The following is an article I wrote for the Cork Independent and which appeared in the edition of March 28.
Minister of Education, Ruarí Quinn, has been at the centre of a debate that is getting increasingly heated recently on the public funding of teacher salaries in private fee-paying schools. There are 55 private schools in Ireland and in 2011-12 they received €96million in public funding, almost 90% of it for teacher salaries. Five private schools in Cork received €9.5 million for teachers’ salaries.
The Joint Managerial Body, which represents fee-paying schools, has argued that since the state would be required to fund the teachers’ salaries in any case the existence of private school is actually saving the state money. This is because the state funds teachers at a higher teacher to pupil ratio than in public schools. The Department of Education’s own figures show that if all of the 55 schools were to enter the public system the state would have to find an additional €23 million annually for teachers’ salaries.
This argument though, that public funding of salaries in private schools saves the taxpayer, is a very odd one from an economic perspective. It is like arguing that one shouldn’t pay tax because by having a job one is saving the taxpayer from having to pay jobseekers benefit. What is actually happening is that because the state is funding salaries, private schools can use the fees from generally wealthier families to fund the extra facilities and student supports which public schools cannot fund from their own resources or from parents.
There is a concept in economics called fungibility. It’s a big word for a simple concept and means that money from different sources is interchangeable. The fee income in private schools can be spent on any of the costs of running the school, but since the salary cost is covered by the state, this frees up the fee income for other uses. Parents can see this and so realise that their fees are being spent directly on providing an educational advantage for their children. They are behaving very rationally based on the structure of our education system.
The saving of €23 million is also based on all of the 55 private schools switching to the public system. Whether this would really happen is questionable. Recent Department of Education reports suggest that fee paying schools have significant disposable income, particularly relative to public schools. While some smaller schools certainly may no longer be viable as fee paying, larger private schools are still likely to continue to see a demand for their services from those parents able to pay even after a rise in fees to cover the withdrawal of public subvention.
In any event, it may be the case that the government should welcome a switch for these schools from the private to the public system. €23 million may be a very small price to pay for an education system which has less inequity built into it. Of course we are unlikely to ever have a situation where educational disadvantage is eliminated, but there doesn’t seem to be any argument in favour of using public money to enable such inequity. If parents wish to pay for secondary school education that is their choice, but they should pay the full cost for that decision.
I'm an economist so many of these posts will be about economic issues. But since everyone is allowed a view on economics I am inclined to go beyond my profession to throw my tuppence ha'penny into other issues.