Righting the ship: Can sponsors can help save struggling schools?

Education economist Victor Lavy said UK educational reforms may hold a roadmap for turning around low-performing public schools

A “drastic” UK educational reform system has seen most secondary schools in England convert to “academies” – essentially, publicly funded schools with private school-like autonomy. The outcome has been improved student achievement and new research links that success to personnel and governance changes resulting from the conversion process.

The research paper, School Management Takeover, Leadership Change and Personnel Policy, used the staggered expansion of the UK’s academy system since the early 2000s to examine the mechanisms by which it improves student performance. It found school management takeovers lead to “profound changes in the teaching body and the school personnel policy”.

These changes often see better-paid and higher-skilled teachers joining converted academies, lifting students’ educational outcomes, according to Victor Lavy, a Professor at the University of Warwick and the Hebrew University of Jerusalem, who co-wrote the paper with Emma Duchini of the University of Essex, Stephen Machin of the London School of Economics and Shqiponja Telhaj from the University of Sussex.

“From year zero, there is a jump in the share of students in the high-performer category,” said Prof. Lavy, delivering the keynote speech at UNSW’s What Works in Education Conference, presented by the STEP UP research initiative. Discussing insights from the paper, he explained that the researchers used evaluations by the Office for Standards in Education, Children’s Services and Skills (Ofsted), the UK’s independent authority responsible for evaluating schools on management, teaching quality and overall performance.

UNSW Business School’s What Works in Education Conference 2024

^{UNSW Business School’s What Works in Education Conference 2024, presented by the STEP UP research initiative. Photos: Jacquie Manning}

“We look at these three outcomes, and the results suggest that in schools converted to academy, there is an improvement in all of them from year zero after the conversion,” he said. “The question is, why? What’s behind these large improvements?” he added. “We are deeply diving into this black box in terms of personnel management and pay structure to understand that.”

Converting an education system

The study covers a “structural change in lower-secondary education in England that completely reshaped the landscape of the UK education system,” Prof. Lavy explained. The transformation stemmed from a 2000 law the Labour government passed amending the Education Act, in response to a “mounting consensus” in the educational community that many UK schools, especially those in poor urban neighbourhoods, were failing to provide adequate education to their students.

“The UK is, in my mind, perhaps the largest and most impressive lab experimenting with changes in education systems, allowing us to study interventions and changes that may be relevant for other countries,” Prof. Lavy said in his keynote speech.

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Initially limited to low-performing public schools deemed “failing” by OFSTED, the law allowed independent organisations, including charities and businesses, to take over the management of schools through self-governing non-profit charitable trusts.

Failing schools face two central challenges, Prof. Lavy explained. “One is to recruit and retain high-quality teachers, and the second is to keep high-quality management and some flexibility that can improve the education outcome of the school,” he said. “In this paper, we bring together these two elements with school policies that are effective in terms of improving student outcomes.”

To tackle the problem of declining educational quality, the government opted to focus on failing, disadvantaged schools through a large-scale system in which sponsors, including charities, private businesses, and universities, would take over the management of the school from the local authority.

The sponsors effectively have “control of every aspect of managing the school – the personnel management, hiring and firing teachers, determining their pay, determining who is the headmaster, and so on,” Prof. Lavy explained. “They have almost free authority, like a private school, but they’re still a public school and are funded by the public system.”

It’s similar to a “private school system within the public system, free of charge, so the sponsor cannot turn away students”, he added. “They cannot fire any of the teachers upon takeover nor reduce their salary. Those are constraints, but the schools otherwise manage the environment and the way they work.”

While the conversion process was initially conceived as a remedial program for low-performing, disadvantaged schools, a subsequent Conservative government extended the program in 2010 to simplify conversion for both primary and secondary schools, removing the sponsor requirement. Nearly 80% of all secondary schools in the UK are now academies; for primary schools, the conversion rate is lower, at about 40% of schools.

Stabilised management, positive selection

Prof. Lavy said he and his co-authors sought to understand how this outsourcing of management of disadvantaged, low-performing public schools affected central elements of the education landscape, including teacher turnover, composition and pay.

“We exploit this rich administrative data so that we have a census of all teachers,” Prof. Lavy explained. “We observe every teacher in the system, mobility across schools over time, data on payments and different components of the paycheque.”

A key finding was that converting a school to an academy frequently comes with a change in the school’s head teacher, with significant implications for the body of teachers. “The first thing they do is appoint a new head – the likelihood of replacing the head of the school jumps by 40% at year zero,” Prof. Lavy said. “Upon implementation of the program, we find the new head is less experienced – namely, he’s younger. He’s better paid by about a 10% increase in salary, and he is more likely to come from other outstanding schools.”

The change results in schools attracting better and more highly skilled headmasters who are paid higher salaries, essentially “stabilising the management of the local school by changing the head teaching”, Prof. Lavy explained.

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There is also evidence of teacher sorting, whereby more experienced teachers tend to leave a school ahead of an academy conversion. “These teachers are older, more experienced and less likely to go to outstanding schools. So there is, in a way, a negative selection in terms of those who leave. For the school, it’s a positive selection,” according to Prof. Lavy.

Moreover, the new hires tend to come from outstanding schools. “Very often, they will come from the same outstanding school that the new headmaster came from,” he said.

The value of competition

Discussing the mechanisms behind the overall improvements, Prof. Lavy noted that, before the reform, salaries were determined by a teacher’s age, experience and education. “There was almost zero variation in the distribution of pay across teachers,” he said. “Following the reform, there is an increase in pay dispersion by about 9% – a result of moving away from the collective-bargaining-agreement elements of determining pay based on seniority and education.”

The result, he said, is “what you would expect from an environment where a competitive nature is taking over the management style”.

The researchers found that these changes in teacher composition account for about 26% of recent improvements in student performance. “That’s a sign of creating heterogeneity in compensation for teachers based on dimensions not captured by the collective bargaining agreement,” according to Prof. Lavy.

The research also showed failing schools experience a decline in enrolment and number of teachers in the lead-up to conversion. “That’s probably one of the reasons they are chosen to be converted,” he noted. But it’s a trend of decline that stops at year zero, followed by a gradual recovery. “To me, it means the school takes the time to build up their teacher body,” Prof. Lavy said. “They lost many teachers; they don’t select, immediately, the same number of teachers they lost.”

It’s part of the positive selection process, he said – looking for good teachers instead of hiring many teachers immediately. As a result, the UK’s approach has been a strong contrast to a failed educational reform from the US, when California schools in 1991 tried to dramatically reduce class sizes. In that case, the outcome was an immediate decline in test scores, contributing to the view that reducing class sizes wasn’t an effective solution. But Prof. Lavy said the new research supports another explanation.

“The result was a consequence of the fact that California schools had to hire many teachers, given the reduction in class size, so they went out and hired anyone walking in the street to be a teacher,” he said. “That’s why test scores went down, not because the class size had declined. Here, you see a reaction that is more careful, that examines teachers and waits for better teachers to graduate. These are the signs of positive selection in the changes in the composition of teachers.”

The impact of management flexibility

The findings are important from a policy perspective because they provide insights into an institutional model that could improve underperforming, high-poverty schools. As the paper stated, “governments around the world are increasingly experimenting with different options to improve teacher recruitment and retention in hard-to-staff schools.”

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The research also contributes to the scholarly literature on the impact of management practices on student achievement, particularly about the mechanisms behind the positive effects of introducing management flexibility on student achievement.

“It was a black box of something that we don’t study very much, but in this context, it’s very important,” Prof. Lavy said. “These sponsored academies are similar in a way to charter schools in the US – but there are five charter schools in Boston, six or seven in New York. Here, we are talking about a system that governs all the schools in the country, so it’s a huge change relative to what we know about charter schools.”