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The Funding of School Education
Connecting Resources and Learning
Launch Seminar
26 June 2017, Brussels
Deborah Nusche & T...
• Purpose: to explore what policies best ensure that school
resources are effectively used to improve student outcomes
• C...
Source: OECD database, Historical population data and projections (1950-2050)
Historical and projected development of scho...
4
Financial
resources
Physical
resources
Human
resources
Other
resources
The OECD School Resources Review
A comprehensive ...
The OECD School Resources Review
Methodology
Analysis
Analytical framework
Review of research
Qualitative data collection
...
6
The OECD School Resources Review
Participation and collaboration
• 18 countries are currently participating in the proje...
7
The OECD School Resources Review
Current participation levels
The Funding of School Education:
Connecting Resources and Learning
• The Review looks at resource issues from an educational
perspective
– Taking account of broad educational goals, differe...
Source: OECD (2012) PISA 2012 Database, Tables IV.1.6 and IV.2.2
The cost of grade repetition
0
2
4
6
8
10
12
14
0
10000
2...
Achieving efficiency & equity objectives
Avoiding the high costs of educational failure
Change in grade repetition rates b...
Source: OECD (n.a.) Education at a Glance 2016 Database, Educational finance indicators
Expenditure per student by educati...
• The Review looks at resource issues from an educational
perspective
• The focus is on achieving efficiency alongside qua...
Governing
school
funding
Distributing
school
funding
Planning
and
evaluating
the use of
funding
14
Key elements in school ...
• Many actors contribute to raising and managing funds
– Over 90% of funds come from public sources (but private funding i...
On average, sub-central governments are the
most important spenders in school education
16
0
10
20
30
40
50
60
70
80
90
10...
But governance arrangements vary across
countries
17
0
10
20
30
40
50
60
70
80
90
100
UnitedStates
Norway
Poland
Finland
C...
Municipal fragmentation in international
comparison
18
Source: OECD (2017), "Subnational government structure and finance"...
Schools may have considerable responsibility
for managing their own budgets
19
0
10
20
30
40
50
60
70
80
90
100
CzechRepub...
Private schools receive considerable
amounts of public funding
20
0
10
20
30
40
50
60
70
80
% Lower secondary education Pr...
Emerging tensions
Decentralisation (Re) Centralisation
Autonomy Capacity
Diversity Equity
Private Public
Governance of sch...
• Connect funding strategies to education goals
• Align roles and responsibilities in complex funding systems
• Build capa...
Countries need to consider a set of guiding questions to design funding
models that fit governance structures:
• Which res...
Source: OECD (n.a.) Education at a Glance 2016 Database, Educational finance indicators: Expenditure by resource category
...
• Administrative discretion is based on an individual
assessment that each school needs
• Historical costs consider histor...
• Two main approaches
– Including additional funding in the main allocation mechanism
(e.g. through weightings in a fundin...
• Systems may direct additional funding to certain geographical
areas or to the actual population in each school
Area-base...
• Availability and quality of data is a key concern
• Trade-off between simplicity / transparency and accuracy / fairness
...
Emerging tensions
Formula Discretionary
Regular Targeted
Student-focused Area-focused
Distribution of school funding
How t...
• Connect funding strategies to education goals
• Align roles and responsibilities in complex funding systems
• Build capa...
Key question: Who should be held accountable and for what aspects?
Factors to consider:
• Division of responsibilities, ca...
Central level
Sub-central
level
School level
Who can be involved in evaluating the use
of school funding?
- Processes as p...
Public availability of budgetary information
Source: OECD (2017), The Funding of School Education: Connecting Resources an...
Public availability of budgetary information
Source: OECD (2017), The Funding of School Education: Connecting Resources an...
Emerging tensions
Accountability Trust
Focus on compliance Focus on improvement
Equity funding Equity outcomes
Transparenc...
• Connect funding strategies to education goals
• Align roles and responsibilities in complex funding systems
• Build capa...
Connect
funding
strategies to
education
goals
Match
funding to
learner
needs
Evaluate for
continuous
improvement
37
The Fu...
38
Thank you for your attention!
All publications of the School Resources Review can be found at:
www.oecd.org/edu/school/...
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The Funding of School Education - Connecting Resources and Learning

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Launch Seminar, 26 June 2017, Brussels with Deborah Nusche & Thomas Radinger, OECD, Directorate for Education and Skills
School systems have limited financial resources with which to pursue their objectives and the design of school funding policies plays a key role in ensuring that resources are directed to where they can make the most difference. As OECD school systems have become more complex and characterised by multi-level governance, a growing set of actors are increasingly involved in financial decision-making. This requires designing funding allocation models that are aligned to a school system’s governance structures, linking budget planning procedures at different levels to shared educational goals and evaluating the use of school funding to hold decision makers accountable and ensure that resources are used effectively and equitably.






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The Funding of School Education - Connecting Resources and Learning

  1. 1. The Funding of School Education Connecting Resources and Learning Launch Seminar 26 June 2017, Brussels Deborah Nusche & Thomas Radinger Directorate for Education and Skills
  2. 2. • Purpose: to explore what policies best ensure that school resources are effectively used to improve student outcomes • Context: A range of global developments have increased attention to school resource use – Global financial crisis – Demographic developments The OECD School Resources Review (2013 - ) Background: Why Look at School Resources?
  3. 3. Source: OECD database, Historical population data and projections (1950-2050) Historical and projected development of school age population 1990-2020 (1990 = 100) 50 60 70 80 90 100 110 120 1990 1995 2000 2005 2010 2015 2020 2025 50 60 70 80 90 100 110 120 1990 1995 2000 2005 2010 2015 2020 50 60 70 80 90 100 110 120 1990 1995 2000 2005 2010 2015 2020 0 to 4 years 5 to 9 years 10 to 14 years 15 to 19 years Lithuania BelgiumEU (27 countries) The OECD School Resources Review (2013 - ) Background: Why Look at School Resources?
  4. 4. 4 Financial resources Physical resources Human resources Other resources The OECD School Resources Review A comprehensive approach
  5. 5. The OECD School Resources Review Methodology Analysis Analytical framework Review of research Qualitative data collection Country background reports (following a common framework) Country reviews OECD-led review visits Stakeholder interviews External experts Tailored policy advice for individual countries Synthesis Policy conclusions based on comparative and country- specific work 3 synthesis reports - School funding - 2017 - School offer - 2018 - Human resources - 2019 All documents are available at: http://www.oecd.org/education/schoolresourcesreview.htm
  6. 6. 6 The OECD School Resources Review Participation and collaboration • 18 countries are currently participating in the project • Additional country reviews are still possible. The project has capacity to conduct further reviews in 2018 and potentially 2019. • A partnership with the European Commission was established for this Review. The financial support of the EC: – Covers part of the participation costs of countries which are part of the EU’s Erasmus+ programme – Contributes to the preparation of the series of thematic comparative reports to the benefit of all countries
  7. 7. 7 The OECD School Resources Review Current participation levels
  8. 8. The Funding of School Education: Connecting Resources and Learning
  9. 9. • The Review looks at resource issues from an educational perspective – Taking account of broad educational goals, different governance contexts and the importance of institutional arrangements in change processes • The focus is on achieving efficiency alongside quality and equity goals. – Investing early, reducing educational failure, enhancing teacher quality, matching demand and supply The Funding of School Education How does the study look at school funding?
  10. 10. Source: OECD (2012) PISA 2012 Database, Tables IV.1.6 and IV.2.2 The cost of grade repetition 0 2 4 6 8 10 12 14 0 10000 20000 30000 40000 50000 60000 Japan0.0 Norway0.0 Estonia3.5 Iceland1.2 Israel1.9 UnitedKingdom2.7 Slovenia3.4 Poland4.2 CzechRepublic4.9 Korea3.6 Sweden4.0 Finland3.8 Denmark4.7 NewZealand5.4 SlovakRepublic7.6 Australia7.5 Canada8.0 Ireland8.6 UnitedStates13.3 Austria11.9 Italy17.1 Portugal34.3 Germany20.3 Spain32.9 France28.4 Netherlands27.6 Belgium36.1 Total annual cost per repeater (USD, PPPs) Total annual cost, relative to total expenditure on primary and secondary education (%) Achieving efficiency & equity objectives Avoiding the high costs of educational failure
  11. 11. Achieving efficiency & equity objectives Avoiding the high costs of educational failure Change in grade repetition rates between 2009 and 2015
  12. 12. Source: OECD (n.a.) Education at a Glance 2016 Database, Educational finance indicators Expenditure per student by educational institutions, relative to expenditure in primary education (Primary = 100) 20 40 60 80 100 120 140 160 180 CzechRepublic France Netherlands Austria Portugal NewZealand Germany Ireland Australia Belgium Turkey Spain Finland Switzerland Japan EU21 UnitedStates OECD-Average Norway UnitedKingdom Mexico Luxembourg Korea Italy Sweden Latvia SlovakRepublic Denmark Slovenia Lithuania Poland Annualexpenditureperstudent(Primaryeducation=100) Secondary education ECEC Achieving efficiency & equity objectives Avoiding the high cost of educational failure
  13. 13. • The Review looks at resource issues from an educational perspective • The focus is on achieving efficiency alongside quality and equity goals. • The design of school funding policies plays a key role in directing funding to where it matters The Funding of School Education How does the study look at school funding?
  14. 14. Governing school funding Distributing school funding Planning and evaluating the use of funding 14 Key elements in school funding policies Who? How?For what?
  15. 15. • Many actors contribute to raising and managing funds – Over 90% of funds come from public sources (but private funding is growing) – Funds are typically raised by 2 or 3 different levels of governance – International funds increasingly contribute to funding education – Schools may contribute to raising their own funds – Private actors have become important end users of public funding 15 Governance of school funding Who pays and who decides?
  16. 16. On average, sub-central governments are the most important spenders in school education 16 0 10 20 30 40 50 60 70 80 90 100 Switzerland UnitedStates Korea Japan Argentina Canada Poland Norway Australia Germany Brazil Finland CzechRepublic Spain Latvia Belgium Lithuania Iceland Mexico SlovakRepublic Austria OECDaverage UnitedKingdom EU22average Chile Estonia Israel France Portugal Italy Ireland Luxembourg Turkey Colombia Hungary Slovenia Netherlands % Sub-central level transfers to schools Initially transferred from the central level Source: OECD (2016), Education at a Glance 2016: OECD Indicators, Table B4.3 Share of final funds allocated to schools by sub-central government (2013, ISCED 1-4)
  17. 17. But governance arrangements vary across countries 17 0 10 20 30 40 50 60 70 80 90 100 UnitedStates Norway Poland Finland Canada Latvia Lithuania Iceland SlovakRepublic Korea UnitedKingdom Argentina Australia Japan Spain Mexico Germany Belgium CzechRepublic Switzerland Austria NewZealand Netherlands Hungary Slovenia Turkey Colombia Luxembourg Ireland Italy Portugal France Israel Estonia Chile OECDaverage % Countries where regional /state authorities allocate most of the funding Countries where central authorities allocate most of the funding Countries where local authorities allocate most of the funding Source: OECD (2016), Education at a Glance 2016: OECD Indicators Proportion of funding allocated to schools by government level, after transfers between government levels (2013)
  18. 18. Municipal fragmentation in international comparison 18 Source: OECD (2017), "Subnational government structure and finance", OECD Regional Statistics (database).
  19. 19. Schools may have considerable responsibility for managing their own budgets 19 0 10 20 30 40 50 60 70 80 90 100 CzechRepublic NewZealand Estonia Iceland Latvia Denmark UnitedKingdom Netherlands Sweden Australia SlovakRepublic Norway Lithuania Luxembourg Finland France Spain Belgium Slovenia OECDaverage Poland UnitedStates Chile Ireland Canada Portugal Switzerland Japan Israel Korea Mexico Hungary Greece Turkey Austria Italy Germany % Percentage of students in schools where the principal has considerable responsibility for formulating the budget (2015) Source: OECD (2016), PISA 2015 Results: Policies and Practices for Successful Schools (Volume II), Table II.4.1
  20. 20. Private schools receive considerable amounts of public funding 20 0 10 20 30 40 50 60 70 80 % Lower secondary education Primary education Upper secondary education Percentage of students enrolled in government dependent private schools (2014) Source: OECD (n.a.) Education at a Glance 2016 Database, Share of students enrolled by education level
  21. 21. Emerging tensions Decentralisation (Re) Centralisation Autonomy Capacity Diversity Equity Private Public Governance of school funding Who pays and who decides?
  22. 22. • Connect funding strategies to education goals • Align roles and responsibilities in complex funding systems • Build capacity for strategic school funding Governance Who? Distribution How? Planning/ Evaluation For what? 22 The Funding of School Education Main pointers for policy
  23. 23. Countries need to consider a set of guiding questions to design funding models that fit governance structures: • Which resource categories are we looking at? • What basis is used to fix amounts allocated to schools? • What balance to strike between the main allocation mechanism and additional grants? • How to determine differential funding needs of schools? • Which indicators are best suited to meet student needs? Distribution of school funding How to design allocation mechanisms?
  24. 24. Source: OECD (n.a.) Education at a Glance 2016 Database, Educational finance indicators: Expenditure by resource category Current and capital expenditure as a percentage of total expenditure in secondary educational institutions (ISCED 2-3, 2013) Over 90% of annual spending is for current expenditure (and 77% of this on staff compensation) 0 10 20 30 40 50 60 70 80 90 100 % Current expenditure Capital expenditure Current expenditure OECD average Staff compensation Staff compensation OECD average
  25. 25. • Administrative discretion is based on an individual assessment that each school needs • Historical costs consider historical expenditure to calculate the allocation for the following year. • Bidding and bargaining involve schools responding to open competitions or making a case for additional resources • Formula funding involves the use of objective criteria with a universally applied rule to establish the amount of resources each school is entitled to 25 What basis is used to calculate the amount of funding allocated to schools?
  26. 26. • Two main approaches – Including additional funding in the main allocation mechanism (e.g. through weightings in a funding formula) – Providing additional resources through targeted programmes (external to the main allocation mechanism) How to ensure that funding is allocated equitably across schools in need of additional resources?
  27. 27. • Systems may direct additional funding to certain geographical areas or to the actual population in each school Area-based funding aims to address additional negative effects of a concentration of disadvantage Student-based funding aims to adapt funding levels to the needs of the actual population in each school How to determine differential funding needs of schools?
  28. 28. • Availability and quality of data is a key concern • Trade-off between simplicity / transparency and accuracy / fairness School-based data Census-based data • National research can be used to choose the best combination of indicators Which indicators are best suited?
  29. 29. Emerging tensions Formula Discretionary Regular Targeted Student-focused Area-focused Distribution of school funding How to design funding mechanisms?
  30. 30. • Connect funding strategies to education goals • Align roles and responsibilities in complex funding systems • Build capacity for strategic school funding Governance Who? • Develop a stable and transparent system • Match funds to learner needs • Strike a balance between regular and targeted funding Distribution How? Planning/ Evaluation For what? 30 The Funding of School Education Main pointers for policy
  31. 31. Key question: Who should be held accountable and for what aspects? Factors to consider: • Division of responsibilities, capacity for financial management, collaboration across levels of control, comparability of data • Multiple school accountability and stakeholder involvement in evaluation Evaluating the use of school funding in complex governance systems Horizontal Bottom-up Vertical Accounting and Internal control Reporting External control
  32. 32. Central level Sub-central level School level Who can be involved in evaluating the use of school funding? - Processes as part of public governance - Involvement of education authorities - Benchmarking systems - Public sector reforms - Performance audits
  33. 33. Public availability of budgetary information Source: OECD (2017), The Funding of School Education: Connecting Resources and Learning, OECD Publishing, Paris.
  34. 34. Public availability of budgetary information Source: OECD (2017), The Funding of School Education: Connecting Resources and Learning, OECD Publishing, Paris.
  35. 35. Emerging tensions Accountability Trust Focus on compliance Focus on improvement Equity funding Equity outcomes Transparency Administrative burden Evaluation of school funding For what are funds used?
  36. 36. • Connect funding strategies to education goals • Align roles and responsibilities in complex funding systems • Build capacity for strategic school funding Governance Who? • Develop a stable and transparent system • Match funds to learner needs • Strike a balance between regular and targeted funding Distribution How? • Be transparent about use of funds for system goals • Bring together information on funding, processes and outcomes • Pay particular attention to evaluating equity outcomes • Use evidence for future budget planning Planning/ Evaluation For what? 36 The Funding of School Education Main pointers for policy
  37. 37. Connect funding strategies to education goals Match funding to learner needs Evaluate for continuous improvement 37 The Funding of School Education Main pointers for policy
  38. 38. 38 Thank you for your attention! All publications of the School Resources Review can be found at: www.oecd.org/edu/school/schoolresourcesreview.htm For further information: deborah.nusche@oecd.org thomas.radinger@oecd.org

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