Freemium in the Education System - Admissions

There is considerable scope for the application of Freemium principles to education. As with healthcare, the principle is well established in small ways. For example, parents can opt to pay for music lessons that take place during the school day.

I propose that this principle is applied to school admissions. Such a proposal would have to based on the following principles which I consider to be reasonable and fair (even if they are a bit disturbing).

1. All children should be offered a place at a state funded school that is within a reasonable distance of where they live. This school place must be free (subject of course to the normal caveat about parents paying through their taxes).

2. No child should be granted privileged access to the state education system based upon where they live. Privileged access, for the purposes of this post, is defined as 'granting a child's choices of school a higher priority than that of another child'.

This means that if you live next door to the best school in the country you should have no more right to attend that school than if you live 3 miles away. This principle must be subservient to principle 1. So if you live next to the best school in the country but your next nearest school is 25 miles away then natural justice suggests that you should not be forced to travel long distances to get to school, so you are granted a place at the school next door.

This is all well and good but if a school receives 500 applications for 180 places then how do you decide who gets a place.

This is where Freemium comes in. All children get a free state education but if you want a 'premium' experience (ie you want to get your child into your preferred school) then you pay a premium.

From this comes principle 3.

3. Parents who wish to have privileged access to the state education system for their children should compensate the children whom they are disadvantaging. This compensation would take the form of a payment to the school the 'disadvantaged' child ends up attending.

The amount paid would be determined by auctioning places at preferred schools to the highest bidder(s).

Such an approach will raise furious objections from those affected among those objections will most likely be .....

A. It is unfair as the rich get access to the best schools. This is true. The problem with this objection is that it is also true today with the current system. The rich buy houses in the catchment area of the good schools and pay a premium for the house. They then get the all the benefits of access to superior education and then they can sell the house later and get most of their premium back.

The system remains in place indefinitely. Nothing changes. The poor and disadvantaged lose out.

In contrast, this proposal contains the seeds of its own destruction. Suppose a portion of the payment (say half) is placed in a trust fund which pays a regular income. Over time, the income of the less preferred school will rise. Eventually the difference in funding will be enough to ensure that the schools are equally preferred.

B. Why should parents have to pay to get their child into a good school? Good question. There are two responses to this

i) Parents don't have to pay to get their child into a state school (see principle 1)

ii) Parents already pay today but the costs are hidden.

Parents pay money to estate agents and solicitors and removal firms and mortgage companies and the government (don't forget stamp duty!) to secure a house close to a 'good school'.

They go through the stress and aggravation associated with a home move. It is widely reported that this is one of the most stressful things you can do. They also incur the opportunity costs associated with the fact that if they didn't have to worry about catchment areas then they would be living somewhere else that was more suitable.

I like solicitors and estate agents as much as the next man (honestly I do) but I fail to see why they should be paid considerable sums of money to facilitate the distribution of school places.

C. By funnelling money to 'failing' schools this proposal rewards failure. This is a good objection. It represents a real problem with the proposal.

It can, however, be mitigated as follows.

a. Ensure that a proportion of the funds are held in trust. That way, if a school really does have poor leadership then they will not be able to spend all the funds in a bad way.

b. Ensure that the trust is independent of the head teacher and the local education authority (LEA). The LEA will like having the extra money available but they won't like the fact that an alternative power base is being created in their backyard.

Finally, and most importantly, it will create a HUGE constituency in favour of sorting out failing schools. If you are a parent the reason for wanting change is obvious. But, even if you are not, the value of your house still depends upon the quality of the schools in the area. But instead of it depending on the quality of the best schools it now depends on the quality of the worst schools. You only get to sell your house at a premium if all the school in the area are good.

If I'm honest, I don't really like the proposal much. I would much rather live in a world where everyone lived near a pretty good school that gave them a good start in life. But I don't and that makes me sad. If this proposal is adopted then one day, maybe, I'll be a bit less sad and bit more happy.