Wednesday, September 05, 2007

Cynic Reviews State Education Productivity

Education productivity- up or down? Take your pick

The Office for National Statistics has just published its updated estimates for productivity in state education (excluding most tertiary education). As has been widely reported, despite the commissars' best efforts to have the figures fudged (eg see here), the picture remains dire.

The ONS reckons that in the decade to 2006, overall spending increased in real terms by 25.3% (technical aside- regular BOM readers may wonder why that's less than the 60% quoted here: essentially it's because the ONS has deflated cash spending using a specific index of educational input prices, whereas we simply used the Treasury's GDP deflator: in other words, educational input prices- especially salaries- have risen much faster than the general price level... another Simple Shopper triumph).

Against that, they say that output has risen by 27.1%, implying that productivity is up by a princely 1.5%, or 0.1% pa.

Well, that's not too bad, you say. OK, productivity in the private sector- even under Gordo- has increased by a massively more impressive 2% pa. But at least education productivity is up, suggesting that Tyler and fellow cynics have been far too pessimistic (eg here).

In fact, teachers' leaders reckon even the ONS is too pessimistic. Martin Johnson, acting deputy general secretary of the Association of Teachers and Lecturers, asks:

"Aren't economists the people who know the price of everything and the value of nothing? This report is simplistic economics."

Actually, we thought it was cynics who got muddled over price and value. Still, cynics, economists... pretty much the same thing really. You certainly wouldn't get marked down in today's GCSE for confusing the two (or even confusing both with an elephant).

But the ONS report is certainly not simplistic. In fact, its 52 dense pages go through no end of Jesuitical contortions to nudge that productivity figure above zero. As ordered by Gordo.

The real facts are these.

First, all of the ONS's estimated productivity growth came before Gordo turned on the spending taps. Since he departed from the Tories' prudent spending plans in 1999 (see here), the ONS says productivity has slumped by 4.5%. The cash splurge and all those fancy top-down strategies have meant worse value for money (productivity being an excellent proxy).

Second, through the whole decade, the actual quantum of pupil hours taught has only increased by 3.8%. Which implies that productivity has actually declined by 17.2%- ie inputs have increase by 25.3% (see above), but outputs have only increased by 3.8%.
The reality is that the ONS has only been able to crank up its output estimate from 3.8% to 27.1% by asserting that the quality of that "pupil hours" output has increased. And increased quite massively, by 22.6%.
Quality? How do you measure that?
With great difficulty.
But the ONS has chosen to use GCSE results. Yes, those GCSEs that most people now reckon are hardly worth the papur there ritun on. Here's the key chart:

It's a magic bullet. If you are prepared to say that those soaring chart lines represent a real improvement in quality, then hey presto, you no longer have falling productivity. Instead of plunging by 17.2% it now just about stays afloat on 1.5%.
I don't know how dumb they think we are, but the truth remains the same: after a doubling of education spending in cash terms, a 60% increase in real terms, and a 27% increase in "input" terms, we are actually getting worse value than ever.
PS In defence of the ONS (this bit under the incredibly brainy and straight Joe Grice), you can tell reading their report that they feel very uncomfortable about all these fudges forced on them by the commissars. Indeed, they actually quote the Durham University reasearchers who are documenting the declining standards of public exams (eg see this blog), and they wring their hands over the inadequacy of the current "quality" methodology. Yet another reason why the ONS still needs more independence.

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