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Managing school finance
Book Reviews
Educational Finance and Resources. W.F. DENNISON. Beckenham: Croom Helm, 1984. pp. 271. $15.95 (cloth). Managing School Finance. B. KNIGIIT. London: Heinemann, 1984. pp. 232. f9.50 (cloth). Value for Money in Education. R. Low. London: Chartered Institute of Public Finance and Accountancy. 1984. pp. 78. f7.50 (paper).
IN ‘I HF
United Kingdom research into educational finance md costing has been slow to develop. There has been ,,urprisingly little interest in studying how schools get money, what they do with it, what the effects of financial ‘Jecisions are. or almost any other related question. At the ,evel of the costing of individual schools, virtually no iesearch at all had been published by the end of the 1970s. Uow quite suddenly the picture has changed and four lnajor hooks. including the three cited above, have been puhlishcd within as many years. Dennison’s compass is remarkably wide: he presents a i.omprchensive survey of the whole of the educational ‘inance scene in the U.K. and in so doing provides a mass of technical detail not previously available together in any one source: anyone wanting to check up on RSG (rate~.upport grant), GRE (grant-related expenditure). AUR ialternative use of resources) or even NAFE (non,Idvanced further education) could not do better than j onsult this hook. But Dennison does much more than give \letailed description: he relates it. in perhaps the major lheme that continues throughout, to the replacement of 1he expansionary years of the 1960s and early 1970s by the Ilrolongcd period of educational contraction which has llecome all too familiar. This change has brought a series of ‘uhtle hut significant alterations to almost every aspect of Ihe financing of education in the UK. The more notice.Ihle, such as direct curbs on the spending powers of the OO+ Local Education Authorities (LEAS) into which lingland and Wales are divided or the non-replacement of ‘caching staff who leave a school while its pupil numbers ~lecline. have to he set alongside developments which pass relatively unnoticed such as the pursuit of savings from t nergy conservation. The cumulative effects add up to a t.crious deterioration in the level of provision. in terms of I& resources, which the schools previously enjoyed. Nowhere is this deterioration more evident than in the career situations in which teachers now find themselves: rhe national salary scale scheme for teachers, known as I%urnham, operated well during the years of expansion but I ow with prolonged contraction its basis of promotionrelated points being earned for pupils in the school means that as pupil numbers and staffing requirements decline, t.:achcrs’ career advancement and promotion prospects t:ecline even more rapidly. Teachers, as a school’s princ opal resource. figure prominently in this book and arc cirectly related to the curriculum which a school can offer t,) its pupils: the author pleads for greater “consideration c I the interactions between resources and the curriculum”
435
although he fears that the continuing retrenchment is allowing LEAS to exercise closer direct control over their schools (some might even argue that that was a good thing?). Dennison goes on to attempt to relate the work of schools and colleges to the needs of the lahour market and the national economy generally but here he is rather less convincing: he portrays teachers as having little or no interest in the future careers of their pupils but does not suggest how such a divide between schools and the world of work might hc bridged. There are some errors in the various tables and figures are inpresentation, adequately explained. and a glossary of technical terms would have been useful. especially for non-U.K. readers. Nevertheless overall this is an eminently worthwhile hook which fills a significant gap in the existing literature. Brian Knight has been headmaster of a secondary school for some 20 years and throughout this time he has developed a keen interest in practical aspects of school finance. The title of his book is very apt: he focuses on practical management prohlems in schools and shows how greater attention to finance and costing will often alter one‘s view of these. It is, in fact, rather a puzzle to him why no-one has done this before: “the study of school costs has been woefully neglected the repair of this neglect would case our present problems proper professional management of school finance could open new possibilities for our schools”. As a result Knight has given us a hook which is both thoroughly scholarly and also essentially practical, indeed it might also he viewed as a do-it-yourself financial manual for school administrators. Knight strongly believes that many - perhaps most - aspects of the lives of schools should he rigorously costed and that the outcomes should be incorporated into practical managerial decisions taken in and by schools. The earlier part of the hook develops alternative cost concepts and shows how the method used -e.g. re how to treat capital expenditure may significantly affect the eventual results. This approach is then applied in particular to the teaching curriculum of a school hut Knight shows clearly the pitfalls inherent in attempts at calculating costs for individual school subjects. To arrive at increased “efficiency” may be possible in theory hut in practice is often prevented by bureaucratic rules. administrative fiat, or the legal framework. Knight then turns to practical problems of management and control of school finance. on which teachers and school administrators typically receive little or nothing in the way of training. Not the least of the resources available to the school is time, which has typically received little attention hut to which Knight devotes a whole chapter. Why do U.K. schools have to he so inflexible in the organization of the school day? Why can we not experiment with e.g. a 8.00 am to 1.30 pm day? There would he considerable savings of staff time. all the costs and problems relating to lunch would be avoided, and the available evidence suggests that the pupils would learn just as much and just as efficiently. But in the U.K. at least it is forbidden: schools would not bc fulfilling their “child-minding” role while their parents are out at work. When putting forward the idea of each school having its own annual budget. the author is obliged to comment “some readers will have found this chapter preposterous”, so great would bc the opposition to his pleas for greater rationality. Hc fears that
436
Book Reviews
at Icast some of his proposals will hc consigned to “the graveyard of Unimplemented Good Ideas”. Both Dcnnison and Knight are outstandingly useful books, each complementing the other. It is. however, difficult to recommend Lord in quite the same way: the author’s background on the right-wing Daily Telegraph and his present position as special adviser to the Chief Secretary to the Treasury indicate his close relationship to the Conservative Party, and the approach taken in this hook is directly related to the present government’s search for ways of reducing expenditure and saving money. He approaches the subject from the standpoint that those local education agencich (LEAS) that spend more per pupil than others are wasteful and that means should he found to curb their excesses. Unfortunately he had to rely almost entirely on the statistics for each LEA which are puhlishcd annually hy the Chartered lnstitutc of Public Finance and Accountancy: not only is the basis of compilation of these statistics non-standardised in that LEAS’ accounting practiccs show considerable variations, but also they show nothing of the much wider disparities that have hccn revealed at more disaggregated Icvels, e.g. at the level of individual schools. A further prohlem with anyone from outside the education service doing such a study is that he may not bc aware of subsequent dcvelopmcnts which largely invalidate some of the points he seeks to make. Thus. Lord‘s reference to a prominent research conclusion by Professor Neville Bennett that “formal methods of teaching obtained hetter results in every way than informal or child-centred methods” makes no mention of the fact that this supposed finding was largely retracted by the author shortly afterwards. Perhaps one of Lord’s main conclusions may hc cited to illustrate the quality of his analysis: “high spending is no guarantee of a superior education, nor that modest expcnditurc will necessarily lead to an inferior one”. Did anyone ever say that it would’? The Inner London Education Authority, which has always spent more per pupil than any other LEA. partly because of inherently high costs in central London and partly in efforts to compensate for the capital’s appalling social background problems, has assuredly never been under any illusions about the outcomes. Statistical analysis shows it to have both high expenditure and (still) poor educational achievement. But is the achievement iror.se than it would otherwise have been without the high expenditure? Who can say? Lord concludes with a plea, with which we would all surely agree. for more dctailcd statistical and other data relating to each LEAS’ schools to be made publicly available. These three hooks show wide variations in what they set out to do and in their SUCCESSor otherwise in achieving their goal. Collectively, they represent a significant advance in the study of educational costing and finance in the U.K. Other work is now in progress and one must hope that this field of study will continue to grow and divcraify: there could bc large and direct bcncfits for the education 01 future generations of children.
Women’s Wages and Work in the Twentieth Century. JAMES P. SMITH and MICIIAEL P. WARD. Santa Monica, CA: Rand Corporation, 1984. pp. 96. $7.50 (paper). Wirti tiit. highest quality of research competence, Smith and Ward use the tools of economic analysis to address two questions: why has the labor force participation of women increased so dramatically in the twentieth century; and why have women’s wages appeared to remain constant relative to men’s during the post-World War II period’? The two questions are interrelated by the intervening variable of labor market cxpericncc which could have expected to increase as female labor force participation rose and. if increasing. should have contrihutcd to a rise in the relative wages of women because cxpericnce. along with education. is a major human capital variable in determining returns to labor market activity. A major contribution hy Smith and Ward with respect to both questions is applymg careful economic analysis. instead of ud hoc explanations, in the prc-World War II period. Regression cstimatcs from a large microdata set of the 1900 Census of Population show traditional wage and labor supply models to he as appropriate for the early period as in the vast literature of model tests upon modern microdata sets. Arrangement of the data to show the life cycle pattern of participation by date of hirth demonstrates that the increasing attachment to the labor market is not a recent phenomenon: the basic reasons for employment growth originate early in the 1900s and “cvcn back into the 19th century”. Analysis for the early period suggests the relative rise in women’s wages. nuclearization of the American family, a rapid rise in high school completion. urbanization, and declining fertility levels as factors making for the long-term growth in the female labor force. Among these. the authors cite the rise in women’s wages as the most important. Emphasis for the wage increase in the early part of the century is placed upon the growth of clerical employment. According to Smith and Ward, clerical employment offered sizeahle improvement in the wage opportunities of married women compared with the opportunities afforded their concentration in domestic employment at the turn of the century. The economic model for understanding female labor force growth in the post-World War II period concentrates upon the movement of real wages and fertility. where consideration is made for the simultaneous association of labor supply and fertility with real wages. Smith and Ward attribute 58% of the rise in the labor supply of women for the period 1950-1’980 to the rise in real wages. One-half of the cxplaincd portion of the rise is associated with the wage impact leading to a decline in fertility and one-half with the wage impact of a rise in real wages encouraging work effort. As with all segments of this study, considerahlc data manipulation and inventiveness is required to investigate the apparent constancy of the relative wages of women to mtn. Because the preponderance of earnings data do not appear until after World War II, the authors construct an historical series of women’s relative earnings from IX90 to
Educational Finance and Resources. W.F. DENNISON. Beckenham: Croom Helm, 1984. pp. 271. $15.95 (cloth). Managing School Finance. B. KNIGIIT. London: Heinemann, 1984. pp. 232. f9.50 (cloth). Value for Money in Education. R. Low. London: Chartered Institute of Public Finance and Accountancy. 1984. pp. 78. f7.50 (paper).
IN ‘I HF
United Kingdom research into educational finance md costing has been slow to develop. There has been ,,urprisingly little interest in studying how schools get money, what they do with it, what the effects of financial ‘Jecisions are. or almost any other related question. At the ,evel of the costing of individual schools, virtually no iesearch at all had been published by the end of the 1970s. Uow quite suddenly the picture has changed and four lnajor hooks. including the three cited above, have been puhlishcd within as many years. Dennison’s compass is remarkably wide: he presents a i.omprchensive survey of the whole of the educational ‘inance scene in the U.K. and in so doing provides a mass of technical detail not previously available together in any one source: anyone wanting to check up on RSG (rate~.upport grant), GRE (grant-related expenditure). AUR ialternative use of resources) or even NAFE (non,Idvanced further education) could not do better than j onsult this hook. But Dennison does much more than give \letailed description: he relates it. in perhaps the major lheme that continues throughout, to the replacement of 1he expansionary years of the 1960s and early 1970s by the Ilrolongcd period of educational contraction which has llecome all too familiar. This change has brought a series of ‘uhtle hut significant alterations to almost every aspect of Ihe financing of education in the UK. The more notice.Ihle, such as direct curbs on the spending powers of the OO+ Local Education Authorities (LEAS) into which lingland and Wales are divided or the non-replacement of ‘caching staff who leave a school while its pupil numbers ~lecline. have to he set alongside developments which pass relatively unnoticed such as the pursuit of savings from t nergy conservation. The cumulative effects add up to a t.crious deterioration in the level of provision. in terms of I& resources, which the schools previously enjoyed. Nowhere is this deterioration more evident than in the career situations in which teachers now find themselves: rhe national salary scale scheme for teachers, known as I%urnham, operated well during the years of expansion but I ow with prolonged contraction its basis of promotionrelated points being earned for pupils in the school means that as pupil numbers and staffing requirements decline, t.:achcrs’ career advancement and promotion prospects t:ecline even more rapidly. Teachers, as a school’s princ opal resource. figure prominently in this book and arc cirectly related to the curriculum which a school can offer t,) its pupils: the author pleads for greater “consideration c I the interactions between resources and the curriculum”
435
although he fears that the continuing retrenchment is allowing LEAS to exercise closer direct control over their schools (some might even argue that that was a good thing?). Dennison goes on to attempt to relate the work of schools and colleges to the needs of the lahour market and the national economy generally but here he is rather less convincing: he portrays teachers as having little or no interest in the future careers of their pupils but does not suggest how such a divide between schools and the world of work might hc bridged. There are some errors in the various tables and figures are inpresentation, adequately explained. and a glossary of technical terms would have been useful. especially for non-U.K. readers. Nevertheless overall this is an eminently worthwhile hook which fills a significant gap in the existing literature. Brian Knight has been headmaster of a secondary school for some 20 years and throughout this time he has developed a keen interest in practical aspects of school finance. The title of his book is very apt: he focuses on practical management prohlems in schools and shows how greater attention to finance and costing will often alter one‘s view of these. It is, in fact, rather a puzzle to him why no-one has done this before: “the study of school costs has been woefully neglected the repair of this neglect would case our present problems proper professional management of school finance could open new possibilities for our schools”. As a result Knight has given us a hook which is both thoroughly scholarly and also essentially practical, indeed it might also he viewed as a do-it-yourself financial manual for school administrators. Knight strongly believes that many - perhaps most - aspects of the lives of schools should he rigorously costed and that the outcomes should be incorporated into practical managerial decisions taken in and by schools. The earlier part of the hook develops alternative cost concepts and shows how the method used -e.g. re how to treat capital expenditure may significantly affect the eventual results. This approach is then applied in particular to the teaching curriculum of a school hut Knight shows clearly the pitfalls inherent in attempts at calculating costs for individual school subjects. To arrive at increased “efficiency” may be possible in theory hut in practice is often prevented by bureaucratic rules. administrative fiat, or the legal framework. Knight then turns to practical problems of management and control of school finance. on which teachers and school administrators typically receive little or nothing in the way of training. Not the least of the resources available to the school is time, which has typically received little attention hut to which Knight devotes a whole chapter. Why do U.K. schools have to he so inflexible in the organization of the school day? Why can we not experiment with e.g. a 8.00 am to 1.30 pm day? There would he considerable savings of staff time. all the costs and problems relating to lunch would be avoided, and the available evidence suggests that the pupils would learn just as much and just as efficiently. But in the U.K. at least it is forbidden: schools would not bc fulfilling their “child-minding” role while their parents are out at work. When putting forward the idea of each school having its own annual budget. the author is obliged to comment “some readers will have found this chapter preposterous”, so great would bc the opposition to his pleas for greater rationality. Hc fears that
436
Book Reviews
at Icast some of his proposals will hc consigned to “the graveyard of Unimplemented Good Ideas”. Both Dcnnison and Knight are outstandingly useful books, each complementing the other. It is. however, difficult to recommend Lord in quite the same way: the author’s background on the right-wing Daily Telegraph and his present position as special adviser to the Chief Secretary to the Treasury indicate his close relationship to the Conservative Party, and the approach taken in this hook is directly related to the present government’s search for ways of reducing expenditure and saving money. He approaches the subject from the standpoint that those local education agencich (LEAS) that spend more per pupil than others are wasteful and that means should he found to curb their excesses. Unfortunately he had to rely almost entirely on the statistics for each LEA which are puhlishcd annually hy the Chartered lnstitutc of Public Finance and Accountancy: not only is the basis of compilation of these statistics non-standardised in that LEAS’ accounting practiccs show considerable variations, but also they show nothing of the much wider disparities that have hccn revealed at more disaggregated Icvels, e.g. at the level of individual schools. A further prohlem with anyone from outside the education service doing such a study is that he may not bc aware of subsequent dcvelopmcnts which largely invalidate some of the points he seeks to make. Thus. Lord‘s reference to a prominent research conclusion by Professor Neville Bennett that “formal methods of teaching obtained hetter results in every way than informal or child-centred methods” makes no mention of the fact that this supposed finding was largely retracted by the author shortly afterwards. Perhaps one of Lord’s main conclusions may hc cited to illustrate the quality of his analysis: “high spending is no guarantee of a superior education, nor that modest expcnditurc will necessarily lead to an inferior one”. Did anyone ever say that it would’? The Inner London Education Authority, which has always spent more per pupil than any other LEA. partly because of inherently high costs in central London and partly in efforts to compensate for the capital’s appalling social background problems, has assuredly never been under any illusions about the outcomes. Statistical analysis shows it to have both high expenditure and (still) poor educational achievement. But is the achievement iror.se than it would otherwise have been without the high expenditure? Who can say? Lord concludes with a plea, with which we would all surely agree. for more dctailcd statistical and other data relating to each LEAS’ schools to be made publicly available. These three hooks show wide variations in what they set out to do and in their SUCCESSor otherwise in achieving their goal. Collectively, they represent a significant advance in the study of educational costing and finance in the U.K. Other work is now in progress and one must hope that this field of study will continue to grow and divcraify: there could bc large and direct bcncfits for the education 01 future generations of children.
Women’s Wages and Work in the Twentieth Century. JAMES P. SMITH and MICIIAEL P. WARD. Santa Monica, CA: Rand Corporation, 1984. pp. 96. $7.50 (paper). Wirti tiit. highest quality of research competence, Smith and Ward use the tools of economic analysis to address two questions: why has the labor force participation of women increased so dramatically in the twentieth century; and why have women’s wages appeared to remain constant relative to men’s during the post-World War II period’? The two questions are interrelated by the intervening variable of labor market cxpericncc which could have expected to increase as female labor force participation rose and. if increasing. should have contrihutcd to a rise in the relative wages of women because cxpericnce. along with education. is a major human capital variable in determining returns to labor market activity. A major contribution hy Smith and Ward with respect to both questions is applymg careful economic analysis. instead of ud hoc explanations, in the prc-World War II period. Regression cstimatcs from a large microdata set of the 1900 Census of Population show traditional wage and labor supply models to he as appropriate for the early period as in the vast literature of model tests upon modern microdata sets. Arrangement of the data to show the life cycle pattern of participation by date of hirth demonstrates that the increasing attachment to the labor market is not a recent phenomenon: the basic reasons for employment growth originate early in the 1900s and “cvcn back into the 19th century”. Analysis for the early period suggests the relative rise in women’s wages. nuclearization of the American family, a rapid rise in high school completion. urbanization, and declining fertility levels as factors making for the long-term growth in the female labor force. Among these. the authors cite the rise in women’s wages as the most important. Emphasis for the wage increase in the early part of the century is placed upon the growth of clerical employment. According to Smith and Ward, clerical employment offered sizeahle improvement in the wage opportunities of married women compared with the opportunities afforded their concentration in domestic employment at the turn of the century. The economic model for understanding female labor force growth in the post-World War II period concentrates upon the movement of real wages and fertility. where consideration is made for the simultaneous association of labor supply and fertility with real wages. Smith and Ward attribute 58% of the rise in the labor supply of women for the period 1950-1’980 to the rise in real wages. One-half of the cxplaincd portion of the rise is associated with the wage impact leading to a decline in fertility and one-half with the wage impact of a rise in real wages encouraging work effort. As with all segments of this study, considerahlc data manipulation and inventiveness is required to investigate the apparent constancy of the relative wages of women to mtn. Because the preponderance of earnings data do not appear until after World War II, the authors construct an historical series of women’s relative earnings from IX90 to