Better schooling and a less distorted housing market
In January, Paul Collier, an economics professor who has frequently been published by the IEA, wrote a controversial article for The Independent on how to reform education in the UK, and on 11 October he gave a lecture at Policy Exchange.
Collier distinguishes between who provides the education and how it is funded. On provision, he observes that the state’s comparative advantage is in the delivery of simple tasks on a large scale, which enables it to push unit costs down; the state does not handle complexity and differentiation well. This suggests that as the complexity of education rises, the role of the state should fall: so early years education can be provided efficiently by the state; tertiary education should be provided privately and schools should be characterised by a mix of provision.
Yet the one type of provision and of funding that seems to make most sense – a mix of public and private– is the only type of provision and funding that is explicitly banned. The moment one tries to spend a single pound on one’s child’s schooling (as opposed to extra tuition, which is not an efficient way to spend the money), one loses access to state funding. Consequently, it is only worth paying for a child’s education if one can dramatically increase the total level of funding.
The result is what statisticians call a “bi-modal distribution”, the very opposite of the bell-curve: there is one (large) group in the public sector receiving a certain amount of funding; a distinct (small) group in the private sector receiving a much larger level of funding; and absolutely nobody in the middle.
There are two crucial facts which accompany this observation:
1) there is no distribution less fair than the bi-modal distribution;
2) the vast majority of children receive less education funding than would be the case in a mixed system.
We have a system characterised by neither equality nor freedom. Instead, we have a bi-modal distribution and very limited choice. This leaves us with “educational apartheid”. Furthermore, as Collier writes, “the parents least committed to their children determine [the] quality” of education that most experience. This is especially odd as the state subsidises children to the tune of over £1,000 a year through the Child Benefit system, and then gives parents the freedom to spend that money on anything (Fags? Booze? Gambling?) except the child’s schooling.
There is one other way that wealth ensures access to a better state school: through the housing market. This not only distorts the housing market but represents the most inefficient way that money can affect education: a zero-sum game, whereby one can only gain a place at a good institution by displacing another, rather than by adding to the resources available to the good institution (and thus creating a positive sum).
Collier recommends allowing parents to supplement state funding by adding their own money to that provided by the government. This would create a more natural distribution, ending the bi-modal distribution that creates the current educational apartheid. It would push the average level of spending on children’s education up. Even those whose parents did not or could not pay more would be no worse off, and if poverty were the impediment the state could always provide a greater subsidy to the most needy. Finally, his proposals would end the zero-sum housing game that distorts both the education and housing markets.