__ LIPS – Leading in Public Schools

The Deputy Prime Minister Julia Gillard yesterday announced a review of the model for funding schools in Australia.  This will take place in the run up to the next Federal election and, predictably, it has made some sectors very anxious. In an attempt to hose down this anxiety, Julia Gillard has maintained that no school will end up poorer as a result of the review.

Various sectors of the educational community have been very vocal in the last months regarding the Federal transparency agenda and the MySchool website in particular.  This site, rather than being static, will continue to evolve, with more and more information being added.  As well as the very important addition of growth data, this year will also see the addition of much more disclosure of all sources of funding for the private sector.  When this is added, it will allow even more clarity in the overall picture across sectors of schooling.  As the piece at the end of this post demonstrates, we haven’t necessarily been shown the full picture before.

Many sources are revisiting the ideological debates surrounding testing agendas and the potential for a narrowing of curriculum, loss of holistic approaches creation of league tables and a perception of stifling creativity.  Some of the loudest voices in this actually come from the non-government sector.

In an avowed attempt to mitigate the negative impact of the use of data to create league tables, unions have called on teachers in public schools to refuse to administer tests.

In the non-government sector, while there’s plenty of rhetoric about holistic education and the evil of a league table environment, there’s absolutely no suggestion at all of a similar form of action against the testing program.

Despite the finely argued ideological opposition, the overwhelming outcome of this action will simply be a reinforcement, in the court of public opinion, that public school teachers and schools have things to hide.

Our public schools are doing some wonderful things for children from the entire spectrum of our local communities.  This year, we have the opportunity to publish the extent to which this is occurring by having the data available which shows growth.  In the years to come, we also have the chance to track and verify this progress, assisted by a range of National Partnership programs which focus heavily on providing even greater access and opportunity for children from low SES communities.

Far from ‘protecting’ low SES communities from the stigma which many fear will flow from the media creation of league tables, we may actually lose the ability to demonstrate that additional resource has meant that our hard work is paying dividends: that the fundamental tenet of free and secular public education can deliver a fair go for all, especially as increasingly fairer funding models are applied.

Let’s ensure that we think through the balance between the need to ‘send messages,’ or to advocate for ideological stances, and the possibility that a broad based agenda of transparency and reporting of a wide range of measures, including NAPLAN data can actually assist in the movement toward a funding model which is more of a level playing field for all.

NAPLAN, approached correctly is no more than a ‘point in time snapshot’ of how we are travelling toward our objective of providing maximum opportunity for every child to grow their potential and to assist us to realistically look at how we can get into the business of ‘planning school’ as a place where this can occur.  Without the snapshot, taken at regular intervals, we have no means, other than asking a sceptical public to ‘trust us, we know best,’ to highlight the quality of the work we do.

As a comment on the current model of funding for schools, the piece below was written a number of years ago, using references to source material which was available at the time.

Having your cake and eating it too

Imagine running a business where you could apply the following formula :

• Assume that you have no funds carried forward, and no debts: you are starting from scratch.  Despite having the capital value of a fully functional site, you are starting with a zero budget.
• Estimate what it will cost you to operate over the next year: salaries, maintenance, contracted services, risk management etc.
• You are now well below zero in the value of your business.  You need to plan to get ahead, and to make sure that you have an attractive product. (All within a highly competitive area and within a narrow market where the consumer described ‘indicators of quality’ are not necessarily a construct contemporaneous with other general societal trends.)
• To stay competitive, in a pro-choice environment, you need to create surpluses to be applied to growth of the business and its capital.
• Work out how much profit you want to make, your ‘operating surplus.’
• Your business is eligible for significant grants from the government.  Work out exactly how much you will get from these grants.
• Now decide how much you will need to charge per unit of your product to achieve the operating surplus you have set as a budget goal.

With no effect on the size of the government grant !

In fact, as you attract more customers, the government will make sure that you get more funds, so that you can set the price that customers pay to give you the profit you need.  A sort of government underwriting of a set income stream ! Oh, and while you get the funds you can decide who works for you based on whether they go to the same church as you, or reflect your beliefs, despite the fact that the government funds you get come from everybody.

And this is how a consultant to the independent schooling sector believes private schools should run their business.  Speaking at a conference of Heads of Independent Schools, Trevor Gorey, suggested some key principles for financial management in private schools.

As a matter of interest, most schools operate on a gross profit (income less direct teaching costs) of between 30% and 40%

Critical Financial Issues in Independent Schools Trevor Gorey –AHISA Conference –  April 2003

In another cool and clinical analysis of how to play hard but fair, Audrey Jackson, 2002 Executive Director of the Association of Independent Schools in Western Australia, has little time for the proponents of the concept of being a ‘not for profit’ organisation, preferring to dismiss this as ‘altruism in the extreme.’ Audrey Jackson – Building a Capital Base in a School – 14^th Biennial NCISA Conference, 2002

Now, look at some strategies to increase surplus.

Clearly, to get a bigger surplus, you need more customers, and preferably customers of the type which will attract the highest level of government funding.

As the calculation is done on postcode, the retention of a boarding house as a home for the sons of western graziers actually retains a number of students who may be from postcodes where the average income levels are massively depressed due to drought and the flight within the Australian GDP from the rural sector.

Or, you can offer scholarships, which give you a double barrelled benefit.

• Firstly, you get to pick the cream from other schools, making your own outcomes improve and enhancing the perception of the value of the education on offer.
• And, what a bonus, because the scholarship can be directed to worthy students from certain SES groups, the actual cost to the school of offering it is not comparatively high.

The judicious use of bursaries and scholarships can have a hugely beneficial effect on enrolments both in the short and long terms.

They can be used to improve the overall academic profile of a school and to bring students into the school from low income families.

The strength of the strategy from a financial point of view is that the scholarship students attract full federal and state funding so the cost of forfeited fees is lessened.

Critical Financial Issues in Independent Schools Trevor Gorey – April 2003

Now, before you rush to describe this as the politics of envy, stop and think it through again.

• How many parents who choose to send their children to private schools understand how their fees are calculated. ?
• As they work themselves into the ground, and sacrifice things to provide what they see as an opportunity, do they understand that the fees they pay don’t just fund the gap between what they think they would get in their local public school and the cost benefit they see in their choice of a private school.?
• Do they understand that they are also paying up to 30% on top, so that the school can maintain and improve its ability to sustain annual capital growth ?
• What would the outcome be of using a percentage of the funds invested in this business, which sets a margin of profit, to invest in a system which can be a hub of the community in which you live, and, as such, be the means by which the entire community will move ahead.

And, in the fairest of all Aussie ways, wouldn’t they agree that there could be some compromises of the aspirational need to ‘have the best’, to create a better, fairer, more truthful system all round ?

References : (These were active at the time of writing – may now be broken)

(www.ahisa.com.au/documents/conferences/SSC2003/Trevor_Gorey_WS.pdf)

(www.isca.edu.au/html/PDF/conf%202002/Jackson%20paper.pdf)