Thursday, 26 July 2012

How school reforms can go wrong

The Education Secretary Michael Gove is introducing some of the most radical reforms of the English school system in a generation and the changes have drawn substantial criticism from local authorities and teacher unions. Gove has been smarter than other cabinet members in formulating his reforms as a continuation of the Blairite reforms. And he is right to lay claim to Blair’s legacy insofar as his reform programme is in essence a speeding up of the removal of schools from local authority control, otherwise known as the Academy programme. 
The motifs are equally undisputed. Gove is on record that the main impetus for education reform is the dissatisfaction with local authorities which often keep up to 25% of the educational budgets for services that often lack transparency, accountability and, more importantly, do little else but increase the burden of bureaucratic control on school teachers without improving school performance. 
So far so agreeable. One main criticism of Gove’s reforms however has focussed on educational budgets for local authorities. Critics argue that removing schools from local authority control and fund them directly from the Department of Education may increase temporarily their available funding, but may undermine the financial viability of those schools that remain under local authority control. 
This is an important point since reductions in funding for those schools that are already underperforming is unlikely to improve their quality of teaching. In a way then, freeing some schools from local authority control and increasing their available budget may improve the lot of those kids who have the chance to enroll there while those staying behind in ordinary schools are likely to face deteriorating conditions. 
Now there is more evidence from the US in a recent piece of research about charter schools (similar to academies in the UK system). The New York Times, referring to the study, writes that the main effect of opening charter schools is that student numbers drop in normal schools, at times up to 10 percent which makes the provision of certain academic subjects unviable. Those schools that remain under local control often need to reduce their teaching portfolio and lay off teachers. 
On the face of it, this would undermine Gove’s claim that more competition in the educational sector through the introduction of free schools and academies lifts the quality of teaching for every pupil in the long term, no matter where he or she is enrolled. 
On the contrary the study seems to demonstrate that in the short term, students remaining in schools under local control are worse off, creating a division of quality between schools that more competition was supposed to eradicate. In order to make Gove’s reforms work for everyone, we may need to look carefully at the funding of those schools left behind. Allowing some schools to move ahead of the pack may be laudable but the reforms will ultimately fail if they fail to improve schools for everyone. 

Tuesday, 24 July 2012

When the money runs out for Germany

The credit rating agency Moody's has put Germany on a watch list. The agency is concerned that Germany may not be able to fulfill its credit obligations in the long term because of the continuing crisis in Greece and Spain.

As the German Finance Minister pointed out, Greece and Spain are quite different cases. Greece is simply refusing to cut its expenditure despite receiving billions of pounds from German taxpayers to pay exorbitant wages to its civil servants in a bloated government sector.

Spain however faces a different crisis. The Spanish government has introduced significant reforms and is on its way to join Portugal and Ireland as the poster boys of reform. However, the legacy that drags Spain into the morass is located in the banking sector and rooted in an unprecedented property boom that lasted almost a decade. Now, Spanish banks are sitting on unsustainable debt with people unable to service their mortgage payments.

So far, most observers have thought that Germany can deal with Greece whose economy represents only about 2 percent of the Eurozone economy as a whole. However, Spain is a different case. The Spanish economy is the fourth largest in Europe and there is no chance that German taxpayers can rescue the Spanish banks without facing significant credit downgrading themselves. So Germany is in a tricky situation. What to do?

It seems that no one would benefit if Germany's credit rating deteriorated. In fact, with German borrowing potentially costs going up, the ability of Germany to help others would be impaired significantly and the whole edifice of Eurozone stability would crumble within weeks.

That's why the German chancellor now needs to show that she can be strong in the face of adversity. She needs to insist that the Greek government either introduce significant wage cuts in the public sector to bring their expenditure under control or she has to insist that Greece leaves the Euro. Likewise there needs to be more fiscal discipline amongst other Eurozone countries and the French president Hollande has to be made understood that this is no time for economic stimuli in his country for which the German taxpayers would need to pick up the bill.

The most important step Chancellor Merkel can do however is to remain firm in refusing to allow the European Central Bank to directly issue so called Eurobonds, which would be another way of providing money to France without the responsibility strings attached. Only if these conditions are met will Germany be able to play the role of main creditor in the Eurozone rescue operation. And no one is served if Germany goes the way of France or Greece.

Saturday, 14 July 2012

When shoddy research is supposed to justify policy

There has been plenty of debate about why Germans are presumably unwilling to bail out other European countries in the Eurozone. And the German government has found itself increasingly under pressure to grant so-called Eurobonds, a financial instrument issued by the European Central Bank which in effect spreads responsibility for public debt in one country amongst all other countries in the Eurozone. Since many countries have amassed enormous public debt that they simply cannot service at this time, underwriting their national debts means nothing less than asking the German taxpayer to pay for the profligacy of other European nations. 
Now observers often note that Germans reject Eurobonds because they are afraid of inflation, a sentiment that is rooted in the painful experience of hyperinflation between 1920-23 in Weimar Germany. The Pew Center has now published some polling data that appear to show that Germans are willing to strike a more balanced approach, allowing some inflation in return for growth in the European economy. However, once you drill down into the results, the findings are not as robust as they may think. Here is what the Pew Center asked Germans in the polling what they are most concerned about (rank in order), offering respondents various options. The researchers from Pew found that ‘Germans are more concerned about unemployment (70% say it is a major threat) than they are about inflation (56%). Among the European nations ..., the Germans are the least fearful of rising prices’
They conclude that this may give Angela Merkel some room for manoeuvre and possibly support Eurobonds. But not so fast! Looking at the polling again, it seems that the researchers from Pew confuse a snapshot of German attitudes with their attitudes under conditions of future change. 
In other words, Germans may currently not be concerned about inflation exactly because they know that Angela Merkel stands fast and would not allow the European Central Bank to issue Eurobonds. If you wanted to know what Germans think about the danger of inflation once Eurobonds have been introduced, you would have to ask exactly that. So, it seems that it is the certainty with which the German government has conducted itself in the face of pressure that allows Germans to fear inflation less than unemployment. 

Thursday, 12 July 2012

Why Canada is so clean and Britain is so dirty

I'm currently in the beautiful city of Halifax, Nova Scotia. For those of you who are scratching the heads thinking where that is, it's in the most Eastern corner of Canada. With glorious sunshine and blue skies, this was a welcome change for me from the continuous rain and drizzle in Cardiff.

It's been almost 20 years now that I have been here and I am probably looking at Canada in a different way, with more than 16 years of experience of life in Wales. One of the things that strike you instantly as you enter Halifax is the enormous space. Everything is wider and broader and bigger. Although the lack of space in Britain may simply be due to its population density (something it shares with other European countries) and geographical condition, it is here in Canada more than anywhere else that some aspects of British life are brought into sharp relief.

One of those sharp differences I noticed as I arrived in Halifax is the breathtaking cleanliness of the city. The litter on British streets is legendary and much commented on, but in a sense I never got used to it and still believe that the way many British people litter their inner cities is a disgrace. The difficult question is however how to change it. The fact is that littering is done by people and people's behaviour is hard to change. Or is it?

Perhaps not so, and the Canadian experience may tell us why. Two things 'conspire' to make Halifax a clean city. Strong social control and relentless enforcement of rules through effective policing. The first is remarkable and easily noticeable as soon as you walk down the streets and reach a traffic light. There is simply no one who dares to cross a road at a red light. Anybody stepping out of line chances to be told off by other pedestrians. Scientists call it social control and it is something, for better or worse, that makes our lives in a city that much more ordered.

The other aspect however is effective policing and exorbitant fines for littering or anti-social behaviour. None of that exists in Britain and it makes life at home much more difficult I think. Remember the endless discussions about families with children out of control and ASBOs? While the politicians argue about the best regulatory framework to bring people into line, they might just be missing the big picture. There is a fundamental permissiveness in British society that tolerates anti-social behaviour or conduct that is thought unacceptable by a large majority of people. It's simply the failure to articulate that certain behaviour is not right that allows people to behave the way they do.

Britain differs from other European countries in this respect too. Try to cross the road in Cologne or Heidelberg at a red light and you know what I mean. The disapproval by others is instant, visible and possibly even audible. And so it is in here in Halifax. This may not be to everyone's taste but the reward is obvious. It is a breathtakingly clean city with an order that you couldn't find in any similarly sized British town.

The Welsh Health Minister in trouble

A minor scandal is rocking the boat of the Welsh Government at the moment. The health minister Lesley Griffiths has commissioned a report on the restructuring of the National Health Service in Wales. The author of the report makes a strong case for removing some services from local hospitals. The argument is that providing the full range of health services in small local hospitals is financially unsustainable in the long term. The urgency of health reforms is undisputed. The 7 health boards have already a projected shortfall this year of £240 million. Since the Welsh Government cannot raise taxes and its core budget is fixed by an annual grant from the Chancellor, this money has to be taken from contingency funds or come from other expenditure areas, such as education. 
However, here is the problem. The author of the report into the restructuring of the health services seems to have had some doubts about his own findings. At some point he contacted the Welsh Government, arguing that the case for the closure of some hospital services in some areas was not as strong as previously thought and asked for ‘better evidence to make the case’. The relevant email exchange has become public and the opposition has cried foul. It seems, so the opposition parties argue, the report was anything but independent if its author thought it necessary to ask the government to provide additional data to make the case that the government wanted him to make. 
Hospital closure can be fatal to political careers, and Lesslie Griffiths is not the first politician to get into hot water for her desire to concentrate some hospital services in bigger population centres. However there is an irony here in the fact that she has consistently, and probably bravely, made the case for health service reform for which she is now criticised while her predecessor Edwina Hart, who was widely seem as ineffectual and out of depth, continuously dodged this issue when in the ministerial seat. 
The opposition parties are equally well advised to tread carefully around this issue. While it is right to criticise the minister for declaring a report to be independent and impartial if it was anything but, they may want to be careful not to undermine the case for reform overall of the health service in Wales. The fact is that the Welsh NHS cannot continue the way it operates at the moment. Welsh politicians of all colour recognise the need for radical reform yet their populist instincts may tempt them to argue against it. In the long term, this serves no one, least of all the people in Wales.