Will Tanner: Information, Choice and the English Baccalaureate

The Government is pursuing widespread reform of the education system in order to, among other things, improve school accountability to pupils, parents and government for educational outcomes and financial management. The Schools White Paper, The Importance of Teaching, argued that “it is vital that schools should be accountable to parents for how well pupils do, and how taxpayers’ money is spent”. The Government has also committed to aiding parent choice by publishing detailed performance and financial data and introducing the new English Baccalaureate.

A Reform roundtable lunch yesterday explored the Government’s reforms and the best way to make schools accountable for educational and financial outcomes. The event was held under the Chatham House rule, so contributions were anonymous, but the debate raised a number of key points around the future of school accountability.

Firstly, opponents of school choice collapse in a heap when they are confronted by parents who simply cannot get a reasonable option for their children.  Those parents exist in rural constituencies just as much as in Hackney or Haringey.

Second, information matters.  The decision by the Welsh Assembly to abolish league tables led to a decline in GCSE attainment levels.

Third, the English Baccalaureate will open opportunities to pupils, not reduce them. Encouraging school pupils in deprived areas to study qualifications of little value in the labour market will do them no favours.  

Will Tanner of Reform: The challenges for the “army of armchair auditors”

In a wide-ranging audit, Reform finds considerable inconsistencies in how government departments are reforming public services

Andrew Haldenby is the director of the independent think tank Reform.

Today Reform publishes a scorecard on how each of the big spending departments, plus the Cabinet Office and the Treasury, is shaping up against the Government’s own principles of reform.

In my view the Prime Minister has been absolutely right to say that its reforms will be based on the following principles: accountability to the user, flexible delivery (by charities, public sector or private sector) and value for money.  These principles are right because the last twenty years' experience in the UK shows that our problem is over-active government, arbitrary rules on who can provide public services and over-spending.  By setting out these principles, David Cameron has sought to give the whole reform package coherence and force, so that the whole is greater than the sum of the parts.

Just as importantly, the Government has said that it will make structural reforms, not incremental ones.  It wants to avoid “halfway house reforms” which make a bit of difference but leave the great majority of provision untouched and then get swept away.  The last Conservative Government achieved fully 1,000 grant maintained schools, arousing a storm of opposition and duly abolished in 1997.  The Blair Government achieved nearly 100 academies - which lost their key freedom (over curriculum) in 2007.  The Blair Government achieved a few dozen Independent Sector Treatment Centres in the NHS which were furiously opposed and in due course the Brown Government ruled against NHS private provision full stop.  This Government is absolutely right to look for structural changes that bring the benefits of reform to the many, not the few.

David Cameron’s problems lie in the policies that his spending departments have delivered.  One at least is on course.  The Home Office’s policing reforms are a model package.  Theresa May is making police services accountable in the right way, to their local electorates.  She is conducting an independent review of the pay and conditions of the police workforce.  And Ministers are arguing that the police should deliver value for money and that there is no simple link between extra resources and lower crime.  If anyone wants to see how to do it, look no further.

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Dale Bassett: Education Maintenance Allowance is not value for money

Dale Bassett is Research Director of Reform.

There has been much debate in the media this week over the Education Maintenance Allowance (EMA) – a cash payment of up to £30 a week made to poor 16-18 year olds for staying in education. The Government wants to scrap it, arguing that the £560 million annual expenditure represents poor value for money since it has an estimated 88 per cent deadweight cost. In other words, 88 per cent of recipients would have been in education anyway, even without the handout. The Institute for Fiscal Studies (IFS) put out a bulletin agreeing with the Government’s assessment of the deadweight cost yet arguing that EMA is nonetheless value for money.

The IFS gives three main justifications for this:

1. Even given the deadweight cost, EMA still pays for itself in a cost-benefit analysis.
2. There are benefits to EMA other than encouraging participation (i.e. getting 16 year olds to stay in school).
3. Many Government policies have substantial deadweight costs so it’s wrong to single out EMA.

 Taking each of these in turn:

1. The IFS argues that “the costs of providing EMA were likely to be exceeded in the long run by the higher wages that its recipients would go on to enjoy in future”. This is a questionable assumption, based on the increased earnings that would arise from increased participation in education post-16 and higher qualification levels, versus the cost of NEETs (those not in education, employment or training). But it is far from clear that receiving EMA to stay in education post-16 actually makes an individual less likely to become a NEET. The IFS did not examine whether receiving EMA actually makes people more likely to get qualifications. Above all, even if the IFS’s analysis is right, it is no justification for not better targeting support. Saying that the deadweight costs of 88 per cent are outweighed by the savings made on the remaining 12 per cent provides no reason not to try to reduce the wasted proportion of the spend.

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Dale Bassett: Michael Gove can revolutionise education – but schools must be able to tackle bad teaching

Dale Bassett is Research Director at the independent think tank Reform. and co-author of its new report, Every teacher matters, which is published today.

Michael Gove has big plans for the English school system. He knows that the current performance of schools just isn’t good enough. England continues to slip down the international education league tables. Almost half of all 16-year-olds leave school without five decent GCSEs – and those who are on free school meals are twice as likely to do so as their wealthier peers.

Since taking office six months ago, the Education Secretary has undertaken a significant programme of structural reforms, creating more academies and allowing the establishment of new free schools. Most importantly, he understands what really makes the difference – better quality teaching, which in July Mr Gove described as “the single most important thing in education”. This focus is correct: studies show that, contrary to popular myth, it is teaching quality rather than class size that really makes the difference to pupils’ educational progress. The difference between a high-performing teacher and a low-performing one could be as much as three or four GCSE grades for each pupil.

Yet for all its reforming zeal, the Government may be in danger of missing its target. The plans to bring more good teachers into the profession, for example by expanding the successful Teach First programme, are right. But Reform’s new report, Every teacher matters, argues that Ministers have given too little attention to the much more important task of improving the existing workforce of 447,000 teachers.

Successive governments have created and then enlarged a bureaucracy designed to allow government to take control of improving teaching. The Training and Development Agency for Schools (TDA) defines the standards teachers are supposed to meet. Ofsted inspects the teaching that goes on in classrooms. The National College for Leadership of Schools and Children’s Services prescribes a compulsory qualification for all new headteachers. Local authorities get stuck in too, deploying School Improvement Partners to monitor schools’ performance.

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Reform think tank warns that Coalition's child benefit plan risks bringing targeting of benefits into disrepute

By Tim Montgomerie

A new report from the Reform think tank analyses the bureaucracy-enhancing 'money-go-round' that grew up under Gordon Brown. The appropriately-titled Money-go-round paper notes that middle and higher earners were big welfare gainers under Labour but all gains were lost in higher taxes:

Although it gives 'in principle' backing to George Osborne's attempt to reduce the welfare payments going to higher earners it is critical of the manner in which he has begun his task. The report warns that the child benefit change risks bringing "the whole idea of targeting benefits into disrepute". "The right way to means-test child benefit," Reform argues, "is to abolish it and to increase the value of the Child Tax Credit. This would remove the anomalies in the current proposals without requiring a new means-testing system to be established."

The Money-go-round report is also critical of Iain Duncan Smith's "badly-constructed" welfare plan. It warns that it will "encourage low wage, part time work and cause an increase in the welfare budget and the numbers of people on benefits".

You can read the full report here.

Iain Duncan Smith and Theresa May nominated to be 'Reformer of the Year'

By Tim Montgomerie

The Reform think tank runs an annual Reformer of the Year award. Last year's winner was Heather Brooke, campaigner for reform of MPs' expenses.

This year's nominations are below:

• Rt Hon Andy Burnham MP, who called for the Government to curb its pledge to increase NHS spending in real terms year on year. Mr Burnham drew attention to the fact that higher spending on the NHS would mean real damage to other services, like social care, despite admitting that his call was "counter-intuitive" for a Shadow Health Secretary.
• Rt Hon Nick Clegg MP, for arguing that middle class benefits should not be sacrosanct. He has noted that in the current fiscal environment continuing to protect universal welfare payments like the Child Benefit and Winter Fuel Allowance is unworkable and has stated a determination to "reverse the trend of making families as ever more dependent on the state."
• Sophia Christie, Chief Executive of NHS Birmingham East and North, who criticised politicians for defending the "19th century infrastructure" of the NHS and explained that real reform could deliver improvements and quality and "save a lot of public money."
• Rt Hon Iain Duncan Smith MP, who announced plans to phase out the default retirement age and raise the state pension age in line with life expectancy, with a rise to 66 as early as 2016. Mr Duncan Smith said: "Now is absolutely the right time to live up to our responsibility to reform our outdated pension system and to take action where the previous government failed to do so."
• Mervyn King, Governor of the Bank of England, who put pressure on the Chancellor to specify spending cuts in the 2010 Budget or risk a damaging backlash from the markets. In the face of rising unemployment, and as others suggested that cuts would damage the British economy further and lead to a double dip recession, Mr King held firm and said it was vital for the Government to tackle Britain's record peace-time deficit.
• Brian Lenihan TD, the Irish Finance Minister, for grasping the nettle on the Irish public finances. He announced plans to reduce spending by 4 billion Euros, around 7 per cent of the annual budget and rejected tax increases as a means of closing the budget deficit. The measures successfuly restored the faith of investors in Ireland.
• Rt Hon Theresa May MP, for announcing a package of radical reforms to the police service. She encouraged citizens to play a greater role in policing their own communities, and ordered an overall review of police pay.

Vote by sending an email to [email protected].

I voted for IDS but for his role in welfare-to-work rather than pensions reform.

Government should step back to allow the creative industries to flourish

The independent think tank Reform today publishes a collection of essays on the future of the creative industries. The book, "A creative recovery", features contributions from leading experts on media policy and a foreword by the Culture Secretary, Jeremy Hunt. An extended version of this essay appears in the book, which is available at www.reform.co.uk.

The UK is in a unique and strong position as the world of media and the creative industries continue to flourish, develop and morph into forms we can barely imagine today. The pace of change is dizzying: Facebook was established only seven years ago and Google a decade ago; indeed, the world wide web itself has been in existence barely 20 years. The creative industries in the UK will become even more important as Government seeks to rebalance the economy away from financial services, globalisation provides the threat of competition but the opportunity of new markets, and technology reduces costs for existing companies but also barriers to entry for competitors.

There are a number of threats that could jeopardise the UK’s position as the world moves on. Technology could entrench existing competitive advantages at the expense of innovation. Piracy continues to threaten investment in content. The movement of revenues away from the creation of content to its aggregation (think of Google) could endanger the supply of content, as could the fragmentation of revenue and the market as a whole as more content providers, TV channels and publishers fight for advertisers’ and consumers’ money.

Yet the UK has got this far, punching above its weight, and leading the world in quality of output and innovation in technology, content and revenue generation. How can the sector enshrine this competitive advantage in this brave new world, in the face of challenges domestic and foreign?

The economics have changed

Undoubtedly, the economics of the new media world require a big adjustment on the part of “old” media companies. Content distributed digitally will earn less than on traditional analogue platforms. Advertising revenues are split amongst more TV stations and indeed more platforms, fragmenting the money available for the creation of new content. Pay TV has rapidly increased in popularity but users are not inclined to pay for “commodity content” such as general news. The licence fee may be under threat from the Coalition Government.

At the same time, the world of content creation has been thrown open. Just a few short years ago this was the monopoly of an elite of companies in the media world; no more. Open sourcing, YouTube and the blogosphere mean that anyone can now create content and distribute it to a mass audience. Media companies must develop new business models to accommodate the new, open, competitive, cross-platform market, realising that this can in fact increase the consumption of media – and therefore, potentially, revenues.

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Reform sounds a note of concern about contradictions in the Coalition's programme after its first hundred days

By Jonathan Isaby

The think-tank Reform has today produced a 196-page report, The first hundred days, reviewing the Government's performance in dealing with Welfare; Education; Public services and the deficit; and Health.

It welcomes the way in which radical policing and school reforms will give more power to local people, but concludes that big welfare spending commitments and its ideas for the NHS contradict its wish to shrink government and decentralise public services.

Dr Patrick Nolan, Chief Economist at Reform, states:

“The first 100 days do matter in establishing a government’s long-term vision.  Its goal of a smaller government and stronger society is right but many of its policies go in exactly the other direction.  Governments need to take the tough decisions straight away when their political capital is at its highest.  That means looking again at the big spending areas of health and welfare.”

As the overview of the report concludes:

"The measures announced in the emergency Budget left the real drivers of government spending unaddressed. They set out to simply trim existing budgets. Rather than withdrawing benefits from people on middle and higher incomes the Child Benefit was frozen. Rather than introducing a link between pay and performance public sector pay was frozen too... Without reform the growing costs of entitlements in areas like pensions and health could bankrupt the country over the coming decades, with the cost of benefits to pensioners alone being set to increase by £12 billion by the end of the term of this Parliament."

Timely then that today's papers are full of speculation about universal benefits being axed for the better off.

Read the full Reform report here.

> Reform Director Andrew Haldenby also has a piece in today's Daily Telegraph making these same points:

"David Cameron has talked of “momentous decisions” on public spending, yet highlighted ideas such as replacing council gardeners with volunteers. He has spoken of “decentralisation”, yet personally overruled Crispin Blunt and Anne Milton on social events in prisons and subsidised milk. He has talked of “transparency”, yet abolished the Audit Commission, one of the few organisations to have successfully pinpointed success and waste in the public sector. In fact, this decision embodies the contradictions in the Coalition’s early days: is it really good husbandry to save that £50 million a year, while protecting the NHS, which spends £50 million every four hours?"

London's think tanks react to the Budget

OVERALL JUDGMENT

Madsen Pirie of the Adam Smith Institute: "Basically the coalition's first budget was a reality check, and an indication that Britain is on the way back from the madness of the Brown years. It will be a slow haul, but this was a positive start."

BIG CUTS IN SPENDING...

Matt Sinclair of The TaxPayers' Alliance: "There is plenty of very good news in the Budget.  A two year public sector pay freeze, the abolition of the Child Trust Fund and cuts in welfare spending are all longstanding TPA recommendations that will be absolutely key to getting the public finances under control.  As a result of all the measures proposed, annual spending will be £31.9 billion lower than planned by 2014-15."

...BUT NOT IN BRITAIN'S CONTRIBUTION TO THE EU

Open Europe: "While today's emergency budget in the UK provided many talking points for the media at large – it also provided new information for those with an interest in the UK’s ever-increasing contribution to the European budget *(courtesy of one T.Blair). Hopefully this graph should illustrate how sharply our contributions climbed last year, and will continue climbing until 2014/15 when the contribution will hit an estimated £10.3 billion."

...WITH PAIN SHARED FAIRLY

Neil O'Brien of Policy Exchange: "As a share of their income, the richest 10 per cent are contributing twice as much as the poorer half of the population towards fixing the debt crisis. The richest tenth will be about £1,600 a year worse off, while the poorest tenth will be less than £200 worse off."

ALTHOUGH VAT HIKE WAS UNFAIR

Matthew Sinclair of The TaxPayers' Alliance: "Voters might be left wondering why they should bother paying attention during elections if campaign rhetoric bears so little relation to reality on such a big issue. The increase in VAT from 17.5 to 20 per cent means that instead of the higher income tax threshold being a welcome break for millions of families on low to middle incomes, it is just inadequate compensation for their increased VAT burden."

BUT WHERE IS THE REFORM OF PUBLIC SERVICES?

Andrew Haldenby of Reform: "Two weeks ago, when launching the Spending Review, George Osborne called for a once-in-a-lifetime debate about the shape of government in the UK.  He implied that there is a right and a wrong way to cut the deficit.  It would be right to cut spending by addressing the structural causes of the deficit - i.e. public sector inefficiency and the UK's unwillingness to cut its pensions and health entitlements.  It would be wrong to leave the shape of public services and welfare unchanged, but limit their costs temporarily – “salami slice” – with public sector pay freezes for instance. Today George Osborne opted for the slice: a two year freeze in public sector pay (rather than linking pay with performance), a three year freeze in child benefit (rather than withdrawing it from middle and high earners), a slightly lower rate of increase of benefits and a slightly lower rate of increase of tax thresholds.  The general sense was that his ambitions for government were similar to that of the last administration."

AND WHERE IS THE ENVIRONMENTALISM?

Global Warming Policy Forum: "Chancellor George Osborne has today left low carbon businesses disappointed with arguably the least green budget address in recent memory. The low carbon economy and the need to cut carbon emissions barely received a mention as the chancellor's first budget address focused almost exclusively on the spending cuts and tax rises required to tackle the UK's budget deficit. There were a few bright spots for green businesses as the chancellor confirmed that the coalition government would "bring forward" plans for a green investment bank, although he provided no further detail on how such a bank would operate. He also said that the Treasury would "explore" proposals to replace Air Passenger Duty with a per plane levy that the Chancellor said would help to cut carbon emissions. However, a report on the proposal will not be delivered until the autumn, despite the reform being included in both the Conservative and Lib Dem manifestos."

...AND A WELCOME FOR THE END OF REGIONAL DEVELOPMENT AGENCIES

Matthew Elliott on The TaxPayers' Alliance: "A quick scan through the document this afternoon for information on the Regional Development Agencies (RDAs) threw up something worthwhile: they are to be abolished through the Public Bodies Bill, for which a White Paper will be produced later this year. Of course, we will be keeping a close eye on it to ensure that this Budget promise is not reneged on or fudged in any way."