England’s education reforms will have little quantifiable impact on education quality unless the government makes significant changes to increase school autonomy and competition, and lifts the ban on for-profit schools.

The majority of parents cannot exercise school choice effectively because:

• Location remains the key factor 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 planning restrictions discourages new school providers from applying, limiting 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 superficially based on parental choice, these and other constraints interfere with what could be a highly effective mechanism for raising education quality. In this new research, Incentivising excellence: school choice and education quality, Gabriel H. Sahlgren demonstrates that to increase education quality significantly, a series of reforms are necessary.

These include:

• 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


• 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.


• 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.


• Improve the information and accountability system. The aim of isolating school effectiveness from pupil ability should not be abandoned. Better information on factors such as family composition, income, and parental education, is required to identify the schools at which pupils would be most likely to improve. Information provision should not be the exclusive scope of government, but should be made available via a number of different sources.

Commenting on the report, James Croft, Director of The Centre for Market Reform of Education, said:

“Increasing school choice and competition ought to be an effective mechanism for raising education quality, but most reforms attempted to date have been hampered by a combination of insufficient autonomy for schools to experiment, inadequate incentives for schools to expand, and constraints on parents’ ability to make informed choices. The proposals which emerge from this book offer the possibility of liberating choice reform from political expediency via a longer-term, experimental approach to raising education quality.”

Notes to editors:

To arrange an interview about the report please contact Stephanie Lis, Communications Officer, slis@iea.org.uk or 07766 221 268.

An executive summary and outline of the author’s policy recommendations may be downloaded from www.cmre.org.uk/publications, where you can find further information about how to obtain a press copy of the book.

The Centre for Market Reform of Education (CMRE) is a new education research and policy unit based at the offices of the Institute of Economic Affairs (IEA). Its purpose is to explore the benefits of more diverse, competitive and entrepreneurial provision in the education sector and the feasibility of market-led solutions to public policy issues.

CMRE works in cooperation with the IEA, but is financially independent. It has no corporate position as such, and bears no political affiliations.

The mission of the Institute of Economic Affairs (IEA) is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The IEA is a registered educational charity and independent of all political parties.