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Sophie Sandor is Programmes Manager at the IEA.

Time and again, it is the poorest children who are affected when government schools fail, but if politicians embraced the free market, an outstanding education by today’s standards would be delivered to the masses.

When another Derbyshire school was placed under special measures this month, perhaps the saddest fact was that the number of pupils from underprivileged backgrounds is disproportionately high in such schools. The government has now given Derby, one of its education opportunity areas, £1 million for multi-academy trusts to expand in the area. Meanwhile teachers are frustrated by bureaucracy-induced delays which have prevented action to date.

Throwing more cash at schools is seldom the answer. Yet the controversy rages on over the additional £1.3 billion announced for core schools funding because, instead of being raised anew, it will come from elsewhere in the education budget.

If we had a cumulative figure for the hours of young people’s time wasted in disruptive classrooms each day, however, there would be outrage. Imagine if those condemned to years in failing schools lived in different postcodes, attended different schools with different teachers and different peers. It would be a game-changer. The teacher is by far the most effective tool in any school, and research also shows that having rowdy peers increases inequality, knocking down their classmates’ future earnings by as much as three to four per cent between the ages of 24 and 28.

It’s possible to tailor top-quality schooling to anyone. Free schools such as Michaela Community School in Brent have experimented with high-discipline, knowledge-rich methods for children whom the odds are otherwise stacked against in life and the results have been phenomenal. Why is it, then, that despite colossal expenditure and knowing what makes a good school, a small minority in the UK, often the poor, still get the worst deal in education?

Jamie Whyte highlighted the causes in a talk he gave this month at the Institute of Economic Affairs’ annual Think conference. He pointed out that even in a state-run system you can’t eliminate pricing. You can try to get rid of markets, but it almost never works. In education, this unavoidable truth manifests itself in house prices as opposed to school fees. When there is a high-quality school in one area it earns a reputation, and parents want to move there. Demand for houses in that area shifts upwards, and it swiftly becomes a pocket of wealthier families attending good schools.

It’s a perverse system when you think about it. If you live in an area with good schools, you have an incentive to deprive people outside it from receiving a similarly good education. If the good school you are currently accessing were to open a partner school just outside your catchment area, the value of your house would fall. Knowing this, you might be inclined to do what is in your power, through politics and nimbyism, to stop new schools being established.

Not only are the poor forced to pay through taxation for underperforming schools, but they are forced to attend them. If you can’t afford to relocate to a more affluent area, then you can’t avoid the bad local schools. The supplier of education is funded regardless of whether consumers’ preferences are met, so there is no incentive to cater to them. People are also unlikely to pay for education when they have already paid for state schools. This has crowded out the private sector, leaving only incredibly expensive private education to exist which is beyond what most people can afford. Only 6.5 per cent of school-aged children are privately educated across the UK, a percentage some would happily reduce in the name of equality.

Objecting to the expansion of private schools because they are elite or undermine equality is absurd. If everyone had the opportunity to attend a private school then, by definition, they couldn’t be elite. The services that are often provided far better by private schools are only regarded a luxury because so few have access to them at the moment – we no longer think that way about iPhones or air travel which almost everyone can enjoy today. As Joseph Schumpeter said: “The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within reach of factory girls”.

The irony of the current system is lost on those promoting it. Far from achieving its aim of providing an equal education for all, quelling choice and competition has wedged a divide between the educations of the least well-off and everyone else. Special measures schools such as those in Derby fall into a negative spiral, stigmatised and hand-held through numerous government support measures, while the “socialist Etons” are celebrated, growing ever-more attractive and expensive to live near.

Conservative politicians should be deliberately using the virtues of the market to accelerate competition and innovation. As a first step, a policy incentivising for-profit organisations to set up or take over schools could extend choice, allocate resources more efficiently, and eliminate schools that children have to be forcibly enrolled in. If not Justine Greening, how long will it be before the Conservatives present an Education Secretary who does something more enterprising than entertain a plan for new grammar schools?

Regrettably, it will already be too late for the children returning to unsatisfactory schools after the summer holidays.

63 comments for: Sophie Sandor: You want better state schools? Then let them make a profit.

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