Are We Spending Too Much On Education?

wEDNESDAY, DECEMBER 08, 2010

Are We Spending Too Much On Education?

How more can be less

Education, education, education.

And sure enough, during Labour's time in office, they whacked up state education spending by an astonishing 73% in real inflation adjusted terms. By 2009-10 spending had increased to £88.3bn - around £8 grand pa for every pupil and student between 5 and 21.

But what precisely have we taxpayers had in return? Where's the pay-off?

You can forget all those fiddled tractor production stats - as everybody now understands, they're not worth the dumbed down exam papers they're written on.

Much more important is yesterday's report from the OECD - the 2009 results from their Programme for International Student Assessment (PISA). That is based on a consistent and regular set of tests sat by 15 year olds across over 60 developed countries. And what it shows is us sinking further down the international league tables with each year that passes.

The Mail has a useful summary:

What should we make of that?

Some argue that it's largely a question of race - we're simply not as bright as the superbrains out East, and we just need to accept that as they build up their education systems we will sink ever further behind.

But even if true, that doesn't explain why we're so much worse than European countries like Finland and, gulp, Estonia.

Immigrants then. Some argue that Finland and others do well because they have far fewer immigrants dragging down the overall scores.

But while with 10.6% immigrant pupils we are much higher than say Finland, other countries with high immigrant percentages also do much better than us. For example, Canada and Australia both have higher percentages, yet both beat us in the league tables.

No, the real problem seems to lie with our school system rather than the pupil mix per se. Despite a huge additional injection of cash, we still aren't getting the results we need - in fact, we seem to be going backwards.

Which raises the obvious question as to whether spending all that extra money was worth it? And whether in these straitened times we ought to cut some of it back?

Because what the OECD report also highlights is that although we are now among the world's top education spenders, others achieve similar or better results while spending much less:

"Only seven OECD countries spend more per student than the United Kingdom...

[but]... moderate spending per student cannot automatically be equated with poor performance by education systems. For example, Estonia and Poland, which spend around US$ 40 000 per student, perform at the same level as Norway and the United States, which spend over US$ 100 000 per student. Similarly, New Zealand, one of the highest performing countries in reading, spends well below the average per student. While the United Kingdom spends almost US$ 85 000, Germany or Hungary achieve a similar average performance and spend around US$ 63 000 and US$ 44 000 respectively."

So if we cut spending back to say German levels, then according to Tyler's fag packet we could save an average $22k over each pupil's 10 years of school education up to age 15. Which works out at an annual saving to taxpayers of around £10bn pa. Not bad.

And it isn't just schools. When last sighted (2006) we were spending 5.9% of our GDP on education as a whole, whereas Germany was spending only 4.8%. Which is equivalent to about £15bn pa - money British taxpayers could save if we cut back to German spending levels.

And remember this - in this post-bubble world, Germany is beating the pants off us. Jeremy Warner has the picture story here including this chart that shows how much lower is their youth unemployment:

It seems German companies actually want to employ the products of German schools.

So what does Germany do right and we do wrong?

Hmm... now, let me see... what could it be... ah yes, selection. That thing nobody is allowed to mention here any more.

It is surely time to ask ourselves a serious question - can we any longer afford an education system that is run by the social engineering commissariat? Prizes for all and A*s all round was a lovely way of spending the last days of summer, but winter's here now.

In this new and tougher world nobody owes us a living. We need an education system that prioritises academic excellence for those with the ability to generate our future wealth, and a strong grasp of basic skills for those at the bottom - it is shocking that the OECD finds that after a decade or more of schooling, 20% of our 15 year olds are functionally illiterate.

Germany shows it can be done. We can get over the fact that our school pupils are not all Chinese. We can cope with the fact that over 10% of our pupils are immigrants. And we can even save £10 - £15bn pa in the process.

We just need to grasp one nettle.

And this time, we should do it properly and fairly (see this blog).

PS And while we're on the subject, Tyler keeps swallowing his false teeth listening to those future politicos who "speak for" the revolting students. You see, English literature degrees are not essential to the future of the nation. There is no God-given right for 18 year olds to spend three years getting pissed at taxpayer expense. The Browne recommendations on university funding and student loans are fair to everyone - both taxpayers and students (see this blog). And the thought of these future Jack Straws ruling over us for the next 40 years makes Tyler gag.

PPS Talking of English Lit degrees, Mr and Mrs T saw Rory Kinnear's Hamletlast night. Stunning - possibly the best live Hamlet Tyler has ever seen. Fresh interpretation, strong performances all round. Mrs T thought they'd slightly overdone the modern instances, but Tyler was... well.. stunned. Highly recommended.

MONDAY, DECEMBER 06, 2010

How Many Million Unemployables?

Tyler has just attended a rather depressing event hosted by a normally rather upbeat think tank. It was a seminar on a question we've mulled many times - Where will all the new jobs come from?

The correct answer of course is that nobody knows.

Nobody knows because nobody ever knows ahead of time where the new jobs will come from. And as we've blogged before, the best thing government can do to assist is to cut taxes, cut regulation, cut working age welfare and the minimum wage, break up public sector monopolies, decentralise, and cap mass immigration.

And that's pretty well all we can say. Other than reminding people that in the three decades following the invigorating pro-market reforms of St Maggs, our "Sick Man Of Europe" economy managed to throw off its bedclothes and create 6 million new jobs - and that net of 4 million fewer jobs in manufacturing (see this blog).

To be fair, none of today's panel members disagreed with the St Maggs' prescription for private sector jobs growth (well, OK, a couple of panelists weren't keen on welfare cuts). But that's mainly because her prescription wasn't really mentioned at all.

Instead, there was much talk of difficulties with people whose "labour market characteristics" make them unappealing to potential employers.

Labour market characteristics?

Yes, that's things you will know better as motivation, work ethic, and previous employment record. Labour market characteristics turns out to be a euphemism for unemployable. And according to one of the panelists, such characteristics now cripple large swathes of the working age population in the old high unemployment blackspots we've blogged so often.

So how many people are affected? Just how many million unemployables have we now got? We've taken a quick look.

Overall, Britain has 40 million people aged between 16 and 64 (the age band the ONS counts as working age adults). Of those, 11.7 million are not in employment. So that's roughly 70% of the working age population working, and 30% not working.

Fortunately, not all of those 30% are people suffering from labour market characteristics. A big chunk of the younger ones are still in full-time education, and hopefully will find employment in due course. And a big chunk of the older ones either have working partners supporting them, or they're plutocrats who don't need to work.

Stripping out those groups, the hardcore unemployables are among the 5 million people of working age who are entirely dependent on welfare handouts - about 12% of the working age population.

So how many of those 5 million are unemployable?

In truth we don't know. But up until 2008 our economy had experienced the longest period of boom since records began. Between the beginning of 1997 and mid-2008, 2.8 million new jobs were created (net). It's surely reasonable to think that anyone who really wanted a job should have been able to get one.

Indeed, so keen were UK employers to fill those jobs that they actually imported new workers from overseas. Foreign workers flooded in, and as things stand today, 86% of the new jobs created since 1997 are filled by workers born overseas. 86%!

Even at the peak of the boom, we still had 4.3 million working age people dependent on welfare - over 10% of our working age population.

4.3 million apparently unemployable people.

Depressing.

Both for us and for them.