Educational Finance: Its Sources and Uses in the United Kingdom 9781487575564

Citation preview

EDUCATIONAL FINANCE ITS SOURCES AND USES IN THE UNITED KINGDOM

UNIT FOR ECONOMIC AND STATISTICAL STUDIES ON HIGHER EDUCATION THE LONDON SCHOOL OF ECONOMICS & POLITICAL SCIENCE

REPORTS

Graduate School: a study of graduate work at the London School of Economics H. Glennerster 2 The Utilization of Educated Manpower in Industry: a preliminary report M. Blaug, M. H. Peston and A. Ziderman 3 Manpower and Educational Development in India 1961-1986 T. Burgess, P. R. G. Layard and P. Pant 4 Educational Finance: its sources and uses in the United Kingdom. A. Peacock, H. Glennerster and R. Lavers In preparation

5 Education and Manpower: Theoretical Models and Empirical Applications T. Thonstad

EDUCATIONAL FINANCE ITS SOURCES AND USES IN THE UNITED KINGDOM

ALAN PEACOCK HOWARD GLENNERSTER ROBERT LAVERS

UNIVERSITY OF TORONTO PRESS

OLIVER & BOYD LTD Tweeddale Court Edinburgh 1 39a Welbeck Street London Wl First published 1968 First published in Canada 1968 by University of Toronto Press 8020 1555 7

© 1968 London School of Economics Reprinted in 2018 ISBN 978-1-4875-7267-9 (paper)

PRINTED IN GREAT BRITAIN BY R. & R. CLARK, LTD., EDINBURGH

Contents

Page

vi

LIST OF TABLES CHAPTERS I

1

AIMS OF THE STUDY

Acknowledgements II

III

2

3

THE MODEL ACCOUNTS

7 7 13 21

EDUCATION EXPENDITURE OF EACH SECTOR

Isolating education expenditure Education expenditure by sector Education expenditure and national income IV

V

Finance of expenditure by spending bodies Allocation of funds to spending bodies Supplies of funds to allocators of finance

24 24 29 33

PuBLISHED STATISTICS-POSSIBLE IMPROVEMENTS

35

SOURCES OF FINANCE

APPENDICES I

SOURCES AND USES OF EDUCATIONAL FINANCE IN ENGLAND AND WALES, SCOTLAND AND NORTHERN IRELAND,

II

1962/3

40

EXPENDITURE AND RECEIPTS OF AIDED INSTITUTIONS IN ENGLAND AND WALES, SCOTLAND AND NORTHERN IRELAND,

1962/3

53

III

EDUCATION AND NATIONAL INCOME AGGREGATES

58

IV

SOURCES AND METHODS

61

Annex A Annex B

Annex C

Non-education expenditure by economic categories, 1962/3

74

Maintenance grants and boarding fees expenditure by type of institution attended and source of funds, 1962/3

76

School population at independent and direct grant schools, January 1963

77 79

INDEX V

vi

CONTENTS

FIGURE 1.

Sources and uses of educational finance

Page 6

LIST OF TABLES

Tables within Chapters Table

III. EDUCATION EXPENDITURE OF EACH SECTOR

3.1

Non-education expenditure of educational institutions by type of service United Kingdom 1962/3 3.2 Grants towards maintenance met out of public funds United Kingdom 1962/3 3.3 Functional classification of expenditure by domestic users of funds United Kingdom 1962/3 3.4 Education expenditure by domestic users of funds, analysed by level of education United Kingdom 1962/3 3.5 Education expenditure by domestic users of funds, analysed by economic categories United Kingdom 1962/3

8 10 13 16

18

IV. SOURCES OF FINANCE

Receipts from spending bodies United Kingdom 1962/3 4.2 Allocation of funds to local authority committees United Kingdom 1962/3 4.3 Allocation of funds to local authorities United Kingdom 1962/3 4.4 Allocation of funds to spending bodies United Kingdom 1962/3 4.5 Inland Revenue and Customs and Excise receipts, 1962/3 4.1

25 30 30 32 34

Tables within Appendices Table

APPENDIX I

Functional classification of expenditure by domestic users of funds England and Wales 1962/3 11 Functional classification of expenditure by domestic users of funds Scotland 1962/3 rn Functional classification of expenditure by domestic users of funds Northern Ireland 1962/3 IV Education expenditure by domestic users of funds, analysed by level of education England and Wales 1962/3 v Education expenditure by domestic users of funds, analysed by level of education Scotland 1962/3 I

42 42 43 43 44

vii

CONTENTS

Table VI

VII

VIII

1x

x XI

xn XIII XIV

xv

Page

Education expenditure by domestic users of funds, analysed by level of education Northern Ireland 1962/3 Education expenditure by domestic users of funds, analysed by economic categories England and Wales 1962/3 Education expenditure by domestic users of funds, analysed by economic categories Scotland 1962/3 Education expenditure by domestic users of funds, analysed by economic categories Northern Ireland 1962/3 Receipts from spending bodies England and Wales 1962/3 Receipts from spending bodies Scotland 1962/3 Receipts from spending bodies Northern Ireland 1962/3 Allocation of funds to spending bodies England and Wales 1962/3 Allocation of funds to spending bodies Scotland 1962/3 Allocation of funds to spending bodies Northern Ireland I962/3

44 45 46 47 48 49 50 50 51 52

APPENDIX 11

Education expenditure of aided institutions, gories and type of institution England and Wales 1962/3 11 Receipts of aided institutions, analysed by institution England and Wales 1962/3 111 Education expenditure of aided institutions, gories and type of institution Scotland 1962/3 IV Receipts of aided institutions, analysed by institution Scotland 1962/3 v Education expenditure of aided institutions, gories and type of institution Northern Ireland 1962/3 VI Receipts of aided institutions, analysed by institution Northern Ireland 1962/3 VII Aided institutions and numbers of pupils United Kingdom 1962/3 I

analysed by economic catespending body and type of analysed by economic catespending body and type of analysed by economic catespending body and type of

54

55 55 56 56 57

57

I

Aims of the Study IN response to growing public interest in the size and structure of educational facilities and their relation to economic and social policy, there has been a welcome increase in the output of statistical information. Nevertheless, one important element in this development, the problem of how education is to be financed, has not been served so well. The Department of Education and Science, for example, published three volumes of its Statistics of Education for 1965, but, out of a total of more than 150 tables, only 15 were concerned with finance.1 The financial statistics published by the Scottish Education Department2 and the Ministry of Education in Northern lreland3 are even more restricted. One reason for the relative lack of attention to educational finance may be found in the troublesome conceptual problems associated with any attempt to place educational services in the social accounts, that is to say their position in the well-established framework for recording transactions between the different economic units in the economy. These problems have been reviewed in a previous paper by two of the authors of this study 4 which also outlined a possible framework and considered the treatment of education in the U.K. national accounts. Once these problems are overcome or circumvented in an acceptable way, a second difficulty arises. The financial data on education are not available in a form which makes it possible to fit them easily into a useful framework for policy purposes. Nor is it possible to make legitimate international comparisons. This monograph is an attempt both to describe a possible framework and to supply the missing data. Briefly, what we have done is to determine the scope of educational services, both public and private, and then to track down the sources of educational finance through the various spending agencies and allocators 1 The Department intends to publish five volumes of statistics for 1966. Volume 5 is devoted to finance and awards. 2 Education in Scotland, Appendices 1-4, Edinburgh, H.M.S.O., annual publication. See also Scottish Education Statistics 1966, Tables 46-8. This is the first edition of a digest of statistics relating to education in Scotland. 3 Education in Northern Ireland, Sections XIII and XIV, Belfast, H.M.S.O., annual publication. Also Education Statistics, No. 2, Belfast, H.M.S.O. 4 'The Social Accounting of Education', by Alan Peacock and Robert Lavers, Journal of the Royal Statistical Society, Series A, Vol. 129, Part 3, 1966. 1

2

EDUCATIONAL FINANCE

of finance back to the eventual suppliers of funds. As a by-product we are able to shed light on the relative importance of the private and public sectors and on the proportion of annual resources devoted to education compared to other parts of the economy. The form of analysis follows very closely that proposed by one of the authors at an O.E.C.D. conference in 1965.1 Chapter II therefore outlines very briefly the model accounts that we propose to use and the sources of information which were available. Chapter III analyses the expenditure of each sector of education. Chapter IV traces the sources of finance for each sector. Chapter V summarises the weaknesses in existing published statistics and suggests improvements which might be made in presentation and in collection of data. Appendix I gives more detailed analyses for England and Wales, Scotland and Northern Ireland separately. Appendix II is devoted to a detailed account of the direct grant institutions. Appendix III is concerned with deductions which might be made from this material about education expenditure and National Income aggregates. Finally, Appendix IV is concerned with sources and methods. ACKNOWLEDGEMENTS

This study was undertaken as part of a joint project on the finance of education being conducted by the Unit for Economic and Statistical Studies on Higher Education at the London School of Economics, and the Institute of Social and Economic Research at York University. The project is financed by the Department of Education and Science with a supplementary grant from the Scottish Education Department. Both of these departments and the Ministry of Education for Northern Ireland have been of the greatest help by making available to us summaries of the returns made to them by local authorities and by giving us access to the returns made by direct grant and voluntary institutions. The theoretical framework which forms the basis of this study was prepared for an O.E.C.D. conference on the statistical aspects of educational planning. It owes a great deal to the discussions which took place in the O.E.C.D. Advisory Group on the Statistics of Educational Finance and Expenditure and with the O.E.C.D. Directorate for Scientific Affairs. Finally we should like to thank Professors Moser, Peston and Wiseman who are associated with the project, Dr Blaug and Miss Woodhall for their comments, Miss Pinney for her help in preparing the paper for publication and Mrs Jory for her care in typing successive drafts. 1 'A conceptual scheme for the analysis of data on educational finance', by Alan Peacock, in Methods and Statistical Needs for Educational Planning, Paris, O.E.C.D., 1967.

II

The Model Accounts IN a very simple model of the education system, it might be sufficient to consider two sectors, one public-financed wholly out of taxation, and another private-financed wholly by households' fee payments for their children's or their own education. In the real world, no such neat divisions exist. Some public institutions charge fees, and private institutions receive grants from public funds. In some instances, fees at private institutions are paid out of public funds. Moreover, while local authorities may administer schools, they receive a large part of their funds from the central government. An analysis of the finance of education must therefore proceed in two stages. First, it is necessary to compare the size of sectors financed in different ways. Second, the sources of funds must be analysed for each sector. For the purpose of this model, we have distinguished four sectors: educational institutions which come under the direct control of the central government; those controlled by local educational authorities; autonomous institutions aided by grants from public funds; and private institutions unaided by grants of any kind. The definition of educational activity raises problems which have still to be resolved.1 In this book, we have kept closely to the narrow definition previously adopted by UNESCO 2-i.e. the activities of establishments offering formal instruction. We have thus not attempted to place a value on on-the-job training or income forgone by individuals attending these institutions. However, the difficulty still remains that the institutions often perform functions other than instruction-in particular, they may provide residential and catering facilities. While the expenditure of direct grant schools and universities includes the costs of administration, these costs are borne mainly by the local education office in the case of maintained schools. It is clear that to make valid comparisons between the expenditure of different sectors, the content of the expenditure must be standardised as far as possible. The 'non-education' expenditure must be distinguished from the educational. Any such distinctions are bound to 1 See Alan Peacock, op. cit. pp. 287-8 and F. Machlup, The Production and Distribution of Knowledge in the United States, Princeton, Princeton University Press, 1962. • Manual of Educational Statistics, Paris, UNESCO, 1961.

3

4

EDUCATIONAL FINANCE

be arbitrary. Many people would claim that boarding has an educational value of its own and we would not wish to dispute that. However, at the moment, comparisons of expenditure between sectors are vitiated because they include different kinds of expenditure. For example, the figures published for maintained schools distinguish expenditure on the school meals and milk service, but this is not done in the case of direct grant schools. Expenditure in training colleges includes expenditure on residence and catering; statistics on university expenditure exclude these items. Wherever possible in the following analysis, expenditure on meals and milk, residence, catering and welfare services like the School Health Service, are shown separately and comparisons made on the basis of 'pure education expenditure'. By this we mean expenditure devoted to instruction and its necessary adjuncts-administration and inspection, transport, and in the case of universities, research.1 Once the scope of educational activity is defined, we can consider other classifications of expenditure which are relevant to economic and social policy. Therefore, we offer a classification of expenditure by educational level, ranging from pre-primary to higher education. More immediately relevant for economic analysis is a classification which distinguishes factor payments, i.e. wages and salary payments, from other purchases on current or capital account. These classifications could form the starting point of more elaborate analyses. For example, an attempt to consider the impact of changes of educational expenditure on the economy might trace purchases of goods and services on current or on capital account to particular industries within the schema usually adopted in a table of inter-industry payments. We have regarded this sort of refinement as beyond the scope of our study. The second aim is to draw up a revenue account to balance the expenditure account for each sector outlined above, and to distingush the source of funds in each case. The educational institutions may be termed the 'users of funds', and those who provide the funds may be called the 'spending bodies' (see Fig. 1 on p. 6). Take the simplest case of private schools. The funds are provided mainly from the fees paid by parents. These can be classed as 'purchases by households'. The schools may receive loans from enterprises, such as building societies or banks. They may also receive grants either from foundations associated with the school or from a public body. The finance of local authority schools is more complicated. They are paid for by the local education committee. These committees, although they are 'spending bodies', do not raise their own funds. Their funds are allocated to them either by the finance committee of the local authority or, in some cases, by a direct grant from the central government. These last bodies have been called 'allocators of finance'. 1 The inclusion of research expenditure may well be a cause for criticism though, at the present time, there is no satisfactory way of excluding this expenditure. See C. F. Carter, 'The Economics of Higher Education', The Manchester School, January 1965.

THE MODEL ACCOUNTS

s

Finally, households and enterprises supply the allocators with their funds through taxes or the local rate. In some cases, revenue may come from overseas aid. We therefore have a chain of transactions with funds passing from one set of decision-makers to another. Moreover, the movement is not only horizontal. There are also 'vertical flows' between spending bodies and between allocators. An example of the first are grants from Ministries of Education to local education committees (see Fig. 1, example A). An example of the second was the general grant, which was a grant from the central government to local authorities to cover a range of services, one of which was education (see Fig. 1, example B). 1 In the simplest case of all, household expenditure on school or university fees, the household is acting as supplier, allocator and spender, and the nominal transfers may be called intra-sector transfers (see Fig. 1, example C) The number of flows is too great to attempt to illustrate the results of the analysis on a flow diagram. They are therefore presented in a series of matrices, the first showing the transfer of funds from spending bodies to the institutions in each sector, the second showing the allocation of funds to the spending bodies. In principle, it would also be possible to draw up an 'articulated' set of accounts which showed both the real and financial flows for the education sector within the whole economic system, but again, we have preferred to concentrate effort on an attempt to fill statistical gaps within a limited accounting framework rather than to elaborate the framework itself. The nearest we get to an attempt to show education's place in the economic system is in our analysis of educational transactions expressed as national income magnitudes. (See Appendix 111.) In many cases, and in particular in the case of the private sector, information is very limited. The aim has been to produce as accurate estimates as possible where actual accounting data are not available, in order to give a complete description of the method of analysis and to bring out the limitations in existing data. The figures relate to the financial year 1962/3 (I April-31 March). This was the latest year for which figures were available when the analysis was begun. 1 The method of calculating this grant was altered by the 1966 Local Government Act and it is now called the 'rate support grant'.

FIG. SUPPLIERS OF FINANCE

1.

SoURCES AND USES OP EDUCATIONAL FINANCE RECEIVERS OF FINANCE

SPENDING BODIES

ALLOCATORS OF FINANCE

USERS

Central Government Educational Institutions

Taxes

r-------~

Central Government

l~--------

Central Gov ernment : Education and other Ministries

1

I I I

I

I I I

Grants ·- · -

i ,_I

r...........

1--------------

Central Government

Educational

Institutions

Pre-Primary Schools Primar y Schools Secondary Schools Further Education Higher Education Other education expenditure Local Government Educational Institutions

Grants, •.••• •.. ••••

I

I I

I

I I

:-------'

~

Local Governmen t {Finance Committee)

Local Government

Local Education Committees

Educational Institutions

I I I

I I

Aided Educational Institutions

Households

Houset1olds

Other Private

1ST

House hold s

Institutions

Otlwr Private lnst1tut1on s

Enterpri ses

Enterprises

Enterprises

Rest of the World

Rest of the World

Rest of the World

Example A= •················•··•·····•

Pre-Primary Schools Primary Schools Secondary Schools Further Education Higher Education Other education expenditure

Example B

= •-·- ·-·-·-·

Example C = - - - - - -

Fees

Aided Edu cational Institutions

Pre • Primary Schools Primary Sc hools Secondary Schools Further Education Higher Education Other education expenditure Private Educational lnstttutions

Fees

Private Educational Institutions

Fees

Rest of the World

Other flows = -----------

Pre - Primary Schools Primary Schools Secondary Schools Further Education Higher Education Other education expenditure

1ST =Intra-Sector Transfer

III

Education Expenditure of Each Sector ISOLATING EDUCATION EXPENDITURE

THE first task is to distinguish education expenditure from other expenditure incurred by educational institutions. Both the National Income statistics and those published by the Department of Education and Science show public authorities' expenditure on school meals and milk separately from other expenditure on education.1 Since school meals are financed in part by parental contributions and in part by a specific grant from the Departments of Education, separate accounts are available for maintained schools. This is not so in the case of direct grant schools but it is possible to extract certain items of current expenditure clearly devoted to meals and milk, for example the purchase of food and milk. No separate capital expenditure figures are available. 2 Expenditure on L.E.A. boarding schools is not distinguished in the official statistics. 3 Expenditure on catering facilities and residence in other L.E.A. institutions is not distinguished in the published statistics. This is true of the local authority and voluntary teacher training colleges.4 These institutions do have separate tuition, and boarding and catering accounts which are returned to the government departments. It has therefore been possible to extract this expenditure. The returns made by universities to the University Grants Committee exclude expenditure on catering and residence. These accounts are meant to be self-financing and there is thus no information on the size of universities' current expenditure on these items. However, the figures for university capital expenditure include expenditure on residence and refectories. 5 Details of individual schemes are given in the Civil Estimates 1 See National Income and Expenditure 1967, Table 53, and Statistics of Education 1965, Part 1, Table 37. • See Appendix IV, p. 61. 3 R. Lambert in his study The State and Boarding Education, London, Methuen, 1966, estimates that in 1964/5 L.E.A.s spent £1 ·3 million on boarding provision of their own. • See Statistics of Education 1965, Part l, Table 46. 5 See Returns from Universities and University Colleges 1962/3, Tables 12 and 13 and Statistics of Education 1965, Part l, Tables 36 and 37.

7

8

EDUCATIONAL FINANCE

and these have been used to eliminate capital expenditure on these items.1 Finally, an estimate has been made of expenditure on boarding facilities at independent schools using estimates of boarding fees in the year 1962/3 and the number of boarding pupils in these schools. 2 In addition to expenditure on food and board, the so-called 'education' expenditure of local education authorities includes a number of items which do not come within the definition we adopted earlier-i.e. expenditure incurred by institutions providing formal instruction. One such item is the Youth Service (expenditure on youth clubs and youth leaders). Others are expenditure on physical training, sports grounds and athletics facilities. In addition, there is expenditure on the School Health Service. This is really preventive medicine amongst school children, though it is administered by local education authorities for convenience. These items of expenditure have been included under 'non-education' expenditure of local education authorities. (See Tables 3.1 and 3.3.) TABLE 3.1 NON-EDUCATION EXPENDITURE OF EDUCATIONAL INSTITUTIONS UNITED KINGDOM 1962/3

BY

TYPE OF SERVICE £ million

Type of service

England and Wales Scotland

Local Education Authority expenditure School meals School milk School Health Service Boarding expenses in T.T.C. Youth Service and Recreation Youth Employment Libraries

89·700 11 ·949 15·299 13·219 12·995

All L.E.A. expenditure on services other than education

143·162

United Northern Kingdom Ireland Total

8·802 1·743 1·479

1·905 0·607

0·859 0·244 0·865

0·060

13·992

2·572

159·726

0·127

100·407 14·299 16·778 13·219 13·914 0·244 0·865

Aided institutions School meals and milk Health Boarding

1·363 0·459 12·257

0·139

0·133

1·490 0·459 12·529

All non-educational expenditure of aided institutions

14·079

0·139

0·260

14·478

Private educational institutions Boarding

21·000

1·000

0·030

22·030

Source: The sources for this and all subsequent tables are described in Appendix IV, p. 61 et seq. Note: Here, as throughout the book: 1

See Appendix IV, p. 65.

-

= nil or negligible 2

..

= not available.

See Appendix IV, p. 62.

EDUCATION EXPENDITURE OF EACH SECTOR

9

Special schools' and approved schools' expenditure does not fall obviously into either of the two categories we have adopted. Special schools are administered or financed by education authorities but the expenditure is part instruction, part boarding and part medical. There is no way of separating these and since the boarding and medical expenditure are necessary to the provision of instruction, all expenditure on special schools has been included under education expenditure. Approved schools in Scotland are financed by local education authorities and the Scottish Education Department. In England and Wales these institutions are financed by child care departments and the Home Office. This expenditure does not appear in the education statistics. Clearly the function of these schools is partly penal and partly instructional. We compromised by assuming that expenditure on education in these schools was equal to the average expenditure per secondary school child in maintained schools. This appears under education expenditure in Table 3.3. The remainder of the expenditure does not appear at all. The total expenditure of L.E.A.s and other educational institutions on 'non-educational' goods and services is substantial and was nearly £200 million in 1962/3 (see Table 3.3). The figures relate to the total cash flowthat is, the total expenditure on wages and salaries, other current expenditure on goods and services, capital formation and loan charges. These separate categories are distinguished in Appendix IV, Annex A. 1 So far we have been concerned with non-education expenditure on goods and services, capital formation and loan charges, but education expenditure in the published statistics2 also includes awards to students. These, of course, are not part of the expenditure of educational institutions. Some of the total constitutes fee payments on behalf of those holding scholarships at universities or other institutions. To this extent, they are helping to finance those institutions and they appear later in Table 4.1. For the rest, student grants are transfer payments to individuals and finance their expenditure on food and boarding. In large part, they thus finance the non-education expenditure of educational institutions. In Table 3.2, we show the expenditure of the central government and local authorities on grants for maintenance. Nearly all the expenditure in this table relates to maintenance grants for those at universities, teacher training colleges or receiving further education. Local authorities can also give grants to those over school-leaving age who remain at school. Only £0·906 million was devoted to this item in England and Wales and £0·579 million in Scotland. It is interesting that in relation to the total school 1 Just over one-third of school meals expenditure was financed by parental contributions in 1962-3. The remainder is met by a specific grant from the Departments of Education. 1 For example, Statistics of Education 1965, Part I, Table 36.

B

10

EDUCATIONAL FINANCE

population substantially more is spent on this item in Scotland. Finally the figures in Table 3.2 include boarding fees paid by L.E.A.s for certain pupils attending independent or direct grant schools. For a breakdown of the totals in Table 3.2, see Appendix IV, Annex B.

TABLE 3.2 GRANTS TOWARDS MAfNTENANCE MET OUT OF PUBLIC FUNDS UNITED KINGDOM 1962/3

£ million

Providers of funds

England and Wales Scotland

United Northern Kingdom Ireland Total

Central Government: Depts. and Ministries of Education 4·222 Other (D.S.I.R., M.R.C., etc.) Local Education Authorities 30·167

5·038

0·500

34·389

All Grants

0·922

..

0·710

9·760 1·600 31-799

5·960

1·210

43·159

..

As can be seen from Table 3.2, most of the expenditure on maintenance in 1962/3 was borne by local authorities in England and Wales. This would be even more true today. No more State Scholarships for undergraduates were awarded after 1962. Local authorities in England and Wales then assumed full responsibility for undergraduate awards while the Ministry of Education retained responsibility for postgraduate awards in non-science subjects. 1 In Scotland, university awards are all made by the Scottish Education Department; local authority grants are confined to school bursaries and grants for those attending further education courses. The position in Northern Ireland is that the L.E.A.s provide undergraduate awards but recover a large part of the cost from the central government. The Ministry of Education provides the postgraduate awards. Finally, other government departments and research councils give grants to postgraduate students which cover maintenance, notably the Science Research Council2 and the Medical Research Council. Having isolated non-education expenditure and transfer payments to individuals, w.e are now in a position to pass on to education expenditure itself. Here some items are arbitrarily excluded from the published statistics merely because they are not incurred by the government depart1 The Ministry of Education became the Department of Education and Science in 1964 and in the academic year 1966---7, postgraduate awards in the social sciences were for the first time awarded by the Social Science Research Council. 2 In 1962/3, the body making the awards was the Department of Scientific and Industrial Research (D.S.I.R.). This appears in our tables.

EDUCATION EXPENDITURE OF EACH SECTOR

11

ments mainly concerned with education. One example is approved school expenditure (see page 9). Similarly, expenditure on the Agricultural Colleges in Scotland appears under the Department of Agriculture Vote. An estimate has been made of expenditure on instruction in approved schools in England and Wales, and the expenditure of the Agricultural Colleges in Scotland has been included under other aided institutions. The largest item of government expenditure which never appears in figures of education spending is that which is incurred by the service departments. This includes the provision of schools for servicemen's children, the maintenance of colleges like Sandhurst and the Dartmouth Naval Training College and the various education and training facilities which the Services provide for their personnel. The latter, to a large extent, provide courses identical to those in further education collegesG.C.E., Ordinary National Certificate and Higher National Certificate. All the Service Estimates show expenditure on their education facilities separately. They substantially understate it. It largely comprises expenditure on the wages and salaries of teaching staff and members of the education corps. Maintenance of educational premises is not distinguished from other maintenance expenditure. The item is nevertheless a substantial one-nearly £12 million in 1962/3. The biggest gap of all in official statistics has always been the lack of any information about the private sector. The only official estimates are those which are included in the National Income and Expenditure total of consumers' expenditure, but they are not published separately.1 One attempt has been made2 to estimate the total expenditure of private schools from 1920 to 1955. This was based on the average fees paid and the number of pupils attending these schools. However, when this estimate was made, no reliable figures were available either of fees or the number of pupils at independent schools. Since then the Department of Education has required all independent schools to be registered. The Department now publishes annually statistics showing the number of pupils attending these schools, the size of the schools, and number of teachers employed. It also publishes less regularly, a list of all those schools which it has recognised as efficient under the 1944 Education Act, together with the number of pupils and the fees of each school. Boarding and tuition fees are given separately. 3 Our own estimate of fee income for tuition was obtained by multiplying tuition fees by the number of pupils in each school. In one respect this will produce an overestimate, since many schools have reductions on the normal fee for various categories of pupil, e.g. where there are brothers or sisters at the school. On the other hand many schools charge for 'extras'. To a certain extent these factors For a discussion of these estimates, see Peacock and Lavers, op. cit. J. Vaizey, Costs of Education, London, Allen & Unwin, 1958, pp. 141-55. • List 70.

1

2

12

EDUCATIONAL FINANCE

compensate for one another and since no accurate figures were available, no account was taken of either. Using Year Books and similar sources, it was possible to obtain some information about the level of fees in a number of non-recognised schools. The level of fees was found not to differ significantly from a sample of recognised schools with similar characteristics-age and sex of pupils, and size range. Average fees of recognised schools broken down in this way were then applied to nonrecognised schools in comparable categories. This gave an estimate of fee income, again for tuition only. In addition, a significant proportion of the expenditure of some independent schools is financed out of endowment income. A recent study of property ownership in Great Britain1 gives us some idea of the income of educational trusts. By excluding universities and the expenditure from these funds on scholarships, a minimum estimate was obtained of the endowment income of schools-just over £5 million. A small amount was added to cover income from appeal funds which is usually devoted to capital expenditure. The results are given in total in Table 3.3. 2 It should be stressed that the figures are not of the same order of accuracy as those for the preceding sectors which derive from accounts of institutions and of public authorities. The Unit for Economic and Statistical Studies on Higher Education is now conducting a survey of the finance of independent schools in co-operation with the Public Schools Commission which it is hoped will give a much clearer and more accurate picture of the expenditure and the income of independent schools. Finally, there is a whole range of private institutions providing instruction-from commercial and language colleges with large staffs to the individual piano teacher. The only source of information about this part of the private sector is to be found in the Ministry of Labour's Family Expenditure Survey which includes an item on households' expenditure on education. This comprises expenditure on university, direct grant and independent school fees, including boarding fees, as well as expenditure on correspondence courses, secretarial courses, music lessons, etc. The unpublished analyses of this survey distinguish expenditure on items other than university and school fees. The Ministry of Labour provided us with the average weekly household expenditure falling in this category and we have made a rough estimate of total expenditure by households on instruction of this kind in 1962/3.3 Since the sample was small and not designed for this purpose, the margins of error are large. Moreover, we have equated households' expenditure with the expenditure of institutions. In most cases-correspondence colleges and music teachers, etc., fees prob1 E. V. Morgan, The Structure of Property Ownership in Great Britain, Oxford, Clarendon Press, 1960. 2 For more detailed description of the method employed, see Appendix IV, p. 67 et seq. 3 See Appendix IV, p. 68 et seq.

13

EDUCATION EXPENDITURE OF EACH SECTOR

ably form almost their sole source of income. One major exception may be professional education. The item in the Family Expenditure Survey includes fees paid and expenses incurred in professional training for the individual concerned, but the courses provided by the professions may well be subsidised to a significant extent.

EDUCATION EXPENDITURE BY SECTOR

In Table 3.3 we give as complete a picture of education expenditure, by sector, in 1962/3 as we can obtain for the United Kingdom. 1 The last two TABLE 3.3 FUNCTIONAL CLASSIFICATION OF EXPENDITURE BY DOMESTIC USERS OF FUNDS UNITED KINGDOM 1962/3 £ million

Education expenditure

Users of funds Central Government

Depts. and Ministries of Education Armed Services Other (D.S.I.R.)

Administration (1)

Re-

search (3)

Total (4)

0·116 1 I ·827

5·029 11 ·827

9·760

4·913

1 l ·943

16·856

11 ·360

28·682

958·940 0·250

987·622 0·250

159·726

31·799

28·682

959·190

987·872

159·726

31·799

6·260 1·470

91 ·706 54·909

9·263

107·229 56·379

14·478

7·730

146·615

9·263

163·608

14·478

Schools* Other•

2-600

63-000 21·700

65·600 21·700

22·030

All private

2-600

84·700

87·300

22·030

43-925

1,202·448

1,255·636

196·234

All Central Government

Local Authority institutions L.E.A.s Other

All Local Government Aided institutions Universities Other

All aided Private educational institutions

All domestic users of funds

4·913

Instruction (2)

NonTransfer education payments expendi- to inditure viduals (5) (6)

9·263

1·600

43·159

• Estimates. 1 Separate analyses for England and Wales, Scotland and Northern Ireland are given in Appendix I, p. 40.

14

EDUCATIONAL FINANCE

columns summarise the figures given in Tables 3.1 and 3.2. The fourth column of figures gives the total education expenditure of each sector. This includes current expenditure on goods and services, capital formation, and loan charges. (These categories are distinguished in Table 3.5.) It shows clearly that the great bulk of education expenditure was undertaken in institutions run by local education authorities-nearly four-fifths of the total. Together, central and local government actually provided almost exactly 80 % of all education. It is of no surprise that the proportion is as high as this. What has been rather less obvious from the published statistics is the size of the non-public sector, in particular what we have called the aided sector. Nearly £164 million was spent in 1962/3 by institutions which were supported by, but not administered by, any public agency. This expenditure formed about 13 % of all educational expenditure. Almost two-thirds of this was university expenditure; the rest was distributed between the many kinds of institutions described in Appendix II. The remaining 7 % of expenditure was undertaken by private institutions. Three-quarters of this was undertaken by schools.

A functional classification

The first three columns of Table 3.3 are an attempt to classify total expenditure by function, in the same way as the model accounts mentioned previously. However, this analysis has a number of defects. In allocating expenditure to administration, for example, the only guide was expenditure which was so designated in the accounts of institutions or the returns of local authorities. Unfortunately there is no consistency in the definition of administration between different types of institution. In particular, no attempt has been made to distribute expenditure on teachers' salaries between administration and instruction in order to take into account the administrative duties of headmasters, professors or other teachers. The published statistics distinguish the administrative expenditure of local education authorities. This is equivalent to the cost of running the education department in the Town or County Hall and the subsidiary offices. It does not cover the expenditure on school secretaries and clerical assistance in the schools. In part, the local authority administrators will be concerned with schools other than those they actually run, e.g, any direct grant schools in the area. However, this item must be an insignificant part of the total and the whole administrative expenditure of L.E.A.s has been shown here as associated with L.E.A. institutions. The returns which direct grant schools make to the Department of Education have two main items listed as administrative expenditure-the

EDUCATION EXPENDITURE OF EACH SECTOR

15

salary of the bursar and that of the headmaster's secretary. Most other aided institutions and the universities distinguish costs of administration. We have no information on the administrative costs in private schools but it has been assumed to form the same proportion as in direct grant schools. In total, administration formed about 3·5 % of education expenditure though in terms of real resources devoted to this activity, the proportion is almost certainly higher. Virtually all of the expenditure of the central government is devoted to administration which includes the inspection of all schools. Local authorities devoted almost 3 % of their expenditure to administration, aided institutions other than universities about 2·5 % and universities nearly 6 %. For the reasons already given, too much significance should not be read into these comparisons. The category 'research expenditure' is open to more objections. Here again, we have not attempted to allocate expenditure according to notions of time spent on this activity. We have merely recorded the activity which is specifically attributable to research in the accounts of institutions. In the case of universities this means, in practice, research activity specifically financed by outside agencies. The U.G.C. have recently asked universities to distinguish expenditure on all research activity, in part by dividing teachers' salaries according to the time spent on this. The procedure adopted is open to considerable doubt1 but it will certainly produce a much higher figure than that given here. In brief, the functional classification of expenditure in Table 3.3 can only give a very rough indication of the uses to which expenditure is put. We shall not have consistent or detailed descriptions until more studies are undertaken at institutional level.

Education expenditure by level

We now analyse the expenditure of each sector by level where more consistent comparisons can be made. The levels we shall use are, with one exception, those suggested in the model set of accounts: 2 pre-primary or nursery education; primary, i.e. up to 10 years of age; secondary, i.e. 11 years and over; further education; and higher education. The O.E.C.D. category 'technical education' is to a large extent comparable with that of 'further education' which we have used, though the further education colleges do provide a certain amount of non-technical education. They also provide courses of degree-level or equivalent, normally called 'advanced courses'. These came within the 1 For a discussion on these returns and the methods adopted, see H. Glennerster, Graduate School, ch. x, London, Oliver & Boyd, 1966. 2 Alan Peacock op. cit.

16

EDUCATIONAL FINANCE

scope of the Robbins Committee's definition of higher education. 1 That Committee's estimates of the expenditure on advanced courses in further education colleges have been added to expenditure by universities and teacher training colleges, to constitute 'higher education'. The category 'non-classifiable' covers expenditure on school transport, administration, special schools and approved schools which cannot reasonably be allocated between levels. The category 'other' arises because the official statistics only allocate net expenditure by level. The total expenditure figure we are using is gross but the additional sum cannot be allocated between levels of education. There are also certain loan charges which properly should be allocated by level but the form of the accounts makes this impossible. It is clear from Table 3.4 that local authority institutions contribute most at primary level. Nearly 93 % of expenditure at this level in 1962/3 TABLE

3.4

EDUCATION EXPENDITURE BY DOMESTIC USERS OF FUNDS, ANALYSED BY LEVEL OF EDUCATION UNITED .KINGDOM 1962/3

£ million

Level of education Users of funds Central Government Depts. and Ministries of Education Armed Services All Central Government Local Authority institutions L.E.A.s Other All Local Government Aided institutions Universities Other All aided Private educational institutions Schools• Other• All private All domestic users of funds

PreNonprimSecondclassiary Primary ary Further Higher liable Other

11·827 11 ·827

All levels

5·029

5·029 11-827

5·029

16·856

3-255

322-417 428·072 114·752

40·244 65·459 13-423 0·250

987-622 0·250

3-255

322·417 428·072 114·752

40·244 65·709 13-423

987·872

0·084

5·554

21-491

5·664

107·229 18·910

4·676

107-229 56·379

0·084

5·554

21·491

5·664 126·139

4·676

163·608

2·210

20·740

42·650

2·210

20·740

42·650

5·549

21-700

65-600 21-700

21·700

87-300

348·71 I 492·213 153-943 166·383 75-414 13-423

1,255-636

• Estimates. 1

Report of the Committee on Higher Education, London, H.M.S.O., Cmnd. 2154,

1963.

EDUCATION EXPENDITURE OF EACH SECTOR

17

was undertaken by state primary schools. There are a number of reasons for this. The most important is that the number of pupils in independent schools gradually rises with age. In 1962/3 there were about 30,000 children of 5 years of age in independent schools of all kinds; 39,000 of 11 years of age and nearly 46,000 of 14 years of age (England and Wales figures). 1 The second reason is that at the secondary stage, a higher proportion of the pupils are at recognised schools which are larger and have higher average fees than the other schools. This situation broadly reflects that in England and Wales where the bulk of private school expenditure takes place. There is a similar though less pronounced trend in Scotland and the reverse situation in Northern Ireland (see Appendix I, p. 43 et seq.).

The direct grant schools' expenditure is even more heavily concentrated at secondary level. This is not surprising, for although many direct grant grammar schools do have lower schools, they receive no direct grant towards their expenditure. In few cases do they accept pupils before 9 years of age. Aided schools are particularly important in Northern Ireland where nearly half of the expenditure at secondary level is undertaken by these schools. About three-quarters of all grammar schools are voluntary schools-the equivalent of the direct grant grammar school in England and Wales. (See pp. 56 and 57.) At the pre-primary stage, the private and aided schools are substantially more important. Even so, nearly 60 % of the expenditure in 1962/3 was undertaken by local authority schools. It is worth emphasising that we are here concerned only with officially registered nursery schools. There are, in addition, day nurseries provided by local health authorities which we have defined as not providing 'educational' facilities. There are a large number of private institutions of a similar kind, and here the private provision is larger than the public.2 Nearly 75 % of further education was provided in local authority institutions. £5·7 million was spent by direct grant institutions like the Royal College of Art and the College of Aeronautics. Finally, household expenditure on education and training has been allotted to further education, though some of it is more properly 'non-classifiable'-such as expenditure on piano lessons. At the level of higher education, the aided institutions become the largest source of expenditure. Universities are the most important element and there are also the C.A.T.s. In the year under consideration, they were still direct grant institutions, though after 1962/3 they should be included with the university sector. Finally there are the voluntary training colleges. See Appendix IV, Annex C, p. 77. Children and their Primary Schools: A Report of the Central Advisory Council for Education (England) (The Plowden Report), Vol. 1, p. 108, London. H.M.S.O., 1967. 1

1

18

EDUCATIONAL FINANCE

The contribution of local authority institutions to higher education is of two kinds: first, the expenditure on advanced courses in LE.A. colleges of further education (including regional colleges) which was £26·2 million in 1962/3; second, expenditure on teacher training colleges run by L.E.A.s in England and Wales. Nearly all such colleges in Scotland and Northern Ireland are aided institutions. Education expenditure by economic categories

So far we have been concerned with total expenditure, undifferentiated by economic categories. Table 3.5 presents the expenditure of each sector analysed by broad economic categories. Column I shows wages and salaries of teaching staff and column 2 wages and salaries of other staff. Both items include employers' National TABLE 3.5 EDUCATION EXPENDITURE BY DOMESTIC USERS OF FUNDS, ANALYSED BY ECONOMIC CATEGORIES UNITED KINGDOM 1962/3

£ million

Purchases of goods and services Wages and salaries Users of funds

Teachers Others (1) (2)

Other Loan current Capital charges (3) (4) (5)

Central Government Depts. and Ministries of Education Armed Services

0·026 8·895

4·636 0·050

0·358 2·047

0·835

All Central Government

8·921

4·686

2-405

Total (6)

0·009

5·029 11 ·827

0·835

0·009

16·856

Local Authority institutions L.E.A.s Other

481 ·314 0· 140

98·776 165·890 157·736 0·090 0·020

83·906

987·622 0·250

All Local Government

481·454

98·776 165·980 157·756

83·906

987·872

Aided institutions Universities Other

36·358 30·356

8·545 5· 165

35·695 1 l ·650

26·514 8·184

0·117 1·024

107·229 56·379

All aided

66·714

13·710

47·345

34·698

1·141

163·608j

Private educational institutions Schools•

45·920

5·000

11 ·600

3·000

All domestic users of Funds Excluding 'other private'

122·252 227·330 196·289

603·009

Total (including 'other private')

65·600 85·056

1,233·936 1,255-636

*

Estimates.

EDUCATION EXPENDITURE OF EACH SECTOR

19

Insurance contributions and superannuation payments as is normal in national accounts. Column 3 shows other current expenditure on goods and services. Column 4 is capital formation. Theoretically there should be a separate item under capital expenditure-'increase in stocks', for example, the increase in the value of exercise books in stock, but no information of this kind is collected. Column 5 shows loan charges. This item should distinguish loan repayments from interest payments but the available sources do not make this possible. A rough estimate can be obtained in the case of LE.A. expenditure in England and Wales. Here 40 % of loan charges constituted interest payments. These are simple and very obvious categories. They are moreover necessary if any meaningful comparisons are to be made between the resources devoted to education and National Income aggregates. Yet in the past no such analyses have appeared in the official statistics. For example, teachers salaries have included superannuation but not National Insurance contributions. Other salaries have never been shown separately. In the latest volume of statistics both defects have been remedied in the case of local authority expenditure, but not elsewhere. 1 The joint publication of the Institute of Municipal Treasurers and Accountants and the Society of County Treasurers, Education Statistics, does analyse LE.A. expenditure in much more detail, but only in the case of that devoted to primary and secondary schools. The returns the local authorities made to the three Departments have enabled us to categorise their net expenditure in the way described above. Even so, some assumptions have had to be made; for example, employers' National Insurance contributions were not distinguished from 'other current expenditure' in the returns made by local authorities in 1962/3. However, the Department of Education had to give an estimate of this item to the Central Statistical Office for the National Income statistics and this estimate has been used here. Another example is capital expenditure on voluntary schools. In 1962/3, the religious denominations received a central government grant to finance capital expenditure on these schools equivalent to 75 % of the total cost and could raise a loan from the Department of Education to cover the remainder of the cost in some cases. 2 Thus, while the current expenditure on these schools appears in the LE.A. returns, capital expenditure does not. It can only be traced from the expenditure of the Department on grants and loans. Moreover, this item is not negligible. It amounted to nearly £15 millions' worth of school building in 1962/3. The accounts which aided institutions return to the Departments are sufficiently detailed to allow this analysis to be undertaken very simply. The returns which the universities make to the U.G.C. are particularly 1 2

Statistics of Education 1965, Part I, Table 41. The percentage has now been raised to 80%.

20

EDUCATIONAL FINANCE

well categorised for this purpose. Moreover, the form of these returns has changed little since before the First World War. In the case of aided institutions, least information exists about capital expenditure. The university returns only cover current expenditure. The U.G.C. have information about capital expenditure which qualifies for a non-recurrent grant, but details of privately financed expenditure on capital projects can only be estimated from quinquennial returns made by the universities about the extent of their 'benefactions'. Similarly, only those direct grant schools which are foundation schools -about one in three-have to return capital expenditure figures. We sent a questionnaire to a sample of all direct grant schools and the figure included in Table 3.5 and the preceding tables is derived from this survey. 1 A detailed description of the expenditure of aided institutions in the United Kingdom is given in Appendix IL The figures for teachers' salaries in private schools have been estimated by assuming that average salaries in these schools are the same as those for similar categories of teachers in state schools. Since the Burnham Scale is used as a basis for teachers' salaries in all sectors, this is not an unreal assumption. Some of the largest schools pay slightly more than this rate and there are 'fringe' benefits which are difficult to measure, but some of the smallest schools also pay less than the Burnham Scale. We have also assumed that independent schools contribute a sum equal to 5 % of salaries for teachers' superannuation. An estimate was also made of National Insurance contributions. There is no detailed analysis of the salaries actually paid to teachers with different qualifications in Scotland or Northern Ireland. It was assumed that the proportion of expenditure devoted to teachers' salaries was the same for all private schools in the U.K. The division of other current expenditure between wages and salaries and the rest, was made by assuming that the expenditure was allocated in the same ratio as in the case of the tuition accounts of direct grant schools.2 No suitable basis exists for distributing the expenditure of other private institutions though a very high proportion will be expenditure on teachers' salaries. Excluding this last item, Table 3.5 shows that just over £600 million was devoted to teachers' salaries in 1962/3. They formed nearly half of all expenditure and 63 % of current expenditure. The proportion of current expenditure devoted to this item varies very little between sectors. The percentage for all L.E.A. institutions was 65. For aided institutions other than universities it was also 65 %. Private schools had a higher figure, 70 %, on our estimate. This reflects the lower pupil/teacher ratio in these schools. Universities alone had a significantly lower figure-45 % of their current 1

See Appendix II, Table I, and Appendix IV, p. 66. 2 For more detail, see p. 70.

EDUCATION EXPENDITURE OF EACH SECTOR

21

expenditure. The distribution varies a little in each of the three countries. Local education authorities in Scotland devoted 69 % of their current expenditure to teachers' salaries. The variations between types of institution are also surprisingly small. Taken together with salaries of other staff, it can be seen that a very substantial part of current expenditure goes on salaries-nearly 76 % in 1962/3.

Nearly £200 million was spent on capital formation in the education sector. A relatively high proportion-about 14 % of the total-was spent on university building, and this was only building for instructional purposes. To a large extent this is explained by the very rapid expansion which took place in student numbers during the early 1960s.

EDUCATION EXPENDITURE AND NATIONAL INCOME

One of the immediate questions which the preceding analysis raises is whether we are now in a position to make a more legitimate comparison of educational expenditure and National Income aggregates. Broadly speaking, National Income magnitudes are designed to show, on the one hand, the contribution of the various production sectors to the annual output of resources or, on the other, the division of the annual output of resources as between those goods and services consumed immediately and those which represent an addition to the stock of capital. Looked at in the first way, the contribution of any production sector is measured either by adding together all the factor payments in that sector (wages and salaries, profits, interest and rent) and expressing them as a proportion of total incomes (the Gross National Income) or by adding up the gross sales of the sector and subtracting from these sales all purchases from other production sectors together with imports. The resultant magnitude in this last method of calculation can then be expressed as a percentage of total output (the Gross National Product). Looked at in the second way, one may regard the contribution of the relevant sector in terms of the purchases made of its product by 'final buyers', i.e. domestic consumers, government, buyers of investment goods, and, in an open economy, the rest of the world. This is in essence a measure of the direct cost of education. 1 When education is related to National Income, it is nearly always considered in the second way, and this particular comparison raises special problems of its own. Leaving aside the 'crude' method of comparison 1 But not, of course, of the 'real' or 'opportunity' costs which requires an estimate of the loss of potential output resulting from the withdrawal from the labour force of those undergoing education.

22

EDUCATIONAL FINANCE

which simply lumps all government expenditure together (goods and services, transfers, loans and grants) and expresses it as a proportion of total expenditure (Gross National Expenditure), there are difficulties encountered in adding together public and private expenditure considered as part of final output. Convention demands that all government purchases of goods and services, including such purchases by education services, are regarded as final expenditure, yet, clearly in the case of education at least, these are 'inputs' which are used to produce an output of educational services. As these services are not priced, we have to adopt the subterfuge of valuing output by the value of inputs. The trouble is that when we add in the private sector, the correct magnitude for comparison with Gross National Expenditure should be households' expenditure on education, e.g. fees and expenditure on books, etc., but this means adding a measure of the value of private educational output to a value of public educational inputs. On the other hand, if we adopt the alternative of adding expenditure on inputs by private educational institutions to the public expenditure figure we do not achieve consistency. This is because some of these inputs are purchases of intermediate goods from other production sectors and are therefore not part of final output. The situation is further complicated in the United Kingdom by the fact that some institutions, e.g. universities and direct grant schools, are treated in the same way as households, i.e. they are part of the personal sector in the national accounts, while others, e.g. profit-making independent schools, are not. If, therefore, we wish to compare educational activity with National Income magnitudes, it makes more sense, at least in the United Kingdom, to attempt a valuation of the contribution of education as an 'industry' to total output (Gross Domestic Product). 1 To do this it is necessary to know: the wages and salaries paid to those in educational institutions, which can be obtained from Table 3.5; imputed rent for educational buildings; and an estimate of profit and interest payments of private institutions. The Central Statistical Office produce an estimate of imputed rent for local education authority buildings. In Appendix III an estimate is made of imputed rent and profit in the private sector. It appears that using the definition we have adopted in this monograph, the education 'industry' contributes just over 3 % of the Gross Domestic Product at factor cost, and certainly falls within the range 3·0 to 3·5 %. This is substantially less than the figure normally referred to. Statistics of Education 1965, Part I for example, refers to a figure of 4·8 % of Gross National Product for the year in question-1962/3-and this figure refers only to public expenditure on education. 2 The reason for the discrepancy is two-fold. First, the Department's figure includes transfer 1

For further discussion, see Peacock and Lavers, op. cit. • Table 36.

EDUCATION EXPENDITURE OF EACH SECTOR

23

payments, such as students' grants, and 'non-educational' expenditure, such as that devoted to social and physical recreation, the School Health Service and boarding. Secondly, the expenditure figure includes purchases from other sectors-which count as intermediate output when education is considered as an industry.

IV

Sources of Finance FINANCE OF EXPENDITURE BY SPENDING BODIES

HA YING analysed the expenditure of institutions in the main sectors, we now turn to a detailed analysis of the way each sector is financed, and we begin by tracing back the expenditure of the various institutions to those bodies or groups in society which actually provide the money for the individual institutions. The total expenditure of each sector is given in the bottom row of Table 4.1. It is distributed between the spending bodies, the Departments and Ministries of Education, other government departments, local authorities, households, enterprises and other private institutions such as foundations, charitable trusts and religious denominations. In each case, the type of finance is distinguished-the three categories being grants, purchases and loans. Where, for example, the local authority is shown as giving a grant to a local authority school, the transaction is a notional one. 'Purchases' indicates either the payment of fees directly by parents or else it indicates the payment of fees by a public authority or charity on behalf of a student. The most obvious example of this is the payment of university fees for all students holding local authority scholarships. Column 10 represents expenditure abroad on education which is financed by spending bodies in the United Kingdom. In practice, we know almost nothing about such transactions and this column is included merely to show how the scheme of accounts should appear. It contains one item: the government's contribution to international education agencies like UNESCO. The item in the penultimate row of Table 4.1 represents the finance of United Kingdom educational institutions by spending agencies abroad. Here, too, we have little or no information. The one figure inserted is an estimate of university research financed from abroad. Columns 1 and 2 of Table 4.1 are fairly obvious. The activities of the government departments are self-financing. Column 3 indicates how local authority institutions are financed. As is to be expected, nearly the whole of the expenditure is financed by the local education authority-£949·050 million out of the total of £987·622 million. The other items require some comment. The most important is the£16·480 24

TABLE 4.1 (")

Spending bodies Departments and Ministries of Education Grants Purchases Loans Other Ministries Grants Purchases Loans Local Government Grants Purchases Loans Households Grants or donations Purchases Loans Enterprises Grants Purchases Loans Other private institutions Grants Purchases Loans Rest of the world Grants Purchases Loans Total

Central Government Depts. of Armed Education Services (1)

£ million

RECEIPTS FROM SPENDING BODIES: UNITED KINGDOM 1962/3

(2)

Domestic users of funds Local Authority Aided Private educational All institutions institutions institutions domestic Univerusers of L.E.A.s Other sities Other Schools Other Funds (3)

(4)

(5)

(6)

(7)

(8)

(9)

Cll

0 C:

Rest of world (10)

:=

(")

t'1

Cll

0

""l

-z ""l

5·029

-

11·827

-

3·584

-

-

-

-

-

949·050 3·670

-

-

16480

-

5·029

-

-

-

-

-

-

-

-

14·838

-

-

-

-

2·241

-

33·833 1·160 0·013

-

-

-

85·630 0·245

2·135 0·011

1·750

0·250

1-615 5·311

1·332 7·739

3·369

-

-

0·510 1·523

7·520

-

1·460 53·200

21·700

-

2·040

-

0·530

-

6·644

-

1·470

-

-

-

-

-

-

-

-

11·827

987-622

0·250

-

-

-

107·229

-

1·609 1·003 0·024

-

56·379

-

-

5·175 0·116

-

-

65·600

-

-

42·446 3-401 0·013

-

2·570

-

1·609

-

27·660 0·140

-

1·470

21·700

z

t,:I

952·247 20·089 1·970 100·423

-

>

(")

99·592 2·006

-

-

0·394

-

1,255·636

N

0·394

VI

26

EDUCATIONAL FINANCE

million which represents the fees, rents and recoupments of L.E.A. institutions. Just over half of this sum represents the income from fees paid to further education colleges for courses they provide. The remainder of this item is made up of miscellaneous receipts, for example for the hire of rooms. The item 'local government purchases' from local authority institutions refers to the fees paid as part of scholarships awarded by L.E.A.s to students taking courses at L.E.A. teacher training or further education colleges. The item shown under 'grants from other private institutions'-£14·838 million-represents the expenditure of the religious denominations on school building for the voluntary maintained schools. As has been mentioned previously, this expenditure is largely reimbursed by a grant or by loans from the central government. This appears in Table 4.4 which shows how the spending bodies are financed. The last item which requires comment is the figure of £3·584 million 'Grants from Depts. and Ministries of Education' which represents the expenditure of the Ministry of Education in Northern Ireland which pays directly the salaries of teachers in nursery, primary and special schools run by local authorities. Although the Ministry actually pay these teachers' salaries, the sum involved counts towards the pooled expenditure which local authorities repay, in part, to the central government. The direct payment is largely a matter of convenience (see p. 70). This is the only example of the direct finance of L.E.A. schools in the United Kingdom though it is, of course, the method used in some other countries, notably France. The expenditure in column 4 is that devoted by child care departments to the education of those in the approved schools which they administer. The aided institutions provide an example of the most varied sources of finance. Column 5 shows how universities are financed . The largest item is the grant, for current and capital expenditure, made through the U.G.C. In 1962/3, the responsible department in Great Britain was the Treasury. Now the Education Departments are responsible. The procedure has remained basically unchanged, however. The departments concerned provide the funds and the U.G.C. distributes them. The U.G.C. system also extends to the University of Belfast. The precise way in which this process works, how the total grant figure is arrived at, how it is distributed, and how the process has changed especially in the last two or three years, could detain us longer. It would certainly repay careful study as a subject of its own. Direct grants from the central government met 80 % of all university expenditure in 1962/3. Just over 2 % was met by fees paid by the various Education Departments and Ministries on behalf of those holding State Scholarships and grants from Research Councils. 1 Fees paid by local 1

Seep. IO.

SOURCES OF FINANCE

27

education authorities to those on scholarships constituted 5 % of universities' income, while local authorities also gave grants amounting to another 1%. In total, therefore, public authorities financed nearly 89 % of university expenditure either directly or indirectly. Other fees are paid out of scholarship funds which arise from college or university endowments. Fees paid by individuals financed less than about 1·5 % of all expenditure, though there was a small additional item of donations which it has here been assumed derives from households. The largest private source of income was from endowments, which appears under 'grants from other private institutions'. About half of this sum is the estimated endowment income of Oxford and Cambridge colleges.1 The remainder is our estimate of research expenditure financed by United Kingdom foundations together with gifts made by these bodies primarily for the finance of capital expenditure. The figure under 'grants by enterprises' similarly represents an estimate of gifts and the finance of research projects by United Kingdom firms. The other aided institutions are less dependent on grants from a single source than is the case with universities. As can be seen from column 6, only 63 % of their expenditure in 1962/3 came by way of direct grant from the central government. Most of this was granted by the Departments of Education but a small amount came by way of the Scottish Department for Agriculture and appears under 'grants from other Ministries'. The percentage coming in the form of grants varies from one kind of institution to another. Voluntary teacher training colleges received 97 % of their funds in the form of a government grant, direct grant grammar schools received nearly 40 %, while their lower departments receive no grant at all. 2 An analysis for each type of aided institution appears in Appendix II. The central government also helps with the fees of children at direct grant schools, for example, and this item appears under 'purchases by the central government'. Local authorities' main form of finance for these institutions is through the payment of fees for pupils, meeting 14 % of expenditure in 1962/3. Grants are given to some institutions such as training colleges. In total, therefore, 82 % of aided institutions' expenditure was financed from public sources, in this particular year, though in a variety of direct and indirect ways. Most of the remainder was financed by fees paid by parents-13 % of the total. The residual was met by endowment income and loans from banks and building societies which financed much of direct grant schools capital expenditure. 3 It is clear from column 7 of Table 4.1 that households' payment of fees 1 Estimated from figures in the Franks Report (Report of Commission of Enquiry, University of Oxford, Oxford, Clarendon Press, 1966) and Cambridge college accounts. 2 Seep. 55. 3 See Appendix II, pp. 55 and 72.

28

EDUCATIONAL FINANCE

finances most of private schools expenditure-over 80 %. Not all fees, however, are paid by households. The Service Estimates give figures for payments of school fees made to servicemen serving abroad or subject to 'frequent changes of station'. Education allowances are also given for the same reason. 1 It has been assumed that both are devoted to paying fees at independent schools and that half is payment for tuition. The estimate of fees supported by the Armed Services is therefore £1 ·750 million. Finally we include a figure for tuition fees paid by local education authorities.2 Local authorities have power under the 1944 Education Act to assist parents to send their children to independent schools. The various criteria adopted and variations between authorities' policies are discussed in R. Lambert's book The State and Boarding Education. The total amount of support for tuition is about £3·370 million. Thus direct state finance may amount to nearly 8 %of the education expenditure of independent schools. This, of course, excludes any indirect aid through the tax treatment of charities. The item of £5· 175 million under 'grants from other private institutions' represents our estimate of the schools' endowment income, while the figure of £0·530 million is our estimate of capital expenditure financed from the Industrial Fund for the Advancement of Scientific Education in schools in this year and counts as grants from enterprises. Expenditure by other private institutions was derived from estimated household expenditure, hence all of it appears under that heading. Summary In conclusion, therefore, it is possible to say that less than 4 % of education expenditure in 1962/3 was financed directly from the central government Departments of Education. A further 8 % was financed by other government departments mainly through the U.G.C. Local government was responsible for financing 77 % of all education expenditure. These relative figures do not at this stage take account of government grants to local authorities; they merely show who actually spends the money on the various institutions. Only just over 8 % of total expenditure was met by households, about 2 % by private institutional funds such as school and college endowments and the remaining l % by enterprises and foundations abroad. One final point may be made about the finance of private institutions. In a number of ways, the tax and rating laws are beneficial to independent schools which are charities and to parents who send their children to independent schools, though it may equally be said that the tax laws could be more generous than they are to such parents and to the schools. Our analysis here makes no attempt to show what might happen if the tax laws 1

See Appendix IV, p. 72.

2

See Appendix IV, p. 72.

SOURCES OF FINANCE

29

were changed. We are merely concerned with estimating the actual income and the sources from which it came. In any case, insufficient information is at present available on the effects of the present tax structure to say anything quantitative about the tax benefits enjoyed by some of these schools.

ALLOCATION OF FUNDS TO SPENDING BODIES

We now take the analysis one stage further to consider the allocation of funds to spending bodies. In the case of households and enterprises which do not receive any government grants, this stage is of little interest. For the most part, fees paid by households are not reimbursed. They therefore appear as notional transfers, e.g. from the household conceived as an 'allocator' to the household conceived as a 'spender' of funds. There is one exception. Those young people who take day-release courses and evening classes in order to obtain Ordinary National Certificate, Higher National Certificate, or other qualifications, often have the fees they pay to the college of further education reimbursed by their firm. So, too, do those on sandwich courses. An estimate has been made of this allocation of funds from firms to households and it appears in Table 4.4-a sum of£3 million. 1 However, in the case of local education authorities the distinction is even more important. Education committees incur expenditure but they are not themselves responsible for raising the revenue to pay for their activities. They can be financed in a number of ways. In the post-war period until the Local Government Act of 1958, local authorities in Great Britain received a grant from the central government specifically for education. This was a percentage of the education authorities' approved expenditure. An alternative method which was introduced in 1959 is for the central government to make a general grant to local authorities which is not tied to a particular service. This should in theory give the local authorities greater say in the allocation of their funds. Whether this is true in practice is much more doubtful since the central departments retain a considerable amount of control which is not directly related to the form the grant takes. Nevertheless, the distinction between finance through specific grants and through general grants is often held to be important and raises certain problems in presenting these accounts. In particular, certain assumptions have to be made in order to allocate a part of the general grant to the finance of education expenditure. The following two tables therefore concern the way in which local education committees' expenditure was financed in 1962/3. Table 4.2 distinguishes the specific grants received from the central government in England and 1

For the method, see Appendix IV, p. 73.

30

EDUCATIONAL FINANCE

Wales, Scotland and Northern Ireland. As can be seen, only very small sums fell under this heading in Great Britain. The largest part comprised payments still due from the percentage grant system which operated before 1959 and there were a few other small items. In Northern Ireland the figure is proportionally much higher. It is a net figure. Certain items of expenditure by L.E.A.s in Northern Ireland are 'shared' with the central government. The central government makes grants to local education authorities equal to their expenditure on certain specified items. In some cases, such as teachers' salaries, their expenditure is actually paid out by the Ministry in the first place; the local education authorities then make a substantial repayment to the central government according to their rateable values-about £4·5 million in 1962/3. The result is to combine a specific grant with an element of redistribution between authorities. The net receipts of L.E.A.s are shown in Table 4.2. TABLE 4.2 ALLOCATION OF FUNDS TO LOCAL AUTHORITY COMMITTEES UNITED KINGDOM 1962/3

Form of finance

£ million

Education Committee's Expenditure Child Care United England Committees Kingdom and Wales Scotland N. Ireland (E. & W.) Total

Central Government Specific grants Local Government Loans Transfers from general revenue

Total

0·125

9·468

3·898

0·444

5·001

119·766

18·346

2·553

732·061

84·090

5·927

0·125

822·203

855·725

102·880

13-481

0·250

972·336

140·665

TABLE 4.3 ALLOCATION OF FUNDS TO LOCAL AUTHORITIES UNITED KINGDOM 1962/3

Form of finance

£ million

Local government's expenditure on education not met by specific grants United Kingdom England and Wales Scotland N . Ireland Total

General grant Rate deficiency grant

447·291 63·300

55·385 10·020

1·850

504·526 73·320

Total Government Grant Rates

510·591 221 ·595

65·405 18·685

1·850 4·077

577·846 244·357

Total expenditure not met by specific grants

732·186

84·090

5·927

822·203

SOURCES OF FINANCE

31

Apart from specific grants, L.E.A.s expenditure is financed out of the general revenue of the whole authority or out of loans raised by the council as a whole. In 1962/3 £822 million was met by transfer from local authorities' general revenue and £141 million from loans raised by local authorities. Table 4. 3 concerns the local authorities' sources of general revenue. The largest central government contribution took the form of the general grant. This contributed towards local authority expenditure on a range of services which included health and welfare, fire, child care and town and country planning as well as education. The total grant was calculated on the basis of estimates of what authorities would spend on these services. The Civil Appropriation Accounts show both the estimated and the actual expenditure of local authorities on each service. In England and Wales 85 % of the total expenditure which was covered by the general grant was devoted to education and 88 % in Scotland. These figures refer to actual expenditure in 1962/3. It has therefore been assumed that a sum equivalent to 85 % of the general grant in England and Wales may be considered as the central government's contribution to educational expenditure in England and Wales in that year. The same procedure was followed for Scotland. The Northern Ireland Government also have a general grant to local authorities, part of which may be indirectly attributed to education in a similar way. The general grant allocated to education on this calculation was nearly £505 million for the United Kingdom as a whole. In addition to the general grants, local authorities with a below-average rate in the pound received assistance from the central government through the rate deficiency grant. Some of this will be devoted to education. Education expenditure in England and Wales formed 54·5 % of all local authority expenditure from the rate fund not met out of specific income. It has been assumed that the same proportion holds good for authorities receiving this particular grant and that that share of the grant may be counted as being devoted to education. A similar method produced a figure for Scotland. The total for the United Kingdom amounted to about £73 million. It has been assumed that the remainder was raised from rates. The total sum met by the rates in the United Kingdom was therefore £244 million or 25 % of all local education authority expenditure (current and capital). The Local Government Act 1966 has amalgamated the general grant and the rate deficiency grant. The new grant is called the 'rate support grant'. The figure for loans which appears in Table 4.2 can be further allocated between loans made by the Public Works Loan Board for educational projects and other loans which have to be raised by the authority on the open market and from individuals. Only a very small sum was lent by the P.W.L.B. in the year we are studying. In Northern Ireland, government

£ million

TABLE 4.4 ALLOCATION OF FUNDS TO SPENDING BODIES: UNITED KINGDOM 1962/3

w N

Spending bodies Central Government

Local Government

Depts. of Education

Other Ministries

Educ. Committees

Other Committees

-

587-189 1·764

0·125

45·860

101-598

Local Government Grants Loans Transfers

-

-

138·901 244·232

0·125

Households Transfers

-

-

-

-

Enterprises Grants Loans Transfers

-

--

Allocators Central Government Grants Loans Transfers

Other private institutions Transfers Loans

-

-

Rest of the world Transfers

-

-

-

Total

45·860

Households

Enterprises

-

--

-

-

-

-

-

Other private institutions 11 ·129 1 855

Rest of the world

-

All spenders

%

l 600

-

-

598·443 3·619 147-458

-

-

-

138·901 } 30·5 244·357

99·393

-

-

-

-

3·000

-·

-

-

-

4·179

-

-

-

-

-

-

101·598 972·086

0·250

-

102·393

-

99·393

3·000 }

-

-

-

14·816

-

-

-

1·470

1·470

27·800

1·470

1,255·636

-

4·179

-

J

4·179

8·0

0·5

"'0

C:

14·816 )

l·O

(")

>

-z --1

0

Note: The totals in this table differ in some instances from the sum of Tables XIII to XV in Appendix I since Armed Services' expenditure is included in 'transfers from central government' and because of rounding in column 7 of Table 4.1. Percentages to the nearest 0·5%.

100·0

> r"

-..,>z z(")

"'

SOURCES OF FINANCE

33

loans are much more important. (See Table 4.4 'central government loans to education committees'.) It is now possible to incorporate these figures in Table 4.4 showing the overall allocation of funds. The only additional item is the breakdown of the income of 'other private institutions'. The loans and grants made to religious denominations by the Departments of Education to finance voluntary school building are given here. The result is to show a very different picture of the importance of the central government from that in the early tables. Of the total funds allocated to education, the central government provided 60 % and local government 30 %- These figures relate to the United Kingdom. The analysis is repeated separately for England and Wales, Scotland and Northern Ireland in Appendix I. SUPPLIES OF FUNDS TO ALLOCATORS OF FINANCE

The final stage in the theoretical model outlined on p. 6 is the supply of funds to the allocators of finance, through taxation in the case of central government, rates in the case of local government and gifts and bequests in the case of charities and other private institutions. The final suppliers of funds are households, enterprises and the rest of the world. In practice such an analysis is difficult if not impossible to make. While it is possible to consider income tax and surtax as contributions by households to government revenue, and to assign profits tax to enterprises, we do not know how much of the indirect taxes are paid by enterprises and how much by households. The breakdown of Inland Revenue and Customs and Excise receipts for the year 1962/3 is shown overleaf in Table 4.5. As a rough estimate of the share of local authorities' rate income supplied by households and enterprises, one might use the relative shares of these sectors in total rateable value as estimated by the Allen Committee.1 The total income from rates in Great Britain, 1962/3 (£928 million) might then be divided between households and enterprises respectively in the approximate proportions 49 % and 51 % (ignoring the rateable value of Crown property). This makes no allowance, however, for the many non-domestic classes of hereditament which should properly be included with households in the personal sector (e.g. non-profit-making institutions) nor on the other hand for small enterprises conducted from domestic premises. Of the total borrowing of local authorities in Great Britain in 1962/3 (£723 million), the Public Works Loans Board supplied £39 million. The problem is to identify the suppliers of the remaining £684 million borrowed by local authorities and allocated by them to the various services, 1 Committee of Enquiry into the Impact of Rates on Households, Report, pp. 127 and 133, Cmnd. 2582, London, H.M.S.O., 1965.

34

EDUCATIONAL FINANCE [TABLE

4.5)

INLAND REVENUE AND CUSTOMS AND EXCISE RECEIPTS, 1962/3 Inland Revenue duties (net) Income tax Surtax Death duties Stamp duties Profits and excess profits tax Other Oand tax, etc.) Total

Customs and Excise duties Beer British wines and spirits Tobacco Purchase tax Football pools Other betting Hydrocarbon oils Protective duties Other

£ million

2820·6 183·5 270·5 95·7 381·9 0·4 3752·5 254·2 211·6 878·2 570·8 24·3 7·1 544·4 144·7 35·1

Total

2670·4

Total all duties

6422·9

Total paid to Exchequer

6419·4

Source: Financial Statistics, February 1966, London, Central Statistical Office.

of which education is one. Information on the sources of local authority borrowing, however, appears to relate only to net borrowing by means of securities not quoted on the Stock Exchange.1 Information on the holders of quoted securities is available only for total stocks held, as opposed to annual borrowing, and 1958 is the latest year for which this is available.2 Any attempt to estimate the sources of local authority loans in 1962/3 from this information would be open to many objections. Finally there is no information about the income of foundations, educational trusts and other private institutions. In the light of these gaps we have not attempted to draw up the final matrix for the allocation of funds to spending bodies. However, in very round figures about one-fifth of education expenditure might be said to be financed by enterprises3 and, excepting an insignificant proportion from abroad, the rest is ultimately supplied by households. Financial Statistics, monthly, London, Central Statistical Office. Revell, J. R. S., and Hockley, G. C., Survey of Holders of Local Authority Debt, Cambridge University Department of Applied Economics, Reprint No. 166. 3 It should perhaps be emphasised that we have throughout omitted training activities as part of our definition of educational activity. 1

2

V

Published Statistics-Possible Improvements ONE by-product of the preceding analysis is to throw light on the deficiencies in the published statistics on the finance of education. Numerous specific instances have been mentioned in passing and many more are to be found in Appendix IV, where we discuss our sources and methods in some detail. However, it may be useful at this stage to summarise some of the major deficiencies as we see them, and to suggest ways in which they might be remedied. The limitations are of two kinds : the first of scope and the second of analysis. The main limitation in the scope of the official statistics is their failure to include any information on privately financed education expenditure. So long as there is no reliable information about the size and nature of the private sector or of expenditure financed from private sources, comparisons of many kinds may be misleading, for example, comparisons of education expenditure with national income aggregates, or international comparisons. The largest constituent of private expenditure is that on independent schools. No official returns are made by any of these schools, though we have estimated that they probably spent a total of about £90 million in 1962/3, of which £65 million was 'education' expenditure in the way we have defined it in this book. Looked at from the point of view of the educational planner or economist this is rather a strange omission. A great deal of other statistical information is gathered from independent schools concerning numbers of pupils and teachers which is comparable with the data collected from state schools. Nearly 8 % of school expenditure is undertaken in independent schools, more if boarding expenditure were included, and certainly a good deal of public debate centres around the place of independent schools in the education system. However, the difficulties of collecting financial information from a large number of individual schools, which are not dependent on the state for support, are considerable. Most are very small and have no full-time bursar. The audited accounts are not in a form which is readily comparable to returns made from local authority institutions. The work now 35

36

EDUCATIONAL FINANCE

being undertaken by the Unit for Economic and Statistical Studies on Higher Education at the L.S.E. on the finances of public and preparatory schools may help to provide answers to some of the practical problems. Moreover, to obtain a reasonably accurate picture of the finance of the independent sector it would not be necessary to obtain full information from every school each year. A sample of institutions would be sufficient, or alternatively a complete return every five years. What has just been said about independent schools also applies to other private institutions such as correspondence colleges or language schools. Some of these institutions are quite large, but for the most part private education is conducted on a much smaller scale: private correspondence courses run by professional bodies, piano lessons, ballet classes and so on. Households' expenditure on education and training of this kind would be most readily obtained from a survey of the type already undertaken on family expenditure for the Ministry of Labour. However, the present sample is not designed to include enough of the households who spend most on education, nor are the questions detailed enough for this purpose. The most useful approach might be for the Education Departments concerned to co-operate to produce a series of questions and a differently weighted sample which would give a rather more accurate picture of private expenditure on education. The new Industrial Training Boards are now collecting a great deal of material on firms' training expenditure, and this source of information could well be used to provide more comprehensive data on firms' own educational provision, their finance of other educational activity and their assistance with employees' education expenses. Not only do we lack information about the expenditure of private educational institutions, we also lack information about expenditure that is financed from private sources, local authority and aided institutions. Local authority expenditure is always shown net of receipts in the education statistics. Thus expenditure financed out offees does not appear. Following the Industrial Training Act 1964, colleges of further education are to provide courses of industrial training at an economic fee. These fees will be paid by the individual employer and reimbursed out of the levy raised from all employers by the particular Industrial Training Board. Local authorities were officially encouraged in 1967 to charge higher fees for courses in these colleges. Thus net expenditure will increasingly be an inaccurate representation of the work undertaken in these colleges by local authorities. While information on the current expenditure of aided institutions is obtained in full by the appropriate government departments, information about capital expenditure, which is not supported by public funds, is not obtained. Thus nothing is published about the capital expenditure of direct grant schools. Nor do we have any information about the capital

PUBLISHED ST A TISTICS-POSSIBLE IMPROVEMENTS

37

expenditure of universities which is financed by appeals and gifts from foundations or from individuals. This source of finance has grown in the last few years, particularly since the designation of a number of new universities. Finally, no information is collected on either the current or capital expenditure of the Oxford and Cambridge colleges. This is another strange omission viewed from the economist's standpoint, particularly in view of their important position in the university system and the discussion in the Robbins Report and elsewhere on the relative levels of provision at these institutions and at other universities. The Franks Commission 1 for the first time provided figures on Oxford's current expenditure which included colleges' expenditure. They were presented in a way which was comparable to the statistics for other universities, which shows that the exercise can be undertaken. The limitations in the analysis and presentation of the official statistics are also important. First, no common definition of educational expenditure has been adopted. In consequence, as we saw previously, expenditure on catering and hostel provision is sometimes included, as in training colleges, excluded in the case of universities, and included, but shown separately, in the case of school meals and milk. A common approach to what is called 'education expenditure' must be adopted throughout if valid comparisons are to be made between sectors or levels of education. Second, it is necessary to categorise transfer payments separately. This not only means showing student grants separately but also distinguishing between the maintenance element and the fee element. Thirdly, it is important to distinguish current expenditure on goods and services from grants to institutions. In Table 3.3 we illustrated the way in which all three principles could be combined while at the same time distinguishing the type of institution, that is to say, whether they were administered by local authorities, voluntary bodies or were wholly private institutions. The precise categories of institution we adopted were somewhat arbitrary. Nevertheless, we believe that this kind of presentation gives the basis for describing the pattern and nature of education expenditure. To complete the description it is necessary to categorise expenditure by level and by economic categories. This cannot always be done, in particular in Scotland and Northern Ireland. There should be no very great difficulty in collecting the required information in this case. Institutions in the main provide education of one kind only. Further education colleges are the only example of any major overlap and here the colleges' expenditure on 'advanced' work is already distinguished in the returns the local authorities make to the Department of Education. These are not published. From the economist's point of view, it is essential to categorise expenditure in a way that is comparable to the National Income accounts. A 1

op. cit., Chapter V.

38

EDUCATIONAL FINANCE

detailed list of the deficiencies in this respect can be gained from the description of the sources and methods that were used to compile Table 3.5. One important example is that the official statistics do not distinguish total salary and wage costs. Salaries other than teachers' salaries are included in 'other current expenditure'. In the past, teachers' salaries have included employers' superannuation contributions but not employers' national insurance payments. The Statistics of Education 1965, Part l, have remedied this last defect but not the former. There are many other questions which it is not possible to answer by inspecting the financial statistics. For example, how much is spent on clerical assistance and on other assistance, about which so much is said? What is the trend of expenditure on books, on television and visual aids, or on maintenance of buildings? Do the newer stock of buildings cost less to maintain or not? The Department of Education and Science's Cost Investigation Unit is undertaking detailed studies of the composition of expenditure by different institutions. The Institute of Municipal Treasurers and Accountants and the Society of County Treasurers do publish a more detailed analysis of school expenditure for each local authority area, but there is scope for a great deal more information of this kind. One reason for many of the deficiencies lies in the fact that the financial data which are presented in the official statistics derive from returns which are made to the Department of Education or the U.G.C. primarily for grant purposes. The local education authority financial data are derived from Form 502. F which covers expenditure relevant for general grant. Similarly the returns from the direct grant schools, other aided institutions and universities are designed primarily for those administering grants. Those parts of the institution or those categories of expenditure which do not count for grants are not included. If the financial statistics are to be as useful to educational planners as they should be, it is essential that the returns made should be specifically designed with their needs in view as well as the needs of those who have to administer grants. The other education statistics have grown in this way and there seems no reason why the same should not happen in the case of statistics on the finance of education. Finally, and most relevant for this study, no systematic attempt is made in the published statistics to indicate the finance of education, that is to say the sources and nature of income received by various institutions. This is no easy task as we ourselves have found. It is to be hoped that we have at least shown that it is possible to provide a framework within which the finance of all three sectors may be combined. It has been argued that such an analysis must proceed by a number of stages. It must first distinguish the types of institution which actually receive the finance whether they be local authority, aided or private institutions. Secondly,

PUBLISHED STATISTICS-POSSIBLE IMPROVEMENTS

39

it is necessary to distinguish the bodies or groups of individuals which actually provided the money for these institutions-local education committees or parents who pay fees. Finally the process must be traced back to the bodies which allocate the funds-either the central government or local councils. In Chapter IV the accounts were presented in this way. It is for others to judge the value of the presentation.

APPENDIX I

Sources and Uses of Educational Finance in England and Wales, Scotland and Northern Ireland, 1962/3 THE following tables present in greater detail the information contained in Tables 3.3 to 4.1 inclusive in the text: each of the latter tables is analysed in three separate tables covering England and Wales, Scotland, and Northern Ireland, and it is therefore possible to see how expenditure by users, functions, levels and economic categories vary in different parts of the U.K. Tables I to III correspond to Table 3.3, page 13, Tables IV to VI to Table 3.4, page 16 and so on. In some cases, figures included in the tables in the text showing expenditure for the U.K. as a whole have been omitted in the following tables, and the totals for educational expenditure will therefore differ. Figures for expenditure on education by the Armed Services and transfer payments to individuals from the D.S.I.R., for instance, are available only for the whole of the U.K., and have therefore not been included in the following tables. The expenditure of private institutions has been rounded in the U.K. tables. Tables XIII to XV correspond to Table 4.4 in the text. The chief purpose of the tables is to illustrate differences in educational expenditure and finance within the U.K. It is clear from Table II, for example, that in Scotland, where total expenditure on transfers is greatest relative to educational expenditure, the central government is far more important as a provider of transfers to individuals than elsewhere in the U.K. In England and Wales, see Table I, the local authorities are most important in their performance of this function. Differences may also be noted in the proportion of total educational expenditure by L.E.A.s devoted to administration. In Northern Ireland, where the aided institutions are more important in relation to total expenditure on education than elsewhere in the U.K., and the local education authorities bear the brunt of the administrative burden involved in the provision of finance to the aided institutions, administrative expenses form a higher proportion of total local authority expenditure. Educational expenditure appears to be distributed between the various levels in roughly the same way throughout the whole of the U.K.,secondary education accounting for just under 40 %, primary for around 30 % and further and higher education combined for just under 25 % (see Tables IV to VI). Within a particular category of institutions, however, con40

SOURCES AND USES

41

siderable variations do exist: the bulk of expenditure on independent schools in Scotland and in England and Wales is devoted to secondary schools, for instance, whereas in Northern Ireland the primary schools account for the major part of such expenditure. Primary education in Northern Ireland also absorbs more than 70 % of all expenditure in the U.K. on aided schools at the primary level. Expenditure on private education other than that provided in independent schools has been omitted from Tables VII to IX, since it has proved impossible satisfactorily to analyse such expenditure by economic category. A similar pattern emerges from all three tables of the distribution of total educational expenditure among economic categories, and the proportion of total current expenditure devoted to teachers' salaries is consistently lower throughout the U.K. in universities than in other types of institution and consistently higher in independent schools. The relative importance of different sources of finance for educational expenditure in the constituent countries of the U.K. may be inferred from Tables X to XII : the Departments of Education and local authorities are the chief providers of funds for central and local government institutions respectively, private expenditure is financed chiefly by receipts from households, and aided institutions throughout receive funds from a variety of sources. In Northern Ireland, however, with its larger aided sector, a higher proportion of the expenditure of aided institutions is financed by Ministry grants. It is clear from Tables XIII to XV that all three countries differ somewhat in the extent to which different allocators of funds bear the burden of financing education. In Northern Ireland about three-quarters of the total expenditure is borne by the central government in the last analysis. In Scotland the proportion is considerably lower at 65 % but still higher than in England and Wales-58 %.

D

TABLE I FUNCTIONAL CLASSIFICATION OF EXPENDITURE BY DOMESTIC USERS OF FUNDS ENGLAND AND WALES 1962/3 £ million Education expenditure Research

NonTransfer education payments expendi- to indiviture duals

Users of funds

Administration

Ministry of Educationt

3·630

0·030

3·660

25·676

843·227 0·250

868·903 0·250

143·162

30·167

25·676

843-477

869·153

143·162

30·167

5-600 1·037

78·642 35·051

8·500

92·742 36·088

14·079

All aided Private educational institutions Schools* Other*

6·637

113·693

8·500

128·830

14·079

2·500

60·920 19·100

63-420 19·100

21·000

All private All domestic users of funds

2·500

80·020

82·520

21·000

38·443

1,037·220

1,084·163

178·241

Local Authority institutions L.E.A.s Other

All Local Government Aided institutions Universities Other

lnstruction

8·500

Total

4·222

34·389

t Throughout this Appendix, reference is made to the Ministry of Education, the title in 1962/3. It is now the Department of Education and Science. • Estimates.

FUNCTIONAL CLASSIFICATION

TABLE II EXPENDITURE BY DOMESTIC USERS SCOTLAND 1962/3 OF

Education expenditure Users of funds

Admini- Instrucstration tion

Research

Total

OF

0·842

0·035

0·877

Local Authority institutions

2·206

100·878

103·084

Aided institutions Universities Agricultural colleges Other

0·560 0·016 0·220

10·689 0·839 9·582

0·763

12·012 0·855 9·802

0·139

All aided

0·796

21-110

0·763

22·669

0·139

0·080

1·985 2·100

2·065 2·100

1·000

0·080

4·085

4·165

1·000

3·924

126·108

130·795

15·131

All private All domestic users of funds

0·763

• Estimates.

£ million

NonTransfer education payments expendi- to individuals ture

Scottish Education Department

Private educational institutions Schools* Other•

FUNDS

5·038 13·992

0·922

5·960

43

SOURCES AND USES

TABLE III FUNCTIONAL CLASSIFICATION OF EXPENDITURE BY DOMESTIC USERS OF FUNDS NORTHERN IRELAND 1962/3 £ million

Users of funds Ministry of Education Local Authority institutions Aided institutions Universities Other All aided Private educational institutions Schools* Other• All private All domestic users of funds

Education expenditure ReAdmini- lnstruction search Total stration 0·492 0·441 0·051

NonTransfer education payments expendi- to indiviture duals 0·500

0·800

14·835

15·635

2·572

0·100 0·197 0·297

2·375 9·437 II ·812

2·475 9·634 12·109

0·260 0·260

0·002 0·002

0·098 0·500 0·598

0·100 0·500 0·600

1·540

27·296

28·836

2·832

0·710

1·210

• Estimates. TABLE IV EDUCATION EXPENDITURE BY DOMESTIC USERS OF FUNDS, ANALYSED BY LEVEL OF EDUCATION ENGLAND AND WALES 1962/3 £ million

Level of education Users of funds Ministry of Education

PreNonprimSecondclassiary Primary ary Further Higher fiable Other

3·660

Local Authority institutions

3-105 278·383 374·542 101·631 L.E.A.s Approved Schools All Local 3-105 278·383 374·542 101·631 Government

Aided institutions

Universities Other All aided

Private educational institutions

Schools* Other• All private All domestic users of funds

All levels 3-660

40·144 57·675 13-423 0·250

868·903 0·250

40·144 57·925 13-423

869· 153

0·079

1-460

13·838

92·742 16·820

3·891

92·742 36·088

0·079

1·460

13·838

109·562

3·891

128·830

2·050

19·900

41-470

2·050

19·900

41·470

19·100

63-420 19· 100

19·100

82·520

5·234 299·743 429·850 120·731 149·706 65·476 13-423 1,084·163

• Estimates.

44

EDUCATIONAL FINANCE

TABLE V EDUCATION EXPENDITURE BY DOMESTIC USERS OF FUNDS, ANALYSED BY LEVEL OF EDUCATION SCOTLAND 1962/3

£ million

Level of education Pre-

Users of funds Scottish Education Department Local Authority institutions Aided institutions Universities Other All aided Private educational institutions Schools* Other* All private All domestic users of funds

Nonprim- Prim- Secondclassiary ary ary Further Higher fiable Other

0·150 38·500 48·020 2·494 2·494 0·153

0·760

1·152

0·153

0·760

1·152

0·303 39·260 51 ·666

All levels

0·877

0·877

0·100 5·240

103·084

12·012 5·664 1·714 0·785 5·664 13·726 0·785

12·012 10·657 22·669

l l ·074

2·065 2·100 4·165

2·100 2·100 18·838 13·826 6·902

130·795

* Estimates. TABLE VI EDUCATION EXPENDITURE BY DOMESTIC USERS OF FUNDS, ANALYSED BY LEVEL OF EDUCATION NORTHERN IRELAND 1962/3

£ million

Level of education Users of funds Ministry of Education Local Authority institutions Aided institutions Universities Other All aided Private educational institutions Schools* Other* All private All domestic users of funds

NonPreprim- Prim- Secondclassiary ary Further Higher fiable Other ary

5·534

5·510

0·005 4·094 0·005 4·094

5·159 5·159

0·005 0·075

0·020

0·005 0·075

0·020

0·500 0·500

0·010 9·703

10·689

2·547

2·047

0-492

0·492

2·544

15·635

2·475 0·376 2-851

* Estimates.

All levels

2·475 9·634 12·109 0·100 0·500 0·600

2·851

3·036

28·836

45

SOURCES AND USES

TABLE VII EDUCATION EXPENDITURE BY DOMESTIC USERS OF FUNDS, ANALYSED BY ECONOMIC CATEGORIES ENGLAND AND WALES 1962/3

Category of expenditure Wages and Loan charges salaries Other Interest RepayTeachers Others current Capital ments

Users of funds Ministry of Education 0·026 3·456 0·169 Local Authority institutions L.E.A.s 421·953 89·571 147-483 136·173 29·700 Approved Schools 0·140 0·090 0·020 All Local Government 422·093 89·571 147·573 136·193 29·700 Aided institutions Universities 30·847 7-505 30·740 23·536 0·114 4·737 0·390 Other 18·132 3·766 8·479 All aided 48·979 ll ·271 39·219 28·273 0·504 Private educational institutions Schools* 44·400 4·900 l l ·220 2·900 All domestic users of funds Excluding 'other private' 515·498 109·198 198·181 167·366 30·204 Total * Estimates.

£ million

All categories

0·009

3·660

44·023

868·903 0·250

44·023

869·153

0·584 0·584

92·742 36·088 128·830 63-420

44·616

1,065·063 1,084·163

46

EDUCATIONAL FINANCE

TABLE VIII EDUCATION EXPENDITURE BY DOMESTIC USERS OF FUNDS, ANALYSED BY ECONOMIC CATEGORIES SCOTLAND 1962/3

£ million

Category of expenditure Wages and salaries Users of funds

Teachers Others

Scottish Education Department

Other current

Capital

Loan charges

All

categories

0·750

0·127

52·077

7-705

15·934

18·975

8·393

103·084

4·781 0·450 5·098

0·894 0·095 1·014

4·356 0·224 1·948

1·978 0·086 1·696

0·003 0·046

12·012 0·855 9·802

10·329

2·003

6·528

3·760

0·049

22·669

Private educational institutions Schools*

1·450

0·160

0·360

0·095

All domestic users of funds Excluding 'other private'

63·856

10·618

22·949

22·830

Local Authority institutions

Aided institutions Universities Agricultural coils. Other All aided

Total

0·877

2·065

8·442

128·695 130·795

* Estimates.

47

SOURCES AND USES

TABLE IX EDUCATION EXPENDITURE BY DOMESTIC USERS OF FUNDS, ANALYSED BY ECONOMIC CATEGORIES NORTHERN IRELAND 1962/3

£ million

Category of expenditure Wages and salaries Users of funds

Teachers Others

Ministry of Education Local Authority institutions

Aided institutions Universities Teacher training Other All aided

Private educational institutions Schools* All domestic users of funds Excluding 'other private'

Other current

Capital

0·430

0·062

7·284

1-500

2·473

2·588

0·730 0·200 6·476

0· 146 0·033 0·257

0·599 0·100 0·899

7-406

0·436

0·070

14·760

Loan charges

All categories 0·492

1·790

15·635

1·000 0·043 1·622

0·004

2·475 0·376 9·258

1·598

2·665

0·004

12·109

0·008

0·017

0·005

2-374

4·150

5·258

Total

0·100

1-794

28·336 28·836

• Estimates.

48

EDUCATIONAL FINANCE

TABLE X RECEIPTS FROM SPENDING BODIES ENGLAND AND WALES 1962/3 £ million

Domestic users of funds

Spending bodies

Local Authority institutions

Aided Private institutions institutions Central Govt. L.E.A.s Other Univs. Other Schools Other

Ministry of Education Grants 3·660 Purchases Other Ministries Grants Purchases Local Government Grants Purchases Households Grants/Donations Purchases Enterprises Grants Purchases Loans Other private institutions Grants Purchases Rest of the world Grants 3·660 Total

835·104 0·250 3·670

15·291

1·407

21-171 0·400

24·831 1·807

74·076 0·225

0·381 0·011

1·680

74·457 1·916

1·450 5·121

0·461 6·550

3·369

837·265 18·710

0·460 1·073

1·400 5·356 51 ·391

1·770

0·500

5·920

0·216 0·024

19·100

1·860 92·211 2·270 1-518

1·518 14·838

All domestic users

4·975 0·105

25·949 0·129

868·903 0·250 92·742 36·088 63-420

19·100 1,084·163

1·240

1·240

49

SOURCES AND USES

TABLE XI RECEIPTS FROM SPENDING BODIES SCOTLAND 1962/3

Spending bodies Scottish Education Department Grants Purchases Loans Other Ministries Grants Purchases Local Government Grants Purchases Households Grants/Donations Purchases Enterprises Grants Purchases Loans Other private institutions Grants Purchases Rest of the world Grants

Total

£ million Domestic users of funds Local Aided Private Authority institutions All institutions Central institudomestic Govt. Univs. Other Schools Other tions users

0·877

0·823

5·539 0·666 0·013

9·464 0·020

1-754

101·895

0·145

0·533 0·307

1-189

0·050 0·450

1·555

0 ·270

6·416 1·489 0·013 11 ·218 0·090

0·070

102·573 0·307

0·055 1-705

2·100

0·025

0·295 0·091

0·091 0·199

0·200 0·010

12·012 10·657

2·065

0·560

0·959 0·010

0·230 0·877

103·084

0·105 6·999

0·230 2-100

130·795

TABLE XII RECEIPTS FROM SPENDING BODIES NORTIIERN IRELAND 1962/3

£ million

Domestic users of funds

Spending bodies

Ministry of Education Grants Purchases

Local Aided Private Authority institutions institutions Central instituUnivs. Other Schools Other Govt. tions 0·492

3·584

0·011

Other Ministries Grants

ll ·199

7·123 0·094

0·105

2·090

2·090

Local Government Grants/Donations Purchases

0·020 0·190

12·051

Households Purchases

0·338 0·882 0·609

Other private institutions Grants Total

0·492

15·635

All users

0·164

0·588

2·475

9·634

12·409 1·072 0·100

0·500

0·100

0·500 28·836

1·209

0·752

TABLE XIII ALLOCATION OF FUNDS TO SPENDING BODIES ENGLAND AND WALES 1962/3

£ million

Spending bodies Central Local Government Government EducaOther Depts. private Rest Other tion of HouseEnterinstituofthe All Educa- Mini- Comtion stries mittees Other holds prises tions world spenders

Allocators Central Government 514·489 0·125 Grants 0·065 Loans 26·638 76·373 Transfers Local Government Grants Loans Transfers

11-129 1·855

525·743 1·920 103·011

119·701 221·470 0·125

119·701 221·595

Households Transfers

91 ·071

Enterprises Transfers

3·000

91 ·071 3·788

Other private institutions Transfers Rest of the world Transfers 26·638 76·373 855·725 0·250 94·071 Total

6·788

13·094

13·094 1·240

3·788

26·078

1·240

1·240 1,084·163

51

SOURCES AND USES

TABLE XIV ALLOCATION OF FUNDS TO SPENDING BODIES SCOTLAND 1962/3

£ million

Spending bodies Central Govt.

Allocators

Local Govt.

Depts. EducaOther of Other tion private Rest Educa- Mini- Com- House- Enter- institu- of the All tion stries mittees holds prises tions world spenders

Central Government Grants Loans 7·918 Transfers Local Government Grants Loans Transfers

11·238

65·849 0·012

65·849 0·012 19·156

18·334 18·685

18·334 18·685

Households Transfers

7·174

Enterprises Transfers

7-174 0·386

Other private institutions Transfers

0·386

0·969

Rest of the world Grants Total

7·918

11 ·238 102·880

7·174

0·386

0·969

0·969 0·230

0·230

0·230

130·795

52

EDUCATIONAL FINANCE

TABLE XV ALLOCATION OF FUNDS TO SPENDING BODIES NORTHERN IRELAND 1962/3

£ million

Spending bodies Central Govt.

Allocators

Local Govt.

Depts. EducaOther of Other private Rest tion Educa- Mini- Com- House- Enter- institu- of the All tion stries mittees holds prises tions world spenders

Central Government Grants Loans 11·304 2·090 Transfers Local Government Grants Loans Transfers

6-851 1·687

6·851 1·687 13·394

0·866 4·077

0·866 4·077

Households Transfers

1·209

1·209

Enterprises Transfers Other private institutions Transfers

0·752

0·752

0·752

28·836

Rest of the world Transfers Total

11 ·304 2·090

13-481

1·209

APPENDIX II

Expenditure and Receipts of Aided Institutions in England and Wales, Scotland and Northern Ireland, 1962/3 IN the following six tables the expenditure and receipts of aided institutions in the United Kingdom other than universities, are analysed in detail. Table VII shows the numbers of aided institutions and pupils attending them at January 1963, or the nearest date. The number of fulltime equivalent students is shown for further education establishments. The figures are based mainly upon returns from individual institutions to the Departments and Ministries of Education. Some estimates had to be made in the case of institutions in Northern Ireland. While they enjoy varying degrees of independence from central and local government control, all the aided institutions are in receipt of central government grants. The lower departments of direct grant grammar schools in England and Wales, although they should strictly be included with independent schools, are as a matter of convenience classified together with their parent schools as aided institutions. In England and Wales and Scotland, the bulk of aided institutions' total expenditure is undertaken by the secondary schools and establishments of further education. In Northern Ireland education at the primary level accounts for a larger part of total expenditure and there are no voluntary institutions providing further education. The proportion of current expenditure devoted to teachers' salaries in Northern Ireland appears to be higher than in the other areas of the United Kingdom. This is partly because we possess inadequate information about current expenditure other than on teachers' salaries, so that total current expenditure in Northern Ireland has probably been underestimated. The estimate of current expenditure of the Northern Ireland grammar schools, however, is based on fuller information than the figures for other levels of education, and is consequently more realistic. The bulk of capital expenditure is undertaken by further education establishments and secondary schools. The pattern of receipts also varies considerably between different aided institutions, some (e.g. the upper grammar schools in England and Wales and the Central Institutions in Scotland) receiving funds from a number of sources, while others are financed almost entirely from public 53

54

EDUCATIONAL FINANCE

(i.e. central or local government) funds. In all three areas of the United Kingdom, central government grants are the most important source of funds. These are characteristically either related to total expenditure or some part of it, such as grants towards expenditure on teachers' salaries or capital formation, or based on numbers of pupils, such as the capitation grant to grammar schools. Purchases (i.e. payments of fees) by local authorities and households account for most of the remaining receipts. The finance of aided institutions' capital expenditure also varies considerably. Voluntary training colleges finance their capital expenditure largely from public funds. Direct grant schools raise all their finance from private sources. Some comes from appeal funds, but the major proportion comes from loans raised through building societies or through overdraft facilities. These are then paid off out of current income. One exception is the group of girls' schools which form part of the Girls' Public Day School Trust, which is large enough to float loans on the market to meet the capital requirements of all the member schools.

TABLE I EDUCATION EXPENDITURE OF AIDED INSTITIJTIONS, ANALYSED BY ECONOMIC CATEGORIES AND TYPE OF INSTITUTION ENGLAND AND WALES 1962/3

£ million Category of expenditure Wages and salaries Loan Other Type of institution Teachers Others current Capital charges Total Nursery Schools 0·040 0·024 0·015 0·079 Grammar Schools (Lower) 0·907 0·123 0·280 0·116 0·034 1·460 2·634 Grammar Schools (Upper) 8·346 1·089 1·443 0·326 13-838 0·441 1·095 0·439 0·022 3·141 Special Schools 1-144 Approved Schools 0·410 0·275 0·065 0·750 Further Education Colleges 4·306 2·716 1·980 0·590 11-185 1·593 0·694 5·635 0·496 0·002 Colleges of Education 2·979 1-464 8·479 0·974 36·088 All aided institutions 18·132 3·766 4·737

Source: Returns to the Department of Education and Science and a survey of direct grant schools capital expenditure (see Appendix IV, p. 66).

55

AIDED INSTITUTIONS

TABLE II RECEIPTS OF AIDED INSTITUTIONS, ANALYSED BY SPENDING BODY AND TYPE OF INSTITUTION ENGLAND AND WALES 1962/3

£ million

Type of institution Grammar Spending bodies Nursery Lower Upper Special Approved F.E. Ministry of Education 0·023 5·429 0·305 9·930 Grants Purchases 0·400 Other Ministries 0·006 0·375 Grants O·Oll Purchases L .E.A.s Grants 0·086 0·375 0·045 3·965 2·540 Purchases Households Purchases 0·004 1·328 2·376 0·242 1·255 Other private institutions 0·007 0·015 0·157 0·037 Grants 0·006 0·018 Purchases Enterprises O·lll 1·407 Loans 0·079 1·460 13·838 3·141 0·750 11-185 All spenders

Coils. of Educa- All tion aided 5·484 21-171 0·400 0·381 O·Oll 0·461 6·550 0·151

5·356 0·216 0·024

1·518 5·635 36·088

Source: As Table I.

TABLE III EDUCATION EXPENDITURE OF AIDED INSTITUTIONS, ANALYSED BY ECONOMIC CATEGORIES AND TYPE OF INSTITUTION SCOTLAND 1962/3

Type of institution Secondary Schools Special Schools Approved Schools Central Institutions Colleges of Education All aided institutions (excluding Agricultural Colleges)

£ million Category of expenditure Wages and salaries Other Loan Teachers Others current Capital charges Total 1·733 0·235 0·350 0·140 0·036 2·494 0·100 0·585 0·144 0·165 0·176 0·010 0·200 0·060 0·060 0·050 0·020 2·164 0·467 1·067 0·966 4·664 1·859 0·997 0·087 0·305 0·470

5·098

1·014

1·948

1-696

Source: Returns to the Scottish Education Department.

0·046

9·802

56

EDUCATIONAL FINANCE

TABLE IV RECEIPTS OF AIDED INSTITUTIONS, ANALYSED BY SPENDING BODY AND TYPE OF INSTITUTION SCOTLAND 1962/3

£ million

Type of institution Coils. Central of AgriculAll Secondlnstitu- Educa- tural ary Special Approved tions tion Coils. aided

Spending bodies

Education Department Grants Purchases Loans Other Ministries Grants L.E.A.s Grants Purchases Households Purchases Other private institutions Grants Enterprises Loans All spenders

1·237

0·336

0·100

2·914 0·362 0·013

0·855

0·899 0·061

0·146

0·100

1·091 0·047

0·103

0·058 2·494

0·585

0·200

5·539 0·666 0 ·013

0·952 0·304

1-754

0·013

0·520

0·533 0·307

0·404

0·060

1·555

0·036

0·013

0·199

0·023

0·010

4·664

1·859

0·091 0·855

10·657

Source: As Table III.

TABLE V EDUCATION EXPENDITURE OF AIDED INSTITUTIONS, ANALYSED BY ECONOMIC CATEGORIES AND TYPE OF INSTITUTION NORTHERN IRELAND 1962/3

£ million

Category of expenditure Wages and salaries Type of institution

Teachers

Other Loan current Capital charges

Nursery Schools Primary Schools Special Schools Secondary Schools (intermediate) Grammar Schools Colleges of Education

0·005 3·384 0·066 0 ·933 2·088 0·222

0·318 0·009 0·230 0·600 0·111

0·392 0·020 0·792 0·417 0·043

All aided institutions

6·698

1·268

1·664

Source: Returns to Ministry of Education.

0·004 0·004

Total 0·005 4·094 0·095 1·955 3·109 0·376 9·634

57

AIDED INSTITUTIONS

TABLE VI RECEIPTS OF AIDED INSTITUTIONS, ANALYSED BY SPENDING BODY AND TYPE OF INSTITUTION NORTHERN IRELAND 1962/3

£ million

Type of institution

Spending bodies

Coils. of SecondEducaary Grammar Nursery Primary Special tion

Ministry of Education Current grants 0·005 Capital grants Purchases L.E.A.s Current grants Purchases Other private institutions Current grants Capital grants Households Purchases

All spenders

0·005

3·386 0·255

0·067 0·013

0·984 0·515

0·215

0·005

0·118

0·101 0·137

0·003 0·007

0·061 0·277

1·347 0·271

0·239 0·042 0·094

0·095

0·001

1·955

3·109

0·376

TABLE VII AIDED INSTITUTIONS AND NUMBERS OF PUPILS UNITED KINGDOM 1962/3 No. of institutions

No. of pupils

20 125 179 111 93 38 49

778 6,657 95,929 8,145 6,200 16,450 17,828

29 13 24 13 8

11,500 1,000 1,500 10,300 6,144

3 744

88 92,640 500 20,692 30,242 1,800

5

49 60 4

Source: Statistics of Education 1963, Part 7. Education in Scotland 1963. Education in Northern Ireland 1963-4.

E

0·165 0·422 0·609

Source: As Table V.

England and Wales Nursery Schools Grammar Schools (Lower) Grammar Schools (Upper) Special Schools Approved Schools Further Education Colleges of Education Scotland Secondary Schools Special Schools Approved Schools Central Institutions Colleges of Education Northern Ireland Nursery Schools Primary Schools Special Schools Secondary Schools (intermediate) Grammar Schools Colleges of Education

6·028 1·096 0·094 0·338 0·882

0·882

0·609 4·094

All

aided

9·634

APPENDIX III

Education and National Income Aggregates IN attempting to derive a consistent basis for evaluating the importance of education as distinct from other forms of activity in total output or expenditure, it must be remembered that any particular procedure is likely to be open to a number of objections. Indeed, as is clear from the salutary caveats of 0. Morgenstern,1 it is unwise and often mischievous to attach a great deal of precision to any measures of output or of expenditure on a particular form of economic activity and their relation to counterpart national aggregates. In particular, we are faced with the difficulties that many of our estimates relating to certain parts of the educational system rest on scanty evidence and that education enters into G.D.P. in the United Kingdom in a number of different ways. However, the need for consistent measures of educational output or effort is sufficiently great, and the current attempts to provide them so inadequate, that the attempt seems worth while. Lastly, the definition of education adopted for present purposes should be borne in mind, since if the scope of education is conceived to be broader than as here defined, the proportion of total output arising from education will obviously be greater. The most straightforward method of arriving at a measure of educational output which is comparable to the output of other industries and services and to total output, is to estimate total factor payments made in the provision of education. For local authority educational services, including non-educational services provided by L.E.A.s, this is in fact done by the C.S.O. in the Blue Book2 except that the contribution of these services to G.D.P. at factor cost is confined to income from employment and therefore excludes imputed rent. The problem consists therefore in estimating the value of all factor services to education which form part of gross domestic product, viz. income from employment (wages, salaries and employers' contributions in respect of National Insurance and superannuation), rent (whether actual or imputed), and profits. The last item is usually measured gross and therefore includes interest payments, but since the private sector forms only a small part of all educational activity in the U.K. and since the value of interest payments made by private educational institutions is likely to be small, the estima1 0. Morgenstern, On the Accuracy of Economic Observations, Princeton University Press, 1963. • National Income and Expenditure 1965, Table 16.

58

EDUCATION AND NATIONAL INCOME AGGREGATES

59

tion of profits on a net basis should not result in serious underestimation. Net profits, however, have been estimated on the basis of profits made during 1962/3 by independent schools which were offered for sale during that year, and it seems likely that this item has been underestimated to the extent that those offering schools for sale reckon net profits exclusive of tax and provision for depreciation, both of which items are of course included in gross profits as defined in the Blue Book. In other respects also, our figure for profits accruing from educational activity must be treated with caution : annual net profits per pupil in those schools offered for sale during 1962/3 displayed a considerable degree of stability (the average profit being£17·75 per pupil per annum), but the number of owners giving information on profits was very small (12 schools out of a total of 45 schools offered for sale in the columns of the Times Educational Supplement during the financial year 1962/3) and nothing is known about the profits accruing to the owners of schools not offered for sale. Finally, a number of assumptions had to be made about the number of pupils in profit-making schools in order to derive total profits from profits per pupil: approximately two-thirds of all the independent schools recognised as efficient by the Department of Education and Science are known to be administered by charities or religious orders, and are therefore non-profitmaking. The number of pupils attending the remaining independent recognised schools in 1962/3 was derived from the size breakdown of all such schools on the not unreasonable assumption that the profit-making schools were also the smallest.1 It was finally assumed that half of the pupils in non-recognised schools were attending profit-making schools. Similar assumptions were made about the number of pupils attending profit-making independent schools in Scotland. The estimated number of pupils attending profit-making schools in the U.K. was 134,500, yielding total profits of approximately £2·4 million in 1962/3. The least satisfactory element is imputed rent. Although there is some evidence (in, for instance, the number of leasehold school premises offered for sale in 1962/3) that actual rent payments in respect of education may be not inconsiderable, we have been unable to find data sufficient to form a realistic estimate of this item. Since the imputed rent of local authority educational buildings explicitly forms a part of public authorities' current expenditure on goods and services2 and therefore of G.D.P., this item has been included as a payment made to factors employed in the provision of education by the public sector. A rough addition has been made on the basis of numbers of pupils and students attending non-LE.A. educational institutions (universities, independent and voluntary schools other than those maintained by L.E.A.s, voluntary teacher training colleges, etc.) to represent actual or imputed rent incurred by these latter Statistics of Education 1963, Part l, Table 16. National Income and Expenditure 1965, Table 42.

1

1

60

EDUCATIONAL FINANCE

institutions. This represents only a rough order of magnitude. Like the estimate of profits, however, it has been formed cautiously and is likely to be too low rather than too high. The figure for wage and salary payments incurred in the provision of education is as shown in Table 3.5, p. 18, and the approximate contribution of education (excluding education in private institutions other than schools) to G.D.P. at factor cost is made up as follows: Income from employment Imputed rent, public educational institutions Imputed rent, other institutions Profits Total factor payments

£ million 725·3

50·0 6-4 2·4

784·1

The net output of the education 'industry' as here defined during 1962/3 thus formed approximately 3· 1% of G.D.P. at factor cost.

APPENDIX IV

Sources and Methods THE sources for each table are given below. They are listed for each row of the table in question and in every case the sources are given separately for England and Wales, Scotland and Northern Ireland, the most frequently used sources being abbreviated as follows: England and Wales: Statistics of Education S.ofE. E. in S. Scotland: Education in Scotland Northern Ireland: Education in Northern Ireland E. in N.I. Table 3.1 NON-EDUCATION EXPENDITURE OF EDUCATIONAL INSTITUTIONS BY TYPE OF SERVICE

Local Education Authority expenditure School meals and milk: England and Wales-S. of E. 1964, P.1, Tables 32 and 36. Scotland -E. in S. 1963, Appendices I and 2. Northern Ireland -E. in N.1. 1963-4, Sections VIII and XIII/3. The School Health Service, Youth Service, Youth Employment and Libraries: England and Wales-S. of E. 1964, P.I, Table 32. This is strictly net expenditure though receipts for these services are probably insignificant. -E. in S. 1964, Appendices I and 2. Scotland Northern Ireland -E. in N.I. 1963-4, Section XIII/3. Loan charges and capital expenditure are only shown in total for all levels and types of service. However, for the financial year 1963-4, they were disaggregated in S. of E. 1964, P.1. The same proportions were applied to the 1962-3 figures. Boarding expenses in T.T.C.: England and Wales-Returns from L.E.A. training colleges to the Department of Education. These returns contain separate boarding and tuition accounts. The combined accounts appear in S. of E. 1964, P.l, Table 37. Scotland -All Colleges of Education in Scotland are aided institutions. Northern Ireland -None available.

Aided institutions School meals and milk: England and Wales-The returns from direct grant schools show expenditure on food, overheads for school meals and the salaries of kitchen staff attributable to school meals. Loan charges and capital

61

62

EDUCATIONAL FINANCE

expenditure are not identified. The figures in the table therefore include expenditure on the previously mentioned categories but exclude any element of loan charges or capital expenditure. In the combined accounts which are published in S. of E. 1964, Table 38, salaries of kitchen staff are not distinguished. -No comparable figures could be obtained for voluntary Scotland secondary schools in Scotland. The arrangements for school meals vary from school to school. In some cases, schools provide the meals themselves but their accounts only include net expenditure. In other schools, the LE.A. provides the meals and the charges cover the cost. In other cases, the meals are provided by the boarding house. In the last two cases, no information on expenditure is available but the provision is self-financing. Catering costs for special schools are obtainable from the returns made to the Department and this item can be extracted but it is not possible to exclude boarding costs. There is no separate account as in the England and Wales returns. Northern Ireland -Figures only available for secondary grammar schools (Civil Appropriation Accounts 1962-3, Vol. V.) Health: England and Wales-Expenditure under the heading 'school doctor' in the direct grant school returns. Scotland } . Northern Ireland -Not ava1lable. Boarding: England and Wales-An estimate of school boarding expenditure was made from average boarding fees in lower and upper schools and the number of boarders. (List 73.) Figures for special schools and colleges of education are taken from the separate boarding accounts returned to the Department. Returns were available for only three further education colleges. Boarding and catering accounts of these colleges were used to estimate boarding expenditure in all the national colleges. No comparable figures for expenditure on university hostels or refectories are returned to the U.G.C. The distribution of expenditure between institutions is given in Annex A. Scotland -Expenditure of the Central Institutions and colleges of education on boarding and catering was obtained from returns made to the Department. Northern Ireland -Returns to the Ministry of Education. Private educational institutions Boarding: England and Wales-These are estimates based on average boarding fees which were obtained from the boarding fees given for independent schools recognised as efficient in List 70 (1963) published by the Department of Education and Science. The number of boarders at independent schools are available in S. of E. 1963, P.l, Table 4. Numbers relate to January

Scotland

1963.

-Since no figures exist on the number of boarders in Scottish independent schools it was assumed to be the same proportion of all pupils as in recognised schools in England and

63

SOURCES AND METHODS

Wales, i.e. 40 %. The total number of pupils was obtained from E. in S. 1963. The sources for fees were: Schools 1963, Public and Preparatory Schools Year Book 1963, Girls School Year Book 1963, Independent Schools Association Year Book 1963. Northern Ireland -The number of boarders in independent schools was obtained from the Ministry of Education. All the figures in this section of Table 3.1 are only very rough estimates. No element of capital expenditure from Joans for example is included. They are given only to provide some idea of the comparative level of non-educational expenditure in the private sector.

Table 3.2 GRANTS TOWARDS MAINTENANCE MET OUT OF PUBLIC FUNDS

Departments and Ministries of Education England and Wales-Total expenditure on university awards is given in S. of E. 1964, P.1, Table 33. It does not distinguish fees from maintenance. In S. of E. 1963, P.2, where L.E.A. expenditure on awards is shown separately as payment of fees and maintenance allowances, the percentage of the total going in fee payments was approximately 25 %. It was assumed that this held good for state scholarships. -E. in S . 1963, Appendices I and 6, Table 23. Total expendiScotland ture on grants is given in the former and expenditure for the academic year showing the fee element is given in the latter source. Northern Ireland -£. in N.J. 1963-4. Grants covering teacher training and postgraduate awards are estimates. Other Central Government Robbins Report, Appendix Two(A), P. IV. Estimate on the basis of numbers receiving awards from D.S.I.R. and other research councils. Local Education Authorities England and Wales-S. of E. 1964, P.1, Table 32. This gives total expenditure on scholarships. S. of E. 1963, P.2, Table 54, distinguishes expenditure on maintenance and fees, but on an academic year basis. The same distribution of expenditure between fees and maintenance was assumed for the financial year. Also included is an estimate of boarding fees paid by L.E.A.s at independent and direct grant schools. (See Annex B.) R. Lambert in The State and Boarding Education gives the total number of pupils supported by L.E.A.s at these schools-9,360 at independent schools and 1,440 in direct grant schools. He also gives average value of support£163 in 1964/5. It has been assumed that half is devoted to tuition and half to boarding. -E. in S. 1963, Appendix 6, Table 23. This gives total expendiScotland ture on school bursaries and grants to those attending further education. School bursaries were assumed to be devoted to maintenance and 80% of further education awards were assumed to be devoted to maintenance. Northern Ireland -E. in N.J. 1963-4, Section XIV. A grant from the Ministry covers L.E.A. expenditure on university grants in excess

64

EDUCATIONAL FINANCE

of £160,000. It was assumed that 25 % of the total cost went in fee payments. Maintenance grant expenditure analysed by the type of institution the award holder attends, is given in Annex B.

Table 3.3 FUNCTIONAL CLASSIFICATION OF EXPENDITURE BY DOMESTIC USERS OF FUNDS AND TABLES I, II AND III IN APPENDIX I

Central Government Departments and Ministries of Education: England and Wales-Civil Appropriation Accounts 1962-3, Class VI, Vote 8. Scotland -Civil Appropriation Accounts 1962-3, Class VI, Vote 9, and E. in S . 1963, Appendix I. Northern Ireland -£. in N.1. 1963-4, Section XIV. Armed Services: Army Estimates, 1962-3, Appendix VI. Navy Estimates, 1962-3, Appendix VII. Air Estimates, 1962-3, Appendix V. Educational expenditure is not distinguished in the appropriation accounts for any service except the Navy. Other Central Government: See p. 63. Local Authority institutions Local Education Authorities: England and Wales-S. of E. 1964, P.1, Table 32. This distinguishes expenditure on administration and inspection. The items specified in Tables 3.1 and 3.2 have been excluded from the expenditure which appears in this table. For example, expenditure on boarding has been subtracted from the item 'training of teachers'. Expenditure under the heading 'transport of pupils between home and school' has been included and counted as 'instruction' in Table 3.3. This item amounted to £12·571 million in 1962/3. To the figure for net expenditure given in S. of E. has been added 'fees, rents and recoupments' of education authorities less income attributable to school meals. (Local Government Financial Statistics. England and Wales, 1962-3, Table I.) Also added is an item for capital expenditure on voluntary schools. This is undertaken by the religious denominations financed by a grant from the Department of Education and in some cases by loans from the same source. The grant covered 75 % of approved expenditure in 1962/3, though this has now been increased to 80 %. As a minimum estimate total capital expenditure on these schools was taken to be one-third more than the total grant for that year. This assumes that the loans financed part of the remaining 25 % of expenditure and that the denominations spent nothing over and above approved expenditure. Civil Appropriation Accounts 1962-3, Class VI, Vote 8. Scotland -£. in S. 1964, Appendices I and 2, and Report of the Accountant for 1962-3. Appendix 2 gives gross expenditure. Northern Ireland -E. in N.I. 1963-4,Section XIII/3 and Local Authority Financial Returns for Northern Ireland, 1963-4.

SOURCES AND METHODS

65

Other Local Government Departments: England and Wales-Statistics relating to Approved Schools, Remand Homes and Attendance Centres in England and Wales, 1964. There were approximately 8,500 children at approved schools in 1962/3. Three-quarters were at voluntary schools. The rest were at schools run by local authority child care committees. It was assumed that 'educational expenditure' was equivalent to the average for all secondary school pupils. A 50% grant is given by the Home Office for approved school expenditure. -Approved schools are aided institutions financed by thf; Scotland Education Department and L.E.A.s. Northern Ireland -No figures for approved schools in Northern Ireland are included. Aided institutions Universities: Great Britain

-Returns from Universities and University Colleges in receipt of Exchequer Grant, 1962-3, Table 12. These cover only revenue expenditure and exclude expenditure by Oxford and Cambridge colleges. They are on an academic year basis and have been interpolated to a financial year basis by using the Returns for 1961-2. The Returns contain no details of capital expenditure apart from that met out of revenue, though the non-recurrent grants they receive are listed in Table 13. These cover capital expenditure on items such as hostels and there is no information about privately financed capital expenditure. The Civil Estimates give details of major schemes covered by the non-recurrent grant (Class VII, V.l). Hostel and refectory expenditure was calculated and it was assumed that the same proportion of the cost of all schemes was devoted to these items as was the case for the schemes listed in the Estimates (i.e. approximately 20%). The only information which is published on universities' private finance of capital expenditure is to be found in the U .G.C. Quinquennial Review (University Development 19571962, p. 54). This does not distinguish annual expenditure or its purposes but merely the total of 'benefactions' received in the period for buildings and equipment. The largest part was undoubtedly for hostel accommodation. It has been assumed that half was allotted to non-educational purposes. Extrapolation from the previous quinquennium's figures therefore gives a minimum figure of about £1 million for privately financed capital expenditure for educational purposes, excluding Oxford and Cambridge colleges. The Oxford figures are based on Chapter 5 of the Report of the Commission of Enquiry (Franks Report) published by Oxford University, Table I. This table presents the full expenditure of the university and the colleges in a way comparable to the U.G.C. Returns. The college figures are for 1963. The university figures are for 1963-4. By subtracting the university expenditure which appears in the U.G.C. Returns for 1963-4 and substituting 1962-3 expenditure, the figures in the Franks Report were put on a 1962-3 financial year basis. Cambridge college accounts for 1962-3 appear in the Cambridge Reporter, 25 February 1964. Since each college has over 20 accounts, the task of extracting educational

66

EDUCATIONAL FINANCE

expenditure is not easy. The task is made more difficult because of the nature of the colleges. There is no way of knowing how much of the maintenance expenditure should be attributed to student accommodation, for example. There is no indication how these allocations were made for Oxford in the Franks Report, but since the accounting problems at the two universities are similar, the following procedure was adopted. It is possible to extract from the college accounts at Cambridge the expenditure on teachers' wages and salaries. It was assumed that the ratio of all current expenditure to the teaching staff salary bill was the same at Cambridge as at Oxford. To have made a less arbitrary allocation would have required a full scale study. No capital expenditure figures for Oxford or Cambridge colleges were available. The U.G.C. Returns distinguish expenditure on administration. Table 11 in the Returns gives the total income from research grants. Northern Ireland -Higher Education in Northern Ireland. (Lockwood Report), Table 97 and Annual Abstract of Statistics, 1964, Table 128. It was assumed that the percentage of expenditure devoted to administration was the same as in Great Britain. Other aided institutions: England and Wales-Returns from institutions to the Department of Education and Science. The returns made by direct grant schools include a heading 'expenditure on administration'. This consists of the Bursar's salary and clerical assistance to the headmaster. Neither the returns from C.A.T.s nor regional colleges have an item for administration. It was assumed that this item amounted to 6 % of current expenditure which is approximately the average for the two Colleges of Advanced Technology to achieve university status by 1962/3-Manchester and Glasgow. Voluntary teacher training colleges have different returns again. These do not specify administrative expenditure but do have an item for secretarial and clerical assistance, and this was used. There were no complete returns of capital expenditure (which does not count for grant) in the case of direct grant schools. A questionnaire was therefore sent to a sample of one in five direct grant schools. There was a 61 % response, and from the respondents an estimate was made of capital expenditure for all direct grant schools, lower and upper. (Appendix II, Table I.) Scotland -Returns for the voluntary institutions are summarised in E. in S. 1963, Appendix 3, and in the Report of the Accountant for 1962/3. Approved school expenditure amounted to over £1 million. However, as in England and Wales, only an amount equivalent to average expenditure per secondary school pupil was included. (See Appendix JI, Table III.) Northern Ireland -Voluntary school and teacher training college expenditure was obtained from the Ministry of Education. Administrative expenditure was assumed to form the same percentage of current expenditure as in comparable institutions in England and Wales. It will be clear from the above that there is no common definition of administration and that in some cases no information exists at all. No significance should therefore be placed on the total allotted to administration for this sector.

SOURCES AND METHODS

67

Private educational institutions Schools: United Kingdom -No expenditure figures are available. All figures are therefore estimates. A certain amount of information on expenditure in boys independent public schools can be found in Chapter Eight of The Public Schools by G. Kalton, London, Longmans, 1966. Historical estimates of expenditure on private schools are to be found in J. Vaizey, op. cit. Finally, the Central Statistical office make an estimate of non-profit making schools' expenditure for the National Income statistics which are not published separately, but see Peacock and Lavers, op. cit. Our estimates of expenditure are based on estimates of the schools' income. Most of their income is derived from fees. The other two important sources are endowments and appeal funds. The Unit for Economic and Statistical Studies on Higher Education is now conducting a survey of the finance of independent schools in co-operation with the Public Schools Commission. This will give a more accurate picture of this sector since it will be based upon returns made by individual schools.

Fee Income: England and Wales-Ministry of Education, List 70, 1963, contains a full list of recognised independent schools together with the fees and number of pupils. In the case of recognised schools therefore tuition fees could be multiplied by the number of pupils to obtain an estimate of fee income. In a few cases, fees were given inclusive of board and tuition fees were assumed to be half the total. In the case of non-recognised schools, no such comprehensive list exists, the main source is the Independent Schools Association Year Book, 1963. Data on fees and size were obtained for no more than 25 schools. A comparable group by size and sex were chosen from the list of recognised schools. An appropriate test showed there was no significant difference between the fees charged in the two groups when the size range was taken into account. Thus, although average fees from the non-recognised group were lower than the average for all recognised schools, the fees were not significantly different from the fees of the smaller recognised schools. Thus total fee income from non-recognised schools was calculated by using the same average fees per size range as had been obtained from List 70 and applying them to the number of pupils at non-recognised schools in the same size ranges. These last were obtained from S. of E. 1963, P.I, Tables 4 and 16. For two reasons fee income for tuition is unlikely to be accurately assessed by multiplying tuition fees by numbers of pupils. First, schools remit fees in whole or part for certain categories of pupils. Second, extra fees are charged on top of the basic tuition fee for additional subjects. Since these tend to cancel one another out, the effects of both were ignored. Scotland -Details of fees were obtained from Schools, 1963; Public and Preparatory Schools Year Book, 1963; Girls School Year Book, 1963; Independent Schools Association Year Book, 1963. Fees and size of school were tabulated for about 30

68

EDUCATIONAL FINANCE

schools containing over half the pupils in independent schools. Size of school and pupil numbers for the remainder were obtained from List F, 1963, published by the S.E.D. Average fees for each size range obtained from the first group were applied to the second to derive total fee income. Northern Ireland -The same Year Books as for Scotland. Endowment Income: United Kingdom -An estimate of the total value of assets owned by educational trusts was made by E. V. Morgan in The Structure of Property Ownership in Great Britain, Oxford, Clarendon Press, 1960. Assuming a 3 % yield, which he suggested as appropriate for this type of institution, an annual income of £5·4 million can be taken as a minimum estimate. However, part of this income is devoted to financing students at independent schools rather than adding additional income to the schools. The value of scholarships available at independent schools was estimated after consulting Scholarships at Boys Public Schools and Scholarships at Girls Schools, London, Truman and Knightly, 1963 and 1965. A figure of £0·225 million was subtracted from the estimated income of educational trusts. The remainder was taken to be the endowment income of independent schools in Great Britain. It was assumed that boarding fees covered cost and that the endowment income was used to finance educational expenditure. Appeal Funds: United Kingdom -These are primarily used to finance capital expenditure. An estimate of the appeal fund income of boys public schools (see Glennerster and Pryke The Public Schools, London, Fabian Society, 1964) suggested an income of £12 million over a seven-year period. We also know that the Industrial Fund for the Advancement of Scientific Education financed capital expenditure of over £3 million mainly in independent schools between 1957 and 1964. Taking both into account it is difficult to see how appeal fund income and gifts for all independent schools can be less than £2 million a year. Other private educational institutions: United Kingdom -Again no expenditure figures exist. The Ministry of Labour's Family Expenditure Survey includes a category-private tuition, music lessons, correspondence courses, etc.-which is not published separately. The unpublished figures show that average expenditure per week of the sample of households taken in 1962 amounted to 6·0 pence under this category, with a standard error of 12% of the mean. By using the Registrar-General's figures for the number of households at the time of the 1961 Census it was possible to make a very rough estimate of households' expenditure on the items in England and Wales, Scotland and Northern Ireland. The figures are clearly subject to a wide margin of error in particular in the case of expenditure by country. Moreover they give only the total of fees paid by households: these institutions may derive income from other sources. These figures should not, therefore, be taken as indicating anything more than rough orders of magnitude for 'other private' expenditure.

69

SOURCES AND METHODS

Table 3.4 EDUCATION EXPENDITURE BY DOMESTIC USERS OF FUNDS, ANALYSED BY LEVEL OF EDUCATION AND TABLES Ill, IV AND VIN APPENDIX I

Central Government

Sources as for Table 3·3. Armed service expenditure has been counted under 'further education' though some is certainly devoted to schools for the children of the service personnel.

Local Authority Institutions

Aided institutions

Net expenditure is allocated by level in the published statistics, e.g. S. of E. 1964, P.I, Table 30. However, receipts obtained are not distinguished in this way for England and Wales. Local authorities' returns to the Department of Education show total fee income of further education colleges. The remainder of the income appears in the 'other' column. Transport of pupils, administration and special schools appear in the non-classifiable column. The official statistics do not distinguish expenditure on advanced work from that on non-advanced, in further education colleges. The Robbins Committee made an estimate for expenditure on advanced work for the year 1962/3 in England and Wales and Scotland. (Robbins Report, Appendix Four, Table C.2.) These figures have been subtracted from the further education total and appear in the higher education column together with training college expenditure. Sources as for Table 3.3. Expenditure by C.A.T.s, national colleges and teacher training colleges appears under the heading 'higher education'.

Private educational institutions

Source as for Table 3.3. School fees were analysed separately for primary and secondary schools, and average fees calculated for the two levels. Most preparatory schools span the break at 11 years which occurs in the state system. For the purposes of this table therefore total expenditure as it appears in Table 3.3 was distributed in proportion to the number of pupils in the appropriate age ranges (under 5, 5-10, 11 and over) weighted to take account of the different level of fees. This was done for recognised and non-recognised schools separately.

Table 3.5 EDUCATION EXPENDITURE BY DOMESTIC USERS OF FUNDS ANALYSED BY ECONOMIC CATEGORIES AND TABLES VII, VIII AND IX IN APPENDIX I

Central Government

Source as for Table 3.3.

Local Authority institutions

Source as for Table 3.3. United Kingdom -In no case were employers' National Insurance contributions included in the published statistics before 1965-see S. of E.

70

EDUCATIONAL FINANCE

1965, P.1. We have therefore made an estimate and added it to the salaries as published. The Department's estimates for the Central Statistical Office were used as the basis. England and Wales-Salaries of other staff. These are included in the returns made by individual authorities but they include salaries of those we have classed as employed on 'non-educational' activity, e.g. youth leaders. An estimate was made of these salaries and they were excluded. Scotland -The Report of the Accountant, 1962--63, gives some nonteaching salaries, i.e. administrative staff and clerical assistance but not other categories. An amount was added to cover these categories by assuming the same ratio of expenditure to 'all other salaries' as was the case in England and Wales. Northern Ireland -No figures available. It was assumed that salaries formed the same share of other current expenditure as in Great Britain. Aided institutions Source as for Table 3.3. United Kingdom -Employers' National Insurance contribution is shown as a separate category on direct grant returns though it does not distinguish contributions in respect of teachers. An estimate was made on the basis of the numbers and sex of the teachers in the various institutions. Private educational institutions England and Wales-It was assumed that average salaries were the same for teachers with comparable qualifications in L.E.A. schools. (See main text, p. 20.) The following average salaries were multiplied by the appropriate number of teachers in each category in independent schools. To this was added an estimate of employers' superannuation and National Insurance.

AVERAGE SALARIES IN MAINTAINED SCHOOLS

1963 £'s

Type of school Primary Secondary

Men

Women

Graduate Non-graduate Graduate Non-graduate 1,406 1,405

1,233 1,123

1,196 1,319

1,024 990

Source: S. of E. 1963, P.3. Other salaries: The remainder of current expenditure was distributed between salaries and other expenditure in the same ratio as for direct grant schools' tuition account. It was assumed that capital expenditure formed approximately 5 % of all expenditure. The figure for boys public schools given in Kalton's study is 7 %. These schools probably have a relatively high endowment and appeal fund income more of which is likely to be devoted to capital expenditure. Our estimate was therefore put rather lower.

Scotland and Northern Ireland -Expenditure was distributed in similar proportions as for England and Wales.

71

SOURCES AND METHODS

Table4.1 RECEIPTS FROM SPENDING BODIES AND TABLES X, XI AND XII IN APPENDIX I

In this table the order of institutions is the same as for previous tables though they refer to each column rather than rows. Central Government

-Source as for Table 3.3.

Local Authority institutions England and Wales-Local Government Financial Statistics, 1962-3, Table 1. S. of E. 1964, P.l, Table 36. Civil Appropriation Accounts 1962-3, Class VI, Vote 8. Total fees and recoupments derive from L.G.F.S. and from those have been subtracted school meals and milk receipts. Religious denominations have been assumed to incur the cost of voluntary school capital expenditure and are classed as 'other private institutions'. Scotland -Report of the Accountant for 1962-3. Northern Ireland -£. in N.I. 1962-3, Section VII. E. in N.l. 1963----4, Section XIII-XIV. Appropriation Accounts of the Parliament of N.I. 1962-3, Class V.

The figure of £3·584 million represents the direct payment of teachers' salaries in L.E.A. nursery, primary and special schools. It derives from the figure of £6·768 million for salaries in all primary and special schools given in £. in N.I. 1963----4, Section XIV. From this was subtracted expenditure on salaries paid to teachers in voluntary schools. (Figures obtained from the Ministry of Education.) This sum counts towards the pooled expenditure which the local authorities repay, in part, to the central government. Aided institutions Universities: Great Britain

-U.G.C. Returns 1961-2 and 1962-3, Table 11. Fees paid by L.E.A.s derives from estimates described earlier (see p. 63). 'Benefactions' for the finance of capital expenditure and 'Donations' were assumed to derive in equal parts from households, enterprises and other private institutions. Research in the social sciences is the only field for which financial information exists. Of that not financed by government departments the following sources were responsible:

Foundations in the U.K. Overseas foundations Industry -

45% 45 % 10 %

Since industry is more concerned with other research, we assumed that research not financed by the government was supported in equal measure by U.K. foundations, enterprises and overseas foundations. Fees paid by households was a residual item of fees remaining after fees paid by those in receipt of scholarships had been deducted. It was assumed that scholarships from L.E.A.s in England and Wales applied only to those at

72

EDUCATIONAL FINANCE

universities in those countries and vice versa. Thus the distribution of fee payments between countries is liable to error. Other aided institutions: England and Wales-Returns to the Department of Education. Questionnaire on the finance of capital expenditure to direct grant schools. (Seep. 66.) Scotland -E. in S. 1963, Appendix 3, and from accounts provided by the Scottish Education Department. Northern Ireland -Ministry of Education. Private educational institutions Schools: United Kingdom -Total fee income was derived as explained earlier. (Seep. 67.) Fees paid by 'other ministries' are derived from the Service Estimates which give figures for fees paid at civilian schools where servicemen are serving abroad or are liable to frequent changes of station. Education allowances are also made for the same purpose. The totals in 1962/3 were: £ million

Fees Allowances

1·046 2·467 3·513

It was assumed that half of this sum was for boarding and the remainder was included here as payment of tuition fees. Fees paid by L.E.A.s in England and Wales derive from S. of E. 1964, P.1, Table 32. A figure is given for fees paid to all pupils in independent and direct grant schools including boarding fees. An estimate of the latter was made as explained previously (see p. 63, and Annex B). Tuition fees paid at direct grant schools had also been calculated (see Appendix II). The residual was therefore L.E.A. expenditure on tuition fees in independent schools. -Fee payments by households were derived in the way explained on p. 68.

Other

Table 4.2 ALLOCATION OF FUNDS TO LOCAL AUTHORITY COMMITTEES

Source as for Table 4.1.

Table4.3 ALLOCATION OF FUNDS TO LOCAL AUTHORITIES

General grant -Civil Appropriation Accounts 1962-3, Class VI, Votes 4 and 5. Rate deficiency grant-Civil Appropriation Accounts 1962-3, Class VI, Votes 6 and 7. Rates -This is a residual item.

73

SOURCES AND METHODS

Table 4.4 ALLOCATION OF FUNDS TO SPENDING BODIES

Source as for Tables 4.1 to 4.3. The estimate of enterprises' refunds of fees to employees who are taking courses in further education derives from surveys of those taking day-release (see Crowther Report 15-18, Vol. II, p. 73) and of those on sandwich courses (see Robbins Report, Appendix Two (A), P. IV, p. 226). Nearly half day-release attenders receive their fees back in whole or part from employers. Nearly 80 % of those on sandwich courses do so.

F

74

EDUCATIONAL FINANCE

ANNEX A

NON-EDUCATION EXPENDITURE BY ECONOMIC CATEGORIES-1962/3 (i) LocAL EDUCATION AU1HORITY EXPENDITURE ENGLAND AND WALES Service

Salaries

32·462

School meals School milk School health Boarding expenses ofT.T.C.s Youth service, etc.

8·791 2·076 43·329

Total

£ million

Other Loan current Capital charges

Total

45-892 1 I ·949 5·974

8·322

3·024

0·323

0·211

89·700 11 ·949 15-299

4·432 9·522 77·769

5·511 2·741 16·897

1·200 0·732 5·167

13·219 12·995 143·162

SCOTLAND Service School meals School milk School health Youth services, etc. Youth employment Libraries Total

Current

Capital

Total

7·681 1·743 1·479 0·659 0·244 0·865 12·671

1· 121

8·802 1·743 1·479 0·859 0·244 0·865 13-992

0·200 1·321

NOR1HERN IRELAND Service School meals School milk Youth service, etc. Total

Current 1·611 0·607 0·060

Capital

Total

0·294

2·278

0·294

1·905 0·607 0·060 2·572

Source: England and Wales: L.E.A. returns to the Department of Education. Scotland: Education in Scotland 1963, and returns to the Department of Education. Northern Ireland: Education in Northern Ireland 1963-4.

75

SOURCES AND METHODS

(ii) AIDED INSTITUTIONS ENGLAND AND WALES Service

£ million

Loan charges

Salaries

Other current

0·011 0·060 0·367

0·006 0·126 0·793

0·017 0·186 1-160

1·761 2·949

0·523 0·002

0·111 1·470 1·066 3·450 6·160

4·710

0·525

14·079

School meals and milk Direct grant nursery schools Direct grant lower schools Direct grant upper schools Medical services Direct grant upper schools Boarding and catering Direct grant lower schools Direct grant upper schools Direct grant special schools Further education colleges Voluntary training colleges

0·459

* * * *

0·111 1·470 1·066 1·166 3·209

All non-educational expenditure in aided institutions

0·897

7·947

Capital

Total

0·459

*

SCOTLAND Service Boarding and catering Voluntary colleges of education Central institutions All recorded non-educational expenditure in aided institutions

Salaries

Other current

0·042

*

0·069 0·028

0·111 0·028

0·042

0·097

0·139

* Not available separately. Source: See pages 61-2.

Capital

Total

76

EDUCATIONAL FINANCE

ANNEX B

MAINTENANCE GRANTS AND BOARDING FEES EXPENDITURE BY TYPE OF INSTITUTION ATTENDED AND SOURCE OF FUNDS-1962/3 ENGLAND AND WALES

Ministry of Education Grants to university students Local education authorities Grants to university students Grants for those at F.E. colleges taking degree-level courses Grants for those at F.E. colleges on other courses Grants for those at teacher training colleges School maintenance allowances Boarding fees at independent schools paid by L.E.A.s Boarding fees at direct grant schools paid by L.E.A.s Other

£ million

4·222 15·320 2·953 4·800 4·538 0·906 0·750 0·115 0·785 30·167

SCOTLAND

Education Department Grants to university students Grants to those at colleges of education Grants to those at Central Institutions (F.E.) Other

2·251 1·279 1·246 0·262 5·038

Local Education Authorities Bursaries for school children Grants to those in full-time F.E.

0·579 0·343 0·922

NORTHERN IRELAND

Ministry of Education Postgraduate and teacher training grants Local Education Authorities Awards to university students Source: As for Table 3.2, see pp. 63-4.

0·500 0·710

77

ANNEX C

SCHOOL POPULATION AT INDEPENDENT AND DIRECT GRANT SCHOOLS JANUARY 1963 ENGLAND AND WALES

Numbers and percentages Percentage of all school children at: Direct grant schools

Independent schools

Total numbers at school

Age

Boys

Girls

Boys

Girls

9·10 16·21 9·21 4·13 4·28 4·56 5·07 5 50 5·82 5·99 6-06 6·06 5·98 11·39 16-72 20·19 15·70

Girls 10·04 16·56 9·56 4·59 4·67 4·97 5·16 5-41 5·79 6·09 6-29 6·34 6·57 12·84 16·31 14·42 ll ·02

Boys

2 3 4 5 6 7 8 9

5·65 1·99 0·35 0·13 0·15 0·25 0·44 0·63 0·79 1·89 2·32 2·36 2·34 4·72 6·84 9·74 10·99

6·02 2·02 0·54 0·33 0·40 0·54 0·64 0·72 0·82 1·93 2·44 2·36 2·22 4·64 6·90 10·66 10·94

1,362 12,953 103,517 355,361 344,761 329,344 333,037 338,251 332,059 335,152 341 ,612 357,214 372,922 194,330 100,668 45,702 20,019

1,413 12,076 97,526 338,246 328,934 314,019 317,306 321,290 318,123 320,245 326,848 341,152 355,718 173,964 86,434 33,529 10,335

13·63

35·05

8·39

6·96

2,3ll

776

10

11 12 13 14 15

16 17 18 19 and over

Source : S. of E. 1963, P. l , Table 6.

SCOTLAND

Numbers and Percentages Age 2 3

4 5 6

7 8 9 IO

ll 12 13 14 15 16 17 18 and over

Percentage of all school children at independent schools

Total numbers at school

8·43 15·92 18·68 1·50 1·12 l ·28 1-35 1·50 1-65 l ·68 1·77 1·91 1·90 4·44 7·04 7-40

392 2,157 5,527 77,740 87,721 85,081 84,128 82,905 81,636 81,439 82,706 84,646 87,026 34,521 18,171 9,004

7-61

2,438

Source: E. in S . in 1963, Appendix 6, Table 2. Note: Pupils in aided schools not shown separately.

Index Civil Estimates, 7, 65 College of Aeronautics, 17 Colleges of Advanced Technology, 17, 66, 69 Colleges of Further Education, 18 Cost Investigation Unit, 38 Crowther Report, 15-18, (Report of the Central Advisory Council on Education), 73 customs and excise duties, 34

Administration, expenditure on, 3, 4, 1415, 16, 42-3, 64, 66 advanced courses, 15 agricultural colleges in Scotland, 10-11 agriculture, department of, 11 aided institutions defined, 3 education expenditure of, 14, 17, 30, 53-7 number of pupils in, 57 sources of finance of, 26-7, 53-7 statistical sources on, 69, 70, 71-2 aided schools, 17 Allen Committee (Committee of Enquiry into the Impact of Rates on Households), 33 allocation of funds to spending bodies England and Wales, SO Northern Ireland, 52 Scotland, 51 United Kingdom, 29-33 allocators of finance, 4, 6, 32 approved schools, 9, 10, 16, 26, 65 awards to students, 9, 10

Dartmouth Naval Training College, 11 day-release, 73 Department of Agriculture (Scotland), 11 Department of Education and Science (see Education and Science, Department of) Departments of Education, 28 direct finance of Local Education Authority schools, 26 direct grant grammar schools, 1, 7, 27, 53 nursery schools, 75 schools, 3, 4, 10, 14, 17, 20, 77

Belfast, University of, 26 benefactions, 20 Blue Book, 59 boarding, 23, 62 and catering, 75 expenses in teacher training colleges, 61 boarding fees, 10, 76 Burnham Scale, 20

Economic categories, 18, 41, 45, 46, 47, 69 Education Act, 1944, 11, 28 education and national income aggregates, 21, 58 Education and Science, Department of, 1, 7, 11, 19, 28, 37, 59, 69 grant from, 2 Education Committee's expenditure, 30 education expenditure by economic categories, 69 by economic categories in England and Wales, 45 by economic categories in Northern Ireland, 47 by economic categories in Scotland, 46 by level of education, 15, 69 by level of education in England and Wales, 43 by level of education in Northern Ireland, 44 by level of education in Scotland, 44

Cambridge colleges, 37, 66 Cambridge Reporter, 65 catering, provision of facilities, 3, 7, 37, 62 Census, 1961, 68 Central Government, 14, 15, 64, 69, 71 education expenditure of, 16, 18, 25, 32 Central Statistical Office, 19, 22 charitable trusts, 24 charities, 33, 59 child care, 9 Committees, 30 Departments, 26

79

80 education expenditure-contd. by sector, 13-21, 40-7 isolated, 7 of aided institutions in England and Wales, 54 of aided institutions in Northern Ireland, 56 of aided institutions in Scotland, 55 education in Northern Ireland, 61 in Scotland, 61 Education in Northern Ireland, Ministry of, 1, 2, 26 Education, Ministry of, 10 Education Statistics, 19 educational trusts, 12 employer's national insurance contribution, 19, 70 endowment income of independent schools, 12, 68 of Oxford and Cambridge, 27 England and Wales education expenditure in, 40-3, 45 expenditure and receipts of aided institutions in, 53-7 finance of education in, 48, 50 non-education expenditure in, 8-10 enterprises, 5, 25, 32 expenditure, 76 in England and Wales, 42 in Northern Ireland, 43 in Scotland, 42 on administration, 3, 4, 14-15, 16, 42-3, 64, 66 Family Expenditure Survey, 12, 67 fee income, 11 fees, 5, 12, 73 at L.E.A. institutions, 26 paid by households, 71 reimbursed by firms, 29 finance of education in England and Wales, 48, 50 in Northern Ireland, 50, 52 in Scotland, 49, 51 firm's payment of further education fees, 29 foundations, 24, 71 Franks Report-Report of the Commission of Enquiry, University of Oxford, 27, 37, 65, 66 further education, 15, 40 further education colleges, 26 General Grant, 29, 31, 38, 72 Government, Central, 14, 15, 64, 69, 71 grammar schools, 17

INDEX

grants, 24, 26-31, 72 for maintenance, 9, 63, 76 for those in further education, 76 from Departments and Ministries of Education, 26 from enterprises, 28 from other private institutions, 26 percentage, 29, 30 rate deficiency, 30, 31 specific, 29 to Local Education Authorities in Northern Ireland, 30 to university students, 23, 76 gross domestic product, 22, 58, 60 gross national expenditure, 22 gross national product, 21 Health, 62 health services, 8, 23, 61, 74 higher education, 15, 16, 40, 43-4 Home Office, 9, 65 households, 5, 25, 32, 48-52 payment of fees by, 27 Imputed rent, 59 income forgone, 3 independent schools, 8, 10, 12, 17, 20, 35-6, 41, 67-8, 70, 72, 77 indirect taxes, 33 Industrial Fund for the Advancement of Scientific Education, 28 Industrial Training Act, 1964, 36 industrial training boards, 36 industry, 71 inland revenue duties, 34 inspection, 4, 15 Institute of Municipal Treasurers and Accountants, 19 Institute of Social and Economic Research at York University, 2 Kalton, G., 67, 70 Labour, Ministry of, 36 Lambert, R., 7, 28, 63 libraries, 61 loans, 24 31 from the central government, 26 local authority institutions, 64, 69, 71 education expenditure of, 16 expenditure on grants by, 10 non-education expenditure of, 48 local authority rate income, 33 scholarships, 24

81

INDEX

Local Education Authorities, 9, 64 payment of fees at private schools by, 28 scholarships from, 26 local government, 14 finance of education, 28 purchases, 26 Local Government Act 1958, 29 Local Government Act 1966, 31 local rate, 5 Lockwood Report-Higher Education in Northern Ireland, 66 Machlup, F., 3 maintenance grants, 76 Medical Research Council, 10 medical services, 75 Ministry of Education for Northern Ireland (see Education for Northern Ireland, Ministry of) Ministry of Labour (see Labour, Ministry of) Morgan, E. V., 12, 66 Morgenstern, 0., 58 National income, 21, 58 and expenditure, 11 statistics, 7, 19 national insurance contributions, 18-19, 69, 70 non-education expenditure, 3, 8-9, 61, 74 Northern Ireland education expenditure in, 40-4 expenditure and receipts of aided institutions in, 53-7 finance of education in, 50, 52 grammar schools in, 53 non-education expenditure in, 8-10 nursery education, 15 nursery schools, 17 Organisation for Economic Co-operation and Development, 2, 15 output of the education industry, 60 Oxford colleges, 37, 66 Percentage grant, 29, 30 physical training, 8 Plowden Report-Children and their Primary schools, 17 pooled expenditure, 26 postgraduate awards, 10 pre-primary education, 15, 17, 43-4 primary education, 15, 17, 41, 43-4 private schools, 17, 20 expenditure for, 28

Private education institutions, 14, 67, 69, 70, 72 education expenditure of, 16 profits tax, 33 Public Schools Commission, 12 Public Works Loan Board, 31, 38 pupils in aided institutions, 57 pure education expenditure, 4 Rate deficiency grant, 30, 31, 72 rates, 30, 31, 72 receipts of aided institutions England and Wales, 55 Northern Ireland, 57 Scotland, 56 receivers of finance, 4, 6 refunds of fees, 73 regional colleges, 18 Registrar-General, 68 religious denominations, 24, 26, 33 religious orders, 59 research, 4 expenditure on, 15 in social sciences, 71 Research Councils, 26 residence, provision of facilities for, 3, 7 Revell, J. R. S., 34 Robbins Report-Higher Education, Cmnd. 2154, 16, 37, 63, 69, 73 Royal College of Art, 17 Salaries, 20 of teachers, 20, 26, 41, 53, 70 Sandhurst, 11 scholarships awarded by Local Education Authorities, 26 schools health service, 8, 23, 61, 74 maintenance allowances, 76 meals and milk, 4, 61, 74, 75 population at independent and direct grant schools, 77 transport, 16 school-leaving age, 9 Science Research Council, 10 Scotland agricultural colleges in, 10-11 education expenditure in, 40-2, 44, 46 expenditure and receipts of aided institutions in, 53-7 finance of education in, 49, 51 non-education expenditure, 8-10 Scottish Department of Agriculture, 27 Scottish Education Department, 1, 2, 9, secondary education, 15, 16, 40, 43-4 10

82

INDEX

service estimates, 11, 64 Society of County Treasurers, 19 special schools, 9, 16 specific grants, 29 spending bodies, 4, 24, 25, 32 sports grounds, 8 state scholarships, 10, 26 Statistics of Education, 1, 22, 38, 61 Stock Exchange, 34 students' grants, 23, 76 superannuation payments, 19

Undergraduate awards, 10 UNESCO, 3, 24 Unit for Economic and Statistical Studies on Higher Education at the London SchoolofEconomics,2, 36 Universities, 3, 17, 71 expenditure, 4, 14 fees, 24 University Grants Committee, 7, 15, 19, 20, 26, 28, 38, 66 quinquennial review, 65 University of Belfast, 26

Taxes, 5, 33 teachers' salaries, 20, 41, 53 teacher training, 26 teacher training colleges, 4, 18 training, 3 industrial, 36 Times Educational Supplement, 59 transport, 4, 16 trusts, 12, 24

Vaizey, J., 11, 67 voluntary maintained schools, 26 voluntary school building, 33 voluntary teacher training colleges, 27, 75 Wages, 20 Youth Service, 8, 61, 74