Public Private Partnerships in Education Sam Carlson – World Bank October 2008

Key Messages: PPPs in Education  Need to pilot new PPP models which can improve delivery of education services.  State-specific  Different models  Rigorous external evaluation Costs and effectiveness  Competition can benefit parents and children

India PPP Feasibility Study  Nine States, 1,400 private aided and unaided secondary and senior secondary schools (completed September 2008)  Interviewed school principal, management committee members, teachers  Financed: World Bank/DFID  Implemented: ORG Centre for Social Research

Key Findings: India PPP Study  Teachers in unaided schools are equally qualified academically as peers in aided schools, and slightly less so pedagogically.  Average experience of unaided school teachers is 10 years.  No major difference in school facilities (classroom infrastructure, laboratories, toilets) between aided and unaided schools.

Key Findings: India PPP Study  Average salary of unaided school teachers is 1/3 of aided school teachers (Rs.5,000/month vs. Rs 15,000)  Given that school costs are primarily driven by teachers’ salaries, this suggests overall unit costs of unaided schools are considerably lower than those of aided schools.

Key Findings: India PPP Study  Students in unaided schools did better on Board Examinations than their peers in aided schools, and were more likely to score in the first division.  Principals in unaided schools were less likely to cite any constraints or limitations to improving educational quality in their school.

Key Findings: India PPP Study  On average, private unaided schools function at around 80% capacity, suggesting an immediate opportunity to use public per student funding mechanisms to enroll more secondary students with no need to build infrastructure and (perhaps) no need to hire more teachers.

Bottom Line: India PPP Study  If it is true that private unaided schools have lower unit costs but at least equal (if not superior) academic results, this offers an important opportunity to use PPPs to expand enrollment in a cost-effective way while ensuring that satisfactory quality is maintained.

PPP: Range of Possible Private Sector Responsibilities  School Facility Services (build and maintain schools)  Provide non-educational services (e.g. catering) and support services (e.g. technology)  Provide curricula and educational services  Provide teacher training services  Manage public schools  Provide all teaching and non-teaching services at public schools  Provide teaching services to publicly- funded students at privately-owned and managed schools

Types of PPP Contracts What gov’t contracts for: Definition:Contract Type: Management, professional services (input) Gov’t buys servicesManagement or professional services Operational Services (process) Gov’t buys school operation services (Grant in aid) Operational contract Education Services (output) Gov’t buys places in private schools Contract for education of specific students Facility Availability (input) Gov’t buys facility availability Infrastructure services contract Facilities and Services (“bundle”) Gov’t buys facility availability and services Infrastructure contract and services contract

PPP: Government-Aided Schools in India at the Secondary Level  Type of PPP  Financing follows the teacher, not the student  No incentive to expand access or improve learning – needs reform!  Lack of accountability to parents, head teacher or government  Mixed evidence in terms of cost- effectiveness

PPP: Charter Schools (USA)  Publicly-funded  Governed by group or organization under contract with government  Funding is per student, based on actual enrollment, at or below public average unit costs  Exempt from government regulations  Open to all students, by lottery  Capital costs are not financed

PPP: Contract Schools (Latin America)  Private School Management of Public Schools  Funding on per-student basis (below average public unit cost)  Accept all students  Performance standards (hours of instruction, quality of nutrition, test scores, retention)  School hires and fires teachers

PPP: Concession Schools (Latin America) School owned by NGO Government pays teacher and head teacher salaries Land, construction, and maintenance are paid by community, foundations, private sector School hires director and teachers without union interference NGO trains/supervises teachers

PPP: Private Management of Public Schools (UK)  School is “sponsored” by individual, public or private school, business, religious or NGOs  Sponsor provides 10% of capital costs; government provides 90%  Operating costs paid by Government  Sponsor hires head teacher, teachers and selects governors  Flexible teacher pay and working conditions  Quality and performance monitored by Government

PPP: Alternative Education Schools (New Zealand)  Government contracts with private providers to provide alternative education, on or off school site, to children who have left formal system.  Funded on a per-student basis (covers staffing, operations, property)  Contract with MOE regarding responsibilities and performance standards

PPP: Per Child Subsidy or Voucher (Chile)  Families choose school (public or private); school cannot charge tuition  Chosen school receives government payment based on per-pupil subsidy multiplied by number of pupils attending (average monthly attendance)  Teachers hired with tenure or under contracts, through competitive, public recruitment, with wage floors.

PPP: Public Subsidy of Poor Children to Attend Private Schools (Philippines)  Gov’t purchases “places” on per- pupil funding basis (at or below public unit cost)  Gov’t certifies quality of private schools (faculty, facilities, curriculum, administration, etc.)  Double-shifting allows more efficient use of infrastructure  School hires/fires all staff

PPP – Private Financing of School Construction (UK)  School designed, built, financed and maintained by private sector  Teaching remains under public sector  Private partner paid by Government under 30-year contract, with performance criteria  Promotes rapid infrastructure development

PPP: School Infrastructure (Canada)  Schools financed, built and maintained by private sector  Government leases schools for 20 years, with options to renew for 10 more years, and option to buy at predetermined price  Government pays annual rent equal to 85% of capitalized cost of project; costs less than if Government financed construction.  Qualified bidders competed on price  Private sector can rent space during non school hours to generate revenue, and can sell building after 20 years.

PPP: School Infrastructure (Australia)  Private sector finances, designs and builds school  Private sector provides cleaning, maintenance, repair, security, furniture, utilities, equipment  30-year contract, with monthly payments based on performance, after which school reverts to government  Core education services provided by Government  Schools built faster and cheaper, with contractor chosen through public tenders

PPP: Publicly-funded private schools (Netherlands)  Schools (non-profit) established by parents, NGO, religious association  Parents choose school  Municipality provides building and per- pupil payment for non-salary operating costs  Central government finances teacher salaries  Teachers must be certified; hired by school  70% of schools in Netherlands are publicly-funded and private

Key Messages: PPPs in Education  Need to pilot new PPP models which can improve delivery of education services.  Need State-specific strategies  Different models  Rigorous external evaluation Costs and effectiveness  Competition can benefit parents and children

 “If a teacher is indeed wise, he does not bid you enter the house of his wisdom, but rather leads you to the threshold of your own mind.” (Kahlil Gibran)  What is your collective “threshold” when it comes to PPP in education in MP?