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Education Policy Trends: School Choice and Private Finance Presentation to Canterbury Deputy and Assistant Principals’ Regional Conference Hanmer Springs, New Zealand 5 August 2004. Norman LaRocque [email protected] The Education Forum.

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Education Policy Trends: School Choice and Private FinancePresentation to Canterbury Deputy and Assistant Principals’ Regional ConferenceHanmer Springs, New Zealand5 August 2004

Norman [email protected]


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The Education Forum

  • Independent public policy organisation based in Wellington – education focused.

  • 13 members – ECE, schools, tertiary, business.

  • Aim is to influence policy through various means – independent view.

  • Website, monthly newsletter, visits by educational experts, research on education policy issues, newspaper articles, books, reports, submissions to government, media releases, etc.

  • Focus is on market-based solutions to education policy issues.

  • Website:

    • OpEds

    • Subtext newsletter

    • Hot Topics

    • Briefing Papers

    • Books, reports

    • Both Sides Now.


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Choice-based Policy Innovations

  • Developing and developed countries are making use of a range of innovative policies at the school level.

  • These policies include:

    • Demand-side financing policies such as vouchers and scholarships

    • Charter schools

    • Private management of public schools

    • Home schooling

    • Private Finance Initiatives.


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Demand Side Financing

  • More than 30 countries using vouchers or other demand-side financing mechanisms to finance education - vary from small/targeted to full/national programmes:

    • Denmark, Ireland, Netherlands, Australia, Ontario, Sweden – public funding of private schools

    • Chile – national voucher programme

    • USA – Milwaukee, Cleveland, Florida operate voucher schemes, many states have tuition tax credits

    • Philippines and Cote d’Ivoire – operate large voucher schemes.

  • Voucher programmes in USA are controversial, but comparatively small in size (13,000 students in Milwaukee, 100,000 private scholarships, etc).

  • No Child Left Behind – students in schools identified as needing improvement for 2+ years must be offered Supplemental Educational Services (SES) such as tutoring – Federal programme, $2 Billion budget, 1,000 providers offering SES.

  • Some growth in USA – Zelman decision in 2002, Washington DC, Colorado?

  • Larger programmes in other countries – far less controversial (eg Netherlands, Ireland).

  • New Zealand examples – TIE, Independent school subsidies, integrated school funding, early childhood education funding, tertiary education funding, health vouchers (new).

  • Vouchers – breaking up that old (Democratic) gang of mine - Black Alliance for Educational Options, Hispanic Council for Reform and Educational Options?


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Charter Schools

  • Public schools that are freed from much of the regulation that applies to standard public schools (eg. zoning, curriculum, industrial relations), in exchange for accountability requirements.

  • Most have specialist focus or mission – at-risk kids, arts, science, etc.

  • Publicly funded, but not for capital – schools remain free to students.

  • Fast growing area - first Charter school opened early 1990s. Now have 2,250 schools with some 700,000 students.

  • Bi-partisan political support.

  • Management can be contracted out to for-profit/not-for-profit providers.

  • Virtual Charter schools – link to home schooling.

  • Weak ones are being closed down.


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Government Assistance to Private Students and Teachers in the Philippines

  • GASTPE main financial assistance scheme – high school and tertiary levels:

    • Educational Service Contracting Scheme – govt contracts with private schools/voucher

    • Tuition Fee Supplement (being wound down) - voucher

    • PESFA (tertiary) – student loans, college faculty development fund.

  • High school assistance much more significant than tertiary:

    • ESC + TFS = 400,000 students assisted in 2002/03

    • PESFA = 15,000 in 2001/02.

  • ESC recipients increasing, TFS recipients declining.

  • ESC numbers increased by 50,000 in 2004/05 and per-student payment increased to PhP4,000 (from PhP2,500).

  • Preschool Service Contracting Scheme – targeted, small scale assistance to preschool sector – 25,000 children assisted.

  • Iskolar scheme – new – free post-secondary education for one child from each poor family.


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Demand Side Financing the Philippines in the Netherlands

  • Nationwide school choice scheme - free choice of public or independent school.

  • No zoning - students can attend any school.

  • Liberal supply side. Non profits and parents can set up schools if minimum requirements are met.

  • Diverse supply of schools.

  • 70% of primary and secondary students attend independent schools receiving government funds.

  • Topping up of fees not allowed.

  • Schools with students from lower income areas receive more government money.


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Government Sponsorship of Students at Private Institutions in Cote d’Ivoire

  • Government sponsors students to attend private schools given lack of places at public secondary schools. Key elements of the scheme are:

    • private schools are paid on a per-student basis. Payment rises with student's education level ($US200+)

    • students in lower/upper secondary, as well as technical and professional training are eligible. Applies to both religious and secular “chartered” schools

    • placement of students is linked to school performance.

  • In 1997, the Government paid out $US10.3 million to subsidise/sponsor over 162,000 students in private schools.

  • In 1995/96, 40% of students in private institutions were state sponsored. Private primary schools receive subsidies.


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Demand Side Financing in in Cote d’IvoireDenmark

  • Nationwide programme of free choice of independent school. Parents who opt out of public system get 80-85% covered by the government.

  • No free choice at public primary and secondary grammar schools - zoning prevails.

  • Free choice for students attending upper secondary vocational schools.

  • Liberal supply side - parents and non-profits can set up schools if they meet requirements.

  • Poorer families can apply for a place at an independent school and have their fees paid.


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Private Management of Public Schools in Cote d’Ivoire

  • Contract schools involve school boards contracting directly with Education Management Organisations (EMOs) to operate public schools. Schools remain ‘free’ to students.

  • In USA, EMOs operate in poorest areas.

  • Politically and financially ‘challenged’.

  • Developed country examples include Edison Schools and others in the USA, Global Education Management Systems and Education Action Zones in the UK.

  • Also, a number of examples of this approach in developing countries:

    • Fe y Alegria in South America

    • Municipal Schools of Bogota

    • Sabis Schools in Middle East, UK and USA

    • Transformed Schools in China.

  • In New Zealand, Alternative Education is an example of school contracting:

    • Introduced 1997

    • Schools may contract with private providers to teach ‘alienated’ students

    • 3,000 teenagers

    • $11,000/student

    • 200 providers.


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Edison Schools in the USA in Cote d’Ivoire

  • Edison Schools formed in 1992.

  • Largest for-profit operator of public schools in the USA.

  • 130 schools, with 132,000 students.

  • Edison Schools operate in low-income areas. Schools are managed under a contract with the local school board.

  • Edison Schools remain free to the student (no tuition fee).


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Fe y Alegria Schools in South America in Cote d’Ivoire

  • Fé y Alegría (FyA) established in Venezuela in 1955 by Jesuits. Schools in 13 countries, 500,000+ students, 22,000 staff. Offer formal education and technical training.

  • Majority of students from poor families. Government provides funding to FyA schools - to meet either operating/set-up costs.

  • In 1998, the Government of Venezuela announced that FyA would take over three failing public schools in two poor Caracas neighbourhoods. FyA will lease buildings for 50 years and the schools under an agreement with the government. Teachers to be paid by the state. The schools will offer a complete education system including higher education.


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Home Schooling in Cote d’Ivoire

  • Home-schooling in USA is significant growth area.

  • Approximately 2% of school age children are being home schooled in the USA.

  • 1.1 million home schooled children in USA in 2003 – up 29% since 1999.

  • Home schooling now ‘mainstream’ in USA.

  • Up to 170,000 students being home schooled in the UK.


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Policy Innovations: School Evaluation Services in Cote d’Ivoire

  • Private sector providing information to assist school districts and parents to make more informed schooling decisions (eg. Standard and Poor’s).

  • Web based information and decision-making tool for parents, educators, policymakers and others.

  • School evaluation services (SES) provide reports on schools districts: strengths, challenges/concerns and other key factors.

  • SES analyses academic, financial, and demographic indicators and trends.


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Private Finance Initiatives in Cote d’Ivoire

  • Governments in the UK, Australia and elsewhere making use of private sector to build and operate schools and related infrastructure (eg. hostels).

  • Form of Public Private Partnership.

  • The UK’s Private Finance Initiative (PFI) is the most prominent of these programmes. Also used in Australia, Canada.

  • PFIs are now the main source of funding from UK Department for Education and Skills for new or replacement schools.

  • Between 1990 and 2003, 102 education PFIs in UK, worth £2 Billion.

  • Operate on a ‘concession’ basis – private sector builds a school and leases it to the government for a set period (eg. 25 years), then turns the building over to the government at the end of that period.

  • Also used at tertiary education level – UK, Australia (University of Southern Queensland, Swinburne University of Technology).


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www.educationforum.org.nz in Cote d’Ivoire



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Public spending on education/GDP*, Selected Countries, 2000 countries, 2001

*: Primary, secondary and post-secondary non-tertiary education



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