This article provides updated estimates of growth in the volume of public service education output, inputs and productivity from 1996 to 2010. Estimates of education output include an adjustment for quality, based on GCSE and equivalent attainment levels of school pupils aged 15-16 years. The article also provides estimates of education inputs broken down into growth of labour, goods and services and capital.
Estimated productivity growth for public service education was 3.4 per cent in 2010 and 2.7 per cent in 2009. This is in contrast to the period between 2000 and 2008 when productivity fell by an average of 1 per cent per year. The recent rise in productivity growth has been caused by a slow-down in input volume growth while output growth, driven mainly by increased quality, has continued to rise strongly.
Annual output growth rates have been positive throughout the period from 1996 to 2010, varying from a low of 0.9 per cent in 2006 to 5.5 per cent in 2009. This variation reflects demographic changes in pupil numbers in the UK and changes in the quality-adjustment factor based on pupil attainment levels in GCSEs, Standard Grades and equivalent qualifications at Key Stage 4 (15 to 16 years old).
Annual input growth rates were low or slightly negative from 1996 to 2000 but from 2000 onwards inputs have grown at an annual average rate of 2.9 per cent. Over the whole time period, expenditure has been translated into around 17 per cent more labour, 60 per cent more capital services and 85 per cent more goods and services.
The latest estimates of public service education productivity show a 3.4 per cent increase in 2010, following a rise of 2.7 per cent in 2009. This recent rise in productivity growth is driven by acceleration in the growth of output, while the volume of inputs growth has slowed from its ten year trend. Figure 1 shows the time series for the latest estimates of public service education output, inputs and productivity since 1996 in index form, with 1996 as the reference year.
Growth rates of pupil and student numbers, adjusted for attendance rates, have been relatively stable over the period. Primary and secondary pupil numbers account for around 78 per cent of total pupils and students in 2009/10. Other types of publicly-funded education included in the total are further education, funded places in private and voluntary sector pre-schools and nurseries, initial teacher training courses and courses for health professionals.
The quality-adjustment factor used in calculating these estimates is based on the growth in Average Point Scores (APS) for GCSEs and equivalent qualifications in England, Wales and Northern Ireland, and Standard Grades and equivalent qualifications in Scotland. The size of this quality-adjustment factor varies across countries, and over time. It is having an increasing effect on the final estimates of education output due to strong growth in APS in England and Wales since 2008. It should be noted that this method of quality-adjustment is used only to produce public service education productivity estimates, and not used in the UK National Accounts.
ONS is publishing a triangulation paper alongside this article which considers the trend in APS in England and evidence on other types of measure for school performance and quality of output (ONS, 2012a). Due to changes in the way pupil attainment measures have been calculated and the future reforms in England’s performance tables brought about by the Government’s response to the Wolf Report (2011), it draws the conclusion that the current method of quality-adjustment needs further development.
Input growth has been positive in all but one year over the period for which data is available, averaging 2.2 per cent per annum. Goods and services and labour inputs are the main contributors to this growth, particularly since 2000. We have incorporated workforce census data for Scotland in this article as detailed in Methods changes in public service productivity estimates: education 2010 (ONS 2012b). This enables an analysis of school labour input by country for the first time. We find that growth in the volume of school labour input has been fastest in England. This coincides with the rapid growth of teaching assistants employed within schools.
This article includes a revisions section which shows how statistics published in this article differ from those published in 2010 (ONS 2010a). The methods change paper (ONS 2012b) explains the changes that have been made to inputs data. The main impact of these changes is on estimates of labour input to schools. These effects, combined with minor corrections and revisions to source data, have led to a revision in productivity estimates of an annual average of 0.3 percentage points.
Reference tables (119.5 Kb Excel sheet) are available to download containing more detailed information for some data series (see section 7). A user feedback survey is also included in this article so we can gather feedback on how useful and relevant are the statistics published here.
Productivity growth is calculated by dividing the index of output by the index of inputs. Productivity rises in 2009 and 2010 because the estimate of output rises more quickly than the volume of inputs in both years. Section 4 describes the drivers of output in more detail.
The latest estimates of productivity show a 3.4 per cent increase between 2009 and 2010, up from 2.7 per cent in the previous year. At the beginning of the period are three years of fairly strong productivity growth between 1997 and 2000. This is followed by a nine year period of mostly negative productivity growth. The annual average productivity growth rate between 2000 and 2008 was -1.0 per cent. See Figure 2.
The largest falls in productivity were in 2002 and 2005. Productivity growth was particularly high in 1999 at 4.6 per cent. Productivity growth estimates vary considerably over the period for which data is available and hence comparisons are sensitive to the time period selected.
Over the whole time period for which data is available, the annual average productivity growth rate is 0.5 per cent. Table 1 shows output, inputs and productivity estimates as indices (1996=100), and Table 2 shows the annual average growth rates for each series over longer time periods.
|Mean annual growth1,||2.7||2.2||0.5|
Education output consists of an estimate of volume (or quantity), which is then adjusted for quality. The reasons for quality-adjusting public service output are well documented and follow from recommendations made in the Atkinson Review (2005).
Quantity is the sum, weighted by cost of education, of full-time equivalent (FTE), publicly-funded pupil and student numbers within the following sectors:
Pre-school education, including places funded in the private, voluntary and independent sector (PVI).
Government maintained primary, secondary and special schools. For England only, City Technology Colleges (CTCs) and (City) Academies (CAs) are included. All of these figures are adjusted for attendance.
Further education colleges.
Higher education studying for initial teacher training and health professional training courses funded by government.
In contrast to their treatment in the UK National Accounts, education volume in this article includes adults who are attending further education colleges and whose courses are funded by government, as well as young people between the ages 16 and 19 studying for upper secondary level qualifications. The definition in National Accounts of education volume is to change in the future due to a classification decision in 2010 to make further education expenditure part of central government expenditure (ONS 2010b).
A quality-adjustment factor for education has been developed specifically for use in measuring public service productivity, and is applied to the aggregate cost-weighted estimate of education quantity for the sectors defined above. The quality-adjustment is based on percentage changes in Average Point Scores (APS) in England, Wales and Scotland. In the absence of suitable data, Northern Ireland’s examination performance is assumed to be the same as England’s.
A paper on education quality-adjustment issues is published alongside this article. This reviews recent trends in APS and other measures of attainment and discusses how this may be affected by recently announced reforms to the school performance system in England (ONS 2012a). The main conclusions from from this paper are that all measures of GCSE and equivalents attainment in England have shown improvement over recent years, but that there is some variation in these measures. The Wolf Report (2011) reviews vocational education provision in England and highlights the increasing impact on school performance measures from a rapid increase in vocational entries and pass rates at Key Stage 4.
The Department for Education has responded to the Wolf Report and announced major reform to the school performance tables (DfE 2011). This together with reforms in other countries to exams to be taken at Key Stage 4, has led ONS to conclude that the current method of quality-adjustment requires further development. Potential areas to examine include direct use of data in the National Pupil Database and the literature on returns to education in the labour market.
The latest estimates for education output between 1996 and 2010 are shown in Figure 3 alongside education quantity (unadjusted for quality change) estimates. Education quantity rose to a peak in 2004 and then fell until 2009. This peak was driven by demographic factors which saw rising numbers of primary school pupils between 1996 and 2000 which then fed into the secondary school sector from 2000 to 2005.
Methodological changes in calculating APS in England were implemented in 2003/04, leading to a break in the series. Changes in APS methodology occurred at a different time in Wales. The impact of this methodology change on output at a UK level was muted for the period from 2003 to 2007 as rising quality was partially offset by falling student numbers. However, in recent years the number of students has stabilised, while growth in the quality-adjustment factor has accelerated. As a result the output estimates have grown strongly, tracking the change in the APS more closely.
Table 3 shows that the largest sectors of publicly-funded education are primary and secondary schools, accounting for 78 per cent of total student numbers in 2009/10 (around 7.7 million pupils), down from 82 per cent at the beginning of the period in 1995/96. There has been strong policy-driven growth in the volume of pre-school places funded in the private, voluntary and independent sector, and for Academies (in England only). However, both these sectors only make a relatively small contribution to overall student numbers in the UK. The number of health professional training courses funded by government increased by around 75 per cent between 1995/96 and 2009/10 but is still the smallest component of the overall total.
|Thousands1||Average annual percentage change2|
|Initial Teacher Training||72||57||62||60||-4.6||1.7||-0.7|
Pupil numbers in primary, secondary and special schools are adjusted for recorded rates of absence. In England, data are also available for CTCs and Academies although this has been estimated with secondary absence rates for the last two and one years respectively.
Figure 4 shows that absence rates have fallen since 1995/96 in each sector, with rates in the secondary sector consistently higher than in the primary sector. The difference in absence rates is falling however, with secondary absence only 1.9 percentage points higher than primary absence in 2009/10 compared to 3.2 percentage points higher in 1995/96.
In order to combine the changes in the quantities of each type of education provider together, ONS use expenditure shares for each sector to create a chain-linked Laspeyres volume index. (See background notes for further information on this technique.) The expenditure share used in this calculation is the cost of each type of provider as a proportion of total education costs. Data for education costs are provided by each of the four countries in the UK.
Table 4 shows that, in 2010, 69.5 per cent of expenditure was in the primary and secondary sectors, with a further 14.2 per cent in further education. This compares with expenditure shares in 1996 of 72.4 per cent and 16.2 per cent respectively. The most substantial increases in expenditure shares have been in pre-school provision and Academies.
|Percentages||Differences, percentage points|
|Health Professional Training||1.7||1.8||2.0||1.8||0.1||0.2||-0.2|
|Initial Teacher Training||1.2||0.7||0.5||0.5||-0.5||-0.2||0.0|
Over the whole time period, the volume of education (unadjusted for quality) has risen by 3.7 per cent. Figure 5 shows that this can be decomposed into annual growth rates (depicted by the red bars). Contributions to this total growth from each sector of education depend partly on the sector’s initial size and partly on its growth.
Primary schools’ contribution to volume growth was negative between 2000 and 2009, with negative contributions concentrated between 2003 and 2006, reflecting falls in pupil numbers. Over the period, falling primary school pupil numbers reduced overall output growth by 2.7 percentage points.
Secondary education made a positive contribution to overall volume of 3.4 percentage points between 1996 and 2004. However, as smaller cohorts of primary pupils have entered into secondary schools the contribution of the latter declined and has been negative since 2005. Over the entire period, secondary education contributed 0.5 percentage points to overall volume growth.
Further education has varied in its contribution. The sector raised total volume growth by around 1.7 percentage points between 1997 and 2004, before turning negative in 2005. Over the entire period, further education raised growth by 0.5 percentage points.
Between 1997 and 2004, ‘Other’ is dominated by courses for health professionals. Over this period, health professional courses raised education volume by 1.5 percentage points. From 2005 to 2010, the fastest growing component of ‘Other’ was Academies. This was largely as a consequence of policy changes. Academies raised total volume by 2.7 percentage points between 2005 and 2010.
In line with recommendations of Eurostat (2001) and the Atkinson Review (2005), a quality- adjustment factor is applied to the estimate of education output. The quality adjustment applied here is the change in uncapped APS in GCSEs and equivalents achieved by 15-16 year old pupils each year. This is applied to pupils in primary and secondary schools for each of the four countries, and in England also for pupils attending CTCs and Academies, to give a final estimate of education output. Initial Teacher Training output is also adjusted by a completion rate factor.
In Scotland, the APS for Standard Grades and equivalent qualifications is used. In Northern Ireland, the change in APS is proxied by the change in APS in England as data for Northern Ireland is not readily available.
Figure 6 shows the indices for APS in England, Wales and Scotland between 1995/96 and 2009/10, all referenced to 1995/96 as the base year. The change to the method of calculating APS is apparent in England in 2003/04 when a wider set of equivalent examinations was included alongside GCSEs. In the five years up to and including 2003/04, the APS grew by an annual average of 1.8 per cent, while over the subsequent six years the average annual rate of growth was 5.0 per cent.
In the last two academic years, APS growth in England has been above its annual average growth rate between 2003/04 and 2009/10. Evidence reported in the Wolf Report (2011) indicates that England has seen a rapid increase in the amount of equivalent vocational qualifications taken in schools. This framework of equivalencies, which has been in operation since 2003, counts Level 2 BTEC courses as equivalent to either two or four GCSE passes. This has had a large impact on overall school performance measures such as APS or 5 A*–C GCSE and equivalent examinations. The triangulation paper on education quality-adjustment (ONS 2012a) discusses this evidence in more detail.
The pattern for APS in Wales follows a similar trend to England between 1995/96 and 2003/04 but growth has been slower than in England since 2003/04. Strongest growth was seen when the data included wider equivalent qualifications from 2008/09 and a break in the series is indicated. Scotland shows slower growth in APS than in England and Wales throughout the period.
The latest estimates for the annual growth in the volume of publicly-funded education inputs are shown in Figure 7. This shows positive annual growth rates over the entire period, apart from 1999. The fall in 1999 was caused by a large drop in recorded expenditure within National Accounts on central government labour input, which was not offset by rises in schools’ labour or other components of input. Strongest annual volume growth of almost 5 per cent was seen in 2002. Growth was almost 4 per cent in 2005 and 2008, but has slowed since 2008 to reach 1.9 per cent in 2010. The annual average growth rate over the whole period is 2.2 per cent.
Inputs to publicly-funded education are broken down into three components:
Labour input, such as teachers, teaching and other support staff, and government administration.
Goods and services input, such as equipment in schools, energy costs, and policy-driven expenditure such as free sessions in private and voluntary sector pre-school settings for children over 3 years old.
Capital services – this is a measure, in volume terms, of the service that is received each year by using the capital stock present within the publicly-funded education system. The data source for this series is the Volume Index of Capital Services (VICS) published by ONS (2011).
Figure 8 shows the indices of these three components of input between 1996 and 2010. The three components show very little volume growth between 1996 and 2000. After 2000, capital services volume starts to grow at an annual average of 4.3 per cent and goods and services volume grows by an annual average of 6.6 per cent from 2001. The volume of labour index grows by an annual average of 2 per cent between 2000 and 2008. Since 2008, the estimates for the volume of labour input have not grown at all.
Over the whole time period, the volume of labour input in the UK has grown by almost 17 per cent, capital services by 60 per cent and goods and services by 85 per cent.
Given the data changes introduced in this article, (see ONS 2012b) it is possible to break down the schools’ labour input estimates by country in the UK for the first time. The series within each country is composed of changes in the types of Full-time Equivalent (FTE) teaching staff aggregated using salary expenditure shares. We also include changes in the types of school support staff (e.g. teaching assistants, bursars, secretaries, technicians) weighted by salary expenditure shares.
For Scotland, as data are not available for support staff until 2003, the index shows the teacher volume growth only, but a combined index of support staff and teachers since 2003. For Northern Ireland, as data are not available, support staff volumes are approximated by the movements in the Welsh support staff series. There are however, plans for data from Northern Ireland to be available in the future.
Figure 9 shows estimates of the volume of labour for each of the four countries in the UK. Volume of schools labour input has grown fastest in England over the period, at an average rate of 1.6 per cent per year. Annual percentage growth rates for schools’ labour input in the other three countries have been lower, at 0.8 in Wales, 0.6 in Northern Ireland and 0.1 in Scotland. All countries have experienced a slow-down in school labour input since 2008. The strong growth in England labour input has been driven by large increases in support staff volumes in maintained schools, which in turn is driven by the increase of different types of teaching assistants such as special needs and higher level teaching assistants.
Changes in the three components of input volume are added together using their relative shares in overall government expenditure on education to form the equivalent of a chain-linked Laspeyres volume index. This is the same statistical technique as used to estimate the volume of output series. More information on this technique is published in the background notes.
Table 5 shows the expenditure shares for the components of input and how they have changed since 1996. The share of labour input has fallen from 63.8 per cent in 1996 to 59.7 per cent in 2010. Goods and services have increased their share in total expenditure from 23.7 per cent in 1996 to 27.6 in 2010. The capital services weight at the end of the period is almost identical to the weight in 1996. In 2010, the expenditure share for capital services was 12.7 per cent.
|Expenditure shares, percentages||Differences, percentage points|
|Goods and services||23.7||21.4||24.1||27.6||-2.3||2.7||3.5|
The annual average growth rate in the overall volume of inputs of 2.2 per cent can be broken down into the contributions from the three components, taking account of the greater weight attached to labour input compared to the other two components. Figure 10 shows that the contribution from the volume of labour was strongest in 2001 and 2002, and has made a strong positive contribution each year since then until 2008. In 2009 and 2010 its contribution to growth fell to around zero when labour inputs remained unchanged. The contribution from goods and services volumes has also been strongly positive since 2002, with a smaller but consistent contribution from the volume of capital services over the entire period.
It is noted that goods and services volume growth has grown rapidly over the period. Included in this component of input is the procurement of pre-school education in the private, voluntary and independent sector, mirroring the increase in places seen in the volume of output analysis in section 3.
The largest revisions to the estimates of education productivity published in this article have arisen from making changes to salary weights for school support staff across the four countries of the UK and a change to the data source used to estimate Scottish school support staff (ONS 2012b). The effect of these changes is to reduce the growth rate of the UK schools’ labour index by an annual average of 0.4 percentage points over the comparison period from 1996 to 2009.
Figure 11 shows the difference between the annual growth rates in output, inputs and productivity in this article, compared with the previously published growth rates. The output series has been revised slightly upwards by an annual average of +0.1 percentage points. This is mainly due to the replacement of end-period forecasts by actual data, and changes to historical administrative data feeding into the estimates.
The inputs index, allowing for rounding, has been revised downwards by an average of -0.2 percentage points per annum from an annual average growth of 2.4 per cent to 2.2 per cent. This is mainly due to the methods and data changes implemented this year. The productivity index has subsequently been revised upwards by an annual average of +0.3 percentage points from an annual average of 0.0 per cent to 0.3 per cent over the comparison period.
The following reference tables (119.5 Kb Excel sheet) are available to download which provide additional information to that presented in this article.
TABLE 1 Contributions to education output growth, by country
TABLE 2 Full time equivalent pupil/student numbers by provider and by country
TABLE 3 Full time equivalent pupil/student absences by provider and by country
TABLE 4 Output expenditure shares by education provider, all years 1996-2010
TABLE 5 Indices for goods and services by local government and central government sector
TABLE 6 Input expenditure shares by component of input, all years 1996-2010
TABLE 7 Comparison of direct labour indices in this article and that published by ONS in November 2010
TABLE 8 Comparison of productivity indices in this article to that previously published by ONS in November 2010.
ONS is actively seeking feedback from users of its public service productivity statistics in order to inform its future work priorities. We are particularly interested in user views on the value of these statistics to inform policy debates and research projects within the academic and national accounts fields.
The user survey provides an opportunity for you to tell us about your use of this education productivity article and your perceptions of the quality of the statistics. The survey will take approximately 10 minutes to complete.
Chain linked Laspeyres volume index
A methodology paper by Robjohns (2006) explains how ONS annually chain-links data series. This technique of annually updating the base period weights produces a rate of change in volume terms over the reference period for the data series.
ONS use this technique to produce estimates of the volume of output and input for public service education, and other measures of government services such as health and social services. See ONS (2008) for more information on this method and how Laspeyres volume indices are calculated for the estimates in this article.
It is important to recognise that the productivity statistics published in this article are based on a concept of output as measured by government consumption expenditure rather than government or state production. This follows from the submission of the estimates of the volume of government output that are used in this article (prior to any quality-adjustment) to the GDP (E) (expenditure) side of the UK national accounts. This means that we are using a measure of government purchased output, regardless of what type of business unit produced the output.
In the case of education, most expenditure is used to fund state providers of education and its administration i.e. maintained primary, secondary and special schools across the four countries of the UK. There is, however, significant expenditure on private or voluntarily-provided pre-school education which is counted as a component of government output in our articles, even though it is provided (or supplied) by business units which are classified as private business or NPISH units in the National Accounts.
Traditional measures of productivity, including those published by ONS, use a supply or production framework. These measures of productivity use Standard Industrial Classification (SIC 07) categories of production as the measure of output and are on a gross value-added (GVA) basis. Input measures count the labour used in the production of these education services to estimate labour productivity series such as those produced by ONS. Multi-factor productivity estimates include labour and capital services as inputs. See Acheson (2011) for an article on multi-factor estimates of productivity for the UK economy.
No account is therefore taken of the way in which these production activities are funded. For example, in pre-primary education the entire output of these services will be included in the traditional GVA output estimates, but in the expenditure based estimates only that part of the pre-school output that is funded by government is counted as output for pre-school education.
The interpretation of the expenditure based productivity estimates presented in this article should therefore be taken as a measure of the technical efficiency with which government is enabling the provision of education services for individuals in the UK (from whatever type of business unit) not producing that service itself. Caution should therefore be used when considering the differences between productivity measures published using the expenditure approach and those using the traditional production approach. Jurd (2011) and Phelps (2010) describe some of these differences in approach in more detail.
An updated QMI describes the intended uses of the statistics presented in this article, their quality and a summary of the methods used to produce them.
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Atkinson (2005) Atkinson review: final report. Measurement of Government Output and Productivity for the National Accounts. Palgrave MacMillan, UK.