The Labour years can, in retrospect, be seen as a massive experiment into the link between cash and education. Gordon Brown almost doubled spending per pupil over the past decade, the biggest money injection in the history of state schooling. But as he did so, England hurtled down the international league tables. It now languishes in 18th place, according to the Organisation for Economic Co-operation and Development (OECD). The plan didn’t work.

Only now is the full cost of that failure becoming clear. In an age when ‘work’ is increasingly something done with the head rather than the hands, education standards determine the wealth of nations. There is now enough data to draw a direct relationship between the two and put a price on it. Smarter nations are richer nations. Eric Hanushek, an academic at the Hoover Institution at Stanford University, has pioneered a way of quantifying this and was commissioned by the OECD. His findings suggest that any politician looking for economic growth should start in the classroom.

Hanushek recently hit headlines by demonstrating how much richer America would be if its schools were at the top of the international league tables rather than languishing — with Britain’s — in the middle. ‘Relatively small improvements in students’ educational performance can have extraordinary impacts on a nation’s future economic well-being,’ he found. At the request of The Spectator, he has made similar calculations for Britain.

Inline sub2


Professor Hanushek was struck by how Britain is now outclassed by so many of her former colonies, many of whom spend significantly less on education. He wanted to see how much wealthier we would be if our schools hadn’t fallen so far behind. His calculations, made together with Professor Ludger Woessmann from the University of Munich, imagine that catching up with Australia would add 0.4 points to our economic growth rate every year — far more than has been purchased by the debt-fuelled stimulus. It works out at £3.96 trillion over the lifetime of a child born today.

And this is, relatively speaking, the easy option. To reach Australian levels would require improving schools by no more than Poland managed in just six years. A more ambitious target would be Canada, which ranks fifth in the OECD league tables. Educating British children to Canadian standards, according to Hanushek and Woessmann, would mean economic growth of an extra 0.64 per cent each year. More importantly, the average worker could be paid 17 per cent more, because the economy would be far more productive.

And if Britain were to have school attainment as good as that of Hong Kong? Under the Hanushek/Woessmann tables, this would give us the fastest economic growth in the West and make the average pay packet 34 per cent larger. It sounds incredible — until you consider that Hong Kong, an island with no natural resources apart from the inventiveness of its people, is already richer than America on a per-capita basis.

If it were possible to buy better education, it would be the best investment that a government could make. But Professor Hanushek’s research shows that spending makes strikingly little difference. American school standards have been stagnant for 40 years in spite of more money and smaller classes. Recent research in Britain shows something similar: a recent study commissioned by the Department for Education found that there was no relationship between the wildly varying amounts of spending per pupil in state schools and the actual results.

What matters, according to Professor Hanushek’s research, is great teachers. ‘A good teacher can get 1.5 years of learning growth; a bad teacher gets half a year of learning growth.’ The difference between a good and bad teacher is one year of learning, every year. Having four consecutive years of high-quality teaching, he says, can eliminate any trace of economic disadvantage. ‘Family is not destiny’: studies show that, 20 years after leaving school, the pupils of great teachers are still doing markedly better in life.

The converse is also true. According to the research, poor teachers hinder the life chances of their pupils and inflict a wider cost on society. Teachers who are half as good as the average don’t cost half as much as the average — which is why education defies the laws of crude economics. Pumping money into the system is not, in itself, a solution. To start taking America’s schools to the top of the league table, Professor Hanushek says, the trick is to sack the least-effective 10 per cent of teachers and replace them with average teachers. Then the huge economic benefits he outlines would start to accrue. It’s an idea that could never be implemented in England. Some things are still too radical — even for a revolutionary like Michael Gove.

This article first appeared in the print edition of The Spectator magazine, dated

Tags: Economics, Education, OECD, Schools, Teaching, UK politics