Category: Blog

The UK in the era of comprehensive state education has had very different views on school size depending on the age of children.

A typical local authority provides small schools for 5-11 year olds. This means they can be close to the homes of the parents. The Head can know all the children in the school and can do some teaching. It cuts the strain on local roads, and even allows the possibility of more children walking to school.

That same typical authority may think secondary school children should attend schools with 1200-1500 children on the school roll. This means they draw on children from a very wide area. It increases the strain on local roads. Head teachers often do no teaching, as the administrative and personnel tasks are all consuming. Whilst Heads and senior teachers would claim to know all the children, in practise their knowledge must be patchy at best in some cases. Only a small fraction of the pupils can walk to school.

The main argument for large secondary schools relates to student choice of subject, especially in the sixth form. A large school can afford a wider range of specialist teachers, offering a wider range of subjects. I think we need to ask if this is sufficient reason to justify building more of these large schools. It would be possible at sixth form stage for pupils from School A to go School B for a specialist course that School A cannot offer and vice versa. It is also possible to draw on the resources of local sixth form Colleges, FE Colleges and local universities for the occasional student who wants to offer an A level outside the mainstream.(I remember having reading rights at the local university library in the sixth form and attending some public lectures). In practise core subjects like maths, english, science, history and economics remain the most popular and can be staffed in a smaller school.

An ancillary argument is that a large school is more economic, allowing concentration of the overhead costs for a larger number of pupils. This argument, however, is not thought relevant in the case of primary education. It also ignores the fact that a smaller school can employ part time staff to carry out functions that need to be full time in a larger establishment, or can share administrative back up with other similar schools.

So what are the advantages of smaller schools? The first is they are less expensive to build, less of a major commitment. The second is a wider range of smaller schools offers more choice. The third is that in practise most pupils will come from the surrounding area, so travel is easier and transport strain and cost less. The fourth is they can develop more sense of community and common achievement. They could have a whole school assembly, and teachers and the Head will have more knowledge of every pupil.

I am not suggesting that big schools are necessarily bad schools – far from it. I know some very good large schools. I do, however, think more small schools in the mix would extend choice, and would offer some solutions to some of our problems. It represents the quickest way of expanding choice and cutting transport stress when capital money is limited.

According to punk Keynsians a large public deficit stimulates an economy, whilst public spending restraint or cuts pushes it back into recession.

In the UK Mr Ed Balls has warned that there could be an economic hurricane hitting as a result of the Coalition government’s “cuts” in public spending. In the US Ben Bernanke has pursued low interest rates and quantitative easing as the President has run very large budget deficits. Despite this, the word is that the growth reported for the second quarter of 2010 is about to be revised down substantially.

Ben and Ed have some explaining to do. Why did Germany grow the fastest of the major western economies in the second quarter, when they were running a relatively low budget deficit and announced spending cuts? Why did the Uk record reasonable growth in the second quarter when Labour had already legislated to halve the budget deficit,imposed a range of tax increases and spending cuts to capital spending and the Opposition made clear its intention to press on more rapidly with deficit reduction? Why didn’t the combination of QE and a large deficit with no immediate plan to cut it boost the US economy to the top of the pile?

We can discount Ed’s words. As a back runner in the Labour leadership contest he has to adopt more aggressive language to get some attention. The media should not take him quite so seriously, as there is little economic foundation to his UK hurricane forecast.

We need to study Ben’s words very seriously tonight. If the US does revise down its figures and if the US authorities are now very worried about a slow pace of recovery, we should expect more extraordinary monetary action. Mr Bernanke cannot cut interest rates, so he will end up printing more dollars.

Meanwhile the failed experiment with a very large budget deficit may gradually draw to a close after the mid term elections, when both Republicans and Democrats might think they need to slow the growth in the massive debt build up which current policy is encouraging. Debt can be to economic growth as alcohol is to happiness. Drink too much and you may get depressed. Borrow more and you may have a headache.

The good announcements just keep pouring out from Eric Pickles and the local government department. Yesterday he said Councils should look again at the rash of signs that have appeared all over our streets warning, advising and requiring motorists to perform in certain ways.

As a convinced localist, or course, all Eric can do is to suggest they think again. Let’s hope they do. Many Councils have fallen prey to the yellow line, red tarmac, bollard, aggressive kerb and sign salesmen. Our roads are in a constant state of flux, with endless niggling works to shift kerbs, erect bollards, insert refuges, add traffic lights, narrow lanes, construct artifical chicanes, remove lanes from operation, direct cycles to the front of traffic light queues, put traffic lights into all red sequences for traffic and re route traffic, turning two way into one way and one way into no way. Removing on street parking places adds to the numbers circulating looking for a spare place.

Much of this work fails to make the roads safer, but adds to congestion. It can make the roads less safe, leaving drivers lost as to the full meaning of the complex instructions, or forced into long detours to get back to where they wish to go. The road works themselves are especially good at adding to congestion, frustration and cases of bad driving as people foolishly try to make up for the time lost in the Council inspired traffic jam.

It would be good if Councils who claim to be short of money at least took a year or two off from all new schemes like these, whilst taking a good hard look at what they had done in the past. Then they might like to find money for reversing some of the more foolish schemes which have reduced road capacity without improving road safety.

The IFS have re entered the political row over the impact of the budget. This intervention will be seen as helpful to attempts to destabilise Lib Dems from the Coalition by claiming the poor will do badly from the Budget at a time when Labour’s main political strategy is to try to detach leftwards inclining Lib Dems from the happy union.

I wait in vain to hear from the IFS on the impact of whether a 50% income tax is competitive when we need new inward investment to the UK, more entrepeneurship and job creation. We still do not know from them what rate of CGT the think would maximise the revenue.

The Budget document covered the ground on the impact on low and high income earners. Much of the Budget debate in Parliament and elsewhere was about this very subject. Chart A1 of the Budget red Book shows that if you take all the budget measures (Labour and Coalition) the bottom 30% by income will be less than £200 worse off. The top 10% will be £1600 worse off, and the second 10% by income will be more than £600 worse off. So far, so progressive.

If you look at the table A2 it shows it as a proportion of net income. That shows once again a progressive pattern, with the top 10% worse off by 2% of their incomes, and the bottom 30% by around 1% of net income. So far, still progressive.

Nor is it just the Labour income tax changes that are “progressive”. The Coalition’s Vat increase is very progressive. The top 10% by income will lose £850 in extra VAT compared to around £50 for the bottom 10% by income, reflecting the zero VAT on many of the staple items in a lower income budget. As the Budget books states, “the top income decile will lose almost fifteen times more” from the indirect tax changes.

I am not sure why we need to have this debate again, or how there can be new shocking evidence about the impact of the Budget measures, when it was all spelt out in so much clear and uncharacteristic detail in the Red Book.

Numerous bloggers have taken up the challenge to answer my question, do you value the £10,000 of public spending which is your average share of the total? How would you like your share spent?

It is time to look a bit more at what we all get for our money. Some of you have been critical of the idea that some part of your £10,000 should go to the neighbours. In practise most of the tax paid by people in good jobs goes to other people. We have a very progressive system, which gives quite large sums to people out of work (income related benefits, social housing etc)by taking larger sums from those in well paid work.

Our system of public spending includes three types of spending. There is expenditure on current publilc services which we all enjoy – we all use the roads, have our rubbish collected, are under the umbrella of the common defence, live with the same police force and seek to comply with the same Revenue, Customs, and criminal justice system. We all pay according to our means for these items of current spending which are incurred every year on our behalf equally.

There is then public spending on public services which we may need at some times of our lives but tend not to need when we are in work and earning. The state makes provision for the young and the elderly. We pay for the young and the elderly, partly because we are decent, and partly because we have been young ourselves and hope one day to be elderly. Public spending insures us by time shifting our payments in and our receipts out of the system.

The third type of public spending is spending for the greater good, spending on others which we would never experience for ourselves. Most people contribute to social housing but will never themselves live in a subsidised house. We all contribute to overseas aid.

In each case the debate on public spending poses three questions.

1.Is too much of the given service being provided? Do we fight more wars than we need do? Do we need so many regulatory systems?

2. Is the service being supplied in an efficent and cost effective way?

3. Could we pay for it in a different way?

We have spent a lot of time on this site discussing 1 and 2 about various services. Today I want briefly to touch on 3.

Some of the servcies in Category one like rubbish collection, lesiure facilities, public entertainments and sports could be paid for more by user charges and less by direct local and national taxation. We pay for our daily bread and water by direct user charging based on what we consume. More current public services could be charged in this way. We would then pay for what we needed and not for what the public sector wanted to supply and charge.

Some of the services in Category Two could be based more firmly on the insurance or loan principle. Students now pay for their university courses from loan money which they repay only if and when they are successful in finding well paid employment. The state pension is based loosely on the insurance pricniple, where you pay in over your working life in order to gain entitlement to a pension on retirement. These are two current ways in which the state helps you time shift between spending money and paying money in. This Insurance principle could be extended, to reward the prudent and to help the state balance its books.

There will always be causes and people deserving of our financial support which will not be able to repay one day. Civil government is about making good judgements about which and how much. I woudl appreciate your thoughts on whether and how we should also strengthen the insurance principle and the pay for what you receive principle in more public service areas.

When US troops left Iraq recently, some were criticised heavily for saying “We won”. It wasn’t that kind of war. The understandable wish of young people in a dangerous job to claim their presence had been worth it, the soldier’s wish to be on the winning side, seemed inappropriate to politicians and armchair generals. Their view of the Iraqi problem had changed and become more nuanced during the period of military activity. The troops had only been there to restore order and help the new civilian power, we were told. Civil wars in a way have no victors and many casualties.

The US General and the President in charge of the overall Afghan intervention need to resolve soon what “winning” looks like in Afghanistan. The langauge has changed over the long years of the conflict. We hear less now of war fighting, and more of seeking to buttress the civilian power, more emphasis on dialogue and policing type activities and less on winning a war. Yet our troops still live in dangerous conditions, and the death rate is high. The General himself still says there is hard fighting ahead, and sees the conflict in terms of putting down an insurrection. He simplifies the world into good guys and bad guys, those who support the current government arrangements and those who use violence and other means to try to oppose them or bring them down.

The Taleban are not an easily recognised uniformed army which one day will surrender to superior Allied forces. Nor will they all melt away over the Pakistan border to avoid Allied firepower, as if that were a good result. They can move around Afghanistan freely, blend into communities, win more recruits, win over a village here with their deeds and promises, terrify another village there into a kind of support. There is no advancing Allied front line, securing all behind it for the government.

So is winning going to be bringing the Taleban into the current government process, getting them to be an opposition which uses words rather than guns? Is it going to be driving enough of them elsewhere so the violence is at a less chronic level? Can Afghanistan produce a civilian government with enough credibility and political skill to unite most of the Afghan people behind a single central government of a non violent kind? When will the people of Afghanistan themselves have the confidence and strength necessary to say to the Taleban, you cannot use violence here to further political ends? Or will more Afghans end up saying they share some of the Taleban’s views?

In these difficult conditions there is only so much foreign troops can achieve at the request of the civilian power. Forcing the pace of our exit forces the pace at which the Afghan government has to tacke what are primarily its problems. Foreign troops have to leave some day. Saying the threat of our exit is undermining the job of buttressing the civilian power implies the civilian power is too weak to do the job it needs to do.

There is a three letter word the BBC and others does not wish to mention – tax. The main reason Mr Rudd, the previous Labour PM lost his job, was higher taxes. Parliament and people disliked his higher taxes and charges in the name of a climate change policy, and voted them down. Then he tried a new tax on resource companies. He thought that too would be popular – why not tax the rich and successful corporates. Australians instead thought he was taxing one of the foundations of their economic success, and they objected strongly.

Ms Gillard did her best to clean up the mess, but she too belonged to a party associated with damaging higher taxes. It should act as a warning to all who think higher taxes are fair , green and popular. In Australian they were seen as mean, damaging and unhelpful.

Each year the state spends on average £10,000 for every man, woman and child in the country.

The idea of public accountability, democracy and more transparency over how public bodies spend your moeny is that you should be more involved in how this money is spent.

I would like to hear from you on your priorities. How do you think your £10,000 a year should best be spent?

For my part I feel I am getting more defence than I want. I could live without the wars in the Middle East, but like to have professional forces to defend our country. I have more levels of government than I want, and wish to see the end to regional government and to much of the EU bureaucracy as it applies to the UK. I have more regulations than I need, and more quangos than I can remember the names of.

How would you like your £10,000 spent? And how much do you want of it spent on you, and how much are you prepared to see spent on the neighbours?

Labour’s big change in transport policy was to increase the amount of subsidy going to the railways substantially, whilst cutting back the amount spent on roads. We received little by way of new railway line or roads during the last thirteen years, other than the completion of the Channel rail link initiated by the previous government. Much of the railway money paid for operating losses.

Yesterday the Coalition government announced a compensation and purchase scheme for home owners affected by a proposed new rail line from London to Birmingham, cutting through the Chilterns. The railway presumably has to be part of the public spending exercise.

Prior to the election the Shadow Cabinet led us to believe that this project could not be started on the ground before 2015, so the main costs of building it will fall outside the current spending review. However, initial costs of planning, land acquisition and the like may well fall in the next few years.

I would be interested to hear from bloggers if they think this is an important public spending priority. If it is, are there ways more of the capital cost can be met from private risk capital to save the taxpayer? Can future running costs and revenues be brought closer together to limit the subsidy cost? What should the timetable be for this project if it is one you like?

In the US the Stock market has been falling because many investors no longer believe printing more money and running up a collosal public deficit is the way to sustained recovery. Mr Obaama continues with more of the same in the hopeless belief this will save him in the mid term elections this autumn.

Labour in the UK belong to this outdated school. If a huge deficit and large amounts of money printing haven’t yet fixed it, why not try some more they ask? They live in denial of what happened to Greece, Ireland, Portugal, Spain, Iceland, the Baltic states and others who overdid the borrowing, only to be forced into worse spending cuts and higher interest rates.

Meanwhile, some in the Uk say our recovery cannot last either, because the government is cutting spending and raising taxes to cut the deficit. Sometimes the rhetoric is more believed than the reality. For as readers will know, overall public current spending carries on rising in cash terms over this Parliament. It is silly to spook people for cuts that are not going to happen. The public sector should explain their true budgets, not make up fictions about the depth of the overall “cuts”.

Talk of cuts of 25% or 40% in public spending is alarming people who depend on public money needlessly. Public spending on current services according to the budget will rise by £90 billion over the course of the next five years, taking it up from £600 billion to £ 690 billion.

Labour spending on current services was £10,000 for every man, woman and child in the UK last year. This government plans to increase that to £11,500 by 2015. Spending on health is going to go up by more than price inflation every year. I expect schools spending to increase every year as well. State pensions are going to go up by prices or wages, whichever goes up by more. Labour was only raising £7500 from every person in the country on average in taxes, and borrowing the other £2500 each.

The questions we should all be asking are these. Are we each getting £10,000 of value from the public service spend today? Will the extra £1500 each be well spent on the right things? Why are some parts of the public sector saying they will have to make clumsy and unpopular cutbacks, when overall spending will go on up in cash terms?

Those of us on good incomes know we have to pay much more than £7500 in tax. Many of us do not expect to get our £10,000 of public spending. If like me your children have left school you receive no education spending. If you are earning a good living you do not need or receive benefits. If you are healthy you do not need to go to the hospital. Those three services alone account for more than half the average £10,000 per person spent.

Many of us are happy to pay extra tax so the sick can receive proper care and the disabled can receive benefits. We are happy to pay for the neighbours children to be educated. It is part of good neighbourliness to pay more in tax so any neighbours who are disadvantaged can enjoy the rising prosperity of our age as well. We are less happy to pay more tax if we think the money is wasted, building bloated bureaucracies or indulging grand political projects that will not make our lives better. By far and away the biggest item in my annual budget is the cost of government. Tax takes far more than my housing or food or travel which I buy for myself directly.

That’s why it is a good idea that central and local government takes a hard look at all that is being spent to drive better value for money, and to get rid of the irritating or wasteful items. What we do not want is another parade of the bleeding stumps, as public sector managers trot out unacceptable cuts to try to avoid making sensible economies in the way they are doing things. If the main public services end up cutting important services when the money available to them goes up it is a sign of bad management, not of insufficient money.