Opinion & Commentary

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Whether public or private, our schools deserve a fair go

Jennifer Buckingham | The Punch | 22 November 2011

School choice means different things to different people. In essence, it refers to the principle that parents should have the right and the means to choose their child’s school, and that this choice should be not be restricted to government schools.

To adhere to this principle, a school funding system must have several key features.

First, it must be child-centred. The amount of public funding provided for the education of each student must be based on their individual needs and circumstances. Second, the type of school attended, whether government or non-government, should not affect the level of funding. Third, students should be able to enrol at any school of their choice. And funding entitlements should follow students.

For school choice to create an effective and dynamic education market that inspires competition and innovation and drives up quality, schools must have a large degree of autonomy.

A robust non-government school sector is vital. Meanwhile, government schools need to be decentralised and empowered.

Over the last two decades, The Centre for Independent Studies has published dozens of reports, books, and opinion articles arguing the case for school choice and a free market approach to schooling.

It has been unwavering and active in supporting school choice and public funding for non-government schools on economic, educational and moral grounds.

The most recent report on school funding from CIS is consistent with previous work in this policy area. The CIS’s publication history speaks for itself (and is free to download).

However, our most recent report does represent a significant departure from previous funding proposals. After 10 years of focussing almost entirely on one issue, it would be unusual for an open-minded scholar and researcher not to see shades of grey between the black and white.

A case in point is balancing the competing objectives of neutrality and efficiency. Typically, school choice advocates have proposed funding models in which all children are entitled to the same level of public funding, irrespective of the school they attend.

Free-market school choice advocates argue that this public funding entitlement should also not be affected by the private income or wealth of the school.

There are good arguments for this approach. It is simple, transparent and neutral.

Importantly, it does not penalise parents who voluntarily make significant financial contributions to their child’s schooling and it does not create disincentives to private investment in education.

The elephant in the room that can no longer be ignored, one which is acknowledged and grappled with for the first time in the recent CIS school funding report, is that this approach is extraordinarily expensive.

The average non-government school student currently receives around half of the public funding of the average government school student.

Bringing all students up to the same average level of public funding would require billions of dollars of additional public expenditure and potentially either supplement or crowd out private spending.

The challenge is to balance neutrality and equity against efficiency and fiscal responsibility.

To keep a lid on costs and to avoid providing scarce public funds where they are not needed, it is essential to find a mechanism that can vary the level of student entitlement according to need.

One option is to apply a means-test for school funding to all families. This would mean a large number of middle-class families with children in government schools would receive a substantially lower amount of public funding.

Government schools would have to charge tuition fees to make up the shortfall. In effect, free public education would be abandoned.

A comprehensive and persuasive argument for this approach would be a welcome contribution to the debate but is yet to materialise, suggesting this idea is not yet of its time.

Another option is a model that considers the private income of the school rather than the family. My recent report, School Funding, Choice and Equity, proposes that funding for all schools be based on a national resource standard.

Schools charging fees beyond a certain threshold would have their public funding reduced incrementally and marginally as fees increase. Importantly, the model also has a lower limit on public funding. A guaranteed minimum level of funding for which all schools are eligible no matter how high their fees, recognising that every child in every school is entitled to some public support for their education.

The model retains a sector-neutral approach. Any school, government or non-government, that charges no or relatively low fees would receive the full student funding entitlement. Schools that collect significant levels of private income from fees do not meet the ‘need’ test of public funding efficiency and therefore have their public funding reduced at a marginal rate (less than dollar for dollar).

This is not an arbitrary “hit list” or discrimination. It is responsible use of taxpayer resources.

Lower public funding can benefit schools by reducing the burden of public accountability.

Schools that voluntarily receive lower public funding would have greater autonomy and independence, the level of which is a matter for debate.

My personal opinion is that discrimination against students on the grounds of sexuality, pregnancy or religious belief alone is no more defensible than racial discrimination.

No school funding model will be perfect but I am yet to see an alternative proposal that effectively deals with the dilemma of equity and efficiency while also promoting excellence.

Likewise, not all students will benefit to the same extent from school choice. In a perfect world, all children have attentive and loving parents who value education and who actively seek the best for them.

We do not live in that world.

Unfortunately, the quality of education children receive is to some extent still influenced by their socio-economic circumstances. It is not a deterministic relationship.

Many children from disadvantaged backgrounds do very well, and vice versa, but there is an effect.

Any given student will very likely have poorer outcomes in a school with a low average SES than in a school with a high average SES, irrespective of socio-economic circumstances. This has been confirmed using numerous data sources, from international and national down to state-level.

Acknowledging that some schools have high concentrations of disadvantage and that this is particularly harmful is not to put a noose around the neck of school choice.

To deny that it occurs - even if it would likely happen under just about any policy - deeply dents the credibility of school choice advocates. It is a problem that has to be dealt with in any school policy framework, whether through increased resources, improved teacher quality, a complete rethink of educational provision, or even a program of school closures, mergers and takeovers.

School choice provides the greatest good to the greatest number.

Future schools policy in Australia should facilitate the ability of parents to choose from a diverse, dynamic and robust array of government and non-government schools. This is possible only with a funding model that is equitable, student-based and efficient.

It’s easy to say, but it’s much harder to do.

Jennifer Buckingham is a research fellow at The Centre for Independent Studies. Her most recent report School Funding, Choice and Equity is published by the CIS.