Hundred Pockets

There’s a new blog in town, currently being e-mailed round (despite not having formally launched yet): LeftFootForward. Billed as an evidence-based progressive blog (they draw actual graphs and everything), and seemingly connected to IPPR and Progress, I’m sure they’ll make a fine addition to the UK blogosphere. I’ll add them to the blogroll as soon as I get round to putting in a ‘UK’ section.

Surely the best welcome I can offer, though, is to disagree (respectfully) with one of their posts. Martin McCluskey’s critique of Conservative school policy (’Unaccounted £1bn cost of Tory school reforms‘) makes what I think is a fairly basic mistake.

For the uninitiated: the Tories have proposed new powers for charities, co-ops, non-profit companies and/or parents to set up new schools. Crucially, these schools will be allowed to open even if their area already has ‘enough’ school places. The reasoning is fairly simple – some school places are terrible. Refusing to allow a new school to open – simply because a failing school exists down the road – is not a recipe for driving up standards.

We’ll leave the knotty literature on ‘School Choice’ to one side for now, and focus on Martin’s post. After expressing some (healthy) scepticism about the Swedish school system, which the Tories are using as a model, he makes his big accusation:

In their 2007 paper [Raising the bar, closing the gap], the Tories proposed an extra 220,000 school places (p. 9). Maintaining current levels of funding per child (set at £5,250 for 2010-11) would result in annual costs of £1.2 billion.

These annual costs cannot be covered by the proposed savings of £4.5 billion from the Building Schools for the Future programme (p.39) since this has been earmarked “for the building of New Academies.”

What’s the error here? Martin is confusing school places with children. Schools in the UK system, are funded per pupil, not per place. And while the Tories have proposed 220,000 new school places, they have not proposed 220,000 new children (eye-catching as that would be in any manifesto…)

The Individual Schools Budget received by a school is heavily dependent on the number of pupils enrolled, weighted by their age  (’Age Weighted Pupil Units’ or AWPUs [pronounced oar-poos] in the terrible jargon). Schools get a few dollops of cash for their fixed costs, but empty places (to a first approximation) aren’t funded at all.

So creating 220,000 new places requires a capital budget (to physically build/kit out thousands of new classrooms), but need hardly affect the annual (’recurrent’) cost of funding schools at all – because funding is ‘per-pupil’, and we have the same number of pupils we had before.

The annual £1bn ‘unaccounted cost’ of the post’s title is the result of a misunderstanding.

The second (smaller) error in the paragraph above is the claim that the ‘Building Schools for the Future’ budget (a gigantic pot of cash earmarked for school construction/refurbishment) can’t be used to fund these new places “because this has been earmarked for the building of New Academies”.

Of course, the current Government can earmark its funds for whatever it likes. But an incoming administration can also ignore those earmarks, because under the UK’s unwritten constitution, no Parliament can bind its successor. There may be costs involved in renegotiating already-agreed contracts, but incoming governments are often willing to incur such costs (as some companies are already discovering). And it costs nothing to reshuffle contract-free ‘earmarks’.

So welcome to the Blogosphere, LeftFootForward. I look forward to the conversation.

Policy Exchange won a fair amount of coverage this week, announcing that the UK private sector has shrunk since 1998. That would be staggering, if true.

In calculations which underline the catastrophic collapse in Britain’s non-public sector economy under Labour, experts have revealed that the private sector will by next year have suffered a “lost decade” of less-than-zero growth.

Fortunately, it isn’t true. David Smith explains why:

The Policy Exchange calculations were based on a popular misconception, that of assuming government spending has risen to around 50% of GDP. Spending may be equivalent to 50% of GDP but that includes transfer payments that are not part of GDP. The G that goes into the national income identity – G + C + I + X – M – is around 20% of GDP (general government spending), plus government capital spending. The public sector has grown too much but it hasn’t crowded out the private sector to quite that extent.

Oops…

In the interests of balance, I should add that Policy Exchange have produced some truly excellent reports on the education system.

But this wasn’t their finest hour.