Tag Archives: markets

School vouchers: convince me

Here’s the thing. I like the simplicity of school vouchers, they appeal to my sense that policy is at its best when it is simple. Events over recent weeks have got me thinking about how we sort out the mess that is school admissions, and they seem to have a lot going for them.

However, that isn’t to say that I don’t have concerns about the system, and I’m not sold yet. Worse, the attitude of most school voucher supporters have is that anyone who doesn’t already support them is either an idiot, an unreconstructed socialist or most likely both. At the risk of exposing my inner-moron, here are my concerns. Can people convince me?

Sweden is always being cited as a socially-progressive country which has made a success out of vouchers. There are two problems with this model however. For comparisons with Sweden to work, any UK voucher system would have to give parents the same purchasing power as Swedish parents. How much is the Swedish voucher in UK money, and how does it compare with the existing spending on each child in the UK? How much extra would the UK have to spend in order to have a similar system? This is particularly significant in rural areas as the size of the voucher would be directly related to the minimum viable size of a school. Set it too low, and all talk of competition and choice will be irrelevant.

Secondly, Sweden would appear to be an overwhelmingly white, Christian country. I’ve been there, and while walking through the streets isn’t anything like as strange an experience as Finland (where seemingly everyone is white), it doesn’t appear to be a country with the same multi-cultural experience that we have. How then would a voucher system work in a country where we already already have mass voluntary segregation in our inner-city schools? Wouldn’t the voucher system simply make this worse? Would you accept some kind of quota system to moderate this? Or is segregation a price worth paying?

Related to that point is how religious schools will be helped by the voucher system. We already have Vardy Schools out there teaching science in permanent ‘quotation marks’ and trying to slip in creationism wherever they can, and there are plenty of religions scrabbling to get their hands on public money. Supporters of the voucher system appear to accept that it will open the floodgates for this sort of thing. This happens in Sweden, but the secular consensus seems to have taken hold much more strongly there than here (due again in part to it being less multicultural). What is the argument for leaving children so much at the mercy of their parent’s belief system? What are the benefits, and how do they outweigh the problems?

As I said above, I want to believe. In 2005, I blogged about how I feared that a truly free market on education might lead to gigantism, but I’m not so convinced now as I can see why people would be distrustful of McSchools (like the scary one being build in Peterborough). But I remain concerned about how such a system would work in the UK in practice. Either way, we should be debating this rather more than the staid one about grammar schools, and we certainly need a better answer to academies, particularly now that Cameron has decided that his response should be little more than “me too!” Seriously though: convince me.

Schools and markets again

I’m pleased and flattered to have my last post on this subject listed in Apollo’s October Top Ten – thanks. Meanwhile, I’ve been jousting with Bishop Hill in the comments section of my last post. He’s been giving me a run for my money, although I’m not at all convinced. We’re coming from two distinct positions: ultimately, he contends that the education of children is the business of parents and parents alone, while I regard it as a public good (while not disregarding the fact that generally parents – and children – are the best judge of what’s right for them). I don’t think he’s thought that one through (if he’s right, we should just save the government a bundle of money and stop public funding for education altogether).

Mary Reid cites an interesting local example of the problems of the government’s proposals.

I suppose my concerns with the government’s proposals, and of markets in education in general, can be summed up this way: the government want to see a market in education, regulated and tempered by national government. I would like to see a market in education, regulated and tempered by local government. And that local government needs to be genuine government, not simply administration, in other words:

  • political autonomy;
  • financial autonomy;
  • genuinely representative via a fair voting system.

I just don’t see how national government can respond effectively and the article Mary refers to above offers an excellent example.

Education needs vary widely from place to place. For many rural areas, choice is limited by the sparse population and locality is at a premium that it isn’t in urban areas. It is dangerous in the extreme to impose a single one-size-fits-all solution.

Perfect markets versus reality

Jonathan Calder has been discussing the government’s new education proposals and I have adding a few helpful comments, leading to this series of questions from Bishop Hill. This has made me realise I’m in danger of being misunderstood, but I thought I’d clarify what my position is here rather than there.

First of all, I think it is important to say that I’m not anti “choice” and I’m certainly not anti markets per se, indeed one of my main interests is how markets can help us achieve environmental goals in a way that simply regulating and imposing sin taxes never could. However, I’m concerned that when we talk about choice in relation to public services we are talking about real choice, rather than simply having a range of relatively neutral options. Roger Levett in “A Better Choice of Choice” (I’m sure Jonathan won’t approve of me linking to a Fabian pamphlet!) talks about “choice sets” whereby we should be enabling people to make full choices about their lives rather than make narrow decisions which close off other choices later on.

I also think that discussions about markets are essentially meaningless unless you also discuss externalities at the same time, and remain fully cogniscent of the fact that the perfect market is a myth. People who don’t I believe are open to the accusation that they are market fundamentalists, eulogising about an ideal that only has a tangential relation to reality.

So I get very uneasy when I read Jonathan writing this:

But would any schools want to grow to this enormous size? Would any parents want to send their children to them if they did? Mark’s case seems to be that governing bodies and parents are both criminally stupid and need local education authorities to save them from themselves.

This is an obtuse caricature. There are numerous examples of cases where a series of perfectly rational choices lead to fundamentally undesirable outcomes. Take bus services for instance. If significantly larger numbers of people used buses, services would be cheaper and more reliable. Unfortunately, what has happened since deregulation is that bus services have got worse, leading to more people making the perfectly rational choice to switch to using the car, leading to worse congestion and less money going into the bus service. This in turn leads to more people using their cars, and everyone suffering from worse congestion and worse pollution.

In Jonathan’s comments I included the example of local shops and post offices, to which Bishop Hill retorted: If everyone agrees that local shops are better why does everyone shop at supermarkets?

Yet this has been well documented. It doesn’t take a mass switch from local shops to supermarkets, just a critical mass which renders local shops unprofitable. This has been well documented by the New Economics Foundation’s series of reports on the emergence of “Ghost Town Britain” – a loss of just 10-20% of trade after the arrival of an out of town supermarket is enough to start shutting shops, despite the vast majority of local people actively supporting them.

Bringing all this back to education, and my quote from Jonathan above, it isn’t simply a case of governing boards deciding the perfect size of the school for them; there will always be pressure to expand. From a purely economic point of view, smaller schools are less cost-efficient than larger schools. It will be a brave governing board that chooses to remain small ahead of books and equipment. And, to use the word du jour of our Great Leader, any such school expansion will be “irreversible” – once you’ve built a new wing to accomodate 200 extra students you can hardly go back to a smaller size later.

Bishop Hill asks: Don’t you think that parents should make the decisions about how their children are educated? The children are not public property after all.

I am working on the assumption that children are the responsibility of wider society as well as parents. I’m sorry if that is an outrageously leftist notion but if it isn’t the case, then there is absolutely no case whatsoever for the state funding of education.

Should parents be able to make decisions about how their children are educated? Yes, but there are limits. It is not in societies interests to have children being indoctrinated into a cult or otherwise be kept ignorant of basic truths about the society they will have to live in for the rest of their lives. There is a liberal argument for and against disallowing children to be taught in such a way, but I trust there is very little question among liberals about whether wider society should pay, or even subsidise it.

There is also the question about whether parents are equipped, in a messy world without the market ideal of perfect knowledge, to make proper choices.

Vince Cable has recently written a Centre for Reform pamphlet entitled Public Services: Reform with a purpose. In it, he adapts a typology by Nicholas Barr to assess the suitability of public services for use of markets. This typology has five criteria:

  1. information easy to get or easy to improve access to;
  2. information easy to understand;
  3. low cost of bad choices;
  4. diversity of tastes;
  5. low transaction costs.

Vince concludes that in the case of schools, 3 and 5 are certainly not the case while the degree to which information is easy to get and understand is questionable.

You will pardon me about remaining sceptical (using the precise definition of the word) about the marketisation of education if one of the so-called arch-marketeers in the Lib Dems shares my scepticism. But what is to be done? Well, Theo Butt-Philip hits the nail on the head: it isn’t for national government to be dictating a line from above, but for local government to be given the room to experiment. Surely no Liberal Democrat would argue against that?

But I accept that that is a bit of a cop-out. My honest answer is that I don’t know. What I suspect however is that the solution lies matching local accountability with a system that allows schools to innovate and allows the maximum amount of choice for parents and children while recognising that places will always be limited to some extent. I am certainly sold on the idea of school selection by lot as the least unfair way of managing demand. I also see the answer lying in lots of small schools with strong identities rather than vast sausage-factory like impersonal institutions. I just don’t believe the market, completely unaided, will be able to do this without a democratic infrastructure to nurture it.

A final point to end on though, and I should preface this by emphasising that I really do have a lot of time for Jonathan Calder’s views – he’s listed in my ‘top blogs’ with very good reason and I seem to agree with him on most things. But I do find it a little hard to take being told that any scepticism about marketising education is dreadfully reactionary while simultaneously being told that the market has no place in dictating broadcasting rights to major sporting events. If the market can’t get that right, why on earth would we want to unleash it on our children?