Adam Smith Institute

Seriously, start with a blank page and ask yourself what we actually desire in a school system? This would be a good start of course:

The country that came top of the Unicef report and did consistently well in the international league tables was...

Yes, all in favour of that, being one of the best in the world means that you're at least doing things better than many, perhaps as well as it can actually be done.

But what it really means is that parents don't snare themselves in mortgages to get into catchment areas they can't afford, or pay expensive school fees or face the humiliation of having to rediscover a lapsed faith.

Yes, that sounds like something to be desired as well: not having to face financial ruin simply to educate the ankle-biters would appeal to most.

There is choice though, and ... children are in the upper quartile of the international tables, which might help explain why the ... is rated as the best place for a child to grow up in the developed world.

Oh, my, yes, that does sound like a good idea. So, how is this done then? What's the magic secret here? Clearly it's going to cost a fortune, yes?

If we want better schools for our children we need to spend more money, don't we? Well actually, no.(....) The surprising answer is that their results have nothing to do with money – in fact, they're spending quite a lot less than we are.

Really? Better schools, better education, the best place in the world to grow up, and it costs less money? Where? How?

They can choose whichever school will suit their child best. Not all parents make an active choice but enough do to influence the standard of schools everywhere. All this is based on the fact that parental choice in education is a part of the Dutch constitution. It assumes that one size does not fit all.

Yes, it's Holland, the Netherlands. The how is that they have a variation of the voucher system that we argue for here at the ASI. The parents choose the school, any one of them that they wish subject to minimal licencing requirements and the government pays the bills. Yes, top up fees are allowed, parents making that decision for themselves as well. We might also note that the Netherlands is a great deal more egalitarian than the UK and I wouldn't be surprised to find out that it has greater social mobility as well (for those who worry about such things).

Engineers have a saying that you can have "better, faster, cheaper, pick any two" for you can't have all three. But it appears that we run our current education system so appallingly badly that we can indeed make it better, fairer and cheaper.

So why is there anyone at all who opposes such voucher systems?

According to Shadow Universities Secretary David Willets, the government's new £165 million package of student support will disproportionately benefit middle-class students and do little to help the poor.

As The Times says, the reforms are meant to encourage more working class students into higher education by providing a "means-tested student maintenance grant, which covers living costs but not fees" and which "will be available to students whose parents earn up to £60,000. Previously the cap was £39,305." Willets says that the most affluent families will gain £150m from the scheme, while those from poorer families will only gain £15m.

I can't say whether Willets' sums are right, but I wouldn't be at all surprised if they were. State-financed universities have always represented a particularly perverse kind of redistribution of wealth – from the working poor to the unproductive offspring of the middle and upper classes. Essentially, people on low incomes who didn't go to university (and whose children probably won't either) pay taxes so that better-off kids can lounge around for three years at someone else's expense. The costs of university do not fall only the beneficiaries of higher education, then, but on taxpayers at large.

I'd like to see British higher education given a substantial overhaul. First of all, universities should be freed from state control and allowed to charge fees as they see fit, but helped (through the tax system) to establish endowment funds to support poorer students. 

To meet any gaps in funding, the government-backed student loans system could be expanded, with loans gradually paid back as students become taxpayers. Such a system would ensure that anyone able to go to university could afford to go to university – but knowing they would eventually be footing the bill, young people would be encouraged to work hard and pursue useful degrees that would boost their future earning power. Turning students into paying customers would also make them demand a higher standard of education than they currently settle for.

Introducing these reforms would certainly not be easy, but the benefits would justify the effort.

Wednesday's Times carried the story that demand for places at independent schools is at its highest in five years, despite above inflation rises in fees and the worsening economic situation. Yesterday's Times reported that thousands of children are set to miss out on their first choice state primary school this year – in some places as many as a quarter of students are to be disappointed. These two pieces of news are not unrelated.

Parents care about where their child goes to school, and want the best for them. In increasing numbers, they are realizing that the state system cannot deliver this and are turning to the private sector instead. Of course, that's fine for families who can afford to pay an average £11,000 a year in fees, but it does leave the less advantaged in a bit of a pickle. They probably cant afford to move into the catchment area of a good state school or pay to go private. They will be stuck with the school they are allocated to by their local authority, regardless of how bad it is.

It doesn't have to be like this. First of all, there are things you can do to improve standards in existing schools. Give them the freedom from regulation and targets that they need to innovate and tailor teaching to the pupils in front of them. Put headteachers back in charge of discipline and expulsions and let them deal with staff pay, using incentives if they want to. Then make them accountable to parents, not bureaucrats.

And that means giving parents a real and effective choice over where to send their children. As in Sweden, the independent sector needs to be encouraged to open more schools, which would be eligible for state-funding on a per-capita basis. As in Denmark, groups of parents should be able to group together, demand their share of state funding, and set up their own schools. The real key here is to create many more good school places, so that the competitive pressures of parent choice can truly be effective.