School choice reform will be a key issue at the next General Election, yet the debate so far has focused on the theoretical arguments for and against creating a ‘schools market’ by bringing more independent providers into the state system. The purpose of this report is to learn the lessons of existing school reforms in England (the academies programme), Sweden (free A guide to school choice reforms schools) and the US (charter schools). We assess the success of reforms in all three countries against seven criteria which we believe a schools market should meet in order to find the right balance between promoting innovation and choice while maintaining accountability and quality control. A guide to school None of the countries studied have achieved this balance yet, though in each case the introduction of new providers to the choice reforms system has brought benefits, but all of the seven criteria are met by at least one country. By combining the best aspects of Daisy Meyland-Smith and Natalie Evans each system, we argue, it is possible to develop a set of school Xxxxxx xxxxxxx xxxxxxx xxxxxxx choice reforms that will increase diversity and performance while protecting against market failure. Daisy Meyland-Smith and Natalie Evans £10.00 ISBN: 978-1-906097-42-4 Policy Exchange Policy Exchange Clutha House 10 Storey’s Gate London SW1P 3AY www.policyexchange.org.uk PX - A GUIDE TO SHCOOL - COVER 02-09.indd 1 20/2/09 10:46:35 A guide to school choice reforms Daisy Meyland-Smith and Natalie Evans Policy Exchange is an independent think tank whose mission is to develop and promote new policy ideas which will foster a free society based on strong communities, personal freedom, limited government, national self-confidence and an enterprise culture. Registered charity no: 1096300. Policy Exchange is committed to an evidence-based approach to policy development. We work in partnership with academics and other experts and commission major studies involving thorough empirical research of alternative policy outcomes. We believe that the policy experience of other countries offers important lessons for government in the UK. We also believe that government has much to learn from business and the voluntary sector. Trustees Charles Moore (Chairman of the Board), Theodore Agnew, Richard Briance, Camilla Cavendish, Richard Ehrman, Robin Edwards, George Robinson, Tim Steel, Alice Thomson, Rachel Whetstone, Virginia Fraiser, Andrew Sells, Simon Wolfson. A guide to school choice reforms About the authors Daisy Meyland-Smith Natalie Evans Daisy is a research fellow in the Education Natalie Evans is Deputy Director of unit. Her work currently focuses on meth- Policy Exchange, responsible for the out- ods of introducing quality, competition and put and strategic direction of the research diversity into the education sector, particu- team. larly through the judicious use of profit. Prior to joining PX she was Head Prior to joining Policy Exchange, Daisy of Policy at the British Chambers of was a Press and Parliamentary Officer for Commerce. She has also previously been the Conservative group in the National Deputy Director at the Conservative Assembly for Wales. Research Department specialising in wel- She has a first class degree from the fare and economic issues. University of Bath, where she read Politics She has a degree in Social and Political with Economics. Sciences from Cambridge University. © Policy Exchange 2009 Published by Policy Exchange, Clutha House, 10 Storey’s Gate, London SW1P 3AY www.policyexchange.org.uk ISBN: 978-1-906097-42-4 Printed by Heron, Dawson and Sawyer Designed by SoapBox, www.soapboxcommunications.co.uk 2 Contents Executive Summary 4 Introduction 6 1. Academies 9 2. Sweden 23 3. USA 36 Lessons and recommendations 54 Appendix A 63 Appendix B 64 Appendix C 68 www.policyexchange.org.uk • 3 A guide to school choice reforms Executive Summary School choice reform will be a key issue at The Ten Key Lessons the next General Election, yet the debate We believe that it is possible to develop so far has focused on the theoretical argu- a programme that adopts the best aspects ments for and against creating a ‘schools of all three systems and could be imple- market’ by bringing more independent mented in this country. We draw ten key providers into the state system. The pur- lessons from our research: pose of this report is to learn the lessons of existing school reforms in England 1. Once established ISFS (Independent (the academies programme), Sweden (free State-Funded School) systems grow stead- schools) and the US (charter schools). ily and reforms are difficult to reverse: In The first three chapters assess the success the US there are now 4,568 charter schools of reforms in all three countries against educating 1,341,687 children. In Sweden, seven criteria which we believe a schools where there are fewer barriers to setting up market should meet in order to find the new schools, approximately 11.9% of chil- right balance between promoting innova- dren are educated in 3,302 free schools and tion, choice and diversity while maintain- pre-schools. ing accountability and quality control. It should be: 2. Most studies of attainment in ISFS show a positive effect 1. Demand-led 2. Easy to Enter 3. A system based on independent 3. Accountable state-funded schools moves naturally 4. Genuinely free towards federation: In Sweden, where 5. Financially consistent and stable there are few barriers to the creation 6. Politically stable of federations, the majority of schools 7. Fair are now run by for-profit companies and the vast majority of new applications None of the countries studied have are for this type of school. In the US achieved this balance yet, though in each there are much stronger barriers but still case the introduction of new providers to as many as 30% of charter schools are the system has brought benefits. The chart involved with management organisations below shows a summary of our findings: in some capacity. Easy to Genuinely Financially Politically Demand-led Accountable Fair enter free consistent stable UK X X USA /* /* X X Sweden X X X indicates that the evidence on whether a system passes the given test is mixed * These categories have been given two ratings because of the huge difference between states that have multiple-authorisers and are, therefore, more demand-led and accountable, and states that only allow school districts to authorise. 4 Executive summary 4. ISFS in federations seem to perform Our Recommendations better than one-offs Our first recommendation is that it makes sense to think of school choice 5. Allowing commercial companies to reform as a series of stages rather than set-up ISFS significantly boosts the a ‘big bang’. That way the system can potential for federations to develop: be developed in a coherent fashion For-profit groups are much more likely to rather than reactively in the face of unex- have the scale and ambition necessary to pected difficulties. create multi-school federations. Stage 1) Immediately reform the acad- 6. The authorising/commissioning emies programme by removing barriers process is crucial for the success of ISFS to entry and developing a transparent reform: The best approach, we argue, commissioning process. The DCSF would is that taken by US states which have identify, in a transparent manner, those multiple authorisers. This is because schools it wishes to become academies schools can approach more than one and initiate a public bidding process for authoriser, so reducing the risk to diver- sponsors. Clear criteria for bidders should sity, but authorisers themselves are in be stated, with preference given to those competition and so typically take a more already running successful academies. For- rigorous approach to accountability profit companies should be allowed to bid and oversight. to boost supply. 7. Existing local government providers Stage 2) Transfer the oversight of acad- should not be able to veto provision but emies to a variety of local and regional also should not be prevented from par- authorisers. As the academies programme ticipating in reforms: In all three coun- expands it will become impossible for the tries, most local authorities (or municipali- DCSF, or any national agency, to manage. ties or school districts) have initially been Instead the DCSF should look to approve hostile towards ISFS reforms. a range of ‘authorisers’ such as Local Authorities, elected mayors, universities 8. Accountability is difficult to man- and educational charities. age at a national level: The problem of entirely ignoring local government Stage 3) Introduce a national funding is that it is very difficult to author- formula. A clear and transparent national ise and oversee schools from central funding formula should be introduced government. as recommended in our report School Funding and Social Justice published last 9. Funding needs to be fair and year. All schools would receive per-pupil consistent funding direct from the government. 10. Choice does not necessarily lead Stage 4) Allow the network of authoris- to segregation but admissions policies ers to start commissioning new schools. have to be set carefully: In particu- Authorisers would be able to approve an lar, policies must remove any ‘early bird’ unlimited number of schools from provid- advantage which would favour the better- ers whose educational model had already informed middle classes and should, ide- proved successful. For entirely new pro- ally, incentivise providers to start schools viders an annual cap would be in place to in deprived communities. regulate supply. www.policyexchange.org.uk • 5 A guide to school choice reforms Introduction Arguments over school choice are likely no incentive to improve. Likewise a com- to feature strongly at the next General pletely free market would undoubtedly Election.