Which is the growth market in English education over a five year horizon – the public or private sector? (Let's define these sectors broadly – not just institutions such as schools or hospitals but all kinds of government and independent efforts.)
Eight years ago, the answer would have been easy. A new government had been elected with a manifesto commitment to shift the focus of public spending from ‘the bills of social failure’ to education, however defined. It had a specific target to increase taxpayer-financed education spending as a share of GDP.
The government sector has duly grown – and how. Since 1999, annual government non-capital spending on school education has risen by 60 per cent in real terms. This expansion was part of a wider expansion in the size of UK government as a whole, with the total public-spending-to-GDP ratio rising from 37.5% to 42.5% over the same period (breaking the long-term downwards trend in public spending begun in the early 1970s).
But this period of expansion has come to an end for a number of reasons – the public limit for tax increases has been reached, the Government has hugely underestimated its borrowing requirement and there is long overdue concern over value for money.
And education spending increases on the same scale will end too. While the Government remains formally committed to a further increase in schools spending of about 45% (to lift per-pupil spending to that of independent schools), that is not going to happen any time soon.
Other factors also apply. The twenty-year experiment in closer government supervision of schooling is increasingly seen to have more cons than pros. The major political parties are looking to make institutions (such as academies) or agencies (the QCA) freer of government. The introduction of tuition fees recognised that public support can only go so far, even in a time of rapidly rising resources.
And as the government sector slows and rethinks, so the conditions for a much more developed private market have emerged. Of these, technology comes first. Last week's PISA study on reading highlighted the very high use of computers by British children and while much of this will be games-playing, combination game/education hybrids are becoming increasingly attractive and popular. At the same time economic growth continues to feed growing prosperity; education providers are becoming more entrepreneurial; and families are becoming more aware of the importance of skills acquisition for success in the modern labour market.
More speculatively, it is possible that a greater understanding of the success factors for learning will also enhance private demand. The next three to five years will see better use of the big datasets which allow correlation of pupil attainment against many environmental variables. My hypothesis would be that these will emphasise the independent contributions of both learners and teachers.
The one exception to this general trend will be property. Given the nature of the planning system, projects which require land will continue to be deeply involved with government. As a result private school providers may be forced to expand through market share rather than by a larger aggregate market.
But property is, I think, the exception that proves the rule. Most successful education organisations will have a close eye to the private market. Potentially there will be a clearer understanding of what should be the responsibility of government in education and what should be the individual's, paralleling current debates over the provision of healthcare. Research organisations such as my own will also give closer attention (for example, conducting studies on the model of the ESRC-funded report in 2004 which found that 25% of state school pupils receive some private tuition). I would welcome the involvement of all those interested in following or supporting such work.
Andrew Haldenby is the Director of Reform, an independent charitable think tank focusing on UK public sector and economic performance.
