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.

Tags: Debt, Education, George Osborne, Gordon Brown, Public spending, Pupil premium, Spending cuts, UK politics