Does competition between institutions make our education system better?

14 January
13 February

In a free market, competition between companies forces them to keep improving products and services to win and retain customers, and to be competitive on price. Does that work for schools, colleges and universities?

Let's start with the theory.

Much of education is state funded. For reasons of fairness we then have largely excluded price based competition and therefore any competitiveness is based on other factors such as academic outcomes, reputation and inspection.

But for any of this to work, customers, be they students or parents, need to be able to exercise choice.

This works reasonably well at a university level. HE institutions are selective and so are choosing students, but students with the right grades also select where they want to apply based on a range of factors such as academic reputation, student experience and location. This is all brokered by UCAS. Since student fees were introduced there is no sign of competition being expressed through price.

At a school level competition is far from perfect.

Under the Blair government "specialist schools" were developed to offer parents choice of arts, science, sports and technology schools. There is also selective schools in some areas, where parents struggle to buy tutoring to cram their kids into making the grade at 10/11 years old so the school can select them. We also have the range of faith and non-faith schools.

In theory this meant that parents had a plethora of choice for their children. Now we have academies and free schools, theoretically we now have choice on steroids.

The reality is that parental choice in rural areas is negligible. School transport is restricted to local or religious schools, with denominational transport denied if you choose a non-religious school. For many, the nearest school is the only option.

Former Shadow/Labour Secretary of State for Education, Tristram Hunt, discusses the negative effects of competition on the Education system

In urban areas, aspirational parents have an angst ridden couple of years worrying about whether they can get their child into the over-subscribed school in their area. Headteachers spend their summer break in appeal hearings as over anxious parents try anything to make the admissions code work for them. Some will have moved house, temporarily moved into what becomes a buy-to-let, or attended church for a couple of years for no reason of faith other than the belief that a certain school will radically influence the life chances of their child.

Schools are therefore heavily incentivised to sustain reputation. Accountability is harsh with published exam results and inspection reports.

As an experience parental choice is stressful for parents and this can leak down to their children. But does it lift school standards?

If a school loses reputation, for whatever reason, the consequences can be catastrophic. School funding is largely based on units of funding per pupil. This is roughly between £5,000 and £7,500 per pupil depending on where in the country you are. Lose half a dozen pupils and quickly your budget is short of the money for a teacher salary.

Schools are therefore heavily incentivised to sustain reputation. Accountability is harsh with published exam results and inspection reports. Test scores in tables take no account of a sudden influx of migrants into your school and a weak cohort can suddenly throw the data and trigger a spiral of decline.

To an extent this fear does drive performance. It also drives a risk averse environment that stifles innovation in schools. Parent promoted free schools could have generated some of this innovation but there is little sign of this becoming a reality.

International evidence draws on choice based systems in the US, Sweden and to some extent Chile. Statistics can be manipulated in all sorts of ways but Sweden are retreating from their free schools policy and the Charter schools in the US are highly variable.

In summary I would argue that choice does not work well in publicly funded schools. Policy makers should concentrate on supporting teachers, better school leadership and strong school governance. However once you have given parents choice it is very hard politics to then take it away.

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