1. PAPERS SUBMITTED TO LORD MESTON'S

COMMITTEE.

The Board of Education are asked by Lord Meston's Committee to submit a Memorandum explaining the present system of grants for education and discussing any possible alternatives to the present system. They are also invited to make comments. or suggestions upon the recommendations in the Report of Sir Eric Geddes' Committee.

The Board are submitting to Lord Meston's Committee two memoranda descriptive (1) of the present system of grants for education and (2) of the system of control exercised by the Board of Education over the expenditure in respect of which grants are made; and they are also submitting sets of tables illustrating the problem from several points of view.

The Board desire to place before Lord Meston's Committee all possible material to assist them in forming their own conclusions upon the subjects referred to them, and the Board will be happy to furnish further information on any points on which the Committee may desire it, and if desired by the Committee to comment upon any specific proposal for changes in the grant system.

As the memoranda and tables submitted by the Board to Lord Meston's Committee are confined to a description of the existing system, the Board add the following remarks in response to the Committee's invitation that they should submit comments or suggestions or discuss possible alternatives to the present system.

2. LIMITS OF PRESENT DISCUSSION.

The Board assume (a) that, for the purpose of the present discussion, the problem is to be limited by the supposition that the number and constitution and responsibilities of the Local Education Authorities in the exercise of their statutory duties. and powers in regard to the provision and maintenance of the educational system of the Country are to remain unchanged; (b) that the purpose of the present inquiry is to discover the grant system most suitable in normal financial circumstances, and that, although one of the obvious characteristics of a good normal system is that it should be capable of adaptation to abnormal circumstances, the consideration of the present abnormal circumstances will be of incidental rather than of primary importance; (c) that it would fall outside the scope of the present inquiry to discuss the general policy which should govern the development of the national system of education. Obviously, if educational policy itself, and the local authorities which carry it out, were thrown into the melting pot, a different grant system (20639) Wt. 1989/6092X 1000 1/26 Harrow G.31

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might emerge; but the Board suppose the present discussion to relate to the question what grant system is best, under existing conditions of Local Government, for giving effect to educational policy as embodied in statutes and as determined by the Government of the day.

3. CONFLICT OF PRINCIPLES AS TO THE PURPOSES WHICH A GRANT SYSTEM SHOULD SERVE. Within these limitations it appears to the Board that any practicable grant system must necessarily have considerable imperfections, and it is not possible to find a grant system which will satisfy all tests, but it is rather necessary to seek for such a grant system as presents, on the whole, the fewest or least important disadvantages. There are probably few advocates for the system which was discarded, after a long trial, of distributing grant at a fixed rate per head of children in attendance at the schools. This system takes no account of the necessary differences of cost between one part of the Country and another, nor of the great differences in the ability of the Local Education Authorities to bear their share of the cost; it would, if applied under present conditions, result in leaving some areas with ruinously high rates while on the other hand the subsidy would be wastefully high in areas where the cost of education is below the average and the area not specially poor. (As a matter of fact, this particular unit of grant distribution is not applicable over a large part of the field of technical education.) But the following tests which conflict with one another are commonly applied :

A grant system is criticised (a) if the grant represents a very much smaller percentage of the expenditure in some areas than in others, or (b) if it leaves a very much greater rate burden to be borne in some areas than in others, or (c) if, while making allowances for differences in necessary cost of expenditure and differences in ability to bear the expenditure, it does not, at the same time, safeguard economy by leaving the Local Authority to bear a considerable proportion of any expenditure which it is in the power of the Local Authority to control or to initiate; and (d) lastly (and this criticism is perhaps the hardest of all to meet), if it does not secure for all children in England and Wales something like "equality of opportunity" of enjoying the advantages of a sound system of education.

The conflict between these principles becomes greater as the cost of education rises; and indeed the growth in the cost of education may ultimately break down the present system of local government of education; for if in the interests of economy we assume that there must be a limit to the proportion of the expenditure which is to be met from grant, and if the remaining cost which has to fall upon the rates is greater in some areas than the rates can bear, then no grant system can satisfy the required conditions, and it would be necessary to make some

structural alterations in the system of local government or some radical modification of the primary responsibility of Local Authorities for educational expenditure. This has already happened once in the history of education in this Country, when the rising cost drove the voluntary bodies, by whom Elementary Schools had formerly been maintained, out of the field.

4. RANGE OF VARIATION IN IN COST AND LOCAL ABILITY TO MEET THE COST.

The very great range of variations which exist in different areas in respect of the cost per child of Elementary Education, and the produce of a penny rate per child, is strikingly illustrated by the following table, and it will be seen that the grant system does something to mitigate those differences. Both the net cost per child and the grant per child vary, within considerable limits; in the richest areas the rate of a penny per child yields exactly seven times as much as in the poorest area, but the grant when expressed as a rate in the differs yet more widely, and in consequence the expenditure per child finally falling on the rate is between five and six times more in some areas than in others.

ELEMENTARY EDUCATION, 1920-21.
Extent of Variation from the Average.

In the following table the average is in each case taken at 100 and the lowest and highest are shown as percentages of the average.

The details which are summarised in the table will be found. further developed in the volume of tables which has been submitted to Lord Meston's Committee, and the references given in this table are to the pages on which those details will be found.

5. THE PRESENT GRANT SYSTEM AND THE RECENT GROWTH IN EXPENDITURE.

There has been a considerable growth in the expenditure of Local Education Authorities during recent years (see page 33 of the Volume of Tables submitted to the Committee by the Board), and this has synchronised with a considerable growth in the grants based on expenditure (see page 42 of the tables); but to infer that the change in grant system was the principal cause of that increased expenditure would indeed be a superficial judgment. The true causes were the general rise in prices, and the general movement for adjusting salaries and wages to the fall in the value of money; and the service of education was particularly susceptible to these influences by reason of (1) the low salaries which had prevailed before the war, (2) the postponement, until after the war, of any general revision of teachers' salaries, and (3) the accumulation during the war of arrears of work to be undertaken on the school buildings. These matters admitted of no further delay, and the inevitable expansion of expenditure, which would have been impracticable under the old system and to that extent was facilitated by the new system, was the more rapid by reason of its previous retardation and compression.

6. EXPENDITURE BASIS MODIFIED BY STANDARDS OF COST.

The memorandum on Control which the Board have submitted to the Committee will, it is hoped, show that the present grant system is not merely a device for increasing expenditure, whether local or central, but is, under present circumstances, a powerful engine for restricting expenditure. As the Board work out and apply, in the light of experience, suitable standards of cost, as limits to the expenditure which should be recognised for grant, the basis of the grant undergoes some modification; for the grant then becomes regulated by those standards, as well as by the expenditure. So long as the expenditure falls within the standards, the expenditure determines the grant; when it touches the standards, the standards determine the grant. This is more economical than to base the grant on the standards only, without reference to the expenditure, for if the grants were paid on the standards, without regard to whether the expenditure is incurred or not, then the grants would be larger in the aggregate, and a portion of them, instead of being applied to educational expenditure would go merely in relief of the rates.

7.

DIFFERENT STANDARDS OF COST FOR DIFFERENT PARTS OF THE EXPENDITURE-SALARIES

TEACHERS.

OF

Standards of cost should be specifically related to the subject matter. Where buildings are concerned, the plans and tenders are examined in the Architect's Department of the Board of Education. Obviously no rule of thumb will replace a professional enquiry into the expenditure proposed for buildings. For the purpose of determining the scale of remuneration for teachers, standard scales have been adopted after prolonged consultation between the representatives of the Local Education Authorities and the representatives of the teachers. The Board use those

standard scales as maxima up to which they will pay and beyond which they will not pay; but the Board do not pay on those scales unless the expenditure is incurred. In the Board's opinion no proposal ought to be entertained for the payment of grant for teachers' salary by reference to scales, without regard to whether the teachers are in fact remunerated under those scales or not. In those areas (and they are the great majority) in which the scales are in force, the present grant system which is briefly described as grant based on expenditure under the scales, might with equal truth be described as a grant at fixed units of cost. The table of units would be obtained by setting out all the details of the scale and translating the grants into a tariff based on that scale, so much for a certificated teacher in the first year of service, so much for the second year, etc., etc., and similarly for all other classes of teachers.

8. MAINTENANCE ALLOWANCES.

The Board also invite attention to the different methods by which they have tackled the problem of applying limits to the expenditure on two other purposes; viz.,

(i) Maintenance Allowances for pupils in Secondary Schools. (ii) Provision of meals.

The limit for Maintenance Allowances is mentioned in Paragraph 15 of the memorandum on Control submitted to the Committee. The Authorities differ considerably in the extent to which they grant Maintenance Allowances. Some Authorities are running up against the maximum limit of recognisable expenditure, others spend very little, and in the aggregate the expenditure amounts to about one half (or rather more) of the maximum that would be recognised for England and Wales as a whole. The Authorities are required to submit for approval to the Board of Education their arrangements for administering Maintenance Allowances, and the Board require that those arrangements should conform to certain conditions, inter alia that there should be a poverty test. The arrangements having been approved, the Board