Miriam Rosen, the Executive Director of Ofsted was our Power Lunch guest this week. She outlined the schools regulator's way of working, which involves a lighter touch for good and outstanding schools and more emphasis on the less satisfactory ones.

There are 1001 things one can try in order to improve education – including spending hundreds of millions on new buildings, as Gordon brown has done. Sure, kids have to be treated as individuals and not statistics (which the obsession with exam results does not help either), and need a degree of discipline in order to learn anything. What seems to come out from Rosen's experience, though, is that what really makes the difference in education is good teachers and good teaching.

That chimes in with the work of James Tooley, who can point to countless excellent schools in Africa and India which do not even have buildings, with the teaching taking place under the shade of a tree. But if it's good teaching, it works – so much so that even the poorest parents are willing to pay for it.

But talent costs money. Many excellent teachers give up because they simply can't afford to live in some of the more affluent areas; and who wants to go to a failing school in a tough part of town unless they are decently rewarded? Naturally, the problem is the politicisation of education, in which remuneration is seen as an exercise in promoting equality rather than in steering talent to where it is needed (and telling non-talent that it isn't wanted, frankly). Until schools manage their own budgets and decide their own pay scales, I can't see things improving.