Mr Chairman, Ladies and Gentlemen!
I am very honoured having been invited to speak before this conference today, and to share some of the Swedish experiences of true school choice with you.
Being both Swede and Conservative, it isn’t always so common I wholeheartedly want to speak before a foreign audience about certain parts of the “Swedish model” as something worth imitating.
Although, true school choice – with a school voucher system and a free market for independent schools that often are for-profit companies – is a unique, and truly inspiring, Swedish policy practice.
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Let me first introduce myself briefly.
I have a political background in the Swedish Conservatives – or the Moderate party, as it is named in Swedish – where I was the National Chairman of the Youth League in the end of the 1990s.
The Moderate party is today the leading party of the centre-right coalition that forms the Swedish government, since 2006.
After having left party politics for a business career, I am now back in the public opinion work with two converging part time jobs.
Partly, I am with the Stockholm based, free market think tank Timbro, as Director of its Welfare and Reform Strategy programme - of which educational policies is one important area.
For the other part, I am involved as a Senior Advisor to a Swedish entrepreneurial family business called Magnora – majority owner of one of the largest for-profit, independent school companies in Sweden, Kunskapsskolan: in English “Knowledge school”.
Kunskapsskolan – the “Knowledge school” – is a chain company with 32 schools in the middle and south of Sweden, and has been in operations for nine years now.
We have around 10 000 students in the ages between 12 and 18.
Our educational concept and the way we run our schools – through a very effective system for internal benchmarking – has attracted attention worldwide.
Kunskapsskolan has now been named preferred sponsor for two new Academies in Richmond, South West London, and one in Suffolk.
The aim is to start the Richmond operations in the fall of next year – along with the English curriculum and all legal requirements for education in England.
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In fact, the reason why the founders of the “Knowledge school” picked just that particular name – which can be seen as a tautology – aligns with the reason why the former centre-right government in the early 1990s carried out the school choice reform.
In Sweden of the 1970s and 80s the term “knowledge” was not necessarily synonymous to the term “school”.
In fact, the Swedish schools became part of a policy for equality, instead of a policy for education.
The ambition to offer “one school for all”, created a monolithic system, where all students were considered to have the same needs, and to learn the same way.
Knowledge and skills were considered less important, as long as all stayed at the same level and underwent the same social training.
Marks were almost entirely abolished, words like “studies” and “homework” considered as dirty.
Almost all schools were public, ran by the city councils, with an exception of a few private schools – open only for those whose parents could afford to pay high private charges on top of the high taxes to the public schools.
Although the promise of the high tax state was to ensure a good education for all, its practices reached the opposite result: students without academic or study traditions in their families – that is, working class or lower middle class kids – came off worst.
And Sweden was doing downhill skiing in the international comparing tables of education results – a heritage that we are still fighting to be liberated from.
One important part of a government agenda for change, was the introduction of the school voucher system in 1992.
The simple thought behind the reform was to promote a higher pedagogical quality and better overall education results, through a higher degree of competition between different kinds of schools.
On this basis, the argument for the reform also had a clearly expressed social dimension:
If we agree that it is a public interest to finance education for all children and youth, and if we agree that students are different with different ways of learning – why shouldn’t all parents and students have the right to choose the school with the best preconditions to help every student reach the overall education goals?
Even if the Social Democrats first opposed it, they later not only accepted the voucher system when they returned to power in 1994 – they expanded the compensation level of the voucher from 85 percent of the average cost for a pupil in a local public school to 100 percent of that cost.
Future changes of government can lead to detail changes in the voucher programme, but its foundation is here to stay.
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The Swedish school voucher system consists of five basic parts:
First: There is a national curriculum that all schools – no matter public or independent – must comply with.
The National Board of Education, together with the National Inspection of Schools, oversees the schools’ alignment with the national curriculum.
Second: Authorized independent schools are publicly funded by a school voucher for each student who chooses that particular school.
In order to be authorized, an independent school must prove its alignment with the national curriculum, its willingness to participate in national tests and inspections, espouse the democratic values of the constitution and prove sustainability to maintain operations over a reasonable time.
The National Inspection of Schools alone makes the decisions for authorization.
The city councils can object – and they often do… many of them still don’t like their own public schools to be subject to competition – but they can’t veto.
Third: The voucher amount is paid by each city council and therefore varies between cities and municipalities.
But the basis for calculating the amount is prescribed by legislation.
The city council is obliged to pay the independent school an amount per pupil and year which corresponds to the average cost for a pupil in a local public school.
This means that independent schools don’t increase public spending on education – they just redistribute the public education budget according to students’ and parents’ free choice.
We call it “voucher” which is the principle term, but technically the independent schools invoice the city councils directly, based on transparent information of which students they host.
Fourth: Independent schools are not allowed to charge additional fees, and they cannot choose students, they are obliged to accept them on a “first come – first serve” basis.
Fifth: Within the framework of the curriculum, the national tests and the inspections – every independent school is free to organize its own programmes, timetables, pedagogical methods and teaching.
For example, Kunskapsskolan has a unique concept of totally personalized education where every student follows his or her own study plan due to the individual attainment goals for each semester.
Goals need, of course, to a minimum extent, be the goals for passed in the syllabi.
But nothing prevents anyone to set higher – or much higher – goals, and Kunskapsskolan encourages its students to set high goals – and helps them to be reached.
Uniquely developed web-based teaching materials, a special pupil track system and standardized teacher preparatory tools, make it possible for Kunskapsskolan’s teachers to spend 50 percent more time in coaching and tutoring the students, compared to the public schools.
We believe all this explains our exceptional results, which I will come back to later.
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What are then the major, general results of the choice reform – did it improve the standards of the Swedish educational system?
My answer is that we are making very good progress.
Independent schools have gone from being an extreme exception into an important part of the Swedish educational system.
Before the reform, in the year of 1991, less than 1 per cent of all Swedish pupils in compulsory education – that is ages 7 to 16 – were enrolled in private schools.
Today the number has increased to 10 per cent of the compulsory school pupils.
In upper secondary education – that is ages 16 to 18 – the trend has been even stronger, from around 1 per cent of all students in 1991 up to 20 per cent today, 17 years later.
In certain regions of the country, almost half of all students are enrolled in independent schools.
Totally, one out of five Swedish schools – compulsory and upper secondary – is an independent school, and independent schools are established in three out of four cities and municipalities
The school voucher programme also give families the right to choose a public school other than the one closest to where they live – and an increasing share of families exercise this right.
Before the reform, the few private schools existing merely differed from public schools regarding ownership.
Today, a large share – almost 50 per cent – of the independent schools differs radically from public schools regarding pedagogical concept and methods to fulfil the curriculum.
More than 6 out of 10 independent schools are run as for-profit limited companies, and there are small, local schools alongside with larger chain school companies like Kunskapsskolan.
The average profit margin of these schools is estimated to around 3 per cent of the total turnover, and for the larger companies is estimated that about 75 or 80 per cent of the profits are re-invested in the schools.
And, the most important thing of all: independent schools show better student attainment – that is, better educational quality – than the public schools: all over the field!
One measure of result is called “merit value”, which is the average value of marks.
Maximum value possible in the compulsory school is 320 points, which summarizes the highest marks in all subjects.
Last year, the average merit value of all Swedish compulsory schools – public and independent – was 206 points.
And the average merit value of the independent schools alone was 226 – and for Kunskapsskolan 236.
Another measure is the national tests that are conducted in all schools and corrected according to strict national standards, for the key subjects.
For these tests, independent schools prove to have a larger share of the two highest mark levels, as well as a larger share of students that passed the tests.
The rate of students, from preparatory, upper secondary school programmes, with formal eligibility for university education, is higher for the independent schools.
And, remember, independent schools are not allowed to choose their students.
The independent schools also show a higher level of satisfaction among the pupils, the parents and the teachers, according to a multitude of surveys.
This summer, the national Swedish Quality Index stated that the difference in teacher satisfaction with their employer, work environment and teaching conditions, between public and independent schools, is “highly significant” in favour of independent schools.
Not to wonder why the teachers unions in Sweden never opposed the school choice reform: a plurality of education providers gives teachers the right to choose employer.
But also public schools are helped by the occurrence of independent schools.
A few years ago, both the National Board of Education and the Institute for Future Studies conducted studies of education results in cities and municipalities where independent schools were established.
And they showed that also public schools in these cities were more efficient and successful than the national average.
Why? Because they needed to improve in order to compete with the independent schools – otherwise they would lose students and thus revenues, because the public schools’ funding from the local school boards also is paid as an amount per student.
So, all in all: the independent schools, funded by the school voucher, create a higher value for the tax payers’ money spent on education.
Both in their own capacity – on average they have better quality and results – and as catalysers for improvement of the public schools they challenge.
Competition surely works!
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To summarize, what are the key success factors behind the Swedish model for raising the standard of choice?
Equal opportunities to choose – regardless of families’ income and wealth status – give the ultimate power to the parents and their children: the power that comes from the freedom of choice.
Equal opportunities for education providers to offer and establish schools – as long as national quality requirements are being met.
I really believe that we have created a system that combines the definition of social justice and equality of the old Swedish model and the Swedish mentality, with the principles of the free market.
The final success factor is perhaps the most controversial – still, among certain politicians, also in Sweden.
And that is the profit factor.
I am totally convinced, that without possibility to make a profit – and to compensate owners and investors for risks through dividends to shareholders – we would not have achieved as much as we now have.
Letting the entrepreneurial spirit flow is a necessity for innovation, and innovation is a necessity for raising standards – not only for products, but also for services.
Education is one of our society’s most important services.
Entrepreneurship is all about taking risks.
If that risk leads to change and improvement, the clients will be flocking and more satisfied.
Of course an entrepreneur – a forerunner – wants, and has a natural right to, compensation for that original risk.
This “natural law” is valid for products and services, and of course therefore also for education.
Starting a school requires both capital and talent that are put at risk.
Premises need to be obtained; staff needs to be employed – before there is even one single student in the class rooms.
So, if the schools get satisfied clients and meet, or exceed, required attainments – why shouldn’t a surplus be disposed at the owner’s discretion, for example to give return on the original investments and risks?
“Because the funding is from the tax payers’ money” is the answer from those who naively believe we can have innovation through entrepreneurship in education, without entrepreneurs.
Well, I say: tax payers’ money is already widely used all over the public sector, to compensate product and service providers that make profits.
Defence industry products, busses and trains for public transports, medicines in health care and coffee to the local treasury staff, just to pick a few examples, are all produced by profitable private companies, paid by public funding – and are viewed as natural.
And why is it OK to let tax payers’ money finance private, profitable companies that put up the school buildings or produce the textbooks – but not allowing profits for those who, out of the same public budget, organize and offer the education in itself?
Without allowing, and welcoming, a profit motive in publicly funded education, there will be no innovation, no spreading of pedagogical progress and no improvement of results.
As a tax payer, I want value for the money that I pay to finance public services.
In education, value for money is that students get knowledge and skills necessary for building a good life for themselves and society.
If certain schools make profits from over-performing those who don’t make profit, I prefer my tax money to be transformed into operations profitable in two ways: to the owners – and to society.
I think that the Swedish independent school example shows that the profit motive has given such innovation and improvement of the education, that politicians should consider forcing all public schools to strive for profits too!
But that’s a topic for another speech.
Thank you very much, again, for the invitation – and for your attention!