Last year, a report published by the Organisation for Economic Co-operation and Development (OECD), showed that while Australia spends more on education than most developed countries, the extra funds may not be making much of an impact.
The finding was contained in the ‘Education at a Glance report’, which examined the state of education around the world. But for the first time, the OECD has now honed in on the actual impact (or lack thereof) that funding has on education outcomes.
A global study published in June explored what policies best ensure school resources are effectively used to improve student outcomes, and found that school funding is not always linked to improved outcomes.
Andreas Schleicher, OECD’s education director, said that in most countries, how schools are funded reflects decades of layers of decisions on school financing, often with shifting priorities.
“In some systems, fragmented governance structures” are reducing the clarity, co-ordination and transparency of funding flows,” he wrote in the BBC.
“In others, the formulas used to calculate per-student funding are so complicated that even those who use them don't fully understanding them.”
Schleicher said targeted funding can help to deliver policy objectives, such as promoting greater equity, promoting school choice or a form of market regulation.
However, he cautioned that “a multiplication of different funding streams” can lead to inefficiency and extra costs in administration.
“Not surprisingly, one of our main recommendations is for school systems to be much more transparent about their funding policies and how resources are distributed to reconcile quality, equity and efficiency,” he said.
“The presentation of clear criteria that can be scrutinised can help stimulate public debate about what is a fair method of funding.”
Schleicher said that as well as the amount of funding, how it is distributed is also important, because many different layers can be involved, whether national or local government or agencies and down to individual head teachers.
“Whatever level of governance is responsible, they need to be able to make sure that funding decisions are equitable and accountable,” he said.
Since the 1980s, many countries have devolved budgets to schools or groups of schools. School autonomy over budgets can give schools much more flexibility over how they use their funding, so that they can adapt to local needs and priorities.
However, Schleicher said there needs to be adequate transparency and “a wider framework of checks and balances” to make sure that autonomous, individual funding for schools does not begin to widen inequality.
The OECD report can be read in full here.