Coffee House

The report the Department for Education does NOT want you to read

26 April 2013

11:03 AM

26 April 2013

11:03 AM

One of the better policies of this government is its offering massive databases up for public scrutiny. Sunlight is the best disinfectant, argues David Cameron, and outsiders can scrutinise what the government is doing and point to flaws. With commendable openness the Department for Education asked Deloitte to look at its massive pupil database last year, which has records on half a million kids factoring in exam results, postcode, ethnicity and poverty. And also the bizarre variation in English spending-per-pupil figures which vary from £4,500 to £10,000 per pupil (odd, given that teachers operate on national pay bargaining). Crucially, Deloitte was also asked to look at spending. The coalition is embarking on a Pupil Premium scheme which makes the poorest pupils £900 more valuable to teach — so perhaps it would vindicate this decision. The results (here, pdf) were something of a bombshell, and have never been reported on before. I look at them in my Daily Telegraph column today.

As you’d expect, pupils in schools marked ‘outstanding’ by Ofsted did better than those in failing schools. Poverty mattered, but not as much as you think. What really stood out was subject choice: kids who were entered for more rigorous subjects tended to do better. But what didn’t matter was money. No matter which way you looked at it, ‘the level of funding, per se, is almost irrelevant as a predictor or performance.’ This was devastating for the Pupil Premium policy: the Lib Dems’ flagship education policy was based on a false (and, now, disproven) premise. Deloitte delivered the bad news to the department: ‘the funding may not be improving performance as intended.’ They produced a graph (below) to show: you can map cash against outcomes, and find no correlation at all.

Funding and results

And as if to make sure they never won another government contract, Deloitte spelled it out for the department:


‘The Pupil Premium strengthens further the relationship between the per pupil funding quantum and deprivation. If it is to provide value for money for the taxpayer, the effects of the Pupil Premium on performance of the most deprived pupils should be rigorously and objectively assessed; and how schools spend money is likely to be much more important than how much they get. Measures to improve school quality, or increase the “rigour” of the subjects studied by pupils are in our view more likely to have a significant impact on improving school performance that raising the per pupil funding level alone.’

In other words: cease and desist, Mr Laws, your idea sounds good but the cash doesn’t work. You’re on a hiding to nothing. If you have a billion quid, spend it on something that helps pupils — not something that Nick Clegg can use as an applause line in speeches. If you want to help disadvantaged kids, make sure they study decent subjects. Pouring more cash into failing schools teaching unchallenging subjects will not help students or society.

The Deloitte report was a missile, aimed at a key coalition policy. So it was quietly defused. It was parked in an obscure corner of the department website; no official mention was ever made of it. It has never been referred to in the media. You can well imagine Department for Education officials being horrified: they’re weeks away from a spending review, they need to bargain with the Treasury and plead that education needs ‘protecting’. I suspect they’ve been busy discrediting the methodology, or coming up with clever reasons why Deloitte is wrong (although a similar study was conducted in the Major years, and drew identical conclusions). Or, better still, hope no one ever finds the study (which they could never realistically shred, given that pesky people had already been FOI-ing them about it). Whitehall turf wars work on departments demanding cash. And here was the biggest ever investigation into English state school outcomes arguing that cash didn’t matter.

I say plenty more about this in my column. But I’d like to end on one note. The Labour years represented perhaps the biggest experiment in state expansion that the developed world has ever seen. Over the last decade, the size of the UK government grew from 37 per cent of GDP to 50 per cent of GDP. No other country has ever expanded its government by this much, over any decade (except for those preparing for war). Forget the bankers: spending caused the crisis that we’re now dealing with. And at its heart lies a rotten ideology: that spending matters. Labour increased health spending by 110 per cent, transport by 83 per cent, education by 78 per cent and welfare by 52 per cent. In so doing, Labour did the world a favour and tested to destruction the idea that massive increases in state spending help a country. The legacy of these years was not world-class infrastructure, brilliant pupils and the smartest welfare system in Europe. Instead we have creaking infrastructure, schools hurtling down the international league tables and the most expensive poverty in the world. And the resulting debt will take a generation to deal with.

That’s bad, but something is worse. Labour abandoned reform, but stuck to spending. Reform works, spending does not. The pupils were betrayed: this was all about a dispute between adults. Or a weapon which Gordon Brown believed helped him win elections. For three elections, Labour drew this dividing line: we spend, they cut. Vote for schools and hospitals: cash means you care. It worked politically. The Tories suffered a nervous breakdown, George Osborne signed up to Brown’s spending plans and a false consensus swept Westminster.

The Lib Dems’ Pupil Premium is a hangover from a failed ideology: that money helps education more than anything. It would work if there was a proper market in education, and profit-seeking schools who would open in poor areas first because the Premium made it rational to do so. But without such schools, it’s all carrot and no donkey. The Labour years started with a reasoned economic critique: that state spending was too low (especially in 1997-2000 when Brown stuck to Tory spending rules). But economic theory mutated into a dogma with a one-line catechism: spending is good, in every given situation. Analysis of this approach is not encouraged.

Deloitte looked at 34 previous reports on English state schools and found to its amazement that not one of them tested the link between funding and results. Brown didn’t want to know if it worked for pupils: it worked for him politically, and that appears to be all that he cared about. Those who paid the price are the pupils who only get once chance at education, and have their life chances dictated by the quality of tuition. And now they’ll spend the next 25 years paying higher taxes to cope with the debt, which is Brown’s one and only legacy. It is a betrayal of the very people whom Labour, as a party, purports to represent. Gove at least has commissioned the research, and his curriculum reform shows he does care about what works.

It will be at least 25 years before the debt-to-GDP ratio is back to normal. Britain had it worse, in the post-war years. But then, the money purchased a great victory. This time, the spending purchased staggeringly little but it did leave a moral. That the pursuit of spending, for its own sake, is the most dangerous ideology of all.

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Show comments
  • Teacher

    This is a very interesting report by Deloitte. However, I can only imagine what it cost the government to sponsor it. If they’d come to me, a teacher of English in a secondary school from 1989 to 2011, I would have told them the same thing for nothing. Throwing money at a problem doesn’t solve it and throwing money around that is tied to made-up ideology makes things worse.

  • Gareth

    Fraser’s missed the basic rule of statistics: correlation is not the same as cause. The report acknowledges this on page 8, before going on to ignore it. It takes a great deal more digging than merely running a few regressions before we can reliably say funding has no impact. Logically, it would be incredible if funding could be reduced to zero without educational outcomes being reduced at all. Clearly, resources play a role. It’s not simply a matter of what is spent but also the uses to which funding is put. The relish with which Fraser has seized upon one element of the report is revealing.

    • Fergus Pickering

      Revealing of what? Let me tell you an anecdote the dates back to the 1960s when I needed a job for a year. A friend of mine got it in the English Department of a top University. They had £500 left over from their budget and were keen to spend it so that the budget would not be cut for the next year. So I got it. The job was a complete waste of time but it did for me very well.

      • Gareth

        Great – what more evidence do we possibly need! Lets base our entire public policy on that anecdote.

        Has it never occurred to you that:
        1) Someone else in that role might have taken it upon themselves to make a contribution worthy of their salary?
        2) Other people in that department may have been doing something useful?
        3) Other departments within that university might have worked more efficiently?
        4) Other universities might have provided better value-for-money scrutiny?
        5) Secondary Schools (which is what the report is about) might operate differently to University English Departments?
        6) Funding accountability might have changed somewhat in the last 53 years?

        You hear what you want to hear to support the views you already hold. Frankly, your anecdote is a shocking weak form of evidence to offer in this current discussion, particularly in response to a moderately technical point about statistical inference.


    Michael Gove wrote in Times in 2003/2004 that he welcomed what Brown was doing because it would test to destruction the idea that public services can be solved by more money – i.e. he PREDICTED this.
    Clearly both Brown & Blair were on ego-trips financed by 13years * .say £1/2 bn = 6.5 TRILLION of other peoples’s money

  • Davidh

    How about private schools? What’s the spend per pupil / achievement correlation there? Maybe it’s ok for rich people to spend more on education in the hope of getting better results but not for everybody else…

    And on the tough subjects correlation. Perhaps it’s high achievers that choose tough subjects, not tough subjects that produce high achievers.

  • thanksdellingpole

    You voted for them!

    Time to vote for UKIP me thinks!

  • Curnonsky

    Deloitte needs to turn their gaze upon the NHS now.

  • Chris lancashire

    Please do not use offensive pictures to illustrate your articles.

  • EM

    The trouble is that Labour always describe ‘spending’ as ‘investment’.

    • Nicholas chuzzlewit

      Agreed. The most ridiculous and obvious lie of 1997 – 2010.

  • arnoldo87

    The first half of this article is worth reading and makes some serious points about future spending on education. Unfortunately the second half is just another unjustified blast at the last Labour government.

    You claim that we have a “creaking infrastructure”. Any evidence for this, Fraser? I would like to see a comparison between the quite disgraceful state of our schools in 1997 with today and then let you justify that claim.

    Furthermore this sentence appeared in the executive summary of the Deloitte report….”..This is not a longitudinal study. It represents a ‘snap shot’ analysis of a single cohort of pupils in England at a single point in time (the academic year 2010-11) across three measures of KS4 performance. The analysis cannot, therefore, isolate and measure the relative impact of policy initiatives over time. For example, in this study we cannot determine the educational impact of significant real increases in per pupil funding over the past decade, or whether investment has had the impact of improving schools in less well-off areas.”
    Therefore the thrust of your claims about the long-term effect of Brown’s spending is not supported by the report, but is just your opinion. As for your comments on the debt to GDP ratio we had enough distortion of the figures in your last article on Labour’s debt record to readily believe any similar claims from you.

    • Nicholas chuzzlewit

      None of which alters the basic truth that vast amounts of money were spent by Labour while the quality of education, health etc actually declined. No amount of econometric sophistry will alter the bitter legacy of Gordon ‘scum’ Brown.

      • arnoldo87

        Neither your comment nor Fraser’s contain any data at all (never mind econometrics) to back up your claims. For instance, give us the facts on long waiting time reduction for operations, or waiting times at A&E., numbers of nurses etc. during New labour’s term of office.

        I know we are falling behind in international terms on education, and something needs to be done about that. Bear in mind, though, that this is a relative measure, not an absolute one, and the infrastructure spending by Labour was absolutely essential to give us any chance of closing the gap.

        I like Michael Gove and think that generally his ideas are sound, but the simplistic claptrap that it’s all Brown’s fault is wishful thinking on your part, and contributes nothing of value to the debate.

        • Nicholas chuzzlewit

          “something needs to be done” award yourself the platitudinous clap-trap award of 2013 before getting on your high intellectual horse and denigrating the comments of others. Gordon Brown controlled the spending undertaken by the Labour Party between 1997 and 2010 and fought tooth and nail to prevent those incontinent levels of spending being accompanied by any meaningful reform. The infrastructure spending by Labour was something we simply could not afford and I will reference any number of statistics from the ONS etc to demonstrate that point. It is simply not worth the effort however, because like all socialists, you are clearly too stupid to understand the concept of affordability and how things are paid for.

          • Span Ows

            Point of order: in New Labour’s first term they stuck more or less to Conservative spending plans (as they had promised), this is clear when you see the crazy irresponsible overspending from 2001. Also, many of the changes in the first couple of years of the Coalition were already on the books.

          • arnoldo87

            Even if I were a socialist I would be happy to look at any statistics that you could offer to back up your case. As usual, however, evidence is there none – just flatulent hyperbole.

  • HookesLaw

    ‘Over the last decade, the size of the UK government grew from 37 per cent of GDP to 50 per cent of GDP’ – which is why we are in a mess now and why it takes time to unpick such a horrible mess. The spending genie is out of the bottle and its not easy to cram it back it.

    ‘Labour abandoned reform, but stuck to spending’ – whichn is why Gordon brown rates as one of the worst politicians of modern times and Tony Blair as pone of the weakest.

    ‘the pursuit of spending, for its own sake, is the most dangerous ideology of all.’ – which nis why Labour present the greatest clear and present danger to lour coluntry and why we need to vote Conservative, a party that believes in low tax and low spend, to keep them out.

  • glurk

    If this is the case, Im not sure which party looks the most credulous, or conniving

  • David B

    I am sure we will have the usual suspects defending spending for the sake of spending.

    It is staggering that our politicians are happy to spend such sums without consideration to the outcomes, but then again it is what we have come to from our politicians.

    • Mr Creosote

      A vanishingly small percentage of our politicians have ever run a business.
      Basic cost/benefit analysis is an entirely alien principle for them.

  • Slim Jim

    I’m glad there is text to accompany the graph above. At first I thought it was frog spawn; then perhaps it was caviare, but no – it’s Gordon Brown’s brain!

    • alabenn

      And the dark shaded bit is dead.

  • Mynydd

    .”And the resulting debt will take a generation to deal with” nice point but you should have added: because Mr Cameron/Osborne will add to the debt more in 5 years than Mr Blair/Brown did in 13 years.

    “And now they’ll spend the next 25 years paying higher taxes to cope with the debt, which is Brown’s one and only legacy” What about the £120,000,000,000 Mr Cameron/Osborne added to the debt last year, this year and next. Maybe in your world this debt of £360,000,000,000 don’t count, in mine it does.

    “It will be at least 25 years before the debt-to-GDP ratio is back to normal” How can this be when in Mr Cameron’s words, “we are paying down the debt” also remember Mr Osborne’s words “debt will fall as a percentage of GDP year on year”

    • Slim Jim

      I’m glad you have spotted that they’re all lying, two-faced b’stards. Remember Mr. no more boom and bust? A plague on all their houses. Did you seriously expect this government to pay off the debt they inherited in 5 years?

    • HookesLaw

      It is because spending is too high and cannot be turned off like water from a tap. It takes years to turn around.
      First you have to cut the deficits which whilst you are doing that still means debt is rising then you have to be able to run surpluses in order to pay down debt.
      All this takes place against the normal workings of the economic cycle, so there is a need to have surpluses to pay off the debt of the normal cycle and then from somewhere you have to find extra surpluses to pay off the accumulated debt.

      Since a large part of the deficit is structural and comes from spending the economy cannot ever afford to pay for, then that is why spending needs to be cut.

      Your remarks are once again facile socialist propaganda. It is labour who inherited falling debt but despite that they allowed debt to rise – not in a recession but in a period of growth. Sound economic management would have left debt 400 billion lower at the time of the crash.

      • Mynydd

        Why is it facile socialist propaganda to quote Mr Cameron. He said in a Party Political Broadcast “we are paying down the debt” when in fact it’s rising. This was no slip of the tongue, but a planned statement intended to deceive, that is propaganda and nothing socialist about it.

      • Makroon

        Do you think Mynydd doesn’t know that ? Lying, stunts and weasel words, that’s all they know, and having stitched up the Tories with their scorched earth policies, they sit there smirking and smug, waiting for the country to re-elect them.

  • Shazza

    The Labour Party – aka the Party of Mass Destruction

    • Russell

      And with a leader who has the backbone of an amoeba (according to Galloway who says Milibands recollection of their 1 hour talk was lies).
      I don’t know which of these two characters is the more deplorable.

    • Nicholas chuzzlewit

      Or perhaps the lying scumbag party.

      • telemachus

        “a left-of-centre political party formed to represent the interests of ordinary working people”
        You undertand
        Not the interests of Bankers

  • G Thomas

    Entirely consistent with my econometric thesis on spending and health outcomes. Spending not remotely a significant variable. Neither was level of income or employment. Ethos and awareness/involvement the only significant variables. Discussed face to face with David Cameron many moons ago too!

  • anyfool

    A nasty vote buying trick at the expense of the lives of children by the trash that infest Labour.

    The irony is that the self same children will be paying the price of Labours corruption.

    • telemachus

      You have fallen for Fraser’s trap hook line and sinker.

      Before 1997 educational standards were falling year on year and schools were rotting to the point that classrooms were falling down. Of course to stop this rot and get us back to 1979 standards it needed a truly massive investment that Gordon had the courage to put in

      A different question needs to be asked

      Just what would have happened if Gordon had not had the foresight to invest?

      We would have had hundreds of thousands of children in portacabins sharing dog eared 1979 books

      We should thank not lambast Gordon

      • anyfool

        You really do talk the most arrant nonsense, educational standards have been falling in almost all state schools since scum like Crossland and your fellow gutter rats scrapped Grammar schools and hijacked the best state schools for their inbred brats.
        The biggest shame is supposedly conservative governments including Maggie do not have the cojones to reverse this travesty.
        The likes of the Miliband, Balls and Blair do not want their children to have an equal chance at 11 plus or any plus exams against the rest, they are worse than the well off who pay via private schools,.
        Labour and their fellow socialist get the best for their brood but do not have to pay, they even freeload their kids futures at the expense of the poor, you and your fellow travellers are the scum of the earth

        • telemachus

          You make the mistake of the Murdoch media and try to belittle attempts at educational egalitarianism just because of a few family anecdotes

          • Fergus Pickering

            Educational egalitarianism! That’s it in a nutshell. Schools are first and foremost agents of social engineering. Actuallly teaching anything comes a poor second. Crosland said ‘I’ll close every fucking Grammar School in trhe land. While leaving Public Schools for his cronies.

          • jazz606

            “……educational egalitarianism….”

            WTFIT ?

        • Teacher

          This is very true. The Socialists finagle the system to catapult their own offspring into the top universities and onto the elite conveyor belt. At my school the Labour voting teachers pursued awful dumbing down policies for the pupils they taught while, to a man, worked the educational system to benefit their own kids. They paid for private education; went through the grammar system; appealed against school decisions that went against them; moved their children from school to school and moved house to secure the best for their kids. Well, that’s human nature, I agree, It was the mealy mouthed hypocrisy that stuck in my craw.

      • Fergus Pickering

        What is wrong with portacabins and dog-eared books? Gleaming new schools and computers don’t seem to have done the trick, do they? The school I was well-educated in was 10 years old and all the books were tenth hand. On the other hand our teachers were distinguished men and women.who KNEW stuff.

        • itdoesntaddup

          I suspect my school copy of the Shortbread Eating Primer was at least 30 years old.

          • Fergus Pickering

            Ah. We Latinists must stick together. My Latin Grammar had been written by a Headmaster of the school long dead. He looked like a mass-murderer. The blots themselves were far older than I was. And the Algebra book had been written before Churchill was Prime Minister..

        • telemachus

          “The school I was well-educated in ….”
          This is self evidently an incorrect statement
          Further your scool clearly missed self reflection from the curriculum

          • Fergus Pickering

            What is wrong with my sentence, telemachus? And it is true elf-reflection was not a subject at the school I was well-educated in.

            • Fergus Pickering


              • telemachus

                It shows

            • telemachus

              The issue is with “well”

            • Gareth

              I think you missed out there! We should demand Elf Reflection classes for all!

        • Teacher

          Absolutely, quite right. My husband and I spent what would have purchased us a small house buying the sort of primary education for our children that we were both given for nothing in our village primary schools in the sixties.

      • paulus

        I cant believe that I ever agree with you , but he is being selective. No conservative will ever barter or fight about the future of children. And if you do it, we wil kick you to death.

      • Teacher

        You have unwittingly hit the nail on the head here by identifying how the Socialists spent all the money on buildings and new equipment. Unfortunately, the important thing for children is the expertise and quality of the teaching – and Labour used its time in office to bully down standards with OFSTED and ‘play lessons’ designed to engage the un-engagable whilst betraying the diligent and focused students.

        I paid a large part of my teachers’ salary to send my son to a prep school where top class teaching went on in what were virtually sheds. At the same time hundreds of thousands of pounds were being spent in my own state school on buildings while proper, traditional teaching from experienced subject teachers was being driven out of those same flashy buildings by Labour initiatives. The poor and disaffected were completely betrayed as discipline and high standards would have given them a real chance in life while ‘infotainment’ got them no-where. The ‘pupil premium’ meant that the highest resources were being spent on those least able or willing to benefit from the extra money.

        Of course, one of the worst results of this policy was the near corruption it engendered in school management which became (like the Mid Staffs debacle in the NHS) almost totally focused on getting hold of the eye-watering sums of money being tied to building programmes and leftist initiatives.

        So, don’t worry about the ‘portacabins’ and the ‘children sharing dog eared 1979 books’ as such. That’s what my kids got and they both went to grammars schools and good universities. Worry about cash being wasted to no effect, or in this case, cash the country could not afford to lose, being used to drive standards down and betray the very students the government said it was trying to help.

        It is easy to criticise others without offering a solution so I will give you the conclusion I reached after 34 years of teaching English at a secondary school. The two crucial factors in a child’s success at school are:

        1) the attitude of the parents towards education,
        2) how much a child reads.

        Neither of these has anything to do with spending money. I have seen the poorest pupils reach Oxbridge because their parents were positive and the students read a lot.

  • Tom Lubbock

    If you read the deloitte report you will see that the finding that Fraser Nelson is so excited about (Insight 5) is based on a simple correlation (or so the report says). Whilst there is more sophisticated analysis supporting other conclusions in the report because analysis of funding and outcomes is simply a correlation it does not include any control for deprivation or any other measure of pupil advantage/disadvantage. As such the findings of the report are entirely consistent with the government line: you target resources at worse off areas to bring them UP to the standard of better off areas. The result is that schools results should be roughly similar irrespective of funding levels exactly because of the different amounts of funding targeted at them — and this is what the report shows.

    • Hugh

      Given the low level of correlation found (“there is no correlation at all between the level of per pupil funding and educational outcomes”) you have to have an absurdly high level of confidence in the accuracy with which resources are currently targetted for your point to be true, don’t you?

      • Tom Lubbock

        Govt target money based on demographic measures which will themselves be strongly correlated with pupil performance. On this basis I would actually expect better funded pupils to perform a bit worse as ‘funding’ is not a silver bullet. Had this been the finding would you be happy concluding that increasing funding to schools makes them worse? I would conclude that worse performing schools get better funded. Either way deloitte should have regressed all the relevant variables using multi-level models before making such strong conclusions about funding.

        • Hugh

          “Either way deloitte should have regressed all the relevant variables
          using multi-level models before making such strong conclusions about

          But we shouldn’t do further analysis to ensure massive increases in funding do actually increase results before committing that funding?

    • CaediteEos

      I think if the report was “entirely consistent” with the government line they’d be shouting it from the rooftops, not burying it away on their website.

      Besides, the core point of Fraser’s article still stands – Labour’s colossal spending increases on our schools, hospitals etc. have not bought the quality increases you’d hope. Hence the spending should be curtailed.

      • Tom Lubbock

        Don’t know what DfE did, but I wouldn’t shout about bad analysis. Would be irresponsible

      • HookesLaw

        The NHS is now going through a 20 billion savings programme (this was also in Labours manifesto). Why one must wonder did Brown need to spend the money in the first place? Answer – to get him the job as PM.

        • Andy

          He spent it because he is a Tax and Spend Socialist. They don’t know any better. Oh and because he was and is a complete moron.

    • itdoesntaddup

      If you read the report you will find that “as an independent variable, controlling for all other factors, school quality is an important indicator of educational outcomes.”
      Insight 3.