What to do about the great education problem?

5 Sep 2013

* November Article of the Month *


Britain’s education system is worse than the one in Armenia. And Barbados. And Estonia. And Hungary. Oh, and Kazakhstan. In fact in the latest United Nations Education Index, Britain placed 31st in the world.

There are those that believe, almost invariably on the left of the political spectrum, that throwing money at a problem will help make it go away. But our tragic 31st position came after years of investment by Blair and Brown’s New Labour governments, so surely spending is not the key to getting Britain to the top of international league tables.


Indeed, as Dr. Max Gammon found out when investigating the NHS, the higher the expenditure to improve services, the lower the quantity and quality of said services. When spending increases in a public body, it is rare that the money will be targeted effectively. He found across the board that increases in expenditure led to a greater percentage increase in bureaucrats and administrators employed than it did doctors and nurses. Milton Friedman named this phenomenon the ‘Theory of Bureaucratic Displacement.’ But how does it ring true today? And if just increasing spending isn’t the solution to fixing Britain’s education system, what is?

The key lies in understanding why increasing spending in state run organisations such as the NHS or education frequently does not increase efficiency. In the free market, there is a producer and a consumer. The consumer will always be looking to maximise their own utility with the money they have, and so will buy off the company that offers best value. As such, the producer has the incentive to produce more cheaply, to maximise efficiency, as it will increase profitability and allow the company to expand. Centralisation occurs within the ever expanding company because it is easier to make large scale business decisions with a small group of people working towards the common aim of greater profit through increased productivity. This private sector model enables economies of scale and so exemplifies the benefits of centralised organisation.

But with education, this isn’t the case. The consumer is the child, or most likely the child’s parents; the producer is the state. Centralisation in industry may increase efficiency, but where there are no incentives to increase productivity, such as with schools, centralisation increases bureaucracy, not teaching staff and quality of education. The individual needs of the consumers in education have their voices drowned out by the increasing levels of bureaucracy as predicted by Gammon, and so quality of education decreases. No matter how much money is thrown at education, if it results in centralisation of administration, the expenditure will be to waste and there will be no benefit to the students.

Therefore the first key to reducing the education problem in the United Kingdom is for individual schools to have greater local power- subject to parents’ needs more than the wishes of the government. This philosophy is reflected in the implementation of academies- schools with greater financial independence from government and as such with more lee-way over their curriculum, and most notably, free schools. The concept by which the local community may set up a school by themselves, backed with government funding, to tailor education to suit local needs is emblematic of  the embracement in the education system of increased decentralisation in order to give more power to the consumers.

But our continued floundering results in the international league tables show we’re not going nearly far enough. The next step in giving power back to the consumer is the school voucher system.  The school voucher idea is a simple one: using state money to provide parents with vouchers that can be reimbursed by buying education at a private school or to offset the costs of home tuition. The thinking behind the voucher system is that the state has an obligation to provide education, not the brick and mortar school buildings themselves that are costly to construct and maintain. By making all schools privately run, with all pupils and parents having the ability to pay for those schools with state money, you give power back to the parents. You induce competition by subsidising the consumers rather than the producers, and as such immediately necessitate that schools improve to attract students.

Even if the voucher system was not implemented completely to replace state run institutions, providing some students with vouchers would reduce the number of students in state schools and so reduce the amount of funding state schools require. If vouchers were available to parents in this area, it would mean that competition would arise between the local private schools and the state schools. The effect of this would be even state run institutions would be forced to improve, or face losing out the best students to private schools. As such, the quality of education would improve for everybody. 

As a result, social mobility, undoubtedly an important issue in an age where politicians universally proclaim the benefits of ‘equality of opportunity’ and yet so often do little to implement it, would receive a massive boost from school vouchers. If parents from impoverished families liked the local state school then by all means they could send their child there, but if not then for the first time they would have another option. They could home school or send their child to a better private institution, still funded by the state. In this way, state schools would continue to exist and continue to be available to parents, but not the only option, meaning that students forced to go to failing schools because none others are available to them would be a thing of the past, a chance to finally embrace competition in the consumption of education. 

But most importantly of all for the state and for the taxpayer, the less students being educated in state run schools, the greater money saved, with a better quality education for students to benefit society. As outlined above, the cost of educating students in the state system is higher than on an individual school-by-school basis as a result of centralisation and the cost of administration on a large scale, making state run institutions across the board inefficient. So when each school answers only to its students and their parents, there is no centralisation of power, no bureaucratic displacement, but instead an ability to meet the needs of said students. It’s a unique way of making high quality education available to everyone, a way to save the British taxpayer money and to finally abandon the notion that merely subsidising the producers of education is the answer. Because at 31st in the world, God knows we need change.

By Elliot Burns

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