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School choice and education quality

England’s education reforms will have little quantifiable impact on education quality unless government makes significant reforms to increase school autonomy and competition, and lifts the ban on for-profit schools. The majority of parents cannot exercise school choice effectively because:

  • Proximity remains the key tie breaker device in admissions, so that it is generally only wealthy parents who can gain access to the best schools.
  • An excessively political free school application process, burdened by overly stringent regulations and unnecessary planning restrictions discourages new schools providers from applying, and limits their ambition to expand.
  • Poorly performing schools are kept afloat through additional investment, making entry to local markets difficult for new providers and muting any incentive they might have to improve.
  • Parents themselves are not supplied with the information they need and in a format that is accessible to them.

Though the English system is ostensibly based on parental choice, these and other constraints interfere with what could be a highly effective mechanism for raising education quality. As Gabriel H. Sahlgen demonstrates in a new book published by The Centre for Market Reform of Education, to increase education quality significantly, a series of mutually re-enforcing reforms are necessary. Incentivising excellence: school choice and education quality proposes:

  • The introduction of a national and universal voucher system. Vouchers should be redeemable across the variety of educational settings, both state-funded and private. Choice should be mandatory, with no default school, and should entail involvement in the actual financial transaction process.
  • Differentiated funding. In so far as the real cost of educating children depends on their ability and background, the voucher should be differentiated. Several brackets based on family income, similar to the current progressive income tax brackets, should be adopted, extending the basis of the pupil premium to account for the fact that privileged and/or high-achieving pupils are correspondingly cheaper to educate. Placing an effective premium on educating underprivileged and low-achieving pupils would discourage cream-skimming and help to attract new providers to difficult areas.
  • A radical change in the government’s approach to free school licensing. To expand supply, and increase competition, the complex bureaucracy associated with the approval of new schools should be cut back. Applicants should have only to meet minimum requirements and to provide their own capital. State capital funding would thus only be required in exceptional circumstances, obviating the need for the complex and opaque procurement and tendering process we have currently.
  • Expansion of online learning opportunities. Access to online learning could be expanded through the voucher. Such opportunities could be extended to pupils in existing school settings, to enhance learning in these contexts, but might also provide an important alternative in areas where school supply is unlikely to increase radically. In cases where there are no viable short-term alternatives to persistently low-performing schools, pupils should be allowed and funded to enroll in e-learning courses.
  • Ownership-blind admission of new providers. Approval of new providers should not depend on their ownership structure or ability/willingness to conform to artificial frameworks of governance. For school competition to be effective, government needs providers that are willing to expand and replicate success in different markets. For-profit organisations have the strongest incentives to do so and it is conspicuous that such schools are ineligible to receive public money.
  • Closure of failing schools. Failing schools managed by public authorities are rarely closed down, despite the detriment they cause to pupils’ education and the costs involved in maintaining them. Turning such schools around usually entails radical changes in staffing – a practice which emulates school closure. Despite being politically difficult, preparedness to actually close failing schools is crucial to improving standards.
  • Performance-related funding. Successful schools should be rewarded. This would make it easier for both new and existing school providers to target areas where provision has historically been poor. Competition and choice would thereby increase where it is most needed, giving parents of pupils in failing schools better alternatives.
  • Improve the information and accountability system. The aim of isolating school effectiveness from pupil ability should not be abandoned. Better information on background variables such as family composition, income, and parental education, is required to identify the schools at which pupils would be most likely to improve. A range of different metrics, including teacher quality indicators, should be employed. Application statistics, admissions test scores, parental and pupil satisfaction scores would also help in providing a more nuanced picture of value added, as would information about wage premiums, and employment outcomes after school, adjusted for prior achievement and background. Information provision should not be the exclusive purview of government, but should be made available via a number of different sources. This would allow competitive improvements in the presentation and quality of information.

To purchase a copy of the book, click here.

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About the author
Gabriel Heller Sahlgren is Director of Research at the Centre for Market Reform of Education and Research Fellow at the Institute of Economic Affairs. He is author of Incentivising excellence: school choice and education quality.