Examination of Witnesses (Questions 20
- 39)
THURSDAY 18 NOVEMBER 2004
LORD BLACKWELL,
MR PHIL
COLLINS, SIR
CHRISTOPHER GENT
AND MR
NICK HERBERT
Q20 Brian White: Can we take this
question of capacity because one of the things, it seems to me,
for choice to work—and I mention the fact that all the secondary
schools in my constituency are full—is that you have to
have an excess of capacity in order to make choice available to
everybody. Sir Christopher, one of the things that you say in
your memorandum is "without structural reform". Are
you saying that we ought to have excess capacity in order to make
choice work?
Sir Christopher Gent: The fact
of the matter is that schools expand in response to parental demand,
so you create demand and that will create additional capacity
in other places. Parents, if they could vote in the sense of making
choice financially, would do because we are now at a point where
it is viable commercially for people to come in charging £5,500
to £6,000 a year as an effective day rate, because that is
what it is costing. You will get capacity created by commercial
development, you will get capacity created by schools expanding
to meet demand if they are successful schools.
Q21 Brian White: So the state should
provide extra money to ensure that there is spare capacity?
Sir Christopher Gent: No, not
necessarily. What we are saying is that the state should direct
its money to those people that cannot afford it. There are an
awful lot more people who could afford it if the charging mechanisms
were in place. That is a fundamental change that we have to make.
In my own experience my parents sacrificed an awful lot in order
to send me to a private preparatory school. They had no circumstances
under which that would normally happen but they decided that that
was the priority that they wished to spend their money on, so
they were able to exercise that choice. There are an awful lot
of people who do not want to make that choice or who, even if
they put all their resources in, would still need help. We are
saying that better use of state funding is behind the patient,
behind the parent, to top up those people who are not capable
of affording it themselves.
Q22 Brian White: But the institution
would still have to have that excess capacity in order to provide
that choice.
Sir Christopher Gent: The capacity
would grow. Additional suppliers would come to market. The successful
schools would expand.
Q23 Brian White: If you take French
health care, there are unused beds.
Sir Christopher Gent: You are
absolutely right.
Q24 Brian White: So the French people
are actually paying for extra beds. One of the things that you
would have said to the Chancellor as the chair of a major company
was that you wanted the PSBR to be lower and therefore you
are saying to the government, "Reduce public spending".
Sir Christopher Gent: Hang on.
You use a good example. Thirty years ago there was no choice in
telecommunications. What happened? We rationed people by forcing
them to wait for months to get fixed lines installed. Now there
is a lot of additional capacity, a lot of competition. You do
not wait. You get immediate service delivery and you get far better
value. That has taken some 20 years to evolve and develop and
the same thing could happen with the supply of health and education
services.
Q25 Brian White: But you get people
moving to new schools, which I have in my area. People move into
an area in order to go to a school. That has a knock-on impact
on other areas—on GPs, on school transport, where the costs
have gone through the roof. How do you, in allowing choice in
one area, anticipate the impact on other areas?
Sir Christopher Gent: You do not.
The fact of the matter is that we live in a fluid and dynamic
society. People are already moving in order to go to catchment
areas which are better for their own view of what their child
may need. That choice is being exercised by parents right now.
You are in the straitjacket of thinking about how these choices
have to be made by government. Consumers, patients, parents want
to make those choices and they want to have a degree of choice
available to them. Just as they have in food supply, in telecommunications
services, they want the same flexibility to be available to them
in education and health.
Q26 Brian White: That is fine as
long as they can afford to pay the extra school bus fares, etc.
Sir Christopher Gent: Yes.
Q27 Brian White: If you have not
got the wherewithal who is going to pay for it, or do they have
no choice?
Sir Christopher Gent: Again, it
is a matter of how that payment takes place. Co-payment is a well
established principle across all of these types of services in
other countries. Why should we think it should not happen here?
Mr Collins: You just have to subsidise
the transport. That is the straightforward answer. It is one of
the big constraints.
Sir Christopher Gent: That is
an absolutely perfect example in view of my experience this morning.
Q28 Chairman: What about this argument
that schools are like phones?
Mr Collins: To some extent we
need to take David's point on the chin. If you say, "Will
the state have to pay for places which are left open?", yes,
it will. Let us be honest about it. It does already. We have 92%
occupancy rate in schools; we have 8% surplus places. Nobody is
moaning about that. I would wager with you that, give it 10 years,
on efficiency grounds alone that system will prove to be better
than the status quo, just because all the history of organisational
theory tells me that that is probably the case. Yes, it will require
surplus places but we do have surplus places, and in fact we have
falling rolls in lots of authorities but because of the surplus
places guidance we are closing them down. If we altered that and
did nothing we would find that we had surplus places without any
extra addition of money. It is a problem, and it is true what
you are saying. I just think it is less of a problem than you
think. Also, I would not want to set up the idea that everyone
must have choice as the test of whether choice works. It will
never be the case that everybody gets their first choice. It is
inevitable.
Q29 Chairman: Having got Sir Christopher
here and just pursuing Brian's point for a moment, and I know
this is all very abbreviated but let us just try and do it, on
your model as I understand it everybody can exercise a choice,
in this case on schools. They can decide to go to whichever school
they want and the state will stump up the cash. Is that right?
Sir Christopher Gent: No. They
have the right to exercise choice. The state should stump up when
they cannot afford to exercise choice. That would be a large slug
of the population but we are talking about a co-payment system,
not the state funding every individual requirement. For those
people who choose to go to more expensive schools, that may be
their choice but the state should not fund all the way up. It
is a matter of whether the person can afford to exercise the choice
they have made.
Q30 Chairman: We are not going to
pay for people who can afford it. Is that right?
Sir Christopher Gent: Yes.
Q31 Chairman: Although on some models
that does happen, does it not?
Sir Christopher Gent: There a
lot of people who currently opt out of the system. That is fine,
but if you want to make choice available to all you have to say
that you are going to support to a much larger degree. Those that
can afford to pay are more than those are not paying.
Q32 Chairman: We are going to pay
a standard tariff, as I understand it, to people who now pay to
go to private schools, are we not?
Sir Christopher Gent: Yes.
Q33 Chairman: We are going to pay
the standard tariff to them and allow them to top up.
Sir Christopher Gent: To spend
more, yes.
Q34 Chairman: That is quite a big
cost we are going to take on to start with.
Sir Christopher Gent: Not necessarily,
if you lower the overall point at which people would have to make
contributions themselves. If you look at the total cost of educating
a child, as I understand it, it is about £6,000 a year next
year. There are an awful lot of commercial suppliers that would
come into the market at that level.
Q35 Chairman: Let us just see how
this is going to work in terms of our person who reads the league
tables and says, "Look: there is a very successful school
over there. I would like my child to go there. I have got a choice
and the state is going to fund it up to the standard tariff. I
apply to go to that school". Then what is going to happen?
Sir Christopher Gent: It depends
on whether that school is over-subscribed.
Q36 Chairman: Yes, of course. It
is full.
Sir Christopher Gent: Then they
will be selected or not, and then there will be other choices
you make. That is what happens in life generally. You do not always
get a choice.
Q37 Chairman: The position is not
going to be much advanced over the present, is it, if they send
a letter back saying, "I am afraid you cannot come"?
Sir Christopher Gent: I have to
tell you that normally there are two or three things available
that you could choose from. You may have a particular preference
and if you are successful in that selection, fine; if you are
not there will be alternatives. This is not a single rule that
applies.
Q38 Chairman: But people will say,
"This is a funny kind of choice because when I try to exercise
it I find it is just the same as it was before".
Sir Christopher Gent: I would
suggest to you that that happens in virtually every other walk
of life. You may want that holiday rather than this; that may
be booked up, so you take the next. That is what life is about.
Q39 Chairman: Just tough?
Sir Christopher Gent: Absolutely.
That is the life that we all lead.
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