I recently stumbled across this article about the education sector from late November. The idiocy-per-word ratio is impressively high.
Over the past decade, the private sector, which consists primarily of for-profit schools, has grown dramatically to accommodate the large number of expatriates.
During the boom years the expatriate population surged rapidly and the number of private schools also increased. However, due to the time required to set up a new school, there was obviously a time lag between the surge in demand and the adjustment of supply following additional private sector investment. This has resulted in a shortage of school availability and rising fees.
Now, essentially for the first time, the expanding private school market is coming under the oversight of government education authorities, particularly in Abu Dhabi and Dubai, in an attempt to ensure uniform standards of quality.
I’ve previously blogged on the issues surrounding such government ‘oversight’. What caught my attention in this sentence is the use of the word ‘uniform’ instead of ‘minimal’. In the private provision of any good or service you are going to have variations in quality and this usually correlates with the price that you are willing to pay. For example, I know that a Kia will not be as good a car as a Mercedes, but I may still purchase the former because I know what I can afford and will thus decide on my best option. Unfortunately such common sense is rarely applied to the education sector, where for some reason the aim is for ‘uniform’ provision where the government decides what is best for you. Trying to make the market uniform will either make schooling unaffordable for many people; reduce standards to the lowest common denominator; or combine both outcomes in a messy ‘third way’. Introducing ‘minimal’ standards would be more understandable, but again, one must also carefully consider the possibility that such regulation could increase the cost of schooling and thus make it unaffordable for some people.
“The main problem is there isn’t a public option for expatriate children,” says Dr Natasha Ridge, a researcher at the Dubai School of Government.
Hmmm. I’m not so sure about that Natasha. Given the well-documented issues with the public sector schools, I’m not sure how many expatriates would want to utilise that option even if it existed.
“The biggest issue is quality,” she adds, pointing out that wealthier families can send their children to better schools.
Good Lord! Wealthy people can afford higher-quality goods and services? What madness is this?
The Government must ensure private schools “do not take advantage of a captive market”, she insists.
Given what is involved in establishing or enlarging a school, supply is going to be inflexible in the short term. When there is a dramatic upsurge in demand such as has occured in the UAE in recent years due to rapid population growth, this is going to result in significant price increases. The only reason that there would be a ‘captive market’ in the long term would be if there were barriers to entry in the private education market which restricted new supply. If onerous regulatory or legal obstacles to establishing new schools do not exist, then new competition will move into the market. Government intervention cannot magically solve this fundamental issue, and is more likely to just create more problems.
The Knowledge and Human Development Authority (KHDA), the government body that regulates schools in Dubai, introduced wide-ranging school inspections for the first time last year, pegging fee increases to performance, and painting a grim picture of private education in the emirate.
Such regulatory interference is more likely to discourage further private investment into the educational sector, which will result in less competition in the long run, which helps no-one. Would you start a business when there was a risk that the government would dictate what price you could charge and whether you could increase it if required?
The KHDA’s involvement is also likely to have an unintended consequence: the prospect of future restrictions on fee changes means that whenever the option of increasing fees is available to a school, they will do so to the maximum extent possible due to the uncertainty about their future freedom of action.
KHDA inspection reports revealed a range of problems, from the use of corporal punishment in schools – a violation of UAE law – to poor provision in key subjects such as maths, science, English and Arabic. Only four schools were ranked as outstanding and more than half were judged to be merely meeting minimum standards.
The situation in Abu Dhabi may be worse: there are still some 70 private schools in the capital, catering for low-income communities, which operate out of villas.
The key phrase here is “low-income communities”; what precisely did they expect? Gilded palaces of learning?
Adec first pledged to shut these schools in September last year, but the challenge of finding alternatives for their pupils has made the process a lengthy and difficult one.
Funny that. The fact is that they are evidently the best option available within the budgetary constraints of the parents. If you shut the schools down you are not magically going to have world-renowned schools offering to take these pupils at the same fee levels as the villa schools.
Despite the “grim picture of private education” though, it appears that it is still better than some options:
In Dubai, half the school-age Emirati population are now educated privately because many parents have lost faith in government schools. In Abu Dhabi, the figure is 40 per cent.
“We have seen a migration of students from public to private,” says Dr Abdulla al Karam, director general of the KHDA. “Now we have half of the nationals in the private schools. The worry is unless major steps are taken to reform the public education system in Dubai then this migration will continue to happen.”
So it seems that despite Natasha’s observations above, many of those who have got a “public option” have voted with their feet. Given this, the question that springs to mind is what on earth the KHDA is doing fiddling about with the private sector? It’s like Robert Mugabe giving a lecture on agricultural efficiency.
Most parents in the UAE also believe they are overpaying for education. A recent YouGov poll found that 88 per cent of parents with children in private schools and nurseries thought fees were excessive.
“It would be a lot less in the UK,” says Gerome Atkin, a Briton who works in construction. He pays Dh28,000 a year to send his daughter to a nursery four days a week.
“It seems like a lot of money, really, for very little. In general the school fees over here are quite ludicrous anyway. What surprises me, especially with the recession and everything else, is that fees have not gone down; in fact, they are putting them up.
“So people who are out here … are possibly being given less money due to the recession … but the price of Dubai in general is still skyrocketing. It just makes it very hard.”
Yes Gerome, it would be a lot less in the UK. However, a significant proportion of your income in the UK would be going to the government as tax so you’re not comparing like with like. As for the “price of Dubai still skyrocketing”, I can only imagine that you haven’t noticed the drastic fall in rents over the last 12 months.
With regard to the continuing rise in school fees, there are a number of factors to consider. First of all, education and healthcare tend not to be particularly cyclical sectors; the demand for schooling in the UAE has not dropped anywhere near as much as that for cars, for example. Furthermore, the recession does not mean that the operating costs of the schools have decreased: teachers tend to enjoy higher than average job security which means that their salaries have not fallen in line with the general labour market. This is compounded by the fact that most teachers here are expatriates and hired from overseas, with all the added expenditure that entails. Most schools also went into this academic year with real uncertainty over the number of pupils they would actually have, due to the potential for expatriate relocations over the summer. As a result they could not simply assume that there would be fewer students and embark on a round of radical cost-cutting. Finally, some of the schools and school groups had previously launched expansion programs in response to the high levels of demand. Just because the demand for these new projects has reduced does not mean that the costs go away. The original plan would have been for these costs to have been borne by new students, but with this no longer possible they will be reflected in increased school fees elsewhere.