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Really free schools Print E-mail
Written by Matthew Triggs   
Wednesday, 01 September 2010 07:00

At the ASI, we like the Government’s free schools policy. However, we agree with the outgoing chief of Ofsted’s comments that it would be more effective were private firms allowed to establish and run publically funded schools at a profit.

Here are two good reasons why:

  1. Adding the profit-motive to the mix would bring a host of new providers into the free schools fold. From entrepreneurs to private schools, many people and organisations currently lack the incentive to establish or run free schools. Allowing them to make a profit will change this, directing new talent at the provision of state-education. The rationale for free schools policies is the truth that greater competition for pupils lifts standards. Permitting more (and more diverse) providers to compete, as in Sweden, lifts standards to greater heights. Whilst having third sector groups competing with the state is good, having the third sector, profit makers and the state all competing with each other is better.
  2. Private firms are better placed than most parent, teacher and charitable groups to finance capital expenditures on new school buildings, etc. Encouraging them to provide this finance, by, shock-horror, allowing them to make a return on it, will improve the policy in two ways. First, it’ll ease its impact on the taxpayer, allowing more new schools to be established at less cost. Second, it will accelerate the creation of such schools. If their construction can be paid for privately, The Department for Education will not need to limit their number in line with its capital budget.

Despite these reasons, opposition to introducing the profit motive into state-education remains strong. It’s worth scrutinising two of the more common objections.

  1. ‘Having firms profit from children’s education is wrong!’ Really? Let’s go back to basics for a second and consider why we have an education policy at all. A sensible answer is, unsurprisingly, in the name: to educate. It thus seems off the point to quibble about means; if we accept that private involvement with free schools will raise standards, it should not matter whether profits are made.
  2. ‘Having firms take a slice of public funding as profit means that less money is spent educating the child than would be with state provision’ So far so true. If the state provides, say, £3000 per annum for a child’s education, the firm can only make a profit if it spends less than £3000 educating the child. However, we must be careful not to make the (rather New Labour) mistake of confusing money-in with education-out. Whilst profit-making firms may spend less per head than the state or voluntary groups educating the child, their expertise and greater incentive to minimise costs likely enable them to achieve better educational outcomes whilst spending less per child.

We have, then, a slight policy adjustment that would yield better results and isn’t all that objectionable. Come on Gove, let’s really set schools free.

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It's all Greek to me Print E-mail
Written by Philip Salter   
Tuesday, 31 August 2010 07:00

The BBC asked “Should British pupils give up studying French?” However, the key issue isn’t whether or not children should be learning French, but the fact that schools are encouraging children to take easier subjects so that the school scores well on the league tables. Crucially this is not always to the advantage of the children, especially if they plan to apply to elite universities.

Independent schools tend not to do this because their reputation requires that they take greater interest in their pupils. In contrast, many state schools are taking the easy way out. Without radical reform of the education system, the government will only be able to choose between the blunt tools of either compulsion or league tables. Both have undesirable unintended consequences.

Others in the article echo my point. For example, the language learning expert Paul Noble states that "the core reason is because pupils know French is difficult to pass, and difficult to get something out of it”, while Michel Monsauret, attache for education at the French Embassy in London, points out that subjects such as religious studies are on the increase because they are perceived to be easier. Mr Monsauret correctly states that “languages are taught more extensively at private schools in the UK, and their pupils go on to dominate places at Oxbridge and the other best universities."

Predictably the National University of Teachers (NUT) is appalled: “The policy drift on modern foreign languages is unforgivable”. Children, according to the NUT, aren’t adequately equipped for life in a global society. A bit rich coming from an organization set up to protect the interests of teachers even when against the benefits to parents and children; an organization that is the biggest impediment to reform. Asking the NUT what is best for children is like asking a turkey what should be eaten at Christmas – the goose will always be cooked.

Whether one’s child should be taught French, German, Cantonese or Chamicuro should be solely that of the parents. Of course, they will be limited by what is being offered, which is an argument for a dynamic and competitive system – one driven by the free market, not bureaucratic oversight. That learning a language involves no literature shows how bankrupt the teaching is many of our schools. As such, the lamentations of Aida Edemariam and others are frankly irrelevant.

The teaching of French – or lack of it – is symbolic of the wider failure of bureaucratic control of the education.

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Interference with universities’ admissions policies is, frankly, unnecessary Print E-mail
Written by Matthew Triggs   
Tuesday, 24 August 2010 07:00

In Sunday’s Telegraph, David Willetts, the Minister responsible for universities, suggested that universities aren’t doing enough to accept bright pupils from poorer backgrounds. He contests that many such pupils’ educational backgrounds prevent them from meeting the demanding offers set by the top universities and recommends offering them reserved places at lower grades than required by their better-off counterparts to correct this discrepancy between potential and places. Yet this solution seeks to address a discrepancy that does not exist. Willetts assumes that universities do not already consider an applicant’s potential when offering her a place when, in fact, they do.

The vast majority of universities offer students places based on three pieces of evidence: AS grades, personal statements and teacher references. Whilst the first is admittedly concerned with a candidate’s attainment, the others offer scope for the display of her potential. Personal statements are used to demonstrate her extra-curricular successes, motivations and interests, whilst teacher references highlight the student’s pace of development and attitude to her work. A standard UCAS form contains a multitude of measures of potential, all of which are considered before a university makes an individual offer.

Further means of assessing potential are utilised by Oxbridge and the Russell Group universities, presumably the targets of such a quota (no-one hears about London Metropolitan’s failures to further social mobility). Not only do they require the completion of entrance exams with a more IQ-test feel than the standard A level for some courses (such as the LNAT and BMAT), they also tend to invite applicants to interview for places. These give admissions tutors an opportunity to examine how candidates think, by subjecting them to a line of questioning designed to reveal thought processes. Were a candidate with mediocre AS levels to truly dazzle at interview, the university would have few qualms offering her a place, complete with realistic grade-requirement suitable to her educational background. Indeed, I’ve met people to whom exactly this has happened.

Universities already take the applicants whom possess the most potential. They have both the means to identify them and the incentive to reduce offers in line with personal circumstances; allowing the best candidates in can only raise the university’s position in the league tables. Universities do not need government instruction to act in their own best interest, and recruit the best applicants thereby.

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Madsen Pirie on universities Print E-mail
Written by Blog Editor   
Thursday, 19 August 2010 11:16

Today, more than 100,000 students with decent grades, will begin the scrabble for the smallest number of clearing places in decades. Droves of young people will be turned away proving what everyone already knows: university finances are in a mess.

If you are subscribed to The Times, click here to read Madsen's solution.

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Grade inflation Print E-mail
Written by Junksmith   
Wednesday, 18 August 2010 07:00

Bagehot asks the right questions.

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A Level results: Funding reform Print E-mail
Written by Matthew Triggs   
Tuesday, 17 August 2010 07:00

It’s difficult not to feel sorry for those students receiving their A Level results this Thursday. Last year 3500 applicants who achieved three A grades were denied places while it is estimated that as many as 200,000 applicants may be turned down this year. If we wish to see more of our young people studying at university, we must acknowledge the need to fund a greater number of university places.

However, given the scale of Britain’s budget deficit, few people would be comfortable diverting more public funds to universities. This leaves private funding. While philanthropy is helpful, the size of the problem necessitates that students themselves must pay for any expansion of higher education. Fee increases seem the obvious source of funding. Unlike a graduate tax, fees are collected upfront. The shortage of places is an immediate problem. As such, it requires an immediate solution. An increase in fees can allow the expansion of university places to begin right away.

Furthermore, a fee increase would channel existing resources to those degrees that yield higher graduate premiums (i.e. those that are most valuable). Were fees to double, a three-year degree would cost the student about £21,000 (excluding the other private costs associated with university, such as accommodation). If the expected premium of a degree were less than this, it wouldn’t be worth applying for. Such degrees would thus be decreasingly taken up. Public funding for these degrees would be set free and could instead be spent increasing the number of places on degree courses that offer better returns to the student. Degree programmes that allow higher incomes to be commanded would be made more widely available whilst ‘Mickey Mouse degrees’, which do little good for those studying them, would be scaled back.

Increased tuition fees could do more than close the gap between applications and university places. They could do so in a way that doubly expands the availability of the most worthwhile degrees.

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Education 'apartheid' Print E-mail
Written by Wordsmith   
Sunday, 15 August 2010 07:00
Mr. Balls and those who support his "progressive" policies think of themselves as opponents of apartheid and the other kinds of political thuggery they condemn as fascism. They are mistaken. They have let the racist details of some historical fascist regimes distract them from the coercive substance of fascism.
Jamie Whyte 'Ed Balls and Education 'Apartheid' WSJ
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Welsh university closures Print E-mail
Written by Harriet Green   
Thursday, 12 August 2010 07:00

The closure of several small Welsh universities sparked different reactions from within government, after the Education Minister Leighton Andrews announced the plans in June. Whilst some ministers have seen the move as a step forward – a smaller number means a stronger few, and there would be no decrease in student numbers – fears have been sparked over whether the move denotes centralization, rather than democratization.

However, the fundamental point here is that there should be a free market, not a state-sponsored monopoly, in higher educational establishments. The comment of the vice-chancellor of Swansea University, “Merger is a no-brainer if as a result you get better delivery for students.” hits on the right end, but not on the right means. There should be no restrictions on mergers, but neither should there be any barriers to new entrants. It should not be for the state, by central planning, to decide on it; it should be for the market.

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Universities, Willetts and Oakeshott Print E-mail
Written by Philip Salter   
Wednesday, 11 August 2010 07:00

News just in. The UK may not have enough clothes to meet the growing demand among the populace. According to the department for jumble sales, there won’t be enough clothes available for those unable to match up people with suitable attire. This comes on the back of the news that shops are going to cut the number of clothes in their stores despite the growing demand.

Could this happen? Only if the government regulated clothes as it currently regulates universities. Given the inherent problems that a central agency faces in trying to coordinate any industry, the fact that we don’t have enough university places to meet demand should be of little surprise. That universities are actively cutting places in the face of rising demand shows how far the price mechanism has been perverted.

But the problems in higher education run deeper than the government’s subversion of the price and information. In his lifetime, Michael Oakeshott was concerned – although never overly pessimistic – about the decline of the institution of the university. If he were alive today I suspect he would be even more troubled by the last twenty years. Independence has been undermined to the point where universities have become – in Oakeshott’s terms – ‘enterprise associations' rather than ‘civil associations’. In other words, universities have been usurped by the state to bring about specific political ends. The fact that power to control universities still resides in BIS is instructive. Theyare seen as a government agency for delivering skills to businesses, social mobility and economic growth.

Our universities are in a serious mess. David Willetts – who gave the LSE 2008 Michael Oakeshott memorial lecture – surely knows what needs to be done. Now it is time he did it.

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Against a graduate tax Print E-mail
Written by Daniel Solomon   
Tuesday, 10 August 2010 07:00

On Sunday, David Willetts, the universities minister, claimed that a graduate tax is “by far the best option to go for in tough times” when looking to ensure university teaching and research funding is maintained.

Presently, non-medical undergraduate students from middle-income backgrounds pay between 15 and 30% of the costs of their degrees. Taxpayers and university endowments pay the rest and subsidise interest on student loans. This means that undergraduates pay far less than the full cost of their university education. When people can buy something for much less than it actually costs, they tend to buy too much of it. Since 1980 the proportion of people going to university has more than doubled. Many students have gone to university but gained degrees which will not increase their future income; at the same time they have spent three years out of the job market losing a small fortune in forgone wages. A ‘double-cost’ for the students and taxpayers.

Replacing student fees and loans with a graduate tax goes too far in the opposite direction. If the tax is implemented as simply as possible, an individual will pay an additional flat rate (say 3 to 5%) on top of their income tax if they go to university. A tax like this would distort the higher education market by encouraging people not to go to university and so avoid the tax altogether. This could impact especially badly on school leavers from poorer backgrounds.

When university-leavers go into graduate jobs the tax would encourage them to work less hard so they pay less in tax. UCU estimates that a graduate tax of 5% would leave the average secondary school teacher about £46,000 worse-off over 25 years. People could end up paying much more than the value of their university education in graduate taxes over their lifetime, discouraging them from going to university. This would mean too few people go to university, decreasing their future earnings and holding back economic growth.

Additionally, people may go to university, enter high-paying jobs and then emigrate to avoid paying the tax. The Student Loans Company has had a tough time getting loan-repayments from emigres so enforcing a graduate tax internationally will be difficult at best. The result would be a state which pays for most of the university education of high-earning emigres, but which cannot recoup the money and whose policies (by causing the emigration of high-earners) decrease future economic growth.

A more complex graduate tax could be implemented, one where different percentages of income are paid according to university attended, degree taken and income earned. This might lead to a better- targeted tax but it would have much higher administrative costs and would cause even more distortion in the higher-education and job markets.

In fact, the idea of a graduate tax needs to be scrapped and instead Willetts should enact James Stanfield's proposals set out in The Broken University.

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Words of wisdom

"The discipine of colleges and universities is in general contrived, not for the benefit of the students, but for the interest, or more properly speaking, for the ease of the masters."

The Wealth of Nations, Book V, Ch I, Part III

 

"The endowments of schools and colleges have necessarily diminished more or less the necessity of application in the teachers. Their subsistence [is] altogether independent of their success and reputation in their particular professions."

The Wealth of Nations, Book V, Ch I, Part III


About the ASI

The Adam Smith Institute is the UK’s leading libertarian think tank. It engineers policies to increase Britain’s economic competitiveness, inject choice into public services, and create a freer, more prosperous society. For more information, click here.

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