing policy makers today.