Tough choices for spending plans

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By Mike Baker When spending is under pressure, should education be protected?

September is an optimistic time in education: a new academic year, students embarking on courses, and teachers and lecturers revitalised after the summer break.

But this year, there is a dark cloud on the horizon. It is the prospect of spending cuts.

Public spending is already emerging as the issue for the general election. All seem to agree that public spending must be trimmed. The question is: when and how?

And should schools and universities share the pain? This week's release by the Organisation for Economic Co-operation and Development of its annual bumper book of statistics (Education at a Glance, 2009) provided some solid evidence to help politicians decide.

While the UK has increased education spending, many other countries have done so at a faster rate.

Overall spending on education rose by an average of 44% in real terms between 1995 and 2006 across all OECD member countries.

The data shows that Tony Blair's "education, education, education" was more than rhetoric. As a proportion of the nation's wealth, or GDP, education spending in the UK has risen from 4.9% in 2000 to 5.9% in 2006.

Spending priorities

However we still spend below the OECD average of 6.1% and are ranked 13th out of 34 countries in the education spending league table.

Iceland, Israel, USA, Korea, and Denmark all spend over 7% of their national wealth on schools, colleges and universities.

Another measure of the priority a country puts on education is its share of all public spending.

In the UK, just under 12% of all public expenditure goes to education. That is well below the OECD average of 13.3%, putting us in 23rd place.

Of course, more important than what goes into the education system, is what comes out. What are we getting for our money?

A good guide to a country's educational performance is the proportion of young adults who are gaining a university degree.

Now this is controversial. Ever since the government set a target of 50% of young people entering higher education, this ambition has been widely ridiculed.

Some descried it as "social engineering". Others said it devalued a university degree. Many a saloon bar expert (and a few media commentators) predicted graduates would end up serving fries in fast-food outlets instead of gaining graduate-level jobs.

Well, the picture shows that while UK graduate numbers have grown, they have risen faster elsewhere.

In 2000, the UK ranked third for the proportion of young people graduating from universities. By 2007, it had fallen to 13th.

Places shortage

Another set of statistics, reveals that in Canada, Korea, the Russian Federation, and Japan well over half of all adults aged between 25 and 34 now have a full university degree. In the UK it is 37%.

Incidentally, this summer's squeeze on university places seems to have changed the tone of media coverage. Instead of complaints about too many students enrolling on 'Mickey Mouse' courses, there is now concern about able candidates being deprived of university places.

Interestingly, David Cameron has shrewdly dropped the Conservatives' past opposition to the 50% participation target.

The OECD statistics also suggest that, despite the gloom-mongers, gaining a university degree still brings a financial benefit to both the state and the individual.

But universities are not the whole picture. What about schools?

The OECD figures show that while the UK spends well above average on each university student (about £9,250), the amount invested in each secondary school student (£5,250) is barely above the average of what other countries spend.

Primary school pupils attract even lower levels of absolute spending (about £4,600 per child) but, in relative terms, the UK invests well above the OECD average on young children.

However, something appears to be going seriously wrong in our school system, since the UK's record for young people staying-on in education is poor.

Only 71% of 15 to 19 year-olds are enrolled full-or part-time in education. This level has not improved since 1995.

Over the same period, other countries have persuaded growing numbers of 15-19 year olds to stay in education. As a result the UK has been overtaken, and is now ranked 31st out of 34 OECD countries.

If these young people were all getting jobs, it might not matter. But, according to Andreas Schleicher, author of the OECD report, the employment "penalties" for those without base-line qualifications (the equivalent of five good GCSEs) are "growing".

Indeed, as he says, "there is good evidence that this is the dividing line in the labour market".

This is borne out by the statistics for the so-called Neets (those not in employment, education or training).

In 2007, 6.4% of all 15-19 year olds in the UK were in this category. That is almost double the average for other countries.

While the debate over education spending should indeed dominate the political debate at the next election, the OECD figures suggest that we should, above all, focus on what to do about the Neets.