Dr Trevor Hamilton, ContributorState financing of education has to be a major item of deliberation for Cabinet as it deliberates the next budget, for three reasons: education is supposed to be one of the soundest public investments; it is the sector receiving the largest share of the budget (13 per cent of the 2007-08 Budget); it is the main vehicle for transformation of the society and the economy.
My analysis of the financing policy has concluded that it is a big failure and represents the single-largest opportunity for rationalisation of government expenditure. The analysis is presented and substantiated on the basis of the following generally accepted and tested principles.
Early childhood development has the highest rate of socio-economic returns because people learn the most between 0 and 10 years old; it is the only time to indoctrinate people to be good citizens; and, it is the best opportunity to prepare people to master the succeeding stages of the education system/process or to make the succeeding stages highly successful. The socio-economic returns to the state in financing education - except teacher education - declines in succeeding stages of the system, especially after secondary education. Concentration of investment in early childhood through to secondary education is a sure way to alleviate the vicious cycle of poverty, hence the reason for the Government of Jamaica (GOJ)-World Bank PATH Programme and the Jamaica Social Investment Fund's (JSIF) large portfolio in basic schools. Investment in tertiary education should yield prosperity, working strategies for social order and improved health of the population. Analysis of financing education has to use the University of the West Indies (UWI) as the reference point for multidisciplinary tertiary education for two compelling reasons: It accounts for almost 60 per cent of public financing for tertiary education, and it dominated the tertiary education landscape for at least 50 of its 60 years of existence.Upside-down priorities
The first major conclusion from my analysis of the structure of public financing in education is that its priorities are upside down, or contrary to the general understanding that early childhood to secondary schooling yields the highest socio-economic returns and tertiary - excluding teacher education - yields the lowest rate of socio-economic returns to the State.
The extent to which the structure of state funding for education has violated the principles of social and economic soundness makes it one of the single-largest sources for perpetuating injustice, poverty, and social disorder.
The biggest yield from public investment in education - excluding teacher education - should be health for the population, economic prosperity and social order. These account for more than 90 per cent of what the community expects. Let us look at the trend in government investment in tertiary education, using only the UWI - since it has been almost the only major source when teachers' colleges are excluded - and the performance of socio-economic trends concentrated in health, economic prosperity and social order.
The population's health should be measured by life expectancy. Frequently, it is measured by mortality rate, but due to the high murder rate, this would be a distortion. Economic prosperity has to be measured by growth in the value of goods and services produced (GDP).Measuring social order
Social order can best be measured by the level of crime, using the murder rate as the main indicator.The whole population is benefiting immensely from the health sciences at the UWI. However, the investment in the UWI, at the increasing rate of 9.4 per cent annually, has yielded only 1.2 per cent growth in economic prosperity, and the social transformation has been extremely negative. It has to be called social disorder when the murder rate is increasing at eight per cent annually and at an accelerating rate.
The failure of the investment policy, which is heavily in favour of the UWI, fails for these, among other reasons.
It has not put enough into early childhood development and primary education to ensure that social order becomes a culture. The UWI's graduates will find it extremely challenging to introduce and maintain strategies for sustaining social order when the foundation - early childhood development - is weak. Most of the UWI's programmes (excluding MSB, CARIMAC, health sciences, teacher education, and a few others) are old-economy, knowledge-oriented (ask employers which graduates they prefer to hire) and are further exacerbated by a high percentage of intra-institutional incestuous intellect. This means too many of its gra-duates return to teach at the institution. Progressive universities do not allow more than 20 per cent of their graduates on their teaching staff. Every common-sense farmer in my parish - St Elizabeth - will tell you that as a rule, he rotates crops and culls his breeding stock in order to get the best yields.As government prepares its budget for the education sector, including its allocation to tertiary institutions, it should consider the following, which is the present landscape for tertiary education and the issues of financing bias towards the UWI.
The UWI is indeed a centre of excellence for health sciences and should get more public and private funding to exploit the large and growing world market for health and allied-sciences graduates. The UWI is significantly ahead of the rest of the sector in research and related postgraduate education and should, therefore, get increased support from private and public sectors in this area. It should however be more applications-oriented and sponsored to reduce investment risk. The fast-growing economies are not really investing in high research. They practise C + I, i.e., they copy and improve on innovations. The UWI consumes 58 per cent of the GOJ's allocation for tertiary education, but accommodates only 30 per cent of the publicly funded students. Annual per capita subsidy at the UWI is $357,000 while similar education is available at the UTech and community colleges for a $157,000 or $101,000 subsidy, respectively. This means that the GOJ could expand its capacities at the UTech and community colleges with savings from rationalisation at the UWI. The UWI is no longer a dominant player in the market. Its market share has dwindled from a virtual monopoly position to 22 per cent. Therefore, the GOJ and the Jamaican population have many more choices. In fact, the private providers now account for 27 per cent of the tertiary-student population. The UWI is not appealing to men; men account for 27 per cent of the student population, but at MIND, G.C. Foster, Knox Community College, Portmore Community College, VTDI, MoBay Community College, the Caribbean Institute of Technology, The UTech, CMI, Excelsior Community College, etc, they account for 35-69 per cent. The belief that men and boys don not like school is a myth. They like school with significant infusions of technology and new-economy knowledge. Government should, therefore, infuse every school, from basic schools to community colleges, with new economy/ social skills and make them part of the TVET certification programme. They will be oversubscribed by boys and men. Female graduates from the UWI are likely to be less successful in the national and international labour markets than their counterparts at the UTech and many other GOJ institutions because they concentrate on old-economy knowledge. The major shareholders of the UWI - Barbados, Jamaica and Trinidad and Tobago - are investing significantly in their national tertiary institutions, mainly because the UWI has not been delivering knowledge in the areas considered to be highly strategic to their national development. Trinidad and Tobago has even gone further and given its local private providers of tertiary education per capita subsidies under its Government-Aided Tertiary Education (GATE) financing policy, provided that the programmes are strategic and approved by the national accreditation body. It is the policy of the government to give students choices and support them wherever such choices exist locally. The GOJ should, therefore, ask itself why it discriminates against students attending tertiary institutions, such as, NCU, UCC and IUC, which are all approved by the University Council of Jamaica. The OECS governments are also funding their nationals' education wherever available, provided that it is relevant to their national priorities. The UWI restricts access to its institution through overconcentration in Kingston and a reluctance to accept system-wide credits earned in other institutions, including some of those funded by the GOJ.This analysis and publication would be incomplete without discussing teacher training for three reasons. About 18,000 or 78 per cent of the present force need training. The return to teacher training is obviously high. It is ranked on par with primary education because they have to drive the early childhood and primary education quality. The present capacity at teachers' colleges is far less than 6,000. This is too inadequate to train replacement teachers and to upgrade 18,000 teachers, even after the colleges are upgraded to degree-granting status.
It appears that Government intends to finance the 18,000-teacher-upgrading programme through a combination of student loans, (at the bureau) a special private-bank-managed revolving-loan programme with $600 million, and teachers' direct contribution. The expectation that teachers would be able to afford this funding model at this time is even higher than it has been in the past because they have received a "massive pay increase".
A myth
This is a myth. First, teachers' so-called "massive pay increase" should be regarded as an 80 per cent realignment with their competitors in the market. It is, therefore, not an increase, or even full market pay. Second, if you assume that the take-home pay is now $70,000 per month, it is well below the level required before teachers could start to make discretionary spending, such as investing in job-related training.
The unavoidable monthly expenses for teachers amount to about $82,000 against a take-home pay of $70,000. Nine of the 15 compulsory items - housing ($25,000), lunch ($5,000), public transport ($10,000), utilities ($4,000), groceries ($8,000), one dependent ($10,000), personal care ($3,000), and amortisation of a laptop ($4,000) and clothing ($5,000) - account for $74,000. They, therefore, cannot fund their skills upgrading either through personal income or loans, because they subsidise their income to live and cannot service the loan. This is substantiated by the fact that the $600-million special-revolving credit fund made available to teachers through a GOJ-private-bank partnership has only experienced about a 15 per cent utilisation rate because most of the teachers cannot qualify for the debt-servicing requirements.
From the foregoing, it should be clear to Government that it will have to divert some of the education budget to fund teachers' upgrading.
I sincerely hope Government puts my analysis on trial and seizes this opportunity to improve the returns from its limited and dwindling resources.
Trevor Hamilton is president of an international management consultancy in Palm Beach, Florida. He commutes to the Caribbean where he has offices. Feedback may be sent to columns@gleanerjm.com.
