Resourcing The National Goals For Schooling · Resourcing The National Goals For Schooling Stage 2 Report Prepared by the Schools Resourcing Taskforce Secretariat for the Ministerial

Resourcing The National Goals For Schooling

Stage 2 Report

Prepared by the Schools Resourcing Taskforce Secretariat for the

Ministerial Council on Education, Employment, Training and Youth

Affairs (MCEETYA)

MAY 2005

Resourcing The National Goals Acronyms

Schools Resourcing Task Force, MCEETYA Final May 05 Page ii

Acronyms

ABS Australian Bureau of Statistics

ABSCQ Australian Bureau of Statistics Classification of Qualifications

ACT Australian Capital Territory

ADSL Asymmetric Digital Subscriber Line

AEA Aboriginal Education Assistant

AGSRC Average Government School Recurrent Cost

ANR Australian National Report (on Schooling)

ANTA Australian National Training Authority

AQF Australian Qualifications Framework

AQTF Australian Quality Training Framework

ARN Additional Resourcing Need

ASP Application Service Provider

BELTS Basic e-Learning Tool Set

BPI Best Practice Initiative

BST Basic Skills Test

CAP Country Areas Program

CECV Catholic Education Commission of Victoria

CECWA Catholic Education Commission of Western Australia

CLaSS Children’s Literacy Success Strategy

CRV Coefficient of Relative Variation

CSE Center for the Study of Evaluation

DEET Department of Education, Employment and Training

DEST Department of Education, Science and Technology

DET Department of Education and Training

DSL Digital Subscriber Line

EdNA Education Network Australia

ELC Existing Least Cost

ELI Early Learning Initiative

ELLA English Language and Literacy Assessment

FTE Full-Time Equivalent

GDP Gross Domestic Product

HF High Frequency

HSC Higher School Certificate


Schools Resourcing Task Force, MCEETYA Final May 05 Page iii

ICT Information and Communication Technology

ICTS Information and Communications Technologies in Schools (Taskforce)

IEC Intensive English Centre

IESIP Indigenous Education Strategic Initiatives Programme

ILSS Indigenous Language Speaking Student

IP Internet Protocol

ISDN Integrated Services Digital Network

ISP Internet service provider

IT&Titab Information Technology and Telecommunications Industry Training Advisory Board

ITAB Industry Training Advisory Board

K-12 Kindergarten to Year 12

KPM Key Performance Measure

LA Learning Area

LAECG Local Aboriginal Education Consultative Group

LAN Local Area Network

LBOTE Language Background Other Than English

LUAC Language for Understanding Across the Curriculum

MCD Marginal Cost Driver

MCEETYA Ministerial Council on Education, Employment, Training and Youth Affairs

M-LATS Mathematics - Learning and Teaching for Success

NCVER National Centre for Vocational Education Research (Ltd)

NEET North East Eduction and Training

NEPMT National Education Performance Monitoring Taskforce

NIELNS National Indigenous English Literacy and Numeracy Strategy

NSRS National School Resourcing Standard

NSSC National Schools Statistics Collection

NSW New South Wales

NT Northern Territory

OECD Organisation for Economic Cooperation and Development

OECD Organisation for Economic Cooperation and Development

Ofsted Office for Standards in Education

PD Professional Development

PISA Programme for International Student Assessment

PMRT Performance Measurement and Reporting Taskforce

PSFP Priority Schools Funding Program

QLD Queensland

RNG Resourcing the National Goals


Schools Resourcing Task Force, MCEETYA Final May 05 Page iv

RTO Registered Training Organisation

SA South Australia

SES Socio-economic Status

SINE Success in Numeracy Education

SRT Schools Resourcing Taskforce

SS Senior Secondary

TAFE Technical and Further Education

TAS Tasmania

TQELT Teacher Quality and Educational Leadership Taskforce

UAI Universities Admission Index

VAEAI Victorian Aboriginal Education Association Incorporation

VET Vocational Education and Training

VIC Victoria

VLAN Virtual Local Area Network

VPN Virtual Private Network

WA Western Australia

WAN Wide Area Network

xDSL Digital Subscriber Line (variants of)

Resourcing The National Goals Table of Contents

Schools Resourcing Task Force, MCEETYA Final May 05 Page v

Table of Contents

CHAPTER 1 REPORT SUMMARY ............................................................................................................................ 1 1.1 REPORT OVERVIEW................................................................................................................................................... 1 1.2 ANALYTICAL FRAMEWORK ...................................................................................................................................... 1 1.3 BASE COST OF SCHOOLING....................................................................................................................................... 2 1.4 STUDENT RELATED - FUTURE ADDITIONAL RESOURCING NEED (ARN)............................................................... 2 1.5 SCHOOL RELATED – ARN ........................................................................................................................................ 3 1.6 VOCATIONAL EDUCATION AND TRAINING (VET) – FUTURE ARN........................................................................ 4 1.7 INFORMATION AND COMMUNICATIONS TECHNOLOGIES (ICT) - FUTURE ARN.................................................... 5 1.8 THE NATIONAL SCHOOL RESOURCING STANDARD – A NATIONAL INTEGRATED APPROACH TO SCHOOL

RESOURCING............................................................................................................................................................ 6 CHAPTER 2 THE BASE COST OF SCHOOLING .................................................................................................. 9

PROJECT AIMS.......................................................................................................................................................................10 2.1 ANALYTICAL FRAMEWORK ....................................................................................................................................10 2.2 STAGE 1 – ANALYTICAL APPROACH AND METHODOLOGY ..................................................................................11 2.3 BASE COST - THE FIRST TIER OF ANALYSIS..........................................................................................................15 2.4 CALCULATING BASE COST - METHODOLOGY.........................................................................................................15 2.5 DETAILED DESCRIPTION OF STAGE 1 METHODOLOGY .........................................................................................16 2.6 BASE COST OF SCHOOLING - RESULTS ...................................................................................................................19 2.7 EFFICIENCY RANGE .................................................................................................................................................23

CHAPTER 3 FUTURE ADDITIONAL RESOURCING NEED: STUDENT RELATED.................................35 3.1 INTRODUCTION........................................................................................................................................................36 3.2 STUDENT RELATED NEEDS – AN IMPERATIVE TO ACT ..........................................................................................36 3.3 FINDINGS .................................................................................................................................................................48

CHAPTER 4 SCHOOL RELATED RESOURCING NEED: CURRENT FUNDING......................................58 4.1 INTRODUCTION........................................................................................................................................................58 4.2 METHODOLOGY.......................................................................................................................................................59 4.3 PROFILE OF SCHOOLS, BY LOCATION AND SIZE .....................................................................................................59 4.4 DIRECT COST FACTORS (LOCATION RELATED) .....................................................................................................62 4.5 DIRECT NON-STAFF COSTS ......................................................................................................................................63 4.6 SPECIAL PROGRAMS................................................................................................................................................63 4.7 DISTANCE EDUCATION ...........................................................................................................................................63 4.8 INDIRECT COST FACTORS (SCHOOL SIZE RELATED) ..............................................................................................64 4.9 TOTAL COST OF SCHOOL RELATED FACTORS (DIRECT AND INDIRECT) ................................................................65

CHAPTER 5 ADDITIONAL RESOURCING NEED: VET IN SCHOOLS ........................................................67 5.1 INTRODUCTION........................................................................................................................................................68 5.2 BACKGROUND AND METHODOLOGY ......................................................................................................................68 5.3 TOTAL COST AND COST DIFFERENTIALS ...............................................................................................................68 5.4 DETAILED FINDINGS - (I) IDENTIFICATION OF THE DIFFERENTIAL AND TOTAL COSTS OF VET IN SCHOOLS .....70 5.5 DETAILED FINDINGS - (II) IMPACT OF FUTURE VET IN SCHOOL ENROLMENT TRENDS ON DELIVERY COST ......73 5.6 DETAILED FINDINGS - (III) OBTAINING CONSISTENT QUALITY IN VET IN SCHOOLS DELIVERY .........................84 5.7 DETAILED FINDINGS - (IV) INCREASING QUALITY OF DELIVERY IN VET IN SCHOOLS........................................91

CHAPTER 6 ADDITIONAL RESOURCING NEED: ICT IN SCHOOLS ........................................................94 6.1 INTRODUCTION........................................................................................................................................................95 6.2 PRIORITY AREA – CONNECTIVITY..........................................................................................................................99 6.3 PRIORITY AREA - CONTENT..................................................................................................................................106 6.4 PRIORITY AREA - PROFESSIONAL DEVELOPMENT...............................................................................................109 6.5 SCHOOL RELATED FACTORS.................................................................................................................................112 6.6 OVERVIEW OF FUTURE ICT REQUIREMENTS.......................................................................................................116 6.7 FUTURE COST ESTIMATES ....................................................................................................................................118

CHAPTER 7 THE NATIONAL SCHOOL RESOURCING STANDARD (NSRS) – A NATIONAL INTEGRATED APPROACH TO SCHOOL RESOURCING .....................................................124

Resourcing The National Goals Table of Contents

Schools Resourcing Task Force, MCEETYA Final May 05 Page vi

7.1 RATIONALE............................................................................................................................................................124 7.2 THE NSRS COST FRAMEWORK ............................................................................................................................124 7.3 NSRS HEADLINE COSTS.......................................................................................................................................126 7.4 KEY FEATURES OF THE NSRS ..............................................................................................................................127 7.5 NSRS - INDICATIVE COST ESTIMATES ................................................................................................................128

APPENDICES .................................................................................................................................................................132

Resourcing The National Goals List of Tables

Schools Resourcing Task Force, MCEETYA Final May 05 Page vii

List of Tables

Table 1.1: Indicative additional required expenditure for future ARN (2003 prices, Government students) ................ 3

Table 1.2: Unit cost summary of future ARN by intervention focus (2003 prices, Government students) ................... 3

Table 1.3: Total cost of school related factors, government schools, Australia, 2001 prices.......................................... 3

Table 1.4: Total costs of delivering VET in Schools for 2001 .......................................................................................... 4

Table 1.5: Additional resources required for achievement of the National Goals (no inflation adjustment) ................. 6

Table 1.6: Projected additional expenditure required to meet NSRS, government schools* .......................................... 6

Table 1.7: Current and future additional expenditure required by ARN type* ................................................................ 7

Table 1.8: Indicative total cost of NSRS, gov’t schools (adjusted annual recurrent costs, 2003 prices)........................ 8

Table 2.1: ELC Schools, by State and Level ....................................................................................................................20

Table 2.2:Public recurrent unit costs – per student...........................................................................................................21

Table 2.3:Recurrent unit costs (public sources and school generated revenues) – per student .....................................22

Table 2.4: Base cost as a proportion of average government expenditure, per capita (%) ............................................22

Table 2.5:ELC Schools - Coefficient of Relative Variation (CRV) - Recurrent Cost per Student ...............................23

Table 2.6:Full-Time Student/Staff Ratios (2001) .............................................................................................................24

Table 2.7:Budget Categories and Cost Line Items ...........................................................................................................26

Table 2.8:Primary Schools Per Student Expenditure ($) by Budget Category (2001)..................................................27

Table 2.9:Secondary Schools - Per Student Expenditure ($) by Budget Category (2001) ............................................27

Table 2.10: Average Recurrent Cost of Teachers, per Student*......................................................................................28

Table 2.11:Cost of Teachers as Proportion of School Level Recurrent Costs*..............................................................29

Table 2.12:Teacher Costs as % of Total School Level Salary Related Expenses ..........................................................29

Table 2.13:ELC Teacher Salaries and National Award Salary Range for Teachers (2001)..........................................30

Table 2.14:Administration and Support Related Salaries per Student (2001)................................................................30

Table 2.15:Average Recurrent Unit Cost of Operating Expenses, per Student..............................................................31

Table 2.16:Average Recurrent Unit Cost of Grants and Subsidies, per Student ............................................................31

Table 2.17:Expenditure (%) by resource inputs: ELC primary schools and Govt. primary school average ................32

Table 2.18: Expenditure (%) by Resource Inputs: ELC Secondary Schools & Govt. Sec. School Average ...............32

Table 2.19:ELC school generated revenues, (Bank held savings, $ per student)...........................................................34

Table 3.1: Indicative additional required expenditure for Student Related future ARN (Gov’t students) ...................35

Table 3.2: Cost summary of future ARN by intervention focus......................................................................................35

Table 3.3: Cost-benefit analysis of Year 12 education for one cohort ($m)...................................................................40

Table 3.4: Additional programs included in the comparative analysis ...........................................................................45

Table 3.5: Cost characteristics of additional programs ....................................................................................................46

Table 3.6: Comparison of average cost per student for additional programs and main analysis ..................................46

Table 3.7: Effect of adding additional programs to the analysis .....................................................................................46

Table 3.8: Difference in cost of future ARN using median or mean of program costs..................................................47

Table 3.9: Indicative Mean National Resource Needs (Government Students) .............................................................47

Table 3.10: Student Related future ARN costs by focus of intervention ........................................................................48

Table 3.11: Range of estimates for primary students ‘at risk’ .........................................................................................49

Table 3.12: Percentage of students achieving the numeracy benchmark, by gender, yrs 3 and 5, Australia, 2000.....49

Table 3.13: Percentage of students achieving the reading benchmark, Australia, years 3 and 5, 1999, 2000 .............50


Schools Resourcing Task Force, MCEETYA Final May 05 Page viii

Table 3.14: Percentage of Indigenous students achieving the reading benchmark, Aust., yrs 3 and 5, 1999 & 2000.50

Table 3.15: Education and labour market status of teenagers aged 15 to 19 years old, Australia, 2001 ......................52

Table 3.16: Estimated Year 12 completion rates (%).......................................................................................................53

Table 3.17: Estimated Year 12 completion rates (%).......................................................................................................53

Table 3.18: Educational attainment, by age group and level of qualification, Australia, 1997–2000 (per cent) ........54

Table 3.19: Range of estimates for secondary students ‘at risk’ .....................................................................................54

Table 3.20: Range of indicative resource needs (Government school students) ............................................................54

Table 3.21: Apparent Retention Rates - Government and Non-Government Schools...................................................55

Table 3.22: Proportion of total costs by Key Resource Inputs (%) .................................................................................56

Table 4.1: Total Cost of School Related Factors, Government Schools, 2001 ..............................................................58

Table 4.2: Direct Costs for Non-metropolitan Areas, 2001 .............................................................................................62

Table 4.3: Full-time Student/ Teaching Staff Ratios, 2001 .............................................................................................64

Table 4.4: Total Indirect Subsidy, Government Schools, 2001.......................................................................................65

Table 4.5: Total Cost of School Related Factors, Government Schools, 2001 ..............................................................65

Table 4.6: Significance of Additional Resources for School Related Factors................................................................66

Table 4.7: Breakdown of Additional Resourcing for School Related Factors, per capita, 2001...................................66

Table 5.1: Total costs of delivering VET in Schools for 2001 ........................................................................................67

Table 5.2: Calculation of the senior secondary Base cost per student hour....................................................................71

Table 5.3: Cost differential between senior secondary Base cost psh and VET in Schools psh ...................................71

Table 5.4: Differential direct school cost of delivering VET in schools for 2001 .........................................................72

Table 5.5: Total direct and indirect cost of delivering VET in Schools for 2001 ..........................................................72

Table 5.6: Variables used in Scenario 1 ............................................................................................................................75

Table 5.7: Estimated direct delivery cost of VET in Schools - Scenario 1, 2001 .........................................................76

Table 5.8: Variables used in Scenario 2 ............................................................................................................................77

Table 5.9: Estimated direct delivery costs of VET in Schools - Scenario 2 ...................................................................78

Table 5.10: Average hours per student per year - 2002 ...................................................................................................80

Table 5.11: Variables used in Scenario 3 ..........................................................................................................................81

Table 5.12: Estimated direct delivery cost of VET in Schools - Scenario 3...................................................................81

Table 5.13: Participation in different certificate levels of VET in Schools courses.......................................................82

Table 5.14: Student participation by certificate level in VET in Schools courses .........................................................83

Table 5.15: Estimated direct delivery cost of VET in Schools - Scenario 4...................................................................83

Table 5.16: Additional factors which influence quality in VET in Schools ...................................................................87

Table 5.17: additional cost factors incurred to delivery of VET in Schools in rural and regional locations................89

Table 5.18: Required Increase in resources to achieve consistent quality in VET in Schools ......................................89

Table 5.19: Direct cost of achieving consistent quality in delivery in VET in Schools - Metropolitan schools..........90

Table 5.20: Direct cost of achieving consistent quality in delivery in VET in Schools - Rural & Regional schools ..90

Table 5.21: Direct cost differential between senior secondary Base cost psh and VET in Schools psh to achieve consistent high quality delivery.....................................................................................................................91

Table 5.22: Comparison of the school level resources to achieve current quality and consistent high quality delivery of VET in Schools, 2001 and 2010 ...............................................................................................................91

Table 5.23: Required increase in resources to achieve a 5 per cent improvement in quality in VET in Schools ........92

Table 5.24: Direct cost of increasing quality in delivery in VET in Schools - Metropolitan schools ..........................92


Schools Resourcing Task Force, MCEETYA Final May 05 Page ix

Table 5.25: Direct cost of increasing quality in delivery in VET in Schools - Rural and Regional schools ................93

Table 5.26: Comparison of the school level resources to achieve current quality and a 5 per cent increase in quality delivery of VET in Schools, 2001 and 2010 ................................................................................................93

Table 6.1: Additional resources required for achievement of the National Goals ........................................................94

Table 6.2: Connectivity - National expenditure annual breakdown ($m)....................................................................100

Table 6.3: Average national cost of Content..................................................................................................................108

Table 6.4: Expenditure for Professional Development for 2003 ($m).........................................................................111

Table 6.5: Independent estimate of future costs ($m), by Priority Area .......................................................................118

Table 6.6: Additional resources for achievement of the National Goals (no adjustment for inflation ......................119

Table 6.7 Future costs - projected from 2003, by Priority Area ($m)..........................................................................120

Table 6.8: Details of predicted national expenditure based on jurisdiction estimates ($m) .......................................121

Table 6.9: Areas requiring additional resources, by Priority Area ...............................................................................122

Table 6.10: Independent estimate of future ICT costs ($m) .........................................................................................122

Table 6.11: Additional resources (rver 2003 levels) required to enable achievement of the National Goals ...........123

Table 6.12: Additional resources required for Priority Areas.......................................................................................123

Table 7.1: Additional expenditure required to meet NSRS, government schools*......................................................129

Table 7.2: Current and future additional expenditure required by ARN type* ............................................................129

Table 7.3: Indicative total cost of NSRS*, government schools (adjusted annual recurrent costs, 2003 prices).......130

Table 7.4 Base Cost as proportion of aggregate cost, government schooling *(%).....................................................130

Resourcing The National Goals List of Figures

Schools Resourcing Task Force, MCEETYA Final May 05 Page x

List of Figures

Figure 1.1: Estimated national ICT expenditure ($ million, no inflation adjustment) ........................ 5 Figure 2.2: ELC Selection Methodology ............................................................................................ 17 Figure 2.3: Primary/Secondary Schools - Per Student Expenditure ($) by Budget Category

(2001) ................................................................................................................................. 28 Figure 2.4: Expenditure (%) by resource inputs: ELC primary/secondary schools and Govt.

primary/secondary school average .................................................................................. 33 Figure 3.1: Relationship between Mean and Spread ....................................................................... 39 Figure 3.2: Resource Intensity Profile (RIP)...................................................................................... 43 Figure 3.3: Percentage of year 3 students achieving the numeracy benchmark, by sub-group,

Australia, 2000................................................................................................................... 49 Figure 3.4: Percentage of year 5 students achieving the numeracy benchmark, by sub-group,

Australia, 2000................................................................................................................... 50 Figure 3.5: Percentage of year 3 students achieving the reading benchmark, by sub-group,

Australia, 2000................................................................................................................... 51 Figure 3.6: Percentage of year 5 students achieving the reading benchmark, by sub-group,

Australia, 2000................................................................................................................... 51 Figure 3.7: Full-time participation rates, Australia, May 2000.......................................................... 52 Figure 3.8: Percentage of 19-year-olds who have completed year 12 or obtained any post-school

qualification, by gender, Australia, May 2000.................................................................. 53 Figure 3.9: Percentage Distribution of Key Student Related future ARN Cost Inputs ................... 56 Figure 3.10: Distribution of Student Related future ARN costs by focus of intervention ............... 57 Figure 4.1: Proportion of Primary Schools by Size of School .......................................................... 60 Figure 4.2: Proportion of Secondary Schools by Size of School ..................................................... 60 Figure 4.3: Primary School Students by School Size, Metropolitan and Non-metropolitan, 2001 61 Figure 4.4: Secondary School Students by School Size, Metropolitan and Non-metropolitan, 2001

............................................................................................................................................ 61 Figure 5.1: Compound growth of students enrolled in VET in Schools - 1996 to 2010 ................. 75 Figure 5.2: Enrolment as percentage by ANTA Industry group - 2002 ........................................... 79 Figure 5.3: Relative importance of factors influencing quality in VET in Schools .......................... 87 Figure 5.4: Weighting of factors with the greatest influence on quality in VET in Schools ............ 88 Figure 6.1: Estimated National ICT Expenditure ($m)...................................................................... 94 Figure 6.2: Connectivity - National expenditure allocation for 2003 ($m) ...................................... 99 Figure 6.3: Connectivity - National expenditure allocation for 2003 (%) ........................................ 99 Figure 6.4: Connectivity - National expenditure annual breakdown ($m) .................................... 100 Figure 6.5: Connectivity - National average cost per student ($) ................................................. 101 Figure 6.6: ICT Infrastructure in Schools - National average cost per student............................ 101 Figure 6.7: Wide Area Networks - National average cost per student ......................................... 102 Figure 6.8: ICT Support in Schools - National average cost per student..................................... 102 Figure 6.9: Centralised Infrastructure & Services - National average cost per student .............. 103 Figure 6.10: Software - National average cost per student ($) ..................................................... 104 Figure 6.11: Internet charges - National average cost per student .............................................. 104 Figure 6.12: Content Development - National average cost per student ($) ............................... 107

Resourcing The National Goals List of Figures

Schools Resourcing Task Force, MCEETYA Final May 05 Page xi

Figure 6.13: ICT cost per student vs school size - Primary .......................................................... 113 Figure 6.14: ICT cost per student vs school size - Primary school bands ................................... 113 Figure 6.15: ICT cost per student vs school size - Secondary ..................................................... 114 Figure 6.16: ICT cost per student - Secondary school bands....................................................... 114 Figure 6.17: Total resources for ICT per school ($)....................................................................... 115 Figure 6.18: Total resources for ICT per school (%) ..................................................................... 115 Figure 6.19: Estimated national ICT expenditure ($m).................................................................. 118 Figure 6.20: Future ICT costs projected from historical data ($m) ............................................... 119 Figure 6.21: Predicted national expenditure based on jurisdiction estimates ($m)..................... 121 Figure 6.22: Comparison of estimates of national ICT expenditure ($m) .................................... 123

Resourcing The National Goals Report Summary

Schools Resourcing Task Force, MCEETYA Final May 05 Page 1

Chapter 1 Report Summary

1.1 Report Overview

In July 2001, the Ministerial Council on Education, Employment, Training and Youth Affairs (MCEETYA) established the Schools Resourcing Taskforce (SRT) to analyse and provide advice on school funding issues. MCEETYA 2001 also endorsed a significant national project Resourcing the National Goals (RNG) to form the major work of the Taskforce. The overall aim of the project is to advise Ministers on the future amount of resources required by the school sector to deliver even more effectively on the National Goals for Schooling. The RNG research has followed the adoption of MCEETYA in 2002 of a set of Principles for a National and Cooperative Approach to Funding Schools. The research and analysis of the SRT on the costs of schooling provides a tangible basis for understanding the possible implications of the Principles. The Australian systems of schooling have demonstrated their effectiveness in recent international assessment of actual student learning. The OECD has found that Australia ranked fourth out of all OECD countries in terms of mean literacy and numeracy outcomes for primary and secondary students - placing Australia ahead of other comparable countries such as the United Kingdom and the USA. This report identifies the future investments that are required so that Australian schooling can improve even further by addressing areas of specific student need and emerging costs. It examines the impact of important school, student and curriculum factors that drive these costs and the extent of their impact. The report concludes with an indicative costing for a specified level of attainment of the National Goals for Schooling. This is presented as the National School Resourcing Standard (NSRS). The NSRS is a cost framework for measuring the required recurrent costs of schooling against specified levels of achievement in learning as well as school participation outcomes that have been derived from the National Goals for Schooling. The cost estimates presented in this report are indicative of future resourcing requirements. Stage 3 of the RNG project is scheduled to commence in 2005. This stage will consider other significant areas of additional resourcing need (e.g. students with disabilities) as well as the potential efficiency gains that might be derived by systems from additional investments. A later report will present these findings and integrate with the Stage 1 and 2 results presented in this report.

1.2 Analytical Framework

The analytical framework integrates two types of cost analyses. A ‘Base cost’ analysis was undertaken during Stage 1 of the project. The Base cost is a theoretical estimate of the efficiency frontier for schooling as measured by existing least cost for primary and secondary schools. Base cost analysis reveals the extent of current efficiencies attained by schools (and hence school systems) that are demonstrating effectiveness against specified student performance data. It also reveals the nature and location of resource need in schooling if the National Goals for Schooling are to be a realistic objective for all schools and students. The Base cost estimate of schooling represents the actual average per capita recurrent costs of a set of government schools that (i) have students meeting a set of specified participation and learning benchmarks, and (ii) draw a least amount of funding because of their profile. The second tier of analysis considers the future Additional Resourcing Need (future ARN) of schools above the Base cost estimates. The future ARN of schools is defined as the product of (i) non-discretionary factors – inherent attributes of the students or the school outside the control of school management that generate additional resourcing requirements above the Base cost, and (ii) those additional resource demands generated by an expanded curriculum. The future ARN analysis



has considered the specific cost impact on schooling of student factors, school factors and curriculum factors. The National School Resourcing Standard (NSRS) emerged as a cost framework integrating the results of both cost analyses. The macro-level cost estimates of the NSRS are expressed through three types of headline cost figures – national aggregate costs to attain the NSRS, additional expenditure required to attain the NSRS, and per student unit cost estimates of the NSRS. All cost estimates are indicative in nature and based on the calculations that are possible from this phase of the project.

1.3 Base Cost of Schooling

The Base cost of schooling was examined in two ways. The Public Base Cost (PBC) is the publicly funded costs from all levels of government. The Total Base Cost (TBC) includes publicly funded resources and school generated revenues. The cost calculations do not include user cost of capital or transport costs.

1.3.1 Total Base Cost (TBC) • The Primary school TBC is $ 6,467 per student (in-school/out of school recurrent costs,

2003 prices) which is approximately 17% less per student than the government school average

• The Secondary school TBC is $ 9,130 per student (in-school/out of school recurrent costs, 2003 prices) which is approximately 10% less per student than the government school average

1.3.2 Public Base Cost (PBC) • The Primary school PBC is $ 6,201 per student (in-school/out of school recurrent costs,

2003 prices) which is approximately $1,300 (18%) less per student than the government school average

• The Secondary school PBC is $ 8,504 per student (in-school/out of school recurrent costs, 2003 prices), which is approximately $1,300 (13%) less per student than the government school average

1.3.3 Key issues and policy implications from these findings are: • Any simple per capita calculation of average cost of government schooling disguises a

diverse spread of per capita costs generated by different schools • Government schools operate effectively at significantly below average per capita funding

where school attributes (size and location) and student attributes have limited additional resourcing needs.

• Governments in Australia are (on aggregate) successfully managing to direct fewer publicly funded resources to those government schools that have lower than average resourcing needs.

• This systemic tendency towards efficient resource allocation across government schools does not mean that school resourcing is always perfectly matched to school needs

• The calculation of Base cost does not address the additional resourcing needs of schools • Base cost schools were found to operate within a relatively narrow efficiency range. This

suggests the Base cost estimate is a robust figure.

1.4 Student Related - Future Additional Resourcing Need (ARN)

The ‘Student Related future ARN’ refers to the additional resources required by schooling systems so they can meet the needs of students that are currently at risk of not attaining the National Goals for Schooling. The project examined in detail the needs of Indigenous students, low SES students



and students with ESL. It is estimated that the additional expenditure required to meet the future ARN of all government school students is in the vicinity of $2 billion per annum, 2003 prices. Teacher salary costs were the largest component of these additional costs.

Table 1.1: Indicative additional required expenditure for future ARN (2003 prices, Government students)

Students % of students at risk Number of students at risk

Average per student cost

Total

Primary 12 164,566 $5,905 $971,762,230 Secondary 15 162,186 $6,548 $1,061,993,928 Total $2,033,756,158

Table 1.2: Unit cost summary of future ARN by intervention focus (2003 prices, Government students)

Students School focused Initiatives

Target Group initiatives

Individual focused initiatives


Primary $247 $1017 $4,641 $5,905 Secondary $265 $979 $5304 $6,548

Analysis was restricted to developing an estimate of the costs of assisting all students reach the currently reported benchmarks in literacy and numeracy for primary school students, and expanded educational participation for secondary students. National resource needs (student related) were calculated as the average cost of future Additional Resourcing Need (future ARN) per student multiplied by the number of students at risk of not achieving benchmarks. A Resource Intensity Profile (RIP) was used to group initiatives into four categories of intervention focus – universal, school, target group, and individual. This framework distinguishes the scale of resource intensity between universal/system wide approaches, through to intensive services for those most ‘at risk’. Separation of the initiatives by the focus of intervention allows examination of comparative cost structures that might otherwise be submerged by simple averaging across all programs. The number of students at risk of not reaching the benchmarks was derived from the Year 5 Literacy and Numeracy Benchmarks for the primary school level, and from a measure of participation in education and training for the secondary level.

1.5 School Related – ARN

School related ARN refers to the additional costs generated by the factors of school size (where that occurs in a rural area and is not a policy related variable) and school location. The currently funded provisions for school-related additional resourcing needs are estimated to be in the order of $590 million based on direct and indirect costs in Australian government schools in 2001. It is estimated that on average each non metropolitan primary student costs approximately $650 more to school than their metropolitan counterpart. The average additional cost for a non metropolitan secondary school student is approximately $870.

Table 1.3: Total cost of school related factors, government schools, Australia, 2001 prices

Primary Secondary Total



Total direct costs $76,321,975 $40,615,434 $116,937,410 Total indirect costs $245,573,857 $226,537,203 $472,111,060 Total costs $321,895,832 $267,152,637 $589,048,470 Total per capita $648 $870 $733

For this study, direct costs are defined as specific purpose financial allocations made by each school system and relate to the location of the school. Costs were organised into two categories:

• Non-staff costs • Special programs

Indirect costs relate to school size and consist of only one category, the increased costs of having lower student-teacher ratios in non metropolitan schools. This was measured by the proportionate difference between metropolitan and non metropolitan teacher salaries within each state on a per-student basis. This constitutes a real, additional cost to school systems from staffing non metropolitan schools, related to the smaller average size of non-metropolitan schools. Direct salary costs associated with location, such as locality allowances designed to attract teachers to non-metropolitan schools, were included in the indirect calculation to address the inability of some jurisdictions to disentangle these from salaries. This analysis does not provide an estimate of future costs – it offers a snap-shot of additional school-related costs in 2001.

1.6 Vocational Education and Training (VET) – Future ARN

The study has produced an estimate of the total national cost to schools of delivering VET, which comprises a direct school cost (costs incurred at the school level) and an indirect school cost (associated administrative and organisational costs). An estimate was also produced for the total additional cost incurred by schools due to the delivery of VET in Schools based on (i) the number of students enrolled in VET in Schools, and (ii) the average number of VET in School hours per student in senior secondary school. The study has found the total national school costs of delivering VET in schools for 2001 was $250.6m The currently funded ARN cost to government school systems for providing VET in Schools nationally in 2001 was $74.3m (above Base cost).

Table 1.4: Total costs of delivering VET in Schools for 2001

Factor Total Additional Direct school cost (psh) $6.41 $0.98 Total Direct $208.1m $31.8m Indirect cost (psh) $1.31 $1.31 Total Indirect $42.5 m $42.5 m Total Costs $250.6 m $74.3 m

The study modelled four possible scenarios for enrolment growth and likely impact on cost: (i) Base Case, (ii) increasing retention rate, (iii) increasing VET in School hours, and (iv) increased uptake of higher level certificates. The highest estimated cost of future ARN associated with anticipated future enrolment trends up to 2010 was $97m (2001 prices).

The study separately examined the likely cost impact of (i) obtaining consistent high quality across all programs and (ii) the additional cost of achieving a modest improvement in overall quality for VET in schools programs.



The highest estimate for future ARN cost to obtain consistent high quality, modelled next to anticipated future enrolment trends up to 2010, was $109.5m.

The highest estimate for future ARN cost to achieve a 5 per cent increase in quality, modelled next to anticipated future enrolment trends up to 2010, was $111.2m (2001 prices).

Government school systems currently provide $74.3m to offer VET in Schools nationally (in addition to Base cost). $37m is thus the estimated unfunded portion of VET related future ARN in 2001 prices, being the difference between projected enrolment growth and quality controls/improvements to the year 2010 ($111.2m) and currently funded provisions for 2001 ($74.3m).

1.7 Information and Communications Technologies (ICT) - Future ARN

Resource implications generated by rapidly changing ICT requirements were examined only as far as ICT relates to the costs of teaching and learning in schools. Costs of ICT in general administration at the central or school level were not included in the study. Both capital and recurrent costs were included. Current and future cost and resourcing requirements were studied for three main priority areas, (i) connectivity issues, (ii) online content, and (iii) professional development.

Total Current ICT Costs • The total national expenditure by jurisdictions on ICT in schools for 2003 was $545m,

comprising Connectivity ($466m), Content ($28m) and Professional Development ($51m). • The per-student expenditure grew at an average annual rate of 17%. • The national per-student average ICT expenditure for 2003 was $241. • The national average ICT expenditure per FTE teacher for 2003 was $3,583.

Future ICT Costs Future costs were estimated by the following three complementary methods, (i) on the basis of projections from historical costs, (ii) jurisdiction predictions based on known costs and needs were then compiled, and (iii) an independent estimate based on additional requirements to enable the achievement of the National Goals. The figure below shows the total amount and the estimated growth in ICT expenditure for the period 2003-2006.

Figure 1.1: Estimated national ICT expenditure ($ million, no inflation adjustment)

The estimate of total additional required future resources by year 2006 is $326 million. This would increase the average annual recurrent expenditure per student on ICT from $241 to $385.

545

650 772

871

0

200

400

600

800

1,000

1,200

2003 2004 2005 2006



Table 1.5: Additional resources required for achievement of the National Goals (no inflation adjustment)

2003 2004 2005 2006 Expenditure for achievement of National Goals ($million p.a.) 545 650 738 871 Additional Resourcing over 2003 level ($ million p.a.) 105 227 326 Per-Student Average Resourcing ($ p.a.) 241 287 341 385 Additional Per-Student Resourcing over 2003 level ($ p.a.) 46 100 144 Increase on 2003 expenditure 19% 42% 60%

1.8 The National School Resourcing Standard – a national integrated approach to school resourcing

The NSRS is a cost framework for determining the actual recurrent costs of schooling in order to meet specified learning objectives derived from the National Goals for Schooling adopted by all Ministers (MCEETYA, 1999). All cost estimates are future oriented in that they represent the investments that are currently foreseeable as necessary for achieving specified outcomes derived from the National Goals. The costs and calculations, and therefore the Standard, are dynamic. The NSRS can serve a number of purposes, including;

• A national resourcing benchmark against which the total public funding of schools can be measured.

• A national framework for the development of macro-level funding policies for schools irrespective of sector.

• An analytical framework and information base for school systems to assist in their internal allocation of funds across schools, levels of schooling and across sectors.

• A rational basis for funding negotiations between the Commonwealth, the States and the non-government sector.

The total additional expenditure required to meet the NSRS is approximately $2.4 billion per annum in 2003 prices. This represents a 13% growth on estimated recurrent public expenditure (accrual basis, excluding user cost of capital, transport and payroll tax) on government schooling for 2003.

Table 1.6: Projected additional expenditure required to meet NSRS, government schools*

School Level National Additional Required Expend.

($ million per annum)

Percentage Growth on existing recurrent

Public Expenditure

Additional Unit Cost Per FTE student($)

Primary level, Projected Additional Expenditure.

$ 1,160

12% 835

Secondary level, Projected Additional Expenditure.

$ 1,213

15% 1385

Total Additional Expenditure. $ 2,373

13% 1048

Adjusted annual recurrent costs, 2003 prices (in-school and out of school, accrual basis accounting). Excluding user costs of capital, transport, payroll tax.

A breakdown of the additional expenditure required for future ARN by primary and secondary levels is presented in the table below. Estimates are also provided of current national public expenditure by ARN type. Total ARN recurrent expenditure for 2003 was estimated nationally at



nearly $3 billion. Additional required expenditure for future ARN is estimated at nearly $2.4 billion per annum which is almost an 80% growth on 2003 national public expenditure allocations.1

The greatest portion of additional required expenditure is for student related future ARN. Additional required public expenditure needs to grow by approximately $2 billion per annum. This is an approximate 90% increase on the estimated 2003 national allocations ($2.2 billion per annum).

ICT and VET related expenses also need strong growth to meet NSRS levels (56% and 38% respectively) but these are coming off a much lower base of expenditure and do not pose as significant additional cost burdens.

These estimates have been derived from the analysis of ARN expenditure in this report. The estimate of current student related expenditure has been obtained by deducting current school related, ICT related and VET related expenditure from total current expenditure. The future school related needs are not shown because no estimate has been produced of any outstanding needs.

Table 1.7: Current and future additional expenditure required by ARN type*

Student related School related** ICT related VET related Total Level of Education

Current ($ m)

Additional ($ m)

Current ($ m)

Additional ($ m)

Current ($ m)

Additional ($ m)

Current ($ m)

Additional ($ m)

Current ($ m)

Additional ($ m)

Primary 1,150.6 972 366.3 0 334.2 187.7 0 0 1851.1 1160 Secondary 539.7 1062 304.0 0 210.8 118.4 84.5 32.3 1139.0 1213 Total 1,690.3 2034 670.3 0 545 306.1 84.5 32.3 2990.1 2373

Annual recurrent costs, 2003 prices (in-school and out of school, accrual basis accounting). Excluding user costs of capital and transport. Payroll tax incorporated in some elements of ICT and VET related.

** No provision made for future additional school related ARN expenditure (see discussion in report) The total cost of funding the NSRS is approximately $21.3 billion per annum in adjusted recurrent costs. This includes public expenditure and the continuation of estimated current levels of school generated revenues from non-public sources. The total NSRS is 116% of estimated actual recurrent expenditure for government schooling. This includes the school generated revenues and the required additional expenditure to provide for the NSRS. National public expenditure for government schooling would need to grow by 13% in real terms to meet the funding levels required by the NSRS. This phase of the project has not costed the needs of disabled students or investments required to improve teacher quality. Research into these costs will be undertaken during 2005/06 and will complete the final cost estimates of the project.

1 Figures do not include a portion of expenditure for these categories that may have been included as part of the Base cost figures. This is most likely to apply to the

student related ARN type. For example, schools that satisfied the Base criteria may have incorporated an element of expenditure for literacy or numeracy programs

that enabled them to perform effectively.



Table 1.8: Indicative cost of NSRS, government schools (adjusted annual recurrent costs, 2003 prices)

School Level/Cost Type Actual Recurrent Expend. 2003 ($ m p.a.)*

NSRS Recurrent Cost ($ m p.a.)

NSRS Unit Cost Per FTE student($)

As % of 2003 public exp. For govt schooling

Primary Level Public Expenditure for Primary Schooling 9,973 11,132 8,016 112% School generated revenues - Prim.Schooling** 347 347 250 3% Total Expenditure for Primary Schooling 10,320 11,479 8,265 115% Secondary Level Public Expenditure for Secondary Schooling 8,294 9,507 10,859 115% School generated revenues – Sec. Schooling** 286 286 327 3% Total Expenditure for Secondary Schooling 8,580 9,793 11,186 118% Total Total Public Expenditure for Schooling 18,267 20,639 9,115 113% Total school generated revenues for Schooling 633 633 280 3% Total Expenditure for Schooling 18,900 21,273 9,395 116%

Estimates based on published ANR data, with projected growth in expenditure using average AGSRC indexation for previous three years. Excluding - user costs of capital, transport, payroll tax.

* Based on project estimates of national average for school generated resources at primary and secondary levels for school year 2003

Resourcing The National Goals The Base Cost of Schooling


Chapter 2 The Base Cost of Schooling

The Base Cost of Schooling - Key Findings Key Concept – Base Costs of Schooling

• The average per capita recurrent costs of a set of government schools where they (i) are operating in middle-range SES communities, (ii) have a school and student profile that attracts very limited (if any) additional targeted resourcing from government, and (iii) have students meeting a set of specified participation and learning benchmarks.

• This existing least cost (ELC) data provide the base cost platform upon which estimates will be derived for developing cost projections for any school.

• The ELC does not represent the average cost of a typical school. It is a theoretical estimate of existing least cost for primary and secondary schools that provide the funding base upon which individual school needs can be built.

• The Base Cost has been compared to an adjusted average government cost of schooling – this excludes user cost of capital and transport costs but includes other accrual based expenditures. While the adjusted average cost of government schooling is close to the AGSRC, the exclusion of accrual costs by the AGSRC means it could not be used as the comparable average cost of government schooling.

Total Base Cost of Schooling

• ‘Total’ refers to expenditures on schooling that are financed from government sources and school generated revenues

• Total Base cost for government primary schools is $ 6,467 per student (in-school/out of school recurrent costs, 2003 prices)

• Total Base cost of government primary schools is approximately $1,000 (17%) less per student than the government school average

• Total Base cost for government secondary schools is $ 9,130 per student (in-school/out of school recurrent costs, 2003 prices)

• Total Base cost of government secondary schools is approximately $1,000 (10%) less per student than the government school average

• Drawing on school generated revenues, Base cost primary schools had on average $251 per student in bank held savings, while Base cost secondary schools held on average, $590 per student.

Public Base Cost of Schooling

• ‘Public’ refers to expenditures on schooling that are government financed (State and Commonwealth sources) • Public Base cost for government primary schools is $ 6,201 per student (in-school/out of school recurrent costs,

2003 prices) • Public Base cost of government primary schools is approximately $1,300 (17%) less per student than the

government school average • Public Base cost for government secondary schools is $8,504 per student (in-school/out of school recurrent

costs, 2003 prices) • Public Base cost of government secondary schools is approximately $1,300 (13%) less per student than the

government school average

Policy Implications • Any simple per capita calculation of average cost of government schooling disguises a diverse spread of per

capita costs generated by different schools • Government schools operate effectively at significantly below average per capita funding where school attributes

(size and location) and student attributes have limited additional resourcing needs. • Governments in Australia are (on aggregate) successfully managing to direct fewer publicly funded resources to

those government schools that have lower than average resourcing needs. • This systemic tendency towards efficient resource allocation across government schools does not mean that

school resourcing is always perfectly matched to school needs • The calculation of base cost does not address the additional resourcing needs of schools • Base cost schools were found to operate within a relatively narrow efficiency range. This suggests the Base cost

estimate is a robust figure



Project Aims

In July 2001, the Ministerial Council on Education, Employment, Training and Youth Affairs (MCEETYA) established the Schools Resourcing Taskforce (SRT) to analyse and provide advice on school funding issues. MCEETYA 2001 also endorsed a significant national project Resourcing the National Goals (RNG) to form the major work of the Taskforce. This project aimed to advise on the appropriate level of public funding for different schools and systems to achieve the National Goals for Schooling.

The Taskforce was thus given the task of quantifying the resource implications of adopting the National Goals as a national target. A national level emphasis on promoting educational effectiveness against national benchmarks, and the adequacy of funding to achieve this effectiveness, has shaped the following aims of the project.

Project Aims • To identify the costs of schooling in a way that can measure and compare existing

expenditure patterns with cost estimates for efficient and equitable delivery of high quality learning outcomes for all children.

• To identify specific school, student and any other factors that drive costs and the extent of their impact.

A two-tiered cost analysis was developed to achieve these aims. Stage 1 fulfils the first aim by producing a calculation of the ‘Existing Least Cost’ (ELC) for a school to be effective. Stage 2 fulfils the second aim by identifying the marginal cost drivers that impose resource demands above the ELC scenario. The calculations developed by stages 1 and 2 may then be combined to generate cost profiles for schools operating under very different social and institutional circumstances and with varied pedagogical orientations.

2.1 Analytical Framework

A two-tiered cost analysis has been developed to quantify the resourcing needs of schools.

The first tier is a base cost estimate for schooling, the Existing Least Cost (ELC) of schooling. The ELC is the average per capita recurrent costs of a set of government schools where they (i) are operating in middle-range SES communities, (ii) have a school and student profile that attracts very limited (if any) additional targeted resourcing from government, and (iii) have students meeting a set of specified participation and learning benchmarks. It is a theoretical estimate of existing least cost for primary and secondary schools (two separate estimates have been produced).

The second tier of analysis considers the impact of additional resourcing needs above the base. These additional needs are (i) non-discretionary factors – inherent attributes of the students or the school outside the control of school management that generate additional resourcing requirements above the base, and (ii) those additional resource demands generated by an expanded curriculum bandwidth.

This chapter describes the SRT’s investigation into Stage 1 of the project, the Base costs of schooling.



Key Concepts Stage One – Base Costs of Schooling

• The average per capita recurrent costs of a set of government schools where they (i) are operating in middle-range SES communities, (ii) have a school and student profile that attracts very limited (if any) additional targeted resourcing from government, and (iii) have students meeting a set of specified participation and learning benchmarks.

• This existing least cost (ELC) data provide the base cost platform upon which estimates will be derived for developing cost projections for any school.

• The ELC does not represent the average cost of a typical school. It is a theoretical estimate of existing least cost for primary and secondary schools that provide the funding base upon which individual school needs can be built.

Stage Two – Additional Resourcing Needs

• Those factors generating additional resourcing needs for schools above and beyond the base cost of schooling.

• Three types of additional needs have been identified by the project: − student related (e.g. low SES, ESL related, indigenous background) − school related (e.g. school size and location) − curriculum (e.g. ICT and VET in schools)

2.2 Stage 1 – Analytical Approach and Methodology

2.2.1 Analytical Framework

The analytical approach and methodology for Stage 1 of the project was developed by the SRT secretariat and endorsed by the Steering Committee in the second half of 2002. The SRT Project Reference Group, a collection of technical experts from government and non-government sectors, applied analytic pressure to the approach in December 2002.

In the early part of 2003, the methodology was presented to key stakeholders, including national organisations such as the Australian Education Union, the Independent Education Union, the Australian Primary Principals’ Association, the Australian Secondary Principals’ Association, the Australian Council of State School Organisations, the Australian Parents Council, the Council of Catholic School Parents, and the National Council of Independent Schools Association. Adjustments were made in the light of their feedback.

The agreed methodology maintained a consistent approach to data collection but responded to the idiosyncrasies of jurisdictions. Project design accommodated the need for a detailed analysis of costs while being mindful of the various jurisdictional and sectoral concerns associated with financial and performance data. The project collected data only from government schools for Stage 1, with analysis kept to an aggregated national level and no state level breakdowns. (Non-government schools were invited to participate and their involvement occurred during Stage 2.)

Resources and Outcomes

At a macro-level of analysis the calculation of the ‘average cost of schooling’ (usually expressed as a standardised ‘recurrent cost per student’) is important for budgetary purposes and broad planning. It does however conceal the diversity of resourcing needs within the schooling sector. The starting point for the analytical approach of Stage 1 was that the resourcing needs of students (and hence schools) do vary significantly if these resourcing needs are defined with reference to the attainment of specified educational outcomes for each student. There is a considerable volume of research that has examined the additional educational needs of certain groups of students and the resultant



resource demands generated for schooling systems.2 Schools also can have certain inherent non-negotiable characteristics (such as location and sometimes size) that impose additional costs via restrictions on their operational efficiency, and these latter variations are considered in Part 2 of this report.

Measuring Effectiveness

The resourcing needs of schooling can only be properly understood when they are considered in relation to the expected outcomes. The Adelaide Declaration on the National Goals for Schooling in the Twenty-First Century (National Goals) provides the overarching national policy framework for schooling in Australia. These National Goals are ambitious in scope, as is appropriate for Australia’s aspirations for schools and students.

This statement of national goals for schooling acknowledges the capacity of all young people to learn, and the role of schooling in developing that capacity. It also acknowledges the role of parents as the first educators of their children and the central role of teachers in the learning process.

In summary, the agreed goals are listed below (the National Goals are listed in full in the appendices).

National Goals for Schooling

1. Schooling should develop fully the talents and capacities of all students.

2. In terms of curriculum, students should have attained high standards of knowledge, skills and understanding through a comprehensive and balanced curriculum in the compulsory years of schooling encompassing the agreed eight key learning areas; attained the skills of numeracy and English literacy; participated in programs of vocational learning and participated in programs and activities which foster and develop enterprise skills.

3. Schooling should be socially just.

The key task of this project was to define the resourcing needs of schools so they can deliver the specified National Goals. Central to this endeavour is measuring the performance of schools against these National Goals. In Australia as in other countries there has been considerable work undertaken to measure and benchmark student performance. This is the starting point for measuring school performance.

The extent of nationally comparable performance measures as they currently exist in Australian schools is indicated in the following table:3

2 Ross,K & Levacic, R.(1999) Needs based resource allocation in education, UNESCO, Hedges, L. (1995) Money Does Matter – a research synthesis of a new universe of education production function studies, in Picus, L. & Wattenburger, J. (1995) Where does the money go, Resource allocation in elementary and secondary schools, Corwin Press 3 Productivity Commission (2003), Report on Government Services 2003, Vol 1, figure 3.6, p.3.17



These performance indicators are focused on student outcomes related primarily to National Goal number 2. This goal emphasises the high standards of knowledge, skills and understanding required in the eight key learning areas as well as in literacy and numeracy. These performance indicators also relate to objectives 1.5 and 1.6 of Goal 1 which deal with vocational education and training, and information and communication technology respectively.

However, performance measures noted as complete, such as literacy and numeracy, do not cover all the years of schooling. Moreover, all of the performance indicators envisaged for the future are focused on measuring student performance, rather than school performance.

For the purposes of this project, the measurement of school performance is limited by the range of available performance indicators related to the National Goals. It is further limited by those performance indicators that can be consistently applied at a national level.

Clearly, measuring school performance is reliant on the progress for measuring student performance. The gaps and limitations of student performance indicators described in the section above impose constraints on the ability of this project to measure school performance at a national level.

School performance measurement is largely based on a composite measure of available student performance indicators. Goal 2 of the National Goals focuses on student achievement in curriculum areas but schools would also need to be tested against Goal 1, the development of

Literacy

VET in Schools

Science

Information Technology

Participation, retention, completion and destination

Civics and Citizenship

Enterprise Education

Other Social Outcomes

Other areas to be identified

Numeracy

Educational effectiveness

Achievement of the national goals of schooling

Performance indicators for Goal 2

Key to indicators Text Provided on a nationally comparable basis Text Information not complete or not strictly comparable Text Yet to be collected.

Figure 2.1: Status of national performance indicators



students’ generic skills and affective qualities, and also Goal 3, which emphasises social justice and increased access to schooling for all students.

Over and above these goals are measures that would need to indicate the extent to which a school adds value to student performance. Highly effective schools may add significant value to student performance but may not achieve all or even most of the National Goals because they are operating from a lower base of performance.

Because of a lack of indicators to cover the entirety of the National Goals, the methodology developed for this project is limited to adapting a basic measure of school performance as its composite indicator. This is described below for the primary and secondary levels.

The Standard for Primary Schools

For primary schools, the standard was that at least 90 per cent of students had achieved the benchmark in each Basic Skill Test (BST), carried out in Years 3 and 5.

These literacy and numeracy benchmarks identify the proportion of students who do not reach a minimum level of competence to continue successfully with their schooling. Measurement is achieved through State-based literacy and numeracy monitoring programs. At each of years 3 and 5, equating the State and Territory tests is a three stage process. The first stage involves the construction of common achievement scales for each of reading, writing, and numeracy. During the second stage the location of the benchmark on the common achievement scale is determined and, in the final stage, the equivalent benchmark locations on State and Territory achievement scales are calculated.

The results are for assessed students. This term has been used for students who sat the test and students who were formally exempted. Exempted students are reported as below benchmark and thus are included in the benchmark calculation. Students not included in the benchmark calculation are those who were absent or withdrawn by parents / care-givers from the testing and students attending a school not participating in the testing.

The Standard for Secondary Schools

Several indicators of success were considered, taking into account the differences in testing and certification of students in the various jurisdictions. Two indicators were agreed to be useful at the national level - the award of a Universities Admission Index score (UAI) and the rate of completion of students of Year 12.

For Stage 1 of this report, the standard was that the school median UAI was at least equal to the respective state average, and that a minimum of 75 per cent of students at that school completed Year 12.

The measures used in this study cannot capture the entire range of knowledge, abilities and character formation expressed through the National Goals. The study has used the most reliable, nationally comparable measures available. These measures may, in fact, be accurate proxies for the National Goals but it is impossible to establish such a relationship nor would it be wise to do so. The schools that this study labels as effective may be achieving some or all of the National Goals but this study does not claim to establish such a relationship. The National Goals are broad in nature while the measures used in this study are specific.

The basic measures of school effectiveness adopted by the study have been determined by the need to inform Ministers of the cost of resourcing the agreed National Goals for Schooling. While many schools may be extremely effective in adding value to the academic ability of their student population, this study must use achievement of the National Goals as its reference point.

The study agrees that the basic measures used do not cover the totality of the National Goals. However, the project can only cost against those school outcomes that are currently being measured. Moreover, these outcomes, limited in scope though they may be, clearly do have a relationship to the achievement of the National Goals, even if they might not capture the totality of our country’s aspirations for schools and students.



2.3 Base Cost - The First Tier of Analysis

Base Cost of Schooling – as measured by Existing Least Cost (ELC) Schools

• The Base cost estimate of schooling has been estimated by examining the actual average per capita

recurrent costs of a set of government schools that (i) are operating in middle-range SES communities, (ii) have a school and student profile that attracts very limited (if any) additional targeted resourcing from government, and (iii) have students meeting a set of specified participation and learning benchmarks.

• The Base cost is a theoretical estimate of the efficiency frontier for schooling as measured by existing

least cost for primary and secondary schools (two separate estimates ). • Nationally, approximately 260 schools were found to fit the strict selection criteria required to be defined

as Existing Least Cost (ELC) schools.

The second tier of analysis (Part 2 of this report) considers the future Additional Resourcing Needs (future ARN) of schools. The future ARN of schools is the product of (i) non-discretionary factors - inherent attributes of the students or the school outside the control of school management that generate additional resourcing requirements above the ELC, and (ii) those future additional resource demands generated by an expanded curriculum.

2.4 Calculating Base cost - methodology

Base Cost Analysis – Overview of Methodology

Task Description Responsibility

Task 1 Identification of those schools effective in attaining a set of nationally consistent learning outcomes for the primary and secondary levels Task 2 Identification of schools categorised as Existing Least Cost (ELC) Task 3 Identification of all ELC schools for each jurisdiction that are effective in attaining the specified national learning outcomes (primary schools) and are effective in retaining their students to Year 12 and attain specified median UAI exit results for Year 12 students (secondary schools) Task 4 Financial analysis of those schools that are effective in attaining the specified national learning outcomes Comment The Base Cost of schooling has been derived as an average of the costs of all government schools that fit the criteria of being effective and having a profile that draws the least amount of government resources. It is not a sample of government schools, but all government schools that were identified as meeting the specified conditions for being effective and with a least cost profile.

States

States States SRT secretariat, and contractor



The Base Cost of Schooling

The Base cost is the platform upon which estimates were derived for developing cost projections for any school. The Base cost does not represent the average cost of a typical school. It represents the existing recurrent costs of schools, operating largely without a designated set of school or student related marginal costs drivers, and whose students meet a set of specified participation and learning benchmarks.

In establishing a Base cost, the study:

1. included out of school and school level costs of sampled government schools catering to an average SES community.

2. estimated existing least cost for an average SES primary school with as few as possible special needs groups (or other factors) to meet national goals for literacy and numeracy.

3. estimated existing least cost for an average SES secondary school with as few as possible special needs groups (or other associated marginal cost factors) that successfully retains students through its junior and secondary cycles and has senior students attaining a specified median University Admissions Index (UAI) score (or its moderated equivalent).

Detailed analysis and comparison of Base cost expenditures did not include out of school (systemic) costs. By focusing on school level economies the study was best able to compare the differential use and need of resources between ELC schools and system wide averages.

Scope of Study

The study was conducted on a national basis, covering the entire government school delivery systems of all states and territories. By focusing on school level costs, the study explored the cost impact of the differing scale and scope of educational services provided by schools across Australia.

The costs of schooling capture the resource inputs required at the school level and system level in order to meet specified learning outcomes. However, Stage 1 of this study only estimated the Base cost related to a set range of learning outcomes for the primary level (literacy and numeracy) and broad participation and UAI performance indicators for secondary schools. While the cost of these inputs will go a long way to addressing resource needs in all Learning Areas (LA), they do not represent total cost of resource needs for all LA.

The study did not produce Base cost figures that cover the resource requirements for the whole of curriculum. Such figures at a national level will only be possible if there is convergence at a national level on curriculum and assessment. At the time of this report, the Performance Measurement and Reporting Taskforce (PMRT) of MCEETYA was developing Key Performance Measures (KPM) for comparable education attainment within six learning areas from the National Goals for Schooling in the Twenty-first Century. This stream of activity may also be useful at a later stage in linking school level costs with measures of school effectiveness across a wider range of learning areas.

2.5 Detailed Description of Stage 1 Methodology

2.5.1 Task 1: Identification of “effective” schools

The criteria for “effectiveness” were:

Primary schools • Schools that have at least 90% of all primary school students succeed in meeting the level

required by the national benchmark Basic Skills Tests (BST) of Reading, Writing and Numeracy in Years 3 and 5.

Secondary schools



• Schools where the median UAI results are equivalent to the State-wide median entrance rank for all students (adjusted for QLD).

• Schools where Yr 9-Yr 12 apparent retention rates are at least 75 per cent.

Lists of effective schools from each jurisdiction were prepared according to these criteria.

2.5.2 Task 2: Identification of schools categorised as ELC

ELC schools represent the anticipated least cost service delivery option for the primary and secondary school levels catering for an average SES community. ELC schools are schools that;

• cater for an average SES student enrolment profile, • possess least cost attributes for a school in each jurisdiction (location, size, etc), • have very few learners requiring access to equity/special programs to attain BST learning

outcomes.

The ELC school is not a typical school. It is a category of school that has been selected to capture ‘least recurrent cost’ resourcing requirements for a school servicing an average SES community.

Schools were selected against the following criteria: • they catered for an average SES student enrolment profile (a nationally consistent

definition of ‘average SES’ was used). • they did not contain a relatively high number of students requiring equity / special needs

(eg, indigenous, new arrivals, disability). • they did not have additional cost burdens such as unusual size or remote location.

2.5.3 Task 3: Identification of all ELC schools for each jurisdiction that are effective

The project then overlaid the results from tasks (1) and (2) described above.

Figure 2.2: ELC Selection Methodology

.

Each jurisdiction developed their list of effective ELC schools and submitted it to the SRT secretariat.

2001 calendar year financial data were used and data set requirements for financial analysis were based on the MCEETYA definition of “in-school” costs.

1 3 2

1 = Select effective schools 2 = Select least cost schools 3 = Effective ELC schools



2.5.4 Task 4: Undertake cost analysis for ELC schools

Data was submitted to an independent contractor for statistical analysis. Detailed analysis and report writing was undertaken by the SRT secretariat with review and support from the project Steering Committee and the SRT members.

Types of Analysis Output Unit Cost Analysis

• Per student • Efficiency comparisons (median, upper and lower limits)

Resource Input Analysis (for available data items) • Teacher salaries • Other salaries • Grants and subsidies • Other operating expenses

Configuration of Inputs Analysis • Average pupil : teacher ratio • School size



2.6 Base Cost of Schooling - results

2.6.1 Unit Cost Analysis

Unit cost analysis – summary Total Base Cost of Schooling (2003 prices)

• ‘Total’ refers to expenditures on schooling that are financed from government sources and school generated revenues

• Total Base cost for government primary schools is $ 6,467 per student (in-school/out of school recurrent costs, 2003 prices)

• Total Base cost of government primary schools is approximately 17% less per student than the government school average

• Total Base cost for government secondary schools is $ 9,130 per student (in-school/out of school recurrent costs, 2003 prices)

• Total Base cost of government secondary schools is approximately 10% less per student than the government school average

• Drawing on school generated revenues, Base cost primary schools in 2001, had on average $251 per student in bank held savings, while Base cost secondary schools held on average, $590 per student.

Public Base Cost of Schooling (2003 prices)

• ‘Public’ refers to expenditures on schooling that are government financed (State and Commonwealth sources)

• Public Base cost of government primary schools is $ 6,201 per student (in-school/out of school recurrent costs, 2003 prices)

• Public Base cost of government primary schools is approximately $1,300 (17%) less per student than the government school average

• Public Base cost for government secondary schools is $ 8,504 per student (in-school/out of school recurrent costs, 2003 prices)

• Public Base cost of government secondary schools is approximately $1,300 (13%) less per student than the government school average

School level expenditures, public funds - (2001 prices)

• ELC primary and secondary schools spent approximately $1,000 less per student than the government school average

• The ELC downward variation from average government primary school expenditure was 18% • The ELC downward variation from average government secondary school expenditure was 13%

Data collection

The unit cost analysis of this study was focused on a comparison of two sets of figures: (i) recurrent unit cost of ELC schools in Australia and (ii) ‘government school average’ recurrent unit cost of schooling in Australia.

The government school average refers to the in-school costs and was based on MCEETYA collected financial and non-financial data. Some of this data was sourced from the financial data tables published (or to be published after the time of writing) as part of the annual Australian National Report on Schooling (ANR). In addition, data was obtained from the National Schools Statistics Collection (NSSC), a non-published data source for the use of government officials. Published and unpublished data was collected and presented as part of this report according to the protocols established by MCEETYA.

The figures for recurrent unit cost of ELC schools were calculated from the data provided by each state jurisdiction. Each state jurisdiction was responsible for (i) implementing clearly specified



methodologies for identifying ELC schools, and (ii) collecting and presenting financial and non-financial data according to a nationally consistent format.

Data was collected from all states and territories except for the Northern Territory. Given the student enrolment share of the Northern Territory, its absence from Stage 1 analysis did not greatly affect the ELC calculations. (The Northern Territory participated in Stage 2 of the project.)

There were 261 ELC schools in total identified by the state jurisdictions. The number and location of these schools is shown in the table below. Individual schools were not identified. Identification was not important for project purposes and formed part of the agreement for collecting and making data available for study purposes. Hence school names were not provided by state jurisdictions.

The disproportionate distribution of ELC schools across states (relative to state jurisdiction shares of government schools) was striking. This was probably a reflection of the impact of student related criteria that were used to exclude certain schools. The size and concentration of student attributes (e.g. SES, ESL need) tended to exclude more schools from being classified ‘ELC’ in some states than in others. The number of ELC schools identified by each state cannot be interpreted as an indicator of state performance against the National Goals.

The ACT and Tasmania were not included in the study of secondary costs. Their use of middle schools and senior secondary colleges posed obstacles to the implementation of the project methodology. First, it was not possible to identify middle schools and senior secondary colleges using the combined academic performance and participation indicators. Second, the middle school/senior college system introduced cost structures in secondary schooling that were markedly different from those in the other states. Given the relatively minor share of total secondary schools in these jurisdictions, their exclusion from this aspect of Stage 1 was considered appropriate.

Table 2.1: ELC Schools, by State and Level

Jurisdiction Primary Secondary Total

NSW 25 23 48

Victoria 31 32 63

Queensland 32 31 63

South Australia 3 7 10

Western Australia 58 7 65

Tasmania 3 0* 3

ACT 9 0* 9

Northern Territory** 0 0 0

National 161 0 261

* Secondary schools were not considered from Tasmania and ACT because of the separation of middle schools and senior secondary colleges creating cost profiles different from the other states

** Northern Territory did not participate in Stage One of the project. The student and school profiles in the Northern Territory were considered as part of Stage Two.



Results of Unit Cost Analysis

The tables below present the key figures generated by the unit cost analysis. Tables show results in actual reported 2001 prices and with price adjustments (based on AGSRC indexation) converting these to 2003 prices. The Base cost of schooling is captured by the unit costs of the ELC schools compared with the average national cost of government schools. The financial comparisons are made on an accrual basis - excluding user costs of capital and transport.

Public recurrent costs refer only to expenditure that is financed from government sources (Commonwealth and state). Expenditures in ELC primary and secondary schools were found to be $1,068 and $1,062 less per capita than the respective government school average. System wide expenditures carry an additional allocation of expenditure based on a national average expenditure for ‘out of school’ expenses as identified and reported by the ANR 2001. These out of school expenses have been apportioned equally between primary and secondary schools and ELC schools have been attributed this national average.

Table 2.2: Public recurrent unit costs – per student

2001 prices 2003 prices

ELC schools ($

per capita)

Govt school average ($ per

capita) ELC schools ($ per capita)

Govt school average ($ per

capita) System Wide

Primary 5,443 6,511 6,201 7,497 Secondary 7,467 8,529 8,504 9,810

School level Primary 4,982 6,050 5,670 6,966

Secondary 7,006 8,068 7,973 9,279

* recurrent costs in this study do not include user costs of capital or transport costs. MCEETYA in-school costs have been adjusted to account for this.

The total expenditure for schooling (combining revenues from government sources and school generated sources) shows a minor growth in expenditure. The government average school generated revenues were estimated at three percent of total government expenditure (accrual basis, in school and out of school items). This equated to $251 and $325 per capita for primary and secondary schools respectively in 2003 prices. The estimate for school generated revenues of ELC schools is based on the findings from Stage 1 of the project. This found that bank held savings in ELC schools from non-government sources equalled $266 and $626 per capita in 2003 prices. The secondary school estimate for ELC schools is considerably higher than the government school and this reduced the resource gap between ELC and average government school resourcing.



Table 2.3: Recurrent unit costs (public sources and school generated revenues) – per student

2001 prices 2003 prices

ELC schools ($ per capita)

Govt school average ($ per capita)

ELC schools ($ per capita)

Govt school average ($ per capita)

System wide Primary 5,694 6,720 6,467 7,747 Secondary 8,057 8,803 9,130 10,135 School level Primary 5,233 6,260 5,936 7,217 Secondary 7,596 8,343 8,599 9,604

* Recurrent costs in this study do not include user costs of capital or transport costs. MCEETYA in-school costs have been adjusted to account for this. School generated revenues estimated at 3% of total govt expenditures – (2001 per capita - primary = $209, secondary = $275) 2003 estimates for school revenues based on 3% of total govt expenditure (accrual excluding user cost of capital and transport)

Table 2.4: Base cost as a proportion of average government expenditure, per capita (%)

Public funded ELC as % of public recurrent costs (%)

Total ELC as % of total recurrent costs (including school revenues)

System wide

Primary 83% 83% Secondary 87% 90% School level

Primary 81% 82% Secondary 86% 90%

Analysis and policy implications

The ELC estimate produced for primary and secondary levels of schooling was the key finding of Stage 1 of the project. These figures confirmed a downward variation in the per student expenditure of ELC schools when compared with the average cost of government schools at primary and secondary levels. The variation is a significant discount on the average costs of government schooling. There are some significant implications from this finding.

Variations around average cost of government schooling - the results of Stage 1 indicated that any simple per capita calculation of average cost of government schooling disguises a diverse spread of per capita costs generated by different schools. Stage 1 found that government schools can and do operate effectively at significantly below average per capita funding where school attributes (size and location) and student attributes have limited additional resourcing needs. By acknowledging and classifying the contextual variability of schooling (school, student and curriculum related, studied in Stage 2) the resource requirements of schools operating under different conditions can be specified with a greater degree of accuracy.

Systemic tendency towards efficient resource allocation across schools - governments in Australia are (on aggregate) successfully managing to direct fewer than average publicly funded resources to those schools that have lower than average resourcing needs. That is, funding for schools is not distributed (by formula or effect) on a flat per capita basis and there is certainly no positive bias in funding towards government schools that have lower than average resourcing needs. In so far as school resourcing needs at a macro level are defined by school and student attributes, government schooling systems have a tendency towards efficient allocation of aggregate levels of resources across schools. This suggests the broad policy settings and operational guidelines of government schooling systems have an orientation towards appropriately recognising differential resourcing needs of schools.

The unmet cost of high resource need schools - this issue was addressed in Stage 2 of the project. Stage 1 did not attempt to answer the question of the additional resource requirements of schools that have a higher resource need profile.



School resourcing as a necessary but insufficient condition for effective schooling - the usual caveat must apply. The inherently complex process of schooling means that no one factor can ensure the success of any particular institution. The provision of any given amount of funding to any school does not ensure that it will be able to produce any specified educational outcomes for its students.

2.7 Efficiency range

Narrow efficiency range of ELC schools • National Coefficient of Relative Variation (CRV) results revealed a narrow recurrent cost efficiency

range. • The recurrent unit costs of ELC primary schools have a CRV of 18 %. • The recurrent unit costs of ELC secondary schools have a CRV of 14%. • The tight ELC efficiency range indicated that the ELC figure is robust for preliminary purposes of

macro-level costing. • For purposes of funding to a school level, any ELC type figure would need to be applied with caution. • Regression analysis indicated that the combined impact of school size and student/teacher ratio

explained less than one-third of the difference in costs between ELC schools

2.7.1 Narrow efficiency range of ELC schools

Table 2.5: ELC Schools - Coefficient of Relative Variation (CRV) - Recurrent Cost per Student

Level Coefficient of relative variation (CRV)*

Primary 18%

Secondary 14%

* based on raw cost data for each schools with no state based weightings. Calculation = standard deviation/mean average of recurrent unit cost

The cost analysis of ELC schools was focused on the ‘average cost’ of ELC schools at an aggregate cost and per budget line item level. Detailed analysis of cost variations in ELC schools showed minimal difference between median and mean calculations of average cost for these schools on a state by state basis. The mean calculation was therefore chosen as the measure for ‘average cost’. This ‘average cost’ figure was the most significant calculation for stage 1 of this project.

There was also an outstanding need to understand the efficiency range of ELC schools operating within the controlled conditions established by their selection. A very simple indicator of the efficiency range of ELC schools is the Coefficient of Relative Variation (CRV) of total recurrent unit costs. That is, CRV represents the standard deviation of the costs of the ELC population of schools as a proportion of the mean average recurrent unit cost of ELC schools. Measured on a raw unweighted basis (no state loadings for shares of total number of government schools) ELC primary schools had a CRV of 18 %. ELC secondary schools had a CRV of 14%. Having a CRV of less than 25%, these national results revealed a surprisingly narrow efficiency range. Given the extent of state jurisdictional policy parameters and control over service delivery a wider efficiency range may have been expected at the national level for aggregate recurrent unit costs.

2.7.2 Interpreting the efficiency range

It is important to recognise that there was an efficiency range in which these schools operated. Further, it cannot be assumed that schools operating below the average ELC per capita cost were doing so because of a more efficient allocation of resources. Conversely, schools operating above the average cannot be assumed to have been operating inefficiently relative to those below the average due to their allocation of resources.



There are a few reasons for this. First, while all these ELC schools met the project specified standard for educational outcomes, the extent to which they exceeded this standard varied. Therefore, it is possible that some schools with above average cost per student were delivering far superior learning outcomes.

Second, schools have other inherent attributes that impose different cost burdens – for example, the salary profile of teachers (where this is not decided at the school level) and age and style of buildings impacting on the cost of maintenance.

Third, the ELC definition of schools did allow for the limited presence of some marginal cost drivers. This may have driven up the per capita cost in some cases, however the impact of this was expected to have been minimal.

The relatively tight efficiency range of ELC schools (as demonstrated by the CRV for average recurrent unit costs for ELC schools) indicated that the ELC figure ws robust for the preliminary purposes of macro-level costing. For purposes of funding to a school level, any ELC type figure would need to be applied with caution. The parallel use of other diagnostic indicators would be needed to facilitate a more flexible funding approach catering for specific circumstances and anomalies.

It is not possible to compare the efficiency range of ELC schools with the national government school average. The absence of school based data at a national level makes such an analysis impossible. At any rate, such analysis would likely yield more meaningful results were it conducted on a state by state basis thereby disentangling state jurisdictional parameters (such as salary levels) from analysis of any patterns in the configuration of inputs (‘resource mix’) in ELC schools.

2.7.3 Configuration of key inputs – impact on efficiency

The configuration of key inputs can have a major impact on the cost of schooling. Class and school sizes are two variables that are often identified as having a major impact on the overall cost and efficiency of schooling. As an initial exploratory exercise, stage 1 examined the cost correlation of student/teacher ratios and size of school enrolments within ELC primary schools. It was not possible to base the analysis on class sizes because this data was not collected for the ELC schools

School size was one of the selection criteria for identifying ELC schools. Primary ELC schools were to have an enrolment base of between 100-500 students and secondary ELC schools between 500-1000 students.

The student/teacher ratios of ELC schools were revealed by analysis. The full-time student/teaching staff ratios for ELC primary (18.4:1) and ELC secondary (13.4:1) were higher in both cases than the government school average (16.8:1 and 12.4:1 respectively). This discrepancy was not surprising as these ELC schools were selected partly on the basis that they had minimal staff inefficiencies related to school size or additional staffing need related to student profile.

Table 2.6: Full-Time Student/Staff Ratios (2001)

State/National ELC schools* Govt. school average **

Primary 18.8 16.8

Secondary 13.4 12.4

*State weighted average

**Source: ANR 2001, Table 19

Simple regression analysis was undertaken to investigate factors that caused total costs per student for each ELC school to differ. The analysis was conducted at a national level. The regression analysis sought to explain total school costs (per student) across ELC schools as a function of their respective student/staff ratios and/or differences in the total number of students. In other words, if we were to take two primary schools and observe the difference between them in the total per student cost, we would ask whether this difference is related to any difference in their student/staff ratio and student numbers.



The regression analysis produced the following equation for estimating total education costs for the primary schools:

PRIMARY Total Education Cost ($) = $6,301 - 66(Ratio of students to staff) - 2.62(FTE Students Total)

This equation allowed an estimation of the amount that total cost will change given a one-unit change in either of the two input variables. For example, an increase in the student/staff ratio of one student would reduce total costs per student by $66. Similarly, increasing the total school size by one student, with all else constant, would reduce total costs by approximately $2.60. Of these two variables, school size had the strongest correlation with total per student cost (b = -0.44), with the standardized correlation coefficient for student/staff ratio only -0.21.

These two variables together only explained less than a third of the variation across ELC schools in total in-school costs (Adjusted R-square = 0.29). At the national level, this suggests that although we could use such a regression equation to estimate the impact that changes in student/staff ratios and school size could have on per student ELC costs, we cannot have a high degree of confidence that such an estimate would actually explain more than a third of any variation. Other factors (such as state jurisdiction of education) also need to be taken into account for a more complete explanation of differences between ELC schools in total education costs per student.

2.7.4 Analysis of Resource Inputs

Analysis of Resource Inputs Primary schools

• Teacher salary related costs at ELC schools were $3,546 per student –9% under the government primary school average of $3,903.

• ELC expenditures varied most significantly from average government school expenditures in three categories (i) other operating expenses, (ii) administration and support salary related expenses, and (iii) grants and subsidies.

Secondary schools

• ELC expenditures varied significantly from average government school expenditures in only two categories (i) other operating expenses, and (ii) administration and support salary related expenses.

Introduction

School level resource inputs have been measured and defined according to the budget categories agreed to by MCEETYA and widely used in its reports and publications. These broad budget categories allow for some analysis of resources based on functional use but are particularly limited in enabling the analysis of school level discretionary funds that may be covered by ‘grants and subsidies’. In spite of this limitation, these categories were adopted because expenditure data has been consistently collected by all states using this budget template.

Two budget categories that are included as part of MCEETYA ‘in-school costs’ that were not incorporated as part of the Stage 1 analysis – (i) user costs of capital, and (ii) capital /investing costs. Capital/investing costs were excluded because they do not constitute a part of the recurrent costs of schooling. The user costs of capital were excluded because of the inconsistent calculation of these costs across different states. To ensure the comparability of data, all variations in the calculation of ELC ‘in-school’ costs were applied to the MCEETYA ‘in-school’ average costs for government schools.

The table below presents the individual line items covered by each of the budget categories. Apart from the budget category ‘Other operating expenses’ all other categories contain the complete set of



line items as collected by MCEETYA in its collection of finance statistics. For ‘Other operating expenses’, the line item ‘transport related costs’ was excluded. It was not possible to accurately collect data for this line item on a school by school basis. Significant variations in the per capita cost of transport across schools mean that an averaging of cost could be misleading.

Table 2.7: Budget Categories and Cost Line Items

Budget Category and component items

Employee Related Expenses – Teachers Salaries Superannuation Long Service Leave Workers Compensation Insurance Payroll Tax Fringe Benefits Tax Other Employee Related Expenses - Administrative and Support Staff Salaries - Admin. & Clerical Salaries – Executive Salaries - Specialist Support Salaries and Wages – Other Superannuation Long Service Leave Workers Compensation Insurance Payroll Tax Fringe Benefits Tax Other Redundancy Payments Redundancy Other Operating Expenses Cleaning Repairs and Maintenance Other Grants and Subsidies Grants and Subsidies to Schools Other Grants and Subsidies Depreciation Building & improvements Plant & equipment Amortisation Other School Expenses School generated revenues



Detailed Analysis of Resource Inputs

Teacher salary related costs per student were the most significant cost item in all primary schools. However teacher salary related costs per student were marginally lower in ELC primary schools compared to the government school average. The lower per capita cost of teachers in ELC primary schools, compared to the government school average, is a product of the higher student/teacher ratio (18.8:1 in ELC schools compared to 16.8:1 for the government school average).

The significantly lower overall cost of ELC schools was reflected in reduced per capita expenditure in all budget categories excluding redundancy payments.

Table 2.8: Primary Schools Per Student Expenditure ($) by Budget Category (2001)

Budget category ELC schools

($ per student) Govt school average

($ per student)

Most significant deviations of ELC from

government school average (%)

Teacher: Salary related 3,546 3,903

Admin & Support: salary- related 495 762 35%

Redundancy payments 26 14

Other operating expenses 312 578 46%

Grants & subsidies 437 546 20%

Depreciation 167 246

Total 4,982 6,050

For secondary schools, the reduction in per capita expenditure was not evident in teacher related salaries with near parity between the ELC and government school average figures. The greatest part of the cost difference was accounted for by administration and support related salaries and other operating expenses. ELC schools at both primary and secondary levels have countervailing tendencies operating in terms of teacher salaries. On the one hand, higher than average student: teacher ratios drive the per capita cost lower than the average, but higher than average teacher salaries push the costs in the opposite direction. The net impact is minimal change from the average cost.

Table 2.9: Secondary Schools - Per Student Expenditure ($) by Budget Category (2001)

Budget category ELC schools

($ per student) Govt school average

($ per student)

Most significant deviations of ELC from

government school average (%)

Teacher: Salary related 5,303 5,296

Admin & Support: salary- related 522 951 45%


Other operating expenses 347 754 54%

Grants & subsidies 615 692

Depreciation 220 357

Total 7,006 8,068



Figure 2.3: Primary/Secondary Schools - Per Student Expenditure ($) by Budget Category (2001)

Teacher employee related expenses

As a national average, all government primary schools in 2001 expended $ 3,903 per student for in-school teacher salary related items compared to $5,296 per student for secondary schools. This differential reflected the lower student/teacher ratio of secondary level schooling. There was a high degree of consistency across state averages (with the exception of Northern Territory which had considerably higher state averages) in their per student cost of teaching measured in terms of dollars per teacher related salary items.

The ELC surveyed primary schools had an average expenditure of $3,546 with a coefficient of relative variation (CRV) of less than 11% across schools within each state.

The ELC surveyed secondary schools had an average expenditure of $5,303 with a coefficient of relative variation (CRV) of less than 14% across schools within each state.

Table 2.10: Average Recurrent Cost of Teachers, per Student (2001)*

Level ELC schools ($ per student) Govt. school average ***($ per student)

Primary $3,546 ** $3,903

Secondary $5,303 $5,296

* Based on MCEETYA defined teacher employee related expenses (including salaries, superannuation, long service leave, workers compensation, insurance)

** Weighted average based on state shares of total number of government schools

*** Based on MCEETYA enrolment figures and in-school expenditures for 2000/01 ‘employee related salaries – teachers’

The cost of primary teachers as a proportion of total school level recurrent costs averaged 71% nationally for ELC primary schools compared to 65 % for all government primary schools.

For secondary schools, the cost of teachers as a proportion of total school level recurrent costs averaged 76% nationally for ELC secondary schools compared to 66% for the all government secondary schools average.

0

1,000

2,000

3,000

4,000

5,000

6,000

Teach

er: S

alar

y re

late

d

Admin &

Sup

port:

salar

y- re

late

d

Red

unda

ncy pa

ymen

ts

Oth

er o

pera

ting

expe

nses

Gra

nts & s

ubsidies

Dep

recia

tion

$ p

er

stu

de

nt

Budget category ELC

primary schools ($ per

student)

Budget category Govt

primary school average

($ per student)

Budget category ELC

secondary schools ($

per student)

Budget category Govt

secondary school

average ($ per student)



This difference between proportionate expenditure on teachers in ELC schools and the government school average was a result of a lower total average expenditure across all government schools on other non-teacher salary items. It was not a product of greater per student expenditure on teacher salaries within the ELC schools.

Table 2.11: Cost of Teachers as Proportion of School Level Recurrent Costs*

Level ELC Schools (%) Govt. school average (%)

Primary 71** 65 Secondary 76** 66



The weight of teacher salaries as the predominant cost item can also be seen in comparison to other non-teacher salaries at the school level. For primary schools, teacher salaries at ELC schools absorbed 88% of the total salary bill compared with the 84% government primary school average. This difference reflected the reduced expenditure for administration and support related salaries in ELC schools.

A similar pattern was revealed in secondary schools. Teachers accounted for 91% of the total salary bill at the ELC school level and 85% of total salaries for all government secondary schools at the national level. The greater share of total salaries obtained by teachers in ELC schools can be explained at least in part by the reduced expenditures on administration and support related salaries in these schools. As seen further below, expenditures on these other non-teacher salaries average $522 per student in ELC schools compared with $951 across all government secondary schools. The greater share of teacher salaries within ELC schools may also reflect some salary differentials from the national average for government schools. This however could not be discerned from the available data.

Table 2.12: Teacher Costs as % of Total School Level Salary Related Expenses

State ELC Schools (%) Govt. schools average (%)

Primary 88** 84 Secondary 91** 85



The average salaries of teachers in ELC schools can also be compared with the industrial award salary range for classroom teachers. In all states, the ELC average teacher salary was either in the top quarter of the salary range or exceeding the salary scale. The high average is in part attributable to the impact of non-classroom teacher salaries (such as principals, deputy-principal teachers and executive teachers) within the ‘teacher related salaries’ category of expenses measured by MCEETYA. It does suggest however that average salary levels in ELC schools are not at the lower end and likely to be concentrated at the higher end of the salary scale in most states. Developing a more nuanced understanding of the cost of labour inputs requires a qualitative study at the school level examining issues such as academic qualifications, experience and hierarchical relativities.



Table 2.13: ELC Teacher Salaries and National Award Salary Range for Teachers (2001)

Level ELC Average Teacher Salary * National Award Salary Range for Teachers**

Minimum Maximum

Primary $52,031 34,104 52,500

Secondary $51,925 34,104 52,500

* Includes the salaries of (i) non-classroom ‘teachers’ such as principals, deputy-principals, (ii) salaries and loadings for teachers with additional duties (e.g. executive teachers). National average derived by applying loading factor for each state based on its share of total schools in Australia

** Data provided by NSW DET ‘Award salary bandwidth for classroom teachers, 2001’

Administration and support related salaries

There were significant variations across states for ‘administration and support salaries’ related items. However in all states (except for primary schools in Western Australia) the expenditure in ELC schools was less than the state government school average. While intra-state variations in ELC secondary schools were more significant (CRV between 13%-29%) than for teacher related salaries, the data still suggests a relatively consistent lower funding of the ELC schools for this budget category.

Table 2.14: Administration and Support Related Salaries per Student (2001)

State ELC Schools ($ per student) Govt. schools average ($ per student)

Primary $495 $762

Secondary $528 $951

Redundancy payments

‘Redundancy payments’ appeared as ELC school costs only in primary schools and in only two states (Western Australia and ACT). The average primary ELC cost for redundancies ($26) was very close to the national average for government primary schools ($14). The low impact of redundancies as a cost upon the system reflected the relative stability of government education systems during the study period.

Other Operating Expenses

As explained earlier, transport costs were excluded as a line item from the ‘other operating expenses’ category. An adjustment was made to the MCEETYA in-school figures for the government school average cost to enable comparability of the data.

‘Other operating expenses’ in each state for ELC schools were lower than for government school state averages in all states. The consistency of the reduced expenditure across states and its magnitude made this a significant difference. The other operating expenses category includes the cost item ‘consultancies’ and this could be one important factor explaining the difference between the average government school cost and ELC schools. The labour and associated costs of targeted support programs and initiatives for non-ELC schools are likely to be ‘receipted’ as consultancies.

At the secondary level, all states had a CRV of less than 19% except for Victoria with 150% showing a wide range of expenditures. For primary schools, there was a wider dispersal of expenditures within states with a CRV range from 12%-88%.



Table 2.15: Average Recurrent Unit Cost of Operating Expenses, per Student (2001)

Level ELC schools ($ per student) * Govt. schools average ($ per student)**

Primary 312 578

Secondary 347 754

* Weighted average based on state shares of total number of government schools

** Based on MCEETYA enrolment figures and in-school expenditures for 2000/01 ‘other operating expenses’ – not including salaries, transport costs

Grants and Subsidies

‘Grants and subsidies’ in each state for ELC primary schools ($437) were lower than the national government primary school average ($546). There was a CRV of 26% or less for all states. Parallel to this is a significant degree of variation between state averages (for ELC and all government schools). This suggests that while state policies had a dominant impact on the level of funds received by all schools, within state policy parameters, ELC schools captured less of these funds than other average government primary schools.

Per student expenditure on ‘grants and subsidies’ did not show as strong a difference at a national level between ELC secondary schools ($615) and the national average for secondary schools ($692).

Table 2.16: Average Recurrent Unit Cost of Grants and Subsidies, per Student (2001)

State/National ELC schools ($ per student) Govt. school average ($ per student)**

National* 437 546

Secondary 615 692

* Weighted average based on state shares of total number of government schools

** Based on MCEETYA enrolment figures and in-school expenditures for 2000/01 ‘grants & subsidies’ – not including salaries

Depreciation

Average ‘depreciation’ expenditures for ELC primary schools ($167) were less than the national average for government schools ($246). For secondary ELC schools, depreciation averaged $220 per student which was again significantly lower than the national government schools per student average expenditure ($357).

The depreciation figures need to be treated with caution. Some of the state jurisdictions supplying this data were concerned that it may not have accurately covered the extent of depreciation for the ELC schools. This relates to the particular complexity of measuring depreciation at an individual school level without a thorough audit of physical facilities and equipment. In addition, the differences in depreciation methods across states as well as different capitalisation thresholds for plant and equipment made consistency and accuracy very difficult at a national level of analysis. The CRV for depreciation expenditures of each state ranged from 15%-49% at the primary level and 14%-41% at the secondary level.

Proportionate distribution of costs

The smaller quantity of total resources available to ELC primary schools meant that the relatively fixed value of teacher salaries consumed on average 6% more of total resources (from 71% to 65%). For secondary schools, a similar pattern appeared with teacher salaries consuming 76% of the per student expenditure in ELC secondary schools compared with 66% on average across all government secondary schools.



Conversely, ELC schools spent proportionately less than the government school average administration and support related salaries (10% compared with 13%) and other operating expenses (6% compared with 10%).

Comparing the relative distribution of available resources across budget categories between ELC schools and state averages for government schools can be a little misleading. It should not be interpreted to mean that ELC schools spent a greater amount on teacher salaries – either per teacher or per student. The greater proportion of total expenditure consumed by teacher salary related items indicates something very different.

First, it demonstrates that government school systems allocated fewer non-teaching resources to the relatively advantaged ELC schools than they did on average to all government schools, Second, it indicates that ELC schools operating within such favourable conditions managed to perform adequately in terms of specified outcomes with relatively fewer additional non-teacher salary related inputs than the national government school average.

Table 2.17: Expenditure (%) by resource inputs: ELC Primary Schools and Govt. Primary School average

Budget category ELC schools (%) Govt school average (%)

Teacher: Salary related 71 65

Admin & Support: salary- related 10 13


Other operating expenses 6 10


Depreciation 3 4

Total 100 100

Table 2.18: Expenditure Resource Inputs: ELC Secondary Schools and Govt. Secondary School Average

Budget category ELC schools (%) Govt school average (%)

Teacher: Salary related 76 66

Admin & Support: salary- related 7 12


Other operating expenses 5 9


Depreciation 3 4

Total 100 100



Figure 2.4: Expenditure (%) by resource inputs: ELC primary/secondary schools and Govt. primary/secondary school average

School generated revenues

The capacity of ELC schools to generate non-government revenues could well have a significant impact on the resourcing profile of these schools. The school generated funds serve as discretionary funds that are available for allocation by the school leadership (principal, parents and possibly teachers). Significant amounts of such discretionary resources may well make a critical difference to the performance of a school measured against the National Goals or against other measures of educational performance.

School generated revenues were not included as part of this analysis due to the unavailability of consistent and detailed data across each of the states. The only data that was available and collected from each of the state jurisdictions was for the amount of school generated revenues held by each ELC school in identified bank accounts. This is presented in the table below.

Caution needs to be exercised in interpreting the school generated data presented in this table. First, the data represents bank holdings and not expenditure. Therefore it does not tell us how much school generated revenue was spent during the year - only the value of these funds at the end of the year. It also does not tell us how much was generated during the one school year – the funds may well have accumulated in some schools over many years. Second, the data does not tell us how the money is likely to be expended. It cannot be assumed that the money is for recurrent cost purposes, as it is quite possible that it may be for capital investment purposes such as the building of a new gymnasium or auditorium.

This caveat understood, some tentative analysis is possible. Data shows that ELC primary schools had on average $251 per student in bank held savings compared with an ELC secondary school average of $590 per student. That is, ELC secondary schools had school generated bank savings that were (in per student terms) more than 2.3 times that of the average ELC primary school. This suggests a significant differential in the capacity of primary and secondary schools to generate non-government sourced finances.

For primary schools there was a strong and positive correlation between school size and bank held savings per student. Primary schools with fewer than 250 students had $214 in school generated savings compared with $273 per student for primary schools with enrolments of between 251and 500 students.

Differential capacity may well be significantly affected by school size and school type (primary or secondary) as suggested by the results of the data from this project. In fact, more detailed qualitative

0

10

20

30

40

50

60

70

80

Teacher:

Salary related

Admin &

Support:

salary-

related

Redundancy

payments

Other

operating

expenses

Grants &

subsidies

Depreciation

Percentage

ELC primary schools

(%)

Govt primary school

average (%)

ELC secondary

schools (%)

Govt secodary

school average (%)



research is needed to explore the possible dimensions of an important capacity, unevenly distributed across schools.

Table 2.19: ELC School Generated Revenues, (based on Bank held savings, $ per student, 2001)

School size (by number of students) Primary schools ($ per student) Secondary schools ($ per student)

250 or less students 214 Na

251-500 students 273 477*

More than 500 students 217* 601

All schools average 251 590

* A small number of primary schools (8) and secondary schools (6) were counted as part of the ELC schools even though they were marginally outside either the maximum prima

Resourcing The National Goals Additional Resourcing Need: Student Related


Chapter 3 Future Additional Resourcing Need: Student Related

Key Findings Total National Costs

• National resource needs were defined as the product of the average cost of future Additional

Resourcing Need (future ARN) per student and the number of students at risk of not achieving benchmarks.

• The number of students at risk of not reaching the benchmarks was derived from the Year 5 Literacy and Numeracy Benchmarks for the primary school level, and from a measure of participation in education and training for the secondary level.

• The additional expenditure required to meet the future ARN of all government school students is in the vicinity of $2 billion per annum, 2003 prices. This is above and beyond current allocations for programs and interventions to address the needs of poor performing students.

• Teacher salary costs were the largest component of these additional costs.

Table 3.1: Indicative additional required expenditure for Student Related future ARN (Government students)

Students % at risk Number of students at

risk


Total

Primary 12 164,566 $5,905 $971,762,230 Secondary 15 162,186 $6,548 $1,061,993,928 Total $2,033,756,158

Per Student Costs

• For primary students, the per student cost of the future ARN is in the order of $5,905 • For secondary students this figure is $6,548.

Table 3.2: Cost summary of future ARN by intervention focus

Students

School focused initiatives

Target Group*

initiatives

Individual focused

initiatives

Average per student

cost

Primary $247 $1017 $4,641 $5,905 Secondary $265 $979 $5304 $6,548

• Includes Low SES, Indigenous, ESL •



3.1 Introduction

For the purposes of this section, analysis has been restricted to developing an estimate of the costs of assisting all students reach the currently reported benchmarks in literacy and numeracy for primary school students, and educational participation for secondary students. The section is based on a report commissioned by the SRT in 2003. The SRT secretariat provided detailed terms of reference specifying a recommended analytical approach and methodology to be adopted by the contractors.4 This was largely followed by the contractors with some minor and useful modifications. The focus of enquiry for this report was on the cost of the student related future Additional Resourcing Need (future ARN) for assisting all students to attain the National Goals for Schooling.

The methodology drew on the assumption that an estimate for the costs of “making a difference” for students at risk could be gained by examining the costs of initiatives that have demonstrated effectiveness in assisting students at risk. The rationale was that if all disadvantaged students had access to effective initiatives or could benefit equally from them, then it may be possible that a higher proportion of students would obtain satisfactory educational outcomes than is the case at present.

The methodology used in this study does not imply that the overall level of resources needs to be expended in the same way, on the same kinds of interventions or programs as used to arrive at the estimated additional resource needs, or even that a programmatic response is what is required in all instances. Rather, it should be left to individual schools and school systems to decide how funds can best be spent to achieve the desired outcomes taking account of their specific contexts and needs.

The three types of student related factors which were considered by the study were; • Low socio-economic status (low SES), • English as Second Language , • Indigenous background.

Costs were studied as follows: • For each category of student related need, an estimate was made of the level of additional

resources (above current expenditure) needed to attain the project specified education effectiveness goal.

• A profile was developed of the type of resources (e.g. teacher time, professional development, administration, materials & equipment) required by schools in order to meet the future additional resourcing needs generated by each category of student related need.

3.2 Student Related Needs – an imperative to act

Increasing disparity in the distribution of wealth is a national problem that forms part of a global trend, and is linked to ongoing economic change. The impact of this phenomenon on education needs to be considered urgently and a coherent long-term policy response must be developed to mitigate its negative effects.

In the last decade, per capita growth rates in OECD countries have ceased to converge.5 Productivity has accelerated in some of the most affluent economies, most notably the United States, and slowed down substantially in others.

The income gap is growing within as well as between countries, particularly in wealthy countries such as the US. In a report published in 2003 by the US Congressional Budget Office6, data showed an extraordinary growth in income inequality in that country. For example, the pre-tax income of the top 1% of households grew by 184% over the 21 years measured (1979-2000). In contrast the

4 Erebus International (2003, unpublished) Resourcing the National Goals for Schooling - Student Related Cost Drivers, A Report to the MCEETYA Schools Resourcing Taskforce, December 5 OECD (2003), “Education at a Glance, OECD Indicators 2003,” p. 170. 6 The CBO data are regarded as more comprehensive than the Census Bureau data because the CBO measure includes realised capital gains and estimates tax liabilities. Report in Economic Policy Institute (2003), ‘Economic Snapshots’, September 3



lowest fifth of households gained 6.6% pre-tax. A detailed analysis entitled ‘Updated Facts on the US Distributions of Earnings, Income and Wealth’ (2002) confirmed that earnings, income and wealth are very unequally distributed, and quoted the extraordinary figures that the wealthiest 1 percent of US households held 1,335 times the wealth of the bottom 40 percent.

Australia is not immune from this global trend towards increased economic stratification. For example, a recent Senate inquiry into poverty has found that the dispersion of earnings and income have become more unequal in Australia, especially since the 1980s. Since 1995-96, 47 per cent of total increases in income were received by those in the top quintile of the population.7 In other words, almost half of the economy-wide increase in income generated since 1995-96 was of no benefit to the bottom four-fifths of the population. In 2000, the bottom 50 per cent of the population held just 7 per cent of the wealth, whereas the top one per cent held 13 per cent of the wealth and the top 5 per cent held 32 per cent of the wealth.8 The Committee’s findings estimate that this distribution of wealth will become more concentrated over the next 30 years.

In Australia, social and financial disadvantage are widespread but concentrated in particular areas of the population. Groups at high risk of poverty include:

• Indigenous Australians • People who are unemployed • People dependent on government cash benefits • Sole parent families and their children • Families that have three or more children • People earning low wages • People with disabilities or those experiencing a long term illness • Aged people, especially those renting privately • Young people, especially in low income households • Single people on low incomes • People who are homeless • Migrants and refugees.9

Indigenous Australians, in particular, face a far greater risk of poverty than other Australians and there is a 20 year gap in average life expectancy between Indigenous and other Australians.10

Today, there are 3.6 million Australians, or 21 per cent of households, living on less than $400 a week – less than the minimum wage.11 The numbers of Australians living in poverty ranges from 2 to 3.5 million and over 700 000 children now grow up in homes where neither parent works.12 Disadvantage is increasingly concentrated and geographic. There is growing evidence of regional disparities, with geographic concentrations of great wealth and great disadvantage within areas of all major capital cities and between cities and rural areas.

3.2.1 Economic and educational inequities

In Australia, the 2000 National Report on Schooling (Annual National Report) notes that there has been a growing body of research linking high levels of education and training to high levels of employment and, conversely, low literacy levels and early school leaving to high risk of unemployment.

This relationship has been identified in a number of recent studies, including the Australian Council for Educational Research’s Longitudinal Survey of Australian Youth (LSAY). Previous LSAY reports explained that lower achievement in literacy and numeracy was associated with lower engagement with school, lower participation in Year 12, lower tertiary entrance scores and less

7 Commonwealth Senate Community Affairs Reference Committee, “A hand up not a hand out: Renewing the fight against poverty,” Commonwealth of Australia, (2004), Report on poverty and financial hardship, p. 48 & 53, March. 8 Ibid, p. 52. 9 Ibid, p. 41. 10 Steering Committee for the Review of Government Service Provision (SCRCSSP) (2003), “Overcoming Indigenous Disadvantage, Key Indicators 2003, Overview,” November , p. 6. 11 Commonwealth Senate Community Affairs Reference Committee (2004) op.cit., p. xviii 12 Ibid, p. xv.



successful transitions from school. Moreover, a recent LSAY research report on literacy and numeracy shows a “strong” link between SES and student achievement, consistent with other research in LSAY and other studies.13

The differential in performance between children from Indigenous and non-Indigenous backgrounds is clearly shown in the literacy and numeracy benchmark scores reported in the Annual National Reports (summarised in Figure 3.3 and Figure 3.4). These ANR benchmark results for literacy and numeracy are not broken down by socioeconomic status but a survey conducted in 1996 by the then Department of Education, Training and Youth Affairs clearly indicated that socioeconomic background influenced reading results for year 3 and 5 students, with achievement decreasing as the socioeconomic status of the student decreased.14 Moreover, a recent study of test scores achieved by Australian 14-year-olds in reading comprehension and mathematics between 1975 and 1998 has revealed growing differences between Australian schools along socioeconomic lines.15

This last study found that socioeconomic status, as measured by parents’ occupation, had a significant effect on the scores achieved by students. Throughout the 1975-1998 period, students whose parents were employed in professional and managerial occupations had the highest average scores and students whose parents were production workers or labourers had the lowest. Between 1975 and 1998, the gap between these two groups of students at an individual level narrowed. However, at the same time, the gap in scores widened between schools with high concentrations of professional parents and all other schools.

Students attending a school that has a higher concentration of students from higher socioeconomic groups will also achieve (on average) higher scores in both reading and mathematics than students attending schools with lower concentrations of students from higher socioeconomic groups. This school-level influence has increased since 1975. The study also found that there is a strong indication that, as a group, students from homes where English is not the main language spoken have improved their achievement both in reading comprehension and in mathematics. While the average achievement on tests of reading comprehension for students of a non-English speaking background was lower than the average for students from English speaking backgrounds, their achievement levels improved significantly over the period and the gap was narrowed substantially. However, the widest gaps in average test scores remain between Indigenous and non-Indigenous students for both reading comprehension and mathematics.

Socio economic background has long been shown to be a significant factor in educational achievement. Schools with higher levels of low SES students and higher levels of students with physical and/or learning disabilities tend to produce achievement outcomes that are lower than average.

Australia needs to improve the equity of its education outcomes. In 2000, the OECD’s Programme for International Student Assessment (PISA) conducted a survey of the reading, mathematical and scientific literacy of 15 year olds across 32 countries, including Australia. Australia scored above the OECD average for all three literacy scales. Only Finland scored significantly higher than Australia on the reading literacy scale, while Japan was significantly higher on the mathematical literacy scale.

But beyond these figures lies a more complex reality. If “quality” on the PISA test can be defined as the extent to which a country exceeds the OECD average, then “equity” is the extent to which a country lies below the OECD average in terms of its spread of scores; ie, the extent to which there is variance amongst the students who sit the test (see figure 1).

13 Rothman, S and McMillan, J, (2003) ‘Influences on Achievement in Literacy and Numeracy’, (LSAY Research Report 36), October . 14 Literacy Standards in Australia, DETYA, 1996. Quoted in Commonwealth Senate Community Affairs Reference Committee, “A hand up not a hand out: Renewing the fight against poverty,” Report on poverty and financial hardship, Commonwealth of Australia, March 2004, p. 148. 15 Rothman, S. (April, 2003), “The changing influence of SES on student achievement: recent evidence from Australia.” Paper presented at the American Educational Research Association (AERA) conference, Chicago, USA.



Figure 3.1: Relationship between Mean and Spread16

While Finland, Japan and Korea scored high on both quality and equity, Australia scored above average on quality but below average on equity. These results indicate that while quality and equity can be achieved together, they are not sufficiently achieved in Australia or in other “above average” countries such as New Zealand or the United Kingdom. One commentator has observed that if you are going to be born in circumstances of poor family background, then, in terms of your education, you would be better to be born in Finland, Korea, Japan or Canada than in Australia, UK, USA, or Germany.17

3.2.2 National and individual benefits of increased investment in education

Investment in education has a high rate of return but it takes a long time to realise. As the Nobel Laureate in Economics for 2001, Joseph E. Stiglitz, observed, “the returns to investment in preschool education today will not manifest themselves for two decades or more – not the kind of results that show up in typical econometric studies.”18 Yet as Stiglitz also emphasises, enhancing education opportunities for disadvantaged groups allows countries to tap into vast reservoirs of underused talent that is one of the central strategies by which growth can be achieved to the benefit of all.

Economic research is increasingly finding that the driving force for economic growth is investment in “human capital;” ie, the knowledge and skills embodied in workers. For technologies to be developed and used effectively, the right skills and competencies must be in place.19

Investment in education is good for the nation and the individual. Better educated people are more likely to be, and remain, employed. The OECD claims that education and earnings are positively linked and that in all countries, graduates of tertiary-level education earn substantially more than upper secondary and post-secondary non-tertiary graduates.20 The more skilled the worker, the wealthier they will be. Educated people have higher income earning potential and are better able to improve the quality of their lives. Post-compulsory education leads to significant improvement in

16 OECD (2001) Knowledge and skills for life, Appendix B1, Table 2.3a, p.253, Table 2.4, p.257. 17 This is the conclusion drawn by the OECD’s Deputy Director-General of Education, Barry McGraw, in his article, “Providing world-class education: What can Australia learn from international achievement studies?” Paper delivered at the Australian Council for Educational Research (ACER) conference, Sydney, 14-15 October, 2002. 18 United Nations Development Program (UNDP) (2003), op.cit., p. 80. 19 OECD (2003), “Education at a Glance, OECD Indicators 2003,” p. 175. 20 OECD (2003), op. cit., p. 13.

Finland

CanadaNew ZealandAustralia

Ireland Korea

United KingdomJapan

SwedenBelgium

Austria Iceland

Norway

United States

Denm ark

SwitzerlandSpainCzech Republic

Italy

Germ any HungaryPolandGreece

Portugal

Luxem bourg

Mexico420

440

460

480

500

520

540

560

5075100125150

Variation expressed as percentage of average variation across the OECD

Me

an

pe

rfo

rma

nce

in

re

ad

ing

lite

racy .

Low quality

High equity

Low quality

Low equity

High quality

High equity

High quality

Low equity



individual earnings, but it is also of benefit to the nation. Greater labour mobility, lower unemployment rates and greater job satisfaction are all directly attributable to education.

The OECD has estimated that the long-run effect on output of one additional year of education in the adult population is in the order of 6 per cent in the OECD area.21 Economic growth and other social benefits such as better health, lower crime and increased civil engagement, make a compelling case for increased investment in education.

In Australia, the Dusseldorp Skills Forum has examined the consequences of not completing education and training for individual young people and the nation as a whole. Their conclusions are summarised in the table below:

Table 3.3: Cost-benefit analysis of Year 12 education for one cohort ($m)22

Public Benefits Private Benefits Total Costs (a) 625 625 1,250 Benefits (a) 550 1,700 2,250 Net Benefit -75 1,075 1,000

In other words, the cost nationally of allowing current levels of school retention to continue will be in the order of $1 billion per annum.

In the United Kingdom, researchers at the University of Hull have also attempted to quantify the costs of students not completing schooling.23 The total costs at present values in the United Kingdom are estimated to be £7 billion in resource costs and £8 billion in public finance costs. Estimates are conservative and only include a limited range of effects.

Regardless of the mix of inputs, the costs of not responding to the needs of ‘at risk’ students are clearly substantial. Within the global knowledge economy, three things have been identified as crucial to a nation’s prospects: education; research and development; and information and communication technologies.24 OECD data shows that Australia is falling behind most of the major developed nations in investing in knowledge.25

Simply having access to education is not sufficient to make a difference. The quality of the education – the degree of mastery of core skills and knowledge it provides – is (at least in part) a function of the amount of investment in education. How education is funded has a profound implication for access, equity, quality and the long-term prospects of both individuals and the nation.

Global economic stratification is not a passing trend. It is an established feature of economic development. The United Nations believes that wide – and widening – income gaps are cause for concern because of their likely negative effects on the pace of development.26 Economic stratification is stifling access to education which in turn is hindering further economic development. Australia is not immune from this global trend.

It is therefore a matter of urgent national priority to achieve a coherent long-term funding policy that increases education access and quality of learning for future national prosperity and well being.

3.2.3 Methodology

The starting point for the analytical approach of this study was that the resourcing needs of students (and hence schools) do vary significantly if these resourcing needs are defined with reference to the attainment of specified educational outcomes for each student.

The data used to develop the estimate of the cost of student related future ARN was derived from educational jurisdictions surveyed to identify Best Practice Initiatives (BPIs) focused on meeting the

21 Ibid, p. 175. 22 Applied Economics, (2002). Realising Australia’s Commitment to Young People 23 Godfrey, C., Hutton, S., Bradshaw, J., Coles, B., Craig, G. and Johnson, J. (2002), Estimating the Cost of Being “Not in Education, Employment or Training” at age 16-18. Department for Education and Skills Research Report RR346: London. 24 Considine, M., Marginson, S., Sheehan, P., Kumnick, M., (2001) The Comparative Performance of Australia as a Knowledge Nation, Melbourne, Monash Centre for Research in International Education 25 OECD (2001) Education at a Glance 26 United Nations Development Program (UNDP)(2003),op. cit., p. 46-47.



needs of those students most at risk, including indigenous students, students with English as Second Language Needs and students from low socio-economic status (SES) backgrounds. A range of initiatives, including allocations, programs and projects were rated according to reported impact, with the intention of identifying “best” practices for inclusion in the analysis. Data sought about these initiatives included goals, student numbers, outcomes and resources allocated.

Jurisdictions and systems identified a broad range of BPIs. Initiatives were organised into four categories of intervention: whole system, targeted schools, targeted groups and targeted individuals. The distinctions drawn were based on the locus of intent of the initiatives. Jurisdictions were requested to identify the key resource inputs to each initiative including teacher salaries, other salaries, teaching/learning materials, professional development, administration costs and other costs. In calculating the cost of future ARN, the costs of whole of system initiatives were excluded as these costs were also reflected in the Existing Least Cost (ELC) estimate, and therefore were not a reflection of additional expenditure.

Data was gathered by means of a survey of initiatives deemed by each educational jurisdiction to ‘make a difference’ in supporting the achievement of the National Goals by students from targeted groups. The survey was discussed at a stakeholders’ teleconference on 7 October 2003 and opportunities were provided for feedback and amendment prior to completion and return by 29 October 2003. The analytical framework and completed surveys were discussed at a meeting of senior education officials from State and Territory jurisdictions on 6 November 2003. Data was clarified where necessary and requests for additional data were completed by 14 November 2003.

3.2.4 Calculation of Cost Estimates

In seeking to delineate specific factors that drive costs the study sought to identify initiatives which have a demonstrable impact on student outcomes and to identify the costs of these initiatives. There were several possible means by which the additional cost of raising educational benchmark performance might be estimated. The end point of the study was to be an estimate of average cost per student that could then be used to calculate total resource needs. This student related future ARN cost estimate would be indicative of the “true” average cost of student related future ARN, which would be somewhere within a range around this estimate.

To arrive at this estimate, it would have been theoretically possible, for example, to examine the resource input costs for individual students whose performance between benchmark testing periods had been raised to an appropriate level. It would be expected that different inputs, and therefore input costs, would be required for different students, but by examining a number of instances a representative “average” figure should be derived.

This method was rejected as impractical for this study for two reasons: first, identification of such students was not possible within the timeframe for the study, and second, it was considered unlikely that resource inputs for individual students could be accurately identified. Likewise, a methodology that surveyed marginal expenditure by schools (similar to that used to identify the Base cost) was rejected on feasibility grounds, and because the true cost of programs is not well understood by schools. The developmental and administrative support costs of programs, particularly when on-costs such as superannuation are considered, are not apparent at the school level. These costs are a legitimate component of the true cost of delivery of interventions to any individual student.

For this reason, the study identified the costs of initiatives at the system level as the most appropriate form of data, which was then converted to an annualized per student cost.

3.2.5 Resource Intensity Profile (RIP)

The experience of many years suggests that there is no single solution to the issue of raising educational performance, particularly for those students for whom traditional classroom practices have not delivered the same level of outcomes as their peers. Education systems, schools and individual teachers have tried many different approaches, with varying degrees of success. Examining the range of these practices, identifying what appears to be “best” practices, and then identifying the cost of these initiatives, we believe, provides a strong indication of the level of effort that would be required to assist all students to achieve their potential.

Rather than seeking a complete audit of all possible practices, this study sought to gather information which was indicative or representative of the range of practices that have been



demonstrated to be effective and indicative of the range of intensity of intervention required to ‘make a difference’ to the educational outcomes of students ‘at risk’ of not achieving the National Benchmarks. The study sought responses detailing the full range of initiatives including projects, programs and interventions that aim to assist students achieve outcomes consistent with the national goals.

As would be expected, the range of initiatives varied considerably, from initiatives that target a few individuals to those that target whole cohorts of students, and those that are highly resource intensive to those that require few additional resources. An analytic framework was required to organize and “make sense” of this range of data.

The Resource Intensity Profile (RIP) used in this study to group initiatives into implementation categories closely parallels the framework used in the British Government Green Paper, ‘Every Child Matters’ (2003). This framework seeks to distinguish between the notions of universal services to all children through to specialist services for those most ‘at risk’. It provides an appropriate model to describe the intensity of educational interventions based on current practices for ‘at risk’ students and supports a breakdown of initiatives by cost categories. This approach recognises that there is no single ‘best way’ to address learning needs by including a range of interventions that have been used by jurisdictions and that have been demonstrated to be effective.

The use of the RIP allows appropriate comparisons to be made between costs of programs with similar intentions and the range of costs per student for similar kinds of programs. Separation of the initiatives by the focus of intervention and the target group for the intervention allows examination of comparative cost structures that might otherwise be submerged by simple averaging across all programs. Likewise, it allows identification and appropriate consideration of “outliers”, that is, programs that differ markedly in their costs, either higher or lower, than similar programs.

The major assumption underpinning the methodology is that the cost of successful current practice provides the best indication for future costs. In seeking to estimate the level of additional resources (above current expenditure) needed, the study collated and analysed current interventions deemed to be effective. The determination of per student costs for targeted ‘at risk’ groups enabled the calculation of indicative National resource needs based upon the number of students who are failing to achieve the National Benchmarks.

The cost calculations for those students performing below the national benchmarks takes into account the weakness of educational attainment and/or participation of these students. The costing assumes at least some of them are participants of remedial/special intervention type programs from which they derive insufficient benefit to meet national standards. No allowance has been made for discounting the cost of these interventions which may be ineffective in relation to at least some of these students. If a significant efficiency gain was possible in relation to some of these programs this would generate a discount on the future oriented additional resourcing need for student related issues. Further work in this area can help to quantify the extent of efficiency gains that might be realistically pursued and hence the discount factor to be applied on the total cost estimates presented in this report.



Figure 3.2: Resource Intensity Profile (RIP)

3.2.6 Criteria for Inclusion in Analysis

Information was sought from all educational state jurisdictions and across sectors. Nine jurisdictions responded including seven government and two non-government systems. In total, jurisdictions identified 163 initiatives deemed to ‘make a difference’. The identification of Best Practice Initiatives (BPIs) was based on the professional judgment of a number of senior officers within each jurisdiction as demonstrating effectiveness for the targeted groups of students.

In requesting jurisdictions to identify BPIs, the study sought to distinguish between those initiatives which are a part of the universal services provided to all students within an educational jurisdiction, those which support specific school communities with significant populations of ‘at risk’ students and those that directly target individuals or groups of ‘at risk’ students. In the end, initiatives that were focused on a whole system were not included in the calculation of cost of future ARN, as these are also a component of the Base cost and not unique to students “at-risk”.

While jurisdictions were able to identify a broad range of initiatives they regarded as Best Practice, they were not always able to supply all the data required to calculate per student costs for these initiatives. In addition, although the initiatives were considered to be effective by the jurisdictions, they were unable to provide evidence that might substantiate these judgments. This study has adopted a conservative approach to the inclusion of BPIs and only included in the analysis those for which there was complete data available that would allow calculation of a per student cost, and also independent verification of the initiative’s effectiveness.

The BPIs nominated by the jurisdictions were then classified high (H) or medium (M) or low (L) according to perceived impact based upon professional judgments made by each system using the following scale:

1. The outcomes are inconsistently demonstrated and measurement likely to be less formal than

formal.

Whole System Provisions for All Students For example

Multicultural Education and Anti-Racism Policies and Practices

Whole School Provisions For Example

Priority Schools Funding Program

Targeted Schools

Provisions for Identified Groups

For Example ESL Classes

Targeted Groups

Provisions for Individuals eg Reading Recovery

Targeted Individuals



2. The initiative has had some impact on the target group although there is only limited evidence to demonstrate this.

3. The initiative has had a high impact on the targeted groups that has been verified by test or other systematically gathered data.

Initiatives rated low (1) were generally excluded from the main analysis.

It should be noted that even where a total per student cost for the initiative could be calculated, jurisdictions were not always able to disaggregate costs of key resource inputs. This is due in some instances to the practice of devolved decision making in the determination of key resource inputs used at implementation in many jurisdictions. In some instances the only centrally available data about program costs is the total budget allocated for the initiative. In other cases, costs for various compensatory initiatives are aggregated and schools supplied with a global budget that is used at their discretion. In these cases, it is not possible to meaningfully disaggregate resource costs by expenditure category. In general, initiatives without full expenditure were excluded from the final analysis.

The initiatives identified are thus representative of the range of initiatives and cost structures nationally rather than a complete catalogue of all possible initiatives. The use of average per student costs also has the effect of levelling differences between jurisdictions. Further confidence in the national applicability of the included initiatives is given by the finding that those initiatives that operate in different jurisdictions, such as Reading Recovery, tend to have similar per student cost profiles.

The study also required examination of differential costs that might be expected to be incurred for particular groups of students known to be disproportionately represented in the group of students not reaching the appropriate benchmark standards. These groups included students from low socio-economic status (SES) communities, ESL, and Indigenous students. It is acknowledged that these categories are not mutually exclusive - that is, some students may have multiple disadvantages, and also that there are students who do not belong to any of these groups who do not achieve the benchmark standards.

3.2.7 Criteria for Exclusion from Analysis

This study only delivered estimates of the cost of future ARN related to a set range of learning outcomes for the primary level (literacy and numeracy) and broad participation and attainment for secondary schools. While the cost of these inputs goes some way towards addressing resource needs in all learning areas, they do not represent the total cost of resource needs to meet all of the National Goals.

The study did not therefore produce an estimate of cost of future ARN that covers the resource requirements for the whole of curriculum. Such figures at a national level would only be possible with national convergence on curriculum and assessment. At the time of the study, the Performance Measurement and Reporting Taskforce (PMRT) of MCEETYA was developing Key Performance Measures (KPM) for comparable education attainment within six learning areas from the National Goals for Schooling in the Twenty-first Century. This stream of activity may also be useful at a later stage in linking school level costs with measures of school effectiveness across a wider range of learning areas.

The study did not attempt to quantify the effects and costs of students with multiple forms of disadvantage, and thus may have under-estimated the true level of additional resources needed.

This study did not seek to gather data related to pre-school education and early intervention initiatives, nor did it seek to explore coordinated full service inter-agency initiatives. While a significant component of school and systemic effort to increase the performance and participation of all students, initiatives relating to vocational education in secondary schools, and special education in general and the coordination of services to students and their families were not included in this study.

In summary, 46 Best Practices Initiatives were identified as meeting all of the criteria for inclusion in the final analysis from those identified by the nine educational jurisdictions that contributed data (Appendix 5). Some of these initiatives were identifiably for primary schools only, some for secondary schools only, and some for students in all year levels. These initiatives were supported by



comprehensive cost breakdowns, specific targets and measurable outcomes. The initiatives included in the final analysis were those for which both the full cost of the initiative and the number of students targeted was known, as well as strong and independent data on the outcomes achieved by the initiative (e.g. through research studies or pre- and post program comparisons of changes in assessed outcomes). While some 46 programs were selected for inclusion in the final analysis, the data from the remaining initiatives supplied to us was used in supplementary analyses to further test the soundness of the final sample and the validity of the methodology. These supplementary analyses, outlined below, demonstrate the inclusion of a broader range of initiatives identified by jurisdictions would not have significantly altered the conclusions drawn from the sample used.

3.2.8 Comparative Analyses

Analysis of other initiatives

To test the accuracy and validity of the findings of this study, consideration was given to other ways in which the cost of future ARN per student might be calculated. Also studied was the impact on overall results of the inclusion of particular initiatives for which full data was not available. Table 3.4 lists initiatives nominated by jurisdictions that were not included in the initial analysis, that appeared to meet the criteria for inclusion, in that they did allow the calculation of a per student cost, but did not have sufficient demonstrated outcomes to rate more highly on the impact assessment framework. An additional 27 programs were thus included in this analysis. The same methodology for determining standardised unit costs as used in the main study was applied to these initiatives.

Table 3.4: Additional programs included in the comparative analysis

Focus of Intervention Initiative Whole System Girls & Technology in the Secondary School Literacy Enhancement - Indigenous Students Literacy Advance Strategy 1 Literacy Advance Strategy 2 Middle Years Reform

Targeted Schools School Resource Package Literacy & Numeracy Educational Needs Index Arnhem Assessment Enrichment Program Success in Numeracy Family Links Additional Professional Learning in Literacy and Numeracy Kid Smart Project Commonwealth Numeracy and Literacy Program First Steps Stepping Out Indigenous Literacy & Numeracy Consultant Class Size Reduction Program Targeted Groups ESL Visiting Teacher Indigenous Education Strategic Initiative Program (1) Year 2 Diagnostic Net ESL General Support ESL Visiting Teacher Indigenous Education Strategic Initiative Program (2) Literacy Enhancement Indigenous Mobile pre-schools Targeted Individuals Indigenous Language Speaking Student Program (ILSS) 1 Indigenous Language Speaking Student Program (ILSS) 2



Table 3.5 and Table 3.6 show the cost characteristics of the additional programs and how these compare with those in the more restricted main analysis. In these tables, costs for primary and secondary school students are combined. There is not a consistent pattern in the differences between these costs. As with the main analysis, some of the excluded programs were of low cost per student, while others where higher cost than the included sample. The greatest difference was with the individual targeted programs, where only two additional programs could be identified. Both these were ESL for Indigenous Language speaking students, which had a lower per student cost than the individually targeted programs such as Reading Recovery included in the main analysis.

Table 3.5: Cost characteristics of additional programs

Focus of Intervention Av. Cost per Student

Lowest cost Median Cost Highest cost

Whole System $219 $11 $17 $753

Targeted Schools $197 $16 $83 $709

Targeted Groups $1339 $183 $738 $3,994

Targeted Individuals $2,830 $2,500 $2,830 $3,159

While the addition of a broader range of initiatives made differences at the different types of intervention considered, at the aggregate level at which the cost of future ARN is derived, the difference made by the inclusion of these additional programs made very little difference. Table 3.7 shows that the overall difference that would have been made if these additional programs had been included was that the estimated average cost of future ARN would have been reduced by 2 per cent or $99 per student.

Table 3.6: Comparison of average cost per student for additional programs and main analysis

Focus of Intervention Additional programs Average cost per student

Programs in main analysis Average cost per student

Whole System $219 $123 Targeted Schools $197 $254 Targeted Groups $1,339 $997 Targeted Individuals $2,830 $4,882

Table 3.7: Effect of adding additional programs to the analysis

Focus of Intervention Main analysis Average cost per student

All programs Average cost per student

Percent difference

Whole System $123 $167 + $44 (36%) Targeted Schools $254 $225 - $29 (11%) Targeted Groups $997 $1098 + $101 (10%) Targeted Individuals $4,882 $4,711 - $171 (4%) Average cost of future ARN per student $6,133 $6,034 - $99 (2%)

The comparative analysis above gives some confidence that the sample of programs included in the main analysis are a fair representation of the range of successful initiatives used by jurisdiction to address the needs of students at risk of not meeting the National Goal benchmarks. Since the sample appears to capture reasonably well the range of costs for such interventions, it would appear that the addition of an even wider selection of initiatives would not substantially change the estimate of the average cost of future ARN.

Use of Mean and Median

To test whether there are any significant differences in the estimate of the cost of future ARN due to the method of calculation of an appropriate measure of central tendency, the study compared the



effect of using the median rather than mean as the basis for the estimate. It is generally considered that using the median is more appropriate when the distribution of scores is highly skewed or might be affected by outlying values that are substantially different from the remainder of the distribution. However, the advantage of using the mean score is that it uses all of the information available within the data set, which is a major consideration when dealing with relatively small data sets.

Table 3.8: Difference in cost of future ARN using median or mean of program costs

School Group Individual Cost of

future ARN Difference

(%) Primary Mean 247 1017 4641 $5,905 Median 243 819 4241 $5,303 10.1% Secondary Mean 265 979 5304 $6,548 Median 261 841 4814 $5,916 9.6%

Table 3.8 shows that using the median of the individual initiative costs within each focus of intervention produces a lower estimate than the mean – a difference of about $600 per student per annum at both primary and secondary level. This is a difference of about 10 per cent in both cases. The consequences of using either method in terms of the calculation of the indicative national resource needs are shown in Table 3.9. The indicative resource cost is reduced by $0.2 billion using the median cost method.

Table 3.9: Indicative Mean National Resource Needs (Government Students)

Students

Number of students in population

% at risk Future ARN Total

Primary 164,566 12 $5,905 $971,762,230 Mean Secondary 162,186 15 $6,548 $1,061,993,928 Total $2,033,756,158 Primary 164,566 12 $5,303 $872,693,498 Median Secondary 162,186 15 $5,916 $959,492,376 Total $1,832,185,874

3.2.9 Calculation of Per Student Costs

The costs for the BPIs were standardised on a per student basis for each targeted population group and annualized for programs that were funded for more than one year.27 Jurisdictions were asked to provide data for the 2001 school year, where possible, to allow comparability with the calculation of the Base cost of schooling. Examination of Appendix 5 highlights two key issues: first, that students may be recipients of more than one kind of intervention, and that significant overlaps exist between the targeted population groups. Second, some particular groups of students require additional resource support that is significantly above the norm. In particular, the needs of newly arrived students with refugee status are considerably greater than other LBOTE students.

The costs of Whole System Initiatives were calculated, but were not included in the calculation of the cost of future ARN for each targeted population group. Whole of System intervention costs were not included in the calculation of the estimated cost of future ARN because they were reflected as a component of the Base cost calculation and therefore not part of the additional resource cost.

The exposure of students from the identified at-risk populations to a range of interventions acknowledges a multi-faceted approach rather than a single ‘best way’ to address educational disadvantage. The intention of this analysis was to show the additional resource costs that might be

27 The cost per student was calculated simply by dividing the number of students targeted for the initiative. In doing so, it is recognised that in practice not all students will have access to the experience of the initiative, the same quality of experience, or receive equal benefit from the experience.



expected. For this reason, the cost of future ARN calculation took into account the additive effect of the different kinds of targeted initiatives. In other words, it should be expected that some students at risk or who have not achieved the National Goal benchmarks would require assistance from more than one level of intervention throughout their school life.

The average cost of future ARN for each level of schooling was calculated by first identifying all of the initiatives within each focus of intervention, that is by including initiatives that targeted low SES students, indigenous students and ESL students in the whole school system, in school focused interventions, targeted groups, and individual focused interventions. The average of these program costs within each kind of intervention was then calculated. The average cost for school-focused interventions, targeted group interventions and individual focused interventions was then aggregated. System level costs were excluded, as these were also counted as part of the Base cost. The reason for aggregating in this way was that it provided the broadest range of initiatives possible within each category for analysis. When finer distinctions were made (ie, identifying target groups within each category of intervention before aggregating the cost of future ARN), the number of programs in each category was small and ran the risk of distorting the average by inclusion of unlike programs. Aggregating initiatives within types of intervention was also justified by the assumption that these were simply representative of the range of costs for successful interventions, regardless of whom they were initially targeted towards.

3.3 Findings

Average Cost of future ARN for Primary and Secondary students

The cost of future ARN for primary and secondary schooling was derived by aggregating the average per student cost of initiatives for the targeted population groups at each focus of intervention. Table 3.10 below summarises the cost of future ARN, rounded to the nearest dollar per student.

Table 3.10: Student Related future ARN costs by focus of intervention

Students School focused

initiatives Target Group

initiatives Individual focused

initiatives Average cost of future

ARN per student Primary $247 $1017 $4,641 $5,905 Secondary $265 $979 $5304 $6,548

Table 3.10 shows that the average cost for interventions targeted towards individual students are by far the most expensive kind of intervention. They are also often the most effective. The total cost of future Additional Resourcing Need is additive, since students need to receive (and schools and systems need to provide) a range of interventions. Taking the average of the range of costs for initiatives targeting various different categories of student provides the best overall estimate of the future Additional Resourcing Need of students not attaining the National Goal benchmarks. For primary students, this cost of future ARN is in the order of $5,905 and for secondary students $6,548. There is not a great difference between these average costs. Indicative Additional Resource Need to meet the National Goal Benchmarks

The costs of future ARN shown in Table 3.10 provide the basis for calculating the indicative national resource needs for meeting the National Goal benchmarks. National resource needs were defined as the product of the average cost of future ARN and the number of students at risk of not achieving their educational potential.

How many students are “at risk” nationally is a matter of debate. National educational performance measurement in Australia, in a form that allows comparability between jurisdictions to be reported, is still in an early stage of development. Many would argue that the currently available benchmark measures for literacy and numeracy are an inadequate expression of the intention of the National Goals, which are much broader in scope. There is also a considerable body of opinion that the benchmarks are set too low. There are also many students in primary schools who only just reach the benchmarks at the testing points that may also be described as being “at risk”. For secondary school students, there is not yet any satisfactory nationally comparable outcome measure that can be used to



describe the quality of learning for students at this level. The estimate of the demand for additional resourcing is therefore based on proxy measures, and may underestimate the real level of demand. This study attempted to address this issue of the difficulty of specifying the exact number of students “at-risk” by calculating indicative resource needs based on the upper and lower limits of reasonably derived estimates of the number of students not attaining the benchmarks. The final estimate of the indicative resource needs was based on the mid-point of this range within which the additional resources needed to overcome student disadvantage might be expected to fall.

Quantifying ‘at risk’ primary school students

For primary students, the demand for resources was calculated by multiplying the average cost of future ARN (ie, the median cost for the targeted groups) by the percentage of students failing to achieve the national benchmarks in Literacy and Numeracy. The percentage of Year 5 primary students who failed to achieve the national benchmarks in Literacy in 2000 was 12.6%. The percentage of Year 5 primary students who failed to achieve the national benchmarks in Numeracy in 2000 was 10.4%. The percentage of those primary students ‘at risk’ of not achieving the national benchmarks is therefore likely to include somewhere between ten and fifteen per cent of the population.

Table 3.11: Range of estimates for primary students ‘at risk’

Table 3.12: Percentage of students achieving the numeracy benchmark, by gender, years 3 and 5, Australia, 2000

Cohort Male Students Female Students Year 3 92.7±2.1 92.8±2.1 Year 5 89.4±1.7 89.8±1.8

As indicated in Figure 3.3and Figure 3.4 below, there are substantial differences between the achievement of numeracy benchmarks by Indigenous students and all students.

Figure 3.3: Percentage of year 3 students achieving the numeracy benchmark, by sub-group, Australia, 2000

Lower range

Mid-range Upper range

10% 12% 15%



Figure 3.4: Percentage of year 5 students achieving the numeracy benchmark, by sub-group, Australia, 2000

As indicated in Figure 3.5, there were no measurable differences between the achievement of year 3 reading benchmarks by boys and girls in both 1999 and 2000. However, there was some evidence of potential differences between the achievement of the year 5 reading benchmarks between boys and girls in both 1999 and 2000.

Table 3.13: Percentage of students achieving the reading benchmark, Australia, years 3 and 5, 1999, 2000

Year Year 3 Year 5 1999 89.7±2.5 85.6±2.0 2000 92.5±2.2 87.4±2.1

The relative performance of Indigenous students is summarised in Table 3.14 and Figure 3.5 and Figure 3.6 where the gap between the performance of Indigenous students and all students is clearly observable. While there are no substantive changes in relative performance between 1999 and 2000, there is little in these results to indicate improvement for Indigenous students.28

Table 3.14: Percentage of Indigenous students achieving the reading benchmark, Australia, years 3 and 5, 1999 and 2000

Cohort Indigenous students All students Year 3, 1999 73.4±6.2 89.7±2.5 Year 3, 2000 76.9±6.5 92.5±2.2 Year 5, 1999 58.7±4.2 85.6±2.0 Year 5, 2000 62.0±4.8 87.4±2.1

28 Note: The source of data for Tables 2-12 and Figures 2-6 is the MCEETYA (2001) National Report on Schooling (Annual National Report)



Figure 3.5: Percentage of year 3 students achieving the reading benchmark, by sub-group, Australia, 2000

Figure 3.6: Percentage of year 5 students achieving the reading benchmark, by sub-group, Australia, 2000

Quantifying ‘at risk’ secondary school students

At the secondary school level, a proxy indicator of school achievement is provided by a measure of educational completion. The meaning of “school completion” is not as clear cut as might be supposed, particularly as the line between school and vocational education and training has become blurred in recent years. Year 12 completion by no means automatically equates with matriculation or qualification for tertiary study. Likewise, students who leave school before Year 12, but who enter and complete a vocational qualification, for example through a TAFE college, cannot be described as “educational failures”. In part to address these complexities, in 2000, MCEETYA endorsed the following measures of 15-24 year olds’ education/training participation and attainment:

• the proportion of 15-24 year olds, by single year of age, in full-time education or training, in full-time work, or in both part-time work and part-time education or training

• the percentage of 18 year olds who have completed Year 12 successfully or attained a qualification at AQF Level 2 or above and the percentage of 24 year olds who have completed a post secondary qualification at AQF Level 3 or above.

The 2001 Annual National Report on Schooling used the term “full-time participation rate” to describe the endorsed key performance measure of participation. The full-time participation rate is the proportion of the population, at specific ages, that is in full-time education or training, or in full-time work, or in both part-time education or training and part-time work. The participation rate for 18-year-olds is markedly lower than the rate for 15-year-olds, largely due to people either leaving



school early after the compulsory years or completing year 12 (see Figure 3.7 and Table 3.17-Table 3.19).

This pattern is more pronounced for females than males, with the full-time participation rate for female 15-year-olds being 99 per cent, whereas the participation rate for 24-year-old females is 70 per cent. This compares to 97 per cent for 15-year-old males lowering to 83 per cent at 24 years of age.

Figure 3.7: Full-time participation rates, Australia, May 2000

Source: ABS Cat. No 6227.0 Survey of Education and Work (unpublished data), May 2000

The pattern of a marked lowering of the level of participation between the ages of 15 and 19 was evident to a greater extent for Indigenous young people than for their non-Indigenous counterparts. The following Table, using 2001 ABS Census data, summarises comparative data for non-Indigenous and Indigenous Australians.

Table 3.15: Education and labour market status of teenagers aged 15 to 19 years old, Australia, 2001

2001

15-19 year olds

% Full-time education

% Full-time work

% Part-time work and/or

education

% Unemployed & not in the labour force

Total population

Non-Indigenous Male 66.2 15.8 6.1 10.7

Female 72.9 9.6 7.3 9.4 TOTAL 69.5 12.7 6.7 10.0 1,235,580

TOTAL NON-INDIGENOUS TEENAGERS AT RISK , % 16.7 Indigenous

Male 42.0 10.6 10.7 34.7 Female 46.8 6.6 9.1 36.1 TOTAL 44.4 8.6 9.9 35.4 42,273

TOTAL INDIGENOUS TEENAGERS AT RISK , % 45.3 TOTAL TEENAGERS AT RISK , % 17.2

NB. Excludes 47,411 people whose Indigenous status is not known. Source: Dusseldorp Skills Forum (2001) How Are Our Young People Faring (2001)

Nearly 70 per cent of non-Indigenous teenagers are still at school compared to around 45 per cent of Indigenous teenagers. Critically, over 35 per cent of Indigenous teenagers are either unemployed or not participating in the labour force, compared with 10 per cent of non-Indigenous teenagers (Dusseldorp Skills Forum, 2001).

Table 3.16 below shows trends in school completion rates. As noted above, school completion rates are not in and of themselves an indication of educational “success”, and need to be viewed from the



context of total educational participation (see Table 3.17). They do indicate, however, that more than 30 per cent of all Year 12 students will have restricted access to qualifications that are associated with higher lifetime earnings and contribution to national productivity.

Table 3.16: Estimated Year 12 completion rates (%)

Year Male Female Total 1994 63 74 68 1995 61 73 67 1996 60 72 65 1997 58 71 64 1998 60 72 66 1999 61 74 67 2000 61 74 67

Both Table 3.16, and the total figures for the 15-19 year old population not in education and training show that in excess of 30% of the secondary cohort do not complete secondary schooling. If a national target completion rate of 90% for secondary schooling was adopted, then approximately 20% of the student cohort may be considered an upper estimate of the secondary level students to be ‘at risk’.

Table 3.17: Estimated Year 12 participation rates (%)

IN FULL-TIME EDUCATION NOT IN FULL-TIME EDUCATION Full-

time work

Part-time work

Un-employed

Not in the labour force

Sub-Total

Full-time work

Part-time work

Un- employed

Not in the labour force

Sub-Total

Males 0.4 20.2 5.4 40.5 66.4 19.8 5.7 4.6 3.4 33.6 Females 0.2 29.9 5.0 36.7 71.7 11.0 8.5 4.2 4.6 28.3 Total 0.3 24.9 5.2 38.6 69.0 15.5 7.0 4.4 4.0 31.0

Source: ABS, Labour Force Australia, May 2002. Catalogue No. 6203.0

Figure 3.8 below provides data for a proxy measure of attainment from the ABS Survey of Education and Work. This measure is the percentage of 19-year-olds who have completed year 12 or obtained any post-school qualification. This measure provides some indication of the number of young people within a particular cohort, however, it does not provide insight into the quality of that experience. It is, nonetheless, a reasonably accurate and reliable reflection of secondary schooling outcomes.

Figure 3.8: Percentage of 19-year-olds who have completed year 12 or obtained any post-school qualification, by gender, Australia, May 2000



Source: ABS Cat. No 6227.0 Survey of Education and Work (unpublished data), May 2000

Table 3.18: Educational attainment, by age group and level of qualification, Australia, 1997–2000 (per cent)

19-year-olds who have completed year 12 or obtained any post-school qualification 1997 1998 1999 2000

Males 65.6 65.8 73.6 69.8 Females 79.5 79.8 79.8 81.6 Persons 72.4 72.7 76.6 75.5

Of the 1,757,000 students in Vocational Education and Training, some 11.8% or 207,326 were 15-24 year olds. Assuming 50% of these were 15-19 year olds then a further 103,663 15-19 year olds were engaged in Vocational Education and Training. Participation data from the Australian Bureau of Statistics indicate that 22.8% of 15-19 year old students were not participating in education in 2001. For this analysis, the resource needs of secondary students, using the proxy measure of participation in education and training, was estimated as being in the order of 15 per cent of the cohort, and most likely within a range of ten to twenty percent of the population cohort. Based on the available data for secondary schooling the following range of estimates is suggested for quantifying ‘at risk’ students.

Table 3.19: Range of estimates for secondary students ‘at risk’

Lower range Mid-range Upper range 10% 15% 20%

3.3.1 Calculation of indicative resource needs

The table below summarizes these calculations, firstly for government students, and secondly for all students. Accurate figures for the proportion of students in non-government schools not meeting the National Goal benchmarks are not available.

Table 3.20: Range of indicative resource needs (Government school students)

Lower range Mid-range Upper range Primary students Mean per student cost ($5,905)

10% 12% 15%

No. of students at risk 137,138 164,566 205,707 Indicative resource needs $809,799,890 $971,762,230 $1,214,699,835 Secondary Students Mean per student cost ($6,548)

10% 15% 20%

No. of students at risk 108,124 162,186 216249 Indicative resource needs $707,995,952 $1,061,993,928 $1,415,998,452 Total resource needs $1,517,795,842 $2,033,756,158 $2,630,698,287

Data in relation to the population sizes in Table 3.19 is derived from the ABS Schools collection (Publication No 4221.0) for 2001. The size of the total Primary cohort in 2001 was 1,896,323 including students in Pre-Primary grades and excluding students in ungraded primary classes. The number of students in Government schools in 2001 was 1,371,382. For the Secondary Students, the estimate of indicative resource needs is based on the number of students who would be eligible for secondary schooling in 2001 rather than actual enrolments (excluding students in ungraded classes and special schools).

Those eligible for enrolment in Years 11 and 12 was estimated from the size of the entering Year 7 cohorts for that Year (ie. The Year 12 eligible cohort was the Year 7 cohort of 1996). It is an



estimate because the entering cohort number is not adjusted to take account of student deaths, students migrating in and out of Australia or students who repeat a Year or otherwise have disrupted schooling.

In determining the number of students at risk, the population was defined as all of the students enrolled in Years 7-10 (on the basis that retention is close to 100 per cent in those Years), plus 90 per cent of the secondary eligible students in Years 11 and 12 (based on the goal of 90 per cent school completion accepted by MCEETYA).

The government “share” of the total indicative resource needs was calculated as 78 per cent of the total, to take account of the fact that retention is lower in government schools than non-government schools (proportion of government: non-government non-retained population = .78).

Table 3.21: Apparent Retention Rates - Government and Non-Government Schools

Year 10 Enrolment 1999

Year 12 Enrolment 2001

Apparent Retention Rates

Government Schools 162928 114953 .70 Non-Government Schools 86599 73157 .84 Govt. proportion of total non-retained population .78

3.3.2 Key Resource Inputs

The study examined the various elements that comprise the average cost of future Additional Resourcing Need. The survey of jurisdictions asked for a disaggregation of the cost of initiatives by various categories of expense, including teacher salaries, other salaries, professional development costs, teaching and learning materials, administration costs, and other costs. These details were not available for all initiatives (38 programs were included in this analysis). For those initiatives for which data was available, an analysis was undertaken. The results of this analysis are summarised in Table 3.22. Note that because the set of initiatives included in this analysis was different from that used in the main analysis (because disaggregated costs were not available for all initiatives), the estimated total cost of future ARN reported in Table 3.20 for the disaggregated costs is slightly different from that reported from the main analysis. However, the total estimated cost of future ARN derived from this analysis is within 5 per cent of the estimate derived from the main analysis.

The tables below show teacher salaries to be the key resource input for school focused and targeted individual initiatives. However, for targeted group initiatives the emphasis shifts to non-teacher salaries. Individualized programs, such as Reading Recovery, are a common approach adopted by most jurisdictions, and are also the most expensive. They may however, be most effective in the long run, and investment in early intervention may prevent the need for later expenditure. There is evidence that the investment in Intensive English classes, although among the most expensive kinds of intervention, reaps considerable rewards later. Students from language backgrounds other than English, once they have overcome their initial English-language deficiency, as a group perform higher on average than English speaking students. The cost to individuals, and to the nation, of allowing school failure to remain institutionalized has been well documented in many countries, including Australia.



Table 3.22: Proportion of total costs by Key Resource Inputs (%)

The distribution of key inputs is further illustrated in the figures below. These figures again demonstrate that teacher salaries are by far the major component of the cost of future ARN. Analysis of interventions shows that those targeting individual students comprise the major component of the student related cost of future Additional Resourcing Need.

Figure 3.9: Percentage Distribution of Key Student Related future ARN Cost Inputs

Key Resource Inputs, proportion of total future ARN expenditure (%)

Initiative Teacher Salaries

Other Salaries

Professional Development

T/L Materials Admin Other

School focused initiatives Low SES 72 2 10 10 1 4 Indigenous 70 0 21 7 2 0 ESL 99 1 Targeted group initiatives Low SES 3.8 56.9 3.0 11.4 17.8 7.2 Indigenous 6.0 88.7 0.9 0.6 0 3.8 ESL 98.1 1.1 0 0 0.4 0.5 Targeted individual initiatives Low SES 96.6 0.1 2.6 0.1 0.4 0.4 Indigenous 76.6 13.3 6.6 3.3 1.8 2.8 ESL 77.2 3.1 0.3 1.4 17.3 0.7

Teacher Salaries, 60

Other Salaries, 14

P.D., 7

T/L Materials, 3

Admin., 8

Other, 8



Figure 3.10: Distribution of Student Related future ARN costs by focus of intervention

System level

School level

Group level

Individual level

Resourcing The National Goals Project Additional Resourcing Need: School Related

Schools Resourcing Task Force, MCEETYA Final May 05, Page 58

Chapter 4 School Related Resourcing Need: Current Funding

Key Findings – Funding for School Related Resourcing Needs

• Current funding for specific school-related resourcing needs (size and remoteness) were estimated to be in the order of $590 million

• This includes both direct and indirect costs for government schools

• Additional costs per non-metropolitan student (over metropolitan levels) were:

o Approximately $650 p.a. for primary students, and

o Approximately $870 p.a. for secondary students

• The table below provides a breakdown of the school related additional resourcing needs in non-metropolitan areas:

Table 4.1: Total Cost of School Related Factors, Government Schools, 2001

Primary Secondary Total Total direct costs $76,321,975 $40,615,434 $116,937,410 Total indirect costs $245,573,857 $226,537,203 $472,111,060 Total costs $321,895,832 $267,152,637.4 $589,048,470 Additional cost per non-metropolitan student

$648.29 $870.78 $733.26

4.1 Introduction

This section analyses the effect that location and size have on the cost of schooling. Both direct and indirect costs were examined for government schools29.

For this study, direct costs (school related) were defined as specific purpose financial allocations made by each school, system relating to the location of the school. For example transport and freight costs, which may be significantly higher in non-metropolitan areas. Direct costs were divided into three main categories:

• Non-staff costs • Special Programs • Distance Education

Indirect costs relate to school size, and were those costs associated with the diseconomies of scale of many of the considerably smaller schools in non-metropolitan locations. Indirect costs comprised only one category - the increased costs of having lower teacher-student ratios in non-metropolitan schools.

Salary costs associated with location, such as locality allowances designed to attract teachers to non-metropolitan schools, were included in the indirect costs, as this calculation includes all aspects of teacher salaries.

29 Unless otherwise stated all references are to government schools.



The analysis did not provide an estimate of future costs, but only a snap-shot of additional school-related costs in a given year, 2001.

It should be noted that additional costs for non-metropolitan students are disproportionately incurred by government school systems - the only sector required by law to provide education services outside metropolitan areas.

4.2 Methodology

Data was obtained from States and Territories on 2001 subsidies for non-metropolitan schools,30 according to categories established by the Commonwealth Grants Commission. The Commonwealth provided data on levels of Commonwealth support for non-metropolitan schools. Both sources of data were analysed in terms of direct and indirect costs. Salient aspects of the methodology include the following:

• All financial, school and student data were supplied by State systems. • DEST supplied data related to Commonwealth funded programs. • Distance education costs were measured and presented but not included as part of costs

because of the difficulty, within the time-frame available, of identifying aspects of distance education costs “additional” to standard schooling as measured in Stage 1 of this study.

• Different financial reporting formats meant that direct staff costs could not be disaggregated from indirect staff costs in all States. Hence all staff-related expenses were considered as part of indirect costs.

• Direct salary costs associated with location, such as locality allowances designed to attract teachers to non-metropolitan schools, were included in the indirect calculation, along with all other aspects of teacher salaries.

• Indirect costs, related to school size, were measured by the proportionate difference between metropolitan and non-metropolitan teacher salaries, on a per student basis. This constitutes a real additional cost to school systems, and is related to the smaller size of non-metropolitan schools.

The analysis did not provide an estimate of future costs, but rather a snap-shot of additional school-related costs in 2001. Changing cost structures were not predicted for the short term future, since:

• Levels of educational adequacy are crucial in predicting the costs of rectifying any inadequacy; however this was not able to be measured in non-metropolitan areas in the time frame available.

• It was not possible to model future population change in non-metropolitan areas in the time frame available.

There is no suggestion that non-metropolitan schools are adequately funded simply because current subsidies for school size and location are considered adequate. An individual school’s student profile will largely determine that school’s level of relative need. The student profile of a school will create cost pressures separate and different to those imposed by school size and location.

4.3 Profile of Schools, by location and size

Australia is usually thought of as highly urbanised with a large percentage of the population living along a thin strip of the East Coast. It may therefore be surprising to note that more than 800,000 students attend government schools in non-metropolitan locations scattered widely across the continent. These non-metropolitan students attend a total of 2,459 government primary schools and

30 In this paper the term non-metropolitan incorporates all areas outside major metropolitan areas including locations that might also be termed rural and remote. Each state/territory was asked to use its own methodology for determining metropolitan and non-metropolitan locations. For example, in NSW, Sydney, Newcastle and Wollongong make up metropolitan areas and the remainder of the state is non-metropolitan. In Queensland, metropolitan includes Brisbane, Logan City, Ipswich City, Gold Coast City, Redlands Shire, Redcliffe Shire local government areas and Thuringowa local government area. All areas outside this are regarded as non-metropolitan.



780 secondary schools. These schools are significantly smaller than their metropolitan counterparts with approximately 20% of non-metropolitan primary schools having fewer than 30 students and approximately 30% of non-metropolitan secondary schools catering for fewer than 100 students. Comparisons between school size in metropolitan and non-metropolitan primary and secondary schools are shown in the following figures.

Figure 4.1: Proportion of Primary Schools by Size of School

Figure 4.2: Proportion of Secondary Schools by Size of School

While not all non-metropolitan schools are small, there are more students in non-metropolitan areas who attend small schools as compared to their metropolitan counterparts. For example, the table below shows that 67% of metropolitan primary school students attend schools which have more than 350 students, while only 49% of non-metropolitan primary school students attend schools of similar size. The figures are similar for secondary schools (67% and 46% respectively). Likewise, the proportion of students attending very small schools in non-metropolitan areas is significantly greater than the proportion of students attending similar sized schools in metropolitan areas.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0-29

students

30-59

students

60-99

students

100-199

students

200-349

students

350 plus

students

Size of school

Pro

po

rtio

n o

f to

tal

pri

ma

ry

sc

ho

ols

Metro

Non-metro

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0-99

students

100-149

students

150-199

students

200-499

students

500-799

students

800 or

above

students

Size of school

Pro

po

rtio

n o

f to

tal

se

co

nd

ary

sc

ho

ols

Metro

Non-metro



Figure 4.3: Primary School Students by School Size, Metropolitan and Non-metropolitan, 2001

Figure 4.4: Secondary School Students by School Size, Metropolitan and Non-metropolitan, 2001

There are, as would be expected, significant differences in the proportion of metropolitan and non-metropolitan schools between States and Territories.31 For example, 74% of primary schools in the Northern Territory, 67% in Tasmania and 60% in Queensland are in non-metropolitan locations, whereas the proportion of non-metropolitan primary schools is lower in NSW, Victoria, South Australia and Western Australia (51%, 51%, 50% and 48% respectively).

31 The entire school population of the ACT is considered to be metropolitan and therefore has not been included in the analysis of this report.

0

100,000

200,000

300,000

400,000

500,000

600,000

0-29 30-59 60-99 100-199 200-349 350 plus

School size

Nu

mb

er o

f s

tud

en

ts

Metro

Non metro

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

0-99 students 100-149

students

150-199

students

200-499

students

500-799

students

800 or above

students

School size

Nu

mb

er o

f stu

den

ts

Metro

Non metro



4.4 Direct Cost Factors (Location related)

Key Findings - Direct Cost Factors

Total Direct Costs • Total direct costs for non-metropolitan schools amounted to $177.3M, comprising:

Non-Staff Costs

• For Primary Schools, this amounted to $38.8M • For Secondary schools, the cost was $24.1M • The total for both was $62.9M (2001) • This represents a per student average for both groups of $78 p.a.

Special Programs

• For Primary Schools, this amounted to $37.5M • For Secondary schools, the cost was $16.5M • The total for both was $54M (2001)

Distance Education

• The total for both Primary and Secondary was $60.4M (2001)

Direct cost factors are those factors that include a direct financial allocation and can be directly attributed to the location of the school.32 For this study, direct costs included:

• non-staff costs • the cost of any specifically targeted programs such as the Country Areas Program (CAP),

and • Distance Education.

The total direct cost of non-metropolitan schools was $177,337,556 comprising: • $76,321,975 for primary schools; • $40,615,435 for secondary schools; and • $60,400,146 spent over both primary and secondary schools via Distance Education.

Table 4.2: Direct Costs for Non-metropolitan Areas*, 2001

Direct Cost Factor Primary Secondary Total Non-staff costs $38,788,813 $24,077,702 $62,866,515 Special programs $37,533,163 $16,537,732 $54,070,895 Total cost $76,321,976.00 $40,615,434.00 $116,937,410.00 Per capita cost $154 $132 $145

* This does not include approximately $60 million of expenditure spread across primary and secondary levels for Distance Education. This is not included here because the expenditure is often incurred outside of school delstructures and cnot all incurred at individual school level.

As noted earlier, these amounts do not include direct staff costs, which are captured in the indirect costs outlined below. Direct costs comprised the following three components:

32 The Commonwealth Grants Commission uses the term dispersion factors to describe these additional costs associated with services to dispersed populations.



4.5 Direct non-staff costs

Non-staff costs include those additional costs to the system that arise due to the remote location of a school. For example, schools might be given additional money in their budgets for the following:

• telephone calls; • freight costs; • travel costs (excluding those travel expenses paid directly to staff); and • more relief days for professional development.

The total cost of $62.9 million dollars per annum33 ($38.8M for Primary students and $24.1M for Secondary students) represents a per student average of $78 p.a. for both primary and secondary non-metropolitan students.

4.6 Special Programs

Special programs include all monies allocated directly to assist non-metropolitan students through specifically targeted programs. For example, the Commonwealth Government Country Areas Program (CAP) provides annual supplementary funding to government and non-government education authorities in each State and Territory to assist schools in “rural and isolated areas”.

In 2001 approximately $37.5 million was spent on special programs for primary schools and $16.5 million for secondary schools - a total of $54 million in non-metropolitan locations.34

4.7 Distance Education

Each jurisdiction provides distance education options for students who are unable to access school or who require access to a wider range of subjects than is available in the school they attend. Geographic isolation is a major reason why students access distance education although not the only reason. Other reasons include:

• sickness; • travel commitments; • artistic or sporting commitments; and • access to subjects unavailable at the students’ current school.

States and Territories were unable to provide a detailed analysis of the students who accessed distance education. In order to estimate the total direct costs of location an assumption was employed that two thirds of all distance education access was due to geographic isolation. This provides a figure of approximately $60.4 million. This figure was also unable to be broken down into primary and secondary as many of the distance education centres cater for K-12.

As mentioned earlier, the costs of distance education are provided for information only and were not included in the final calculation of direct costs.

33 Accounting difficulties in NSW and Queensland, primarily as a result of global budgeting, made it difficult to extract the direct non-staff costs associated with location and hence require an estimate of the extent of the direct non-staff costs in those two jurisdictions. A per capita average was derived using the figures supplied by SA, Tas., and Vic and then applied to NSW and Qld. WA data was not included in the calculation as it is significantly more dispersed than the other states and bears a disproportionate cost associated with distance. The per capita Western Australia figure was used to calculate the total cost for the Northern Territory as they were also unable to adequately cost direct non staff costs. 34 Qld had atypically large expenditure due to the Cooler Schools program in non-metropolitan schools in 2001. The capital expenditure program aims to provide and maintain air conditioners in schools in particularly hot climates. Expenditure on the program peaked in 2001.



4.8 Indirect Cost Factors (school size related)

Key Findings - Indirect Cost Factors

Total Indirect Costs • Total indirect costs for non-metropolitan schools amounted to $472.1M, comprising:

Indirect Costs for Primary Schools

• This amounted to $246.6M

Indirect Costs for Secondary Schools • This amounted to 226.5M

This section of the report calculates the indirect factors arising from service delivery scale in non-metropolitan areas.35 The size of a school is acknowledged as a significant factor in determining costs of schooling: small schools are said to have some ‘diseconomies of scale’ leading to higher costs per unit of service compared with larger schools. Non-metropolitan schools are significantly smaller than metropolitan schools. Diseconomies of scale principally arise from higher staff to student ratios, as these account for over 75% of total costs in both primary and secondary government schools. In addition, fixed costs of operating such as library facilities, network connections and sporting equipment are spread over more students in larger schools resulting in further diseconomies of scale for smaller schools.

The higher proportion of smaller schools in non-metropolitan locations is reflected in the slightly lower student to teacher ratios for both primary and secondary non-metropolitan schools. The national average (not including the ACT)36 for non-metropolitan primary schools is 17.16 and 12.53 for secondary schools, compared to 18.33 for primary schools and 13.47 for secondary in metropolitan schools.37

Table 4.3: Full-time Student/ Teaching Staff Ratios, 2001

Metropolitan school* Non-metropolitan school* Primary 18.33 17.16 Secondary 13.47 12.53

* Derived from data supplied by States to SRT Secretariat

While staffing costs are the main focus of this section of the project, it is acknowledged that the figure calculated for size (indirect) factors will underestimate the true cost by the amount of diseconomy associated with the fixed costs.

35 It is argued that scale factors arising in metropolitan areas are policy related issues and should not be included in the estimate of school-related additional resource needs. 36 The entire school population of the ACT is considered to be metropolitan and therefore has not been included in the analysis of this report. 37 These student-teacher ratios are slightly higher than the all government school average. This reflects the different sample frame used for the analysis of metropolitan and non-metropolitan schools and their teachers. The total number of teachers counted for this exercise was only those directly allocated to schools. This count does not include teachers who are: i) administration, curriculum and project work activities positions not allocated to individual schools as part of their entitlements; ii) school counselors; iii) mobile teachers; and iii) teachers otherwise miscellaneously defined.



In order to calculate the indirect costs associated with non-metropolitan schools, each State and Territory (except ACT) was asked to provide the following data for primary and secondary schools in designated bandwidths (ranges of school size)38:

• Schools • FTE students • FTE teachers • FTE non teaching staff • Teacher and non-teacher salaries

A net subsidy per non-metropolitan school student was calculated by dividing total non-metropolitan salaries by the number of non-metropolitan students, minus total metropolitan salaries divided by the number of metropolitan students. This was done for each jurisdiction. Total net subsidy was calculated by multiplying the per capita subsidy figure by the number of non-metropolitan students.39

This analysis revealed a total national net subsidy of $472,111,060 for all non-metropolitan students, including $245,573,857 for primary school students and $226,537,203 for secondary school students. The per capita cost per primary school student in 2001 was $495, and $738 per secondary school student.

Table 4.4: Total Indirect Subsidy, Government Schools, 2001

Primary Secondary Total Metropolitan Student / Staff ratio 18.33 13.47 Non-metropolitan Student / Staff ratio 17.16 12.53

Net subsidy $245,573,856 $226,537,202 $472,111,060 Per capita subsidy $495 $738 $588

4.9 Total cost of school related factors (Direct and Indirect)

The total cost of school related factors includes both the direct and indirect costs, although this analysis excludes the $60.4 million dollars spent on distance education in 2001. From these total costs, it is estimated that each non-metropolitan primary student costs approximately $650 more to school than a metropolitan counterpart. The cost for a non-metropolitan secondary school student is approximately $880.

Current funding for additional resourcing needs of school related factors for non-metropolitan schools is considerable. The table below shows an additional national expenditure in the order of $590 million. This equates to an additional allocation of $735 per non-metropolitan student in direct and indirect subsidies.

Table 4.5: Total Cost of School Related Factors, Government Schools, 2001

Primary Secondary Total Total direct costs $76,321,975 $40,615,434 $116,937,410 Total indirect costs $245,573,857 $226,537,203 $472,111,060 Total costs $321,895,832 $267,152,637.4 $589,048,470 Total per capita $648 $871 $733

This is a significant additional cost. It represents approximately 11 per cent of the comparable national average per capita cost of schooling (accrual basis), as shown in the table below. Additional expenditure for non-metropolitan schools represents 12-13 per cent of the Base Cost of schooling (2001 figures) and 11-12 per cent of the AGSRC.

38 In line with Commonwealth Grants Commission reporting. 39 Total salaries figures include all allowances paid directly to staff as a result of the location of the school.



Table 4.6: Significance of Additional Resources for School Related Factors

Additional resources Per Capita ($) % of ELC Per capita

% of government average in school

costs

% of AGSRC Per capita

Primary level 648 13% ($4982) 11% ($6050) 11% ($5657) Secondary level 871 12% ($7006) 11% ($8068) 12% ($7469)

The greatest part of additional expenditures (up to 85 per cent) is accounted for by salary related indirect costs (see table below). This is the cost associated with the diseconomies of operating smaller schools in non-metropolitan areas.

Table 4.7: Breakdown of Additional Resourcing for School Related Factors, per capita, 2001

Factor Primary Secondary $ per capita % of total $ per capita % of total

Direct costs 154 24 132 15 Salary related indirect costs 495 76 738 85 Total 649 100 870* 100

* Minor variation from previously quoted figures due to rounding

Resourcing The National Goals Additional Resourcing Need: VET in Schools


Chapter 5 Additional Resourcing Need: VET in Schools

Key Findings Total VET in Schools Costs (Years 11 & 12)

• The total national school costs of delivering VET in schools for 2001 (years 11 and 12 only)

was $250.6m, ($208.1m excluding indirect costs)

Table 5.1: Total costs of delivering VET in Schools for 2001, (Years 11 and 12)

Differential Cost

• The differential direct cost of providing VET in Schools (years 11 and 12) is estimated to be $31.8 million for 2001. These are costs incurred at the school level and are compared with school level costs calculated as part of the Base cost.

• Per capita differential – $187 additional recurrent cost per VET student for 2001, • Indirect recurrent costs are estimated at $42.5 million for 2001. Indirect costs are those costs

borne by non-school organisations including central administrations for processing, testing, certification, travel etc. They have not been calculated as part of the differential cost because it is not possible to disentangle and compare these costs with the average indirect costs across all years 11 and 12 programs.

Cost of Enrolment Trends

• The maximum estimated additional cost associated with anticipated future enrolment trends up to 2010 was $97m. Four scenarios were examined:

Base Case Increasing retention rate Increasing VET in School hours Increased uptake of higher level certificates

Cost of Consistent High Quality

• The maximum additional cost of obtaining consistent high quality, modelled next to anticipated future enrolment trends up to 2010 was estimated at $109.5m

Cost of Improving Quality

• The maximum additional cost of achieving a 5 per cent increase in quality, modelled next to anticipated future enrolment trends up to 2010 was estimated at $111.2m.

Factor Total Additional Direct school cost (psh) $6.41 $0.98 Total Direct $208.1m $31.8m Indirect cost (psh) $1.31 na Total Indirect $42.5 m Na Total Costs $250.6 m



5.1 Introduction

VET in Schools imposes cost burdens above those generated by the general curriculum. These additional costs are the focus of this chapter, as well as the total, national costs of delivering VET in Schools.

The SRT secretariat developed a detailed methodology for the analysis of the VET related future ARN and an independent contractor was engaged to undertake the assignment. This chapter is based on the results from that study and its estimates40 of the:

• total costs and the differential costs of providing VET in Schools nationally; • additional costs associated with anticipated enrolment trends in the future; and • additional costs associated with obtaining consistent high quality.

For the purpose of this project, the MCEETYA definition of VET in Schools is being used:

Programs that are undertaken by school students as part of the senior secondary certificate and which provide credit towards a nationally recognised VET qualification within the AQF. The training that students receive reflects specific industry competency standards and is delivered by Registered Training Organisations (RTOs) or by the school in partnership with an RTO.

The implication of adopting this definition is that the cost estimates focus on senior secondary schooling. VET courses offered at lower year levels or those not leading to a recognised qualification are not captured.

5.2 Background and methodology

The basis of the cost of general education for senior secondary schools was derived from the Base cost estimates of Stage 1 of the Resourcing the National Goals Project. Information on the current cost of delivering VET in Schools was obtained from the report The Cost of VET in Schools.41

The Cost of VET in Schools report suggests the total cost per student hour (psh) of delivering VET in Schools is $7.72psh. This includes $6.41psh of costs incurred directly at the school and $1.31psh of costs incurred by non-school organisations in their support of VET in School activities. The Base cost estimate does not include any costs incurred by non-school organisations. Thus, to be comparable to the Base cost estimate, the relevant cost for delivery of VET in Schools is the direct school cost of $6.41psh.

It should be noted that the cost model developed in the Cost of VET in Schools report does not reflect all possible delivery environments but rather the predominant structures of delivery and drivers of costs that exist within Australia. Other jurisdictions may have more expensive modes of delivering VET in Schools that are not captured in the Cost of VET in Schools report. However, this chapter confines itself to the national, direct costs identified in the Cost of VET in Schools report.

5.3 Total Cost and Cost Differentials

Using information on the number of students enrolled in VET in Schools and the average number of VET in School hours per student in senior secondary school it was possible to calculate an estimate of the total additional cost incurred by schools due to the delivery of VET in Schools courses.42

40 The Allen Consulting Group (2003, unpublished report to SRT) Resourcing the National Goals, Stage 2: Curriculum Related Cost Drivers, VET in Schools 41 The Allen Consulting Group, Deloitte Touche Tohmatsu, NCVER (June 2003), The Cost of VET in Schools: An analysis of the costs of delivering VET in Schools including an analysis of cost efficiencies, Final Report to the Department of Education, Science and Training. 42 The number of students enrolled in VET in School programs in 2001 was 169,809. The average number of VET in School hours per student in senior secondary school in 2001 was 191 hours. Information from the publication National Data on Participation in VET in Schools Programs for the 2002 School Year Compiled by the MCEETYA Taskforce on Transition from School from data provided by States and Territories has been used to calculate the average number of VET in School hours per student in senior secondary in 2001 at 191. It is noted that the Cost of VET in Schools Report includes an estimate of 205 hours for the 2001 average annual VET in School hours. This estimate was based on the previous MCEETYA Taskforce on Transition from School publication that included an error in the total number of reported VET in School hours, that was identified in the 2002 publication.



It was also possible to calculate an estimate of the total national cost to schools of delivering VET in Schools. This comprises two elements, a direct school cost and an indirect school cost, further broken down to costs per student hour.

The growth scenarios that were modelled do not include indirect costs and only account for direct costs. This is because the nature of the relationship between the non-school organisation costs and enrolments, or average annual student hours (the factors that are modelled in the scenarios), is likely to be different to the relationship between direct school costs and those factors modelled. For example, the non-school organisation costs are likely to have a large fixed component that does not substantially increase as, say, VET in School student hours or enrolments increase. Consequently, it is not appropriate to directly apply the per student hour cost to changing student hours/enrolments. The implication is that the results apply only to costs incurred at school level and do not capture those additional costs incurred by non-school organisations to support the delivery of VET in Schools.

5.3.1 Additional costs associated with anticipated enrolment trends in the future

The cost of providing VET in Schools will fluctuate with changing enrolment patterns. Both demand side and supply side factors will impact on VET in Schools enrolments. For example, demand side factors driving cost fluctuations include changes in the participation rate, proportion of students undertaking VET in Schools programs, as well as the absolute number of students. Supply side factors driving cost fluctuations include the course types and levels on offer.

The project examined the impact of future VET in School enrolment trends on delivery cost under four alternative scenarios. The scenarios were developed based on reviewing relevant documents, particularly Future Funding Options for VET in Schools completed by the Australian National Training Authority (ANTA) and with input from the SRT Secretariat. The scenarios were modelled using the available data and projecting out to 2010.

The scenarios modelled are: • Scenario 1 base case: assumes that the growth in enrolments in VET in Schools programs

will continue in the future, while the average hours per student per year and the range of courses available are maintained.

• Scenario 2 increasing retention rate: builds on scenario 1 and assesses the impacts of a higher retention rate in senior secondary schooling on demand for VET in Schools programs.

• Scenario 3 increasing VET in School hours: extends scenario 2 by assuming an increase in the ‘depth’ of VET in Schools participation by each student.

• Scenario 4 increased uptake of higher level certificates: builds on scenario 3 and extends it by assuming that more students undertake higher level certificate courses.

5.3.2 Additional costs associated with obtaining consistent high quality

The purpose of this component of the project was to identify those factors that are most influential on quality in VET in Schools, and to provide an estimate of the cost of obtaining consistent and high quality VET in Schools delivery. Achieving high quality VET in Schools is a critical issue for the education and training sector, for industry, unions and students. All parties have an interest in ensuring that VET in Schools programs provide equivalent quality training to VET delivered by the training sector. Jurisdiction representatives on the Transition from School Taskforce completed a survey that was used in conjunction with existing cost information to estimate results on the additional costs associated with obtaining consistent high quality.

The results uniformly identify the importance of teacher professional development and training, and access to work placement for students as critical factors in achieving quality delivery of VET in Schools. Schools in rural and regional locations incur additional costs associated exclusively with the delivery of VET in Schools programs. These additional VET specific costs are mostly related to transportation and travel for all parties involved in VET in Schools including students, teachers and workplace co-ordinators.



5.3.3 Additional costs associated with obtaining an improvement in quality

Information was also obtained to examine the resource implications associated with an increase in the quality of VET in Schools of 5 per cent.

As with the analysis of consistency, metropolitan and rural and regional schools would require different resource mixes to achieve this outcome. For metropolitan schools to achieve the improvement in quality, the greatest increase in resources would be directed to improving access to work placement for students. In contrast, for rural and regional schools to achieve the five per cent increase in quality of VET in Schools delivery, would require a substantial increase in four (of the total seven) of the quality factors.

The impact on cost to achieve improved consistency of VET in Schools delivery and a five per cent increase in the quality of VET in Schools delivery are of a similar magnitude. A priori it was expected that the achievement of the step change in quality would require a notably higher level of resourcing than achieving increased consistency in delivery. The similarity in the result may indicate that achieving consistency in delivery of VET in Schools is a task that is of similar magnitude to increasing quality by five per cent.

5.4 Detailed Findings - (i) Identification of the differential and total costs of VET in Schools

The purpose of this component is to provide an estimate of the total and differential cost of delivering VET in Schools and general education in the senior secondary years.

5.4.1 Approach

To calculate the differential costs of providing VET in Schools to general education requires estimates of the cost of providing VET in Schools and the cost of general education. The additional cost of providing VET in Schools is the difference between the VET in Schools and Base cost. To enable comparison of these two costs, they are calculated on a per student hour basis.

5.4.2 General education

The basis of the cost of general education for senior secondary schools is derived from the estimates of Stage 1 of the Resourcing the National Goals Project. Stage 1 calculated the Base cost for schools that were identified as being effective in attaining specified learning and participation outcomes, with average SES profile and minimal additional program resource inputs required to address learning needs. This was calculated for both primary and secondary government schools.

For the purpose of this project, the MCEETYA definition of VET in Schools is being used:

Programs that are undertaken by school students as part of the senior secondary certificate and which provide credit towards a nationally recognised VET qualification within the AQF. The training that students receive reflects specific industry competency standards and is delivered by Registered Training Organisations (RTOs) or by the school in partnership with an RTO.

The implication of adopting this definition is that the cost estimates focus on senior secondary schooling. VET courses offered at lower year levels or those not leading to a recognised qualification are not captured.

To reflect the focus on senior secondary schooling, the SRT secretariat adjusted the Base cost results to establish an average senior secondary school cost. The adjusted Base cost for senior secondary students is $7,983 per student per annum, calculated using the proportionate difference between total secondary in-school expenditure and senior secondary in-school expenditure. The Base cost figure represents the costs of all business operations of a school for all activities, that is, the hours a school is open and for which they are responsible for students.

To establish the per student hour (psh) Base cost requires an estimate of student hours per year, reflecting not just classroom time, but the hours a school is open and responsible for students. School



opening hours do not appear to be prescribed in the same way that teacher hours are prescribed in industrial awards or regulations. The convention is that classes operate from 9.00am to 3.00pm. However, schools are open for a short period prior to and after these times while students arrive and depart. Thus, in this project it has been assumed that schools are open from 8.30am to 3.30pm, for five days per week and 42 weeks per year. Using this information an average of 1,470 hours was calculated as the average annual hours per senior student per year.

Based on the information described above, the calculated Base cost psh cost for senior students is $5.43 (see Table 5.2).

Table 5.2: Calculation of the senior secondary Base cost per student hour

Item Base cost Senior student cost per annum $7,983* Annual senior student hours 1,470 Senior student Base cost psh $5.43

* Base cost for secondary schools of $7,006 multiplied by the proportionate increase of senior secondary in-school expenditure compared to total secondary in-school expenditure, as outlined in MCEETYA 2001/02 Summary Table 4.5.

5.4.3 VET in Schools

Information on the current cost of delivering VET in Schools is available from the report The Cost of VET in Schools.43 This information is based on school cost estimates obtained from a survey returns of 48 schools across all States and Territories. The Cost of VET in Schools report presents indicative dollar amounts for the actual cost experience for schools of delivering VET in Schools programs. These estimates are reasonably representative of the average costs across schools. The results of the national model presented in The Cost of VET in Schools provide the estimate of the cost of delivering VET in Schools used in this report.

This project uses the assumption that teachers work 32 hours per week, which is the national average of the regulated hours required by all jurisdictions.44

The Cost of VET in Schools results for the national model with an assumption of teacher hours at 32 hours per week reports the total cost per student hour of delivering VET in Schools is $7.72psh. This includes $6.41psh of costs incurred directly at the school and $1.31psh of costs incurred by non-school organisations in their support of VET in School activities. The Base cost estimate does not include any costs incurred by non-school organisations to support the delivery of VET in Schools. Thus, to be comparable to the Base cost estimate, the relevant cost for delivery of VET in Schools is the direct school cost of $6.41psh.

5.4.4 Results

Using the above information, an estimate of the differential cost of delivering VET in Schools and general education, as estimated by the senior secondary Base cost (SS-base cost), is $0.98psh (see Table 5.3).

Table 5.3: Cost differential between senior secondary Base cost psh and VET in Schools psh

SS –Base cost psh VET in Schools cost psh Cost differential SS –Base cost and VET in Schools psh

$5.43 $6.41 $0.98

As evident from Table 5.3, it is more costly for schools to deliver VET in Schools courses than general education curriculum, as represented by the SS-Base cost. Based on the information in table 2.2, it is possible to calculate an estimate of the total additional cost incurred by schools due to

43 The Allen Consulting Group, Deloitte Touche Tohmatsu, NCVER (2003), op.cit. 44 The Cost of VET in Schools Report also included modelling results based on an assumption that teachers work an average of 38 hours per week which is the number of hours required by Victoria and is the highest of the regulated hours among all jurisdictions.



the delivery of VET in Schools courses. For 2001, the total additional cost to schools of delivering VET in Schools courses was approximately $31.8 million (see Table 5.4).

Table 5.4: Differential direct school cost of delivering VET in schools for 2001

Factor Additional VET in Schools Cost Difference delivering VET in Schools and all education (psh) $0.98 Number of students enrolled in VET in Schools programs (2001) 169,809 Average number of VET in School hours per student in senior secondary in (2001)

191

Per capita differential – additional recurrent cost per VET student $187 Total differential for 2001 $31.8m

It is also possible to calculate an estimate of the total national cost to schools of delivering VET in Schools. This comprises two elements, a direct school cost and an indirect school cost. The direct school cost is calculated using $6.41 psh to deliver VET in Schools and was approximately $208.1 million in 2001. Non-school organisations — including government departments and agencies and non-government school organisations — also incur costs associated with policy setting, administration and the delivery of VET in Schools. These costs have been estimated to be in the order of $1.31 per student hour which was approximately $42.5 million in 2001.45 The estimate of total direct school costs and indirect non-school organisation costs associated with the national delivery of VET in Schools in 2001 was $250.6m (see Table 5.5).

Table 5.5: Total direct and indirect cost of delivering VET in Schools for 2001

5.4.5 Issues for consideration

This report has relied on existing cost data. The factors set out below are relevant when interpreting the results in this report. Alternative assumptions or different cost data would deliver different results:

• the Base cost schools cost incorporates both the cost of delivering general education and VET in Schools subjects. If the costs of delivering VET in Schools courses were to be removed from the Base cost, it would leave a pure general education cost which could reasonably be expected to be less than $5.43. This would have the effect of increasing the difference of $0.98 psh calculated above.

• the Base cost schools were selected particularly because they were effective in relation to student outcomes and were considered to have characteristics that contributed to a relatively low delivery cost. Thus, the Base cost will be lower than a cost associated with an average cost school. The schools included in the Cost of VET in Schools Report survey were selected based on the use of particular VET in School delivery modes and course offerings.46 It is noted that eight of the 66 schools included in the final survey sample had

45 The Allen Consulting Group, Deloitte Touche Tohmatsu, NCVER (2003), op. cit., p 85. It is noted that the figure of $1.31 was calculated based on data in survey returns that included the costs of the main education/training department and the Board of Studies in each jurisdiction but did not have a 100 per cent response rate. 46 The Allen Consulting Group, Deloitte Touche Tohmatsu, NCVER (2003), op. cit., p.4.

Factor Total VET in Schools direct cost

Total VET in Schools indirect cost

Difference delivering VET in Schools and all education (psh) $6.41 $1.31 Number of students enrolled in VET in Schools programs (2001) 169,809 169,809 Average number of VET in School hours per student in senior secondary in (2001)

191 191

Total school level VET in schools cost 2001 $208.1m Total indirect VET in schools cost 2001 $42.5 m Total school level and indirect VET in Schools cost 2001 $250.6



been identified by stakeholders as best practice schools. A consequence of the different selection criteria is that the Cost of VET in Schools Report results may have been lower if the Base cost selection criteria had been adopted. This would have the effect of reducing the difference of $0.98 psh calculated above;

• the cost base used to calculate the Base costs is broader than the cost base used to calculate VET in Schools costs. For example, the VET in Schools cost does not include the costs of infrastructure at the school used to deliver VET in Schools courses. The Cost of VET in Schools report identified that these costs can be substantial. Further, the VET in Schools cost does not include an amount that represents the school administrative overhead, indirect infrastructure, for example libraries and maintenance, or physical infrastructure. If these costs were included, it would increase the cost of VET in Schools psh and therefore increase the cost differential above $0.98;

• the Base cost schools results are based on information from government schools. The VET in Schools results are based on information from government, Catholic and independent schools;

• the figure of $1.31 was calculated based on data in survey returns that included the costs of the main education/training department and the Board of Studies in each jurisdiction but did not have a 100 per cent response rate, thus is an under-estimate of the average national indirect cost of delivering VET in Schools; and

• costs for the delivery of VET and the Base cost are assumed to remain constant over time.

5.5 Detailed Findings - (ii) Impact of future VET in School enrolment trends on delivery cost

The purpose of this component is to identify the impact of future VET in School enrolment trends on delivery costs at the school level. These school level costs are referred to as direct costs.

5.5.1 Approach

The cost of providing VET in Schools will fluctuate with changing enrolment patterns. Both demand side and supply side factors will impact on VET in Schools enrolments. For example, demand side factors driving cost fluctuations include the changes in the participation rate, proportion of students undertaking VET in Schools programs, as well as the absolute number of students. Supply side factors driving cost fluctuations include the course types and levels on offer.

To understand the cost impacts of various enrolment trends four scenarios were developed based on reviewing relevant documents, particularly Future Funding Options for VET in Schools completed by the Australian National Training Authority (ANTA). The scenarios are modelled using the available data and projecting out to 2010.

The scenarios modelled are: • Scenario 1 base case: that assumes that the growth in enrolments in VET in Schools

programs will continue in the future, while the average hours per student per year and the range of courses available are maintained.

• Scenario 2 increasing retention rate: that builds on scenario 1 and assesses the impacts of a higher retention rate in senior secondary schooling on demand for VET in Schools programs.

• Scenario 3 increasing VET in School hours: that extends scenario 2 by assuming an increase in the ‘depth’ of VET in Schools participation by each student.

• Scenario 4 increased uptake of higher level certificates: builds on scenario 3 and extends it by assuming that more students will undertake higher level certificate courses.

The background, assumptions, and draft results for each scenario are presented below.

As discussed previously, non-school organisations incur costs associated with the delivery of VET in Schools. In 2001, these costs were in the order of $1.31 psh, or $42.5 million nationally. The costs



presented in the scenarios below include the costs incurred directly at school level but do not account for costs incurred in non-school organisations. This is because the nature of the relationship between the non-school organisation costs and enrolments, or average annual student hours (the factors that are modelled in the scenarios), is likely to be different to the relationship between direct school costs and those factors modelled. For example, the non-school organisation costs are likely to have a large fixed component that does not substantially increase as, say, VET in School student hours or enrolments increase. Consequently, it is not appropriate to directly apply the $1.31 psh cost to changing student hours/enrolments. The implication is that the results below apply only to costs incurred at school level and do not capture those additional costs incurred by non-school organisations to support the delivery of VET in Schools.

5.5.2 Scenario 1: Base Case

Scenario 1 assumes that the growth in enrolments in VET in Schools programs will continue in the future, while the average hours per student per year and the range of courses available are maintained.

Growth in the system would be: • the natural increase in the 15 – 19 year old population; and • growth in student participation in VET in Schools at a slowing rate.

Discussion

VET in Schools has experienced strong growth from 1996 to 2002. In 1996 the number of senior secondary students undertaking VET as part of their senior secondary school certificate was 16 per cent, increasing to 44 per cent in 2002.

There are a number of reasons to assume a slower growth rate in VET in Schools participation than experienced to date.

Although there is strong growth in student enrolments in VET in Schools, that growth was much higher during the first three years of this period, levelling out at around 10 per cent per annum during the last three years. Between 1999 and 2002, the compound growth in the number of student enrolments was 11 per cent per annum, compared to just over 44 per cent between 1996 and 1999. This suggests ongoing growth in enrolments, but at a diminishing rate.

Senior certificate students select a limited number of subjects from both general education and VET in Schools programs. Thus, there is a natural limit to the number of VET in Schools subjects that students can undertake.

By 2002 more than 95 per cent of schools offering a senior secondary certificate offered VET in Schools programs compared to about 70 per cent in 1997. This suggests that the rapid initial start up and establishment phase for schools taking up VET in Schools is drawing to a close, and that growth opportunities in number of schools offering VET in Schools programs are limited.

Scenario 1 assumptions

For the purposes of this study it is assumed that growth will continue at a diminishing rate until levelling out at 2.75 per cent in 2010 (i.e. 25 per cent of the compound growth of 11 per cent between 1999 and 2002). The result is compound growth of 6.8 per cent for the eight years between 2002 and 2010, resulting in almost 70 per cent of senior secondary students enrolled in VET programs as part of their senior secondary school certificate in 2010. ANTA have suggested that 70 per cent of students enrolled in VET in Schools by 2010 is a useful figure for projection purposes. Figure 5.1 illustrates the assumed growth rate of student enrolments in VET in Schools.



Figure 5.1: Compound growth of students enrolled in VET in Schools - 1996 to 2010 Source: MCEETYA, National Data on Participation in VET in Schools Programs for the 2002 School Year, 2003; and The Allen Consulting Group.

Results

The draft results of modelling scenario 1 are summarised in Table 5.6 and Table 5.7. Table 5.6 illustrates how the number of students increases at a diminishing growth rate over the eight-year period from 2002 to 2010, while the average number of hours per student per year stays constant at the 2002 average of 201 hours. On the basis of these assumption outlined above it is expected that there will be more than 286 000 students enrolled in VET in Schools programs in 2010.

Table 5.6: Variables used in Scenario 1

Student participating in VET — slowing growth rate

Average hours per student per year — unchanged

2001 169,809 191 2002 185,520 201 2003 201,177 201 2004 216,520 201 2005 231,273 201 2006 245,152 201 2007 257,871 201 2008 269,154 201 2009 278,744 201 2010 286,409 201

Source: The Allen Consulting Group

Using the cost information presented in Section 5.4 (see Table 5.4), it is possible to estimate the impact of future VET in Schools enrolment trends (as set out in Table 5.6) on delivery costs over the period.



Assuming that the SS-Base cost psh cost and the VET in Schools psh cost remain constant over the period, the total cost of providing VET in Schools will increase from the estimated $208.1 million in 2001 to an estimated $369 million in 2010. If the students undertaking VET in School were instead all undertaking general education subjects at Base cost schools the estimated cost to the schools would have been $176.3 million in 2001 and increased to $312.6 million in 2010. Thus, in this scenario the additional costs to schools associated with students undertaking VET in Schools rather than general education subjects increases from $31.8 million in 2001 to $56.4 million in 2010.

Table 5.7: Estimated direct delivery cost of VET in Schools - Scenario 1, 2001

Cost of VET in Schools $m

Equivalent SS- Base cost $m

Differential cost $m

2001 208.1 176.3 31.8 2002 239.6 203.0 36.6 2003 259.2 219.6 39.6 2004 279.0 236.3 42.6 2005 298.0 252.4 45.5 2006 315.9 267.6 48.3 2007 332.2 281.5 50.8 2008 346.8 293.8 53.0 2009 359.1 304.3 54.9 2010 369.0 312.6 56.4


5.5.3 Scenario 2: Increasing retention rate

Scenario 2 assesses the impacts of a higher retention rate in senior secondary schooling on demand for VET in Schools.

Growth in the system would be: • natural increase in the 15 – 19 year old population (consistent with scenario 1); • growth in student participation in VET in Schools at a slower rate (consistent with scenario

1); and • an increase in the proportion of the 15 – 19 year old population that complete senior

secondary schooling.

Discussion

The National Goals for Schooling state that: all students have access to the high quality education necessary to enable the completion of school education to Year 12 or its vocational equivalent and that provides clear and recognised pathways to employment and further education and training.

Jurisdictions have committed to a school retention target of 90 per cent by 2010. The apparent retention rate for years 10 to 12 in 2002 was 77 per cent. Increasing the retention rate will increase the absolute number of students at school and hence the number of students undertaking VET in Schools.


For the purpose of this scenario, it is assumed that jurisdictions will meet their 90 per cent retention target rate by 2010 and that the proportion of students undertaking VET in Schools subjects will be consistent with the current trend, such that by 2010, 70 per cent will be enrolled in a VET in Schools subject.

Results

The impact of a 90 per cent retention rate for senior secondary students on enrolments in VET in Schools programs is illustrated in Table 5.8. Although the number of students participating in VET in Schools will still grow at a diminishing growth rate, it is estimated that the increase in the number



of students completing year 11 and year 12 will result in more than 350,000 students enrolled in VET in Schools programs by 2010. For this scenario is it assumed that the average number of hours per student per year stays constant at the 2002 average of 201.


Student participating in VET — slowing growth rate, increased retention rate

Average hours per student per year — unchanged

2001 169,809 191 2002 185,520 201 2003 211,580 201 2004 227,205 201 2005 243,975 201 2006 261,973 201 2007 281,288 201 2008 302,692 201 2009 325,712 201 2010 350,467 201


The estimated total and differential cost of the future delivery of VET in Schools in scenario 2 is summarised in Table 5.9.

Assuming that the SS-Base cost psh cost and the VET in Schools psh cost remain constant over the period, the increased retention rate will have the following impacts on school costs:

• The total cost of providing VET in Schools will increase from the estimated $208.1 million in 2001 to an estimated $451.5 million in 2010.

• If the students undertaking VET in School were instead all undertaking general education subjects at Base cost schools the estimated cost to the schools would have been $176.3 million in 2001 and increased to $382.5 million in 2010.

• The additional costs to schools associated with students undertaking VET in Schools rather than general education subjects increases from $31.8 million in 2001 to $69 million in 2010.

• The estimated total cost of delivering VET in Schools is estimated to be $451.5 million in 2010. Compared to a Base cost for general education over the same period of $382.5 million, the estimated differential cost of delivering VET in Schools in scenario 2 amounts to $69 million in 2010.

There is currently discussion around the general cost implications associated with obtaining a retention rate of 70 per cent. It has been proposed by some that the per student costs of achieving the higher retention rate will increase due to the additional effort required by schools to meet the needs of the group of students who, under current arrangements, would choose not to remain at school. It is also possible that this group of newly retained students could be more strongly attracted to VET in School subjects than the existing student group. If this were the case the rate of growth in demand for VET in Schools subjects would be greater than the 6.8 per cent compound growth rate between 2002 to 2010. Both of these factors would increase the total cost and differential cost of providing VET in Schools. However, due to the absence of data on which to make any estimate of the extent of any increase in resource requirements, the results presented in this modelling do not account for this.



Table 5.9: Estimated direct delivery costs of VET in Schools - Scenario 2

Cost of VET in Schools — $m

Base cost — $m Differential cost — $m

2001 208.1 176.3 31.8 2002 239.6 203.0 36.6 2003 272.6 230.9 41.7 2004 292.7 248.0 44.7 2005 314.3 266.3 48.0 2006 337.5 285.9 51.6 2007 362.4 307.0 55.4 2008 390.0 330.4 59.6 2009 419.7 355.5 64.1 2010 451.5 382.5 69.0


5.5.4 Scenario 3: Increasing VET in School hours

Scenario 3 builds on scenario 2. It uses the assumptions from scenario 2 and further assumes an increase in the ‘depth’ of VET in Schools participation by each student.


1); • an increase in the proportion of the 15 – 19 year old population that complete senior

secondary schooling (consistent with scenario 2); and • growth in the average number of hours per student per year in VET in Schools programs.

Discussion

In 2002, the average hours per student per year in VET in Schools was 201 hours, compared to 110 hours in 1998. Growth depends on how schools and students construct their participation in VET in Schools programs. There are two potential sources of growth in the average number of hours per student per year in VET in Schools programs.

First, there may be an increase in the average number of courses undertaken by students. The discussion below suggests that it is reasonable to assume that subject offerings may increase and that students may increase the number of VET in Schools subjects undertaken as part of the senior certificate program.

Nationally, enrolments in VET in Schools represent all nineteen ANTA industry groups. However, in 2002, 62 per cent of enrolments in VET in Schools courses were in four industries (see figure 3.2):

• Tourism — 19.7 per cent; • Business and Clerical — 16 per cent; • Computing — 15.4 per cent; and • General Education and Training — 10.7 per cent.



Figure 5.2: Enrolment as percentage by ANTA Industry group - 2002

Source: MCEETYA, National Data on Participation in VET in Schools Programs for the 2002 School Year, 2003; and ANTA, Future Funding Options for VET Schools, 2002.

It has been reported that several industries which represent a substantial share of the labour market, or which are expected to experience strong employment growth, are not yet significantly represented in current VET in Schools programs. Employment forecasts, released by Monash University in December 2002, indicate that the overall level of employment will increase by 10.8 per cent over the eight years from 2001-02 to 2009-10. Similar growth is also expected in occupational categories that are typically aligned with vocational education and training such as associate professional and intermediate clerical, sales and service workers. This suggests that VET in Schools could play an increasingly important role in assisting students prepare for future employment and in meeting industry training needs.

As noted above, there has been a substantial increase in the average hours per student per year in VET in Schools between 1996 and 2002. Thus, the second likely driver of increased hours in VET in Schools is an increase in the average length of each course.

A particular factor that could contribute to more hours per course is a higher proportion of courses including work placement. Between 1996 and 2002, strong growth was recorded in students participating in work placement. The average number of students participating in structured workplace learning increased from around 27 per cent of all VET in Schools students in 1997 to more than 61 per cent in 2002 and the total number of hours in workplace learning increased from 2.3 million to 7.4 million in the same period. However, while more students are undertaking structured workplace learning, the average number of hours per student in workplace learning has



decreased, from 89 hours in 1999 to 70 hours in 2001 suggesting that the additional structured workplace learning components are relatively short.

School-Based New Apprenticeships have also grown. Students commencing School-Based New Apprenticeships also showed strong growth, increasing from 1,500 students (or 1.3 per cent of VET students) in 1998 to 7,390 (or 4 per cent) students in 2002.

The growth in the average number of hours per student per year participating in structured workplace learning and School-Based New Apprenticeships, is expected to continue as the school sector increasingly embrace training packages within the secondary school certificate.


For the purposes of this scenario it is assumed that although growth in student enrolments will continue at a diminishing rate (see scenario 1), there will be an increase in the proportion of the 15 – 19 year old population that complete senior secondary schooling (see scenario 2) while the average number of hours per student per year will increase by approximately 40 hours per student per year over the eight-year period between 2002 and 2010.

As noted above, from 1998 to 2002, the average number of hours per student increased from 110 hours to 201 hours. This represents a growth of 83 per cent over four years. It is expected that although the average number of hours will continue to increase (as discussed before) it will be at a slower rate, reflecting the now broad range of subject and certificate level offerings. The national average is underpinned by a high degree of difference in the average hours per student across States and Territories (see Table 5.10).

The modelling assumes that the average number of hours in the four jurisdictions that are currently below the average of 201 hours (NSW, South Australia, Western Australia and the ACT), will increase to 201 hours by 2010 and the average number of hours in the jurisdictions currently above the national average will remain the same. The outcome of this assumption is that the average number of hours per student per year will be 241 hours in 2010, representing an increase of 40 hours (see Table 5.11) over the eight-year period from 2002 to 2010.

Table 5.10: Average hours per student per year - 2002

Jurisdiction

Average hours

NSW 132 Victoria 250 Queensland 309 South Australia 111 Western Australia 171 Tasmania 341 Northern Territory 260 ACT 112 Australia 201

Source: MCEETYA, National Data on Participation in VET in Schools Programs for the 2002 School Year

Results

Table 5.11 shows the increase in the average number of hours over eight years. It is estimated that the average number of hours per student per year will increase to 241 hours in 2010, while the number of students enrolled in VET in Schools increase to more than 350 thousand students over the same period.




Student participating in VET — slowing growth rate, increased retention rate

Average hours per student per year — increasing

2001 169,809 191 2002 185,520 201 2003 211,580 206 2004 227,205 211 2005 243,975 215 2006 261,973 220 2007 281,288 225 2008 302,692 230 2009 325,712 236 2010 350,467 241


The estimated total and differential cost of the future delivery of VET in Schools according to scenario 3 is summarised in Table 5.12.

Assuming that the SS-Base cost psh and the VET in Schools psh cost remain constant over the period, the increased average hours will have the following impacts on school costs:


• If the student undertaking VET in School were instead all undertaking general education subjects at Base cost schools the estimated cost to the schools would have been $176.3 million in 2001 and increased to $458.7 million in 2010.

• The additional costs to schools associated with students undertaking VET in Schools rather than general education subjects increases from $36.4 million in 2001 to $94.6 million in 2010.

Table 5.12: Estimated direct delivery cost of VET in Schools - Scenario 3


Base cost — $m Differential cost — $m

2001 212.7 176.3 36.4 2002 244.8 203.0 41.8 2003 285.5 236.7 48.8 2004 313.5 259.9 53.6 2005 344.3 285.5 58.8 2006 378.1 313.5 64.6 2007 415.2 344.2 71.0 2008 456.9 378.8 78.1 2009 502.8 416.8 85.9 2010 553.2 458.7 94.6


5.5.5 Scenario 4: Increased uptake of higher level certificates

Scenario 4 builds on scenario 3 but extends it by assuming that there is a shift to students undertaking higher level certificates.


1); • an increase in the proportion of the 15 – 19 year old population that complete senior

secondary schooling (consistent with scenario 2);



• growth in the average number of hours per student per year in VET in Schools programs (consistent with scenario 3); and

• a shift in the proportion of students undertaking higher level certificate courses.

Discussion

Currently, the majority of VET in Schools courses are offered at Certificate Level I and Level II. However, it is reasonable to expect that the proportion of VET in Schools students undertaking higher level certificates will increase in the coming years.

Demand for higher level courses will be underpinned by a number of factors including: • the anticipated increase in retention rates into senior secondary schooling; • the extension of VET in Schools courses into the earlier years of secondary school which

provides a basis for students to commence higher level certificates in senior secondary school years;

• the growth of School-Based new Apprenticeships; and • the employment needs of industry (as discussed in scenario 3).

Schools’ ability to provide higher level courses is also anticipated to increase as VET in Schools becomes more embedded in school curricula. These higher level courses may be offered either directly by schools, or by delivery mode arrangements involving external parties. A potential shift to students undertaking higher certificate levels is relevant due to the increased costs generally associated with offering higher level certificate courses.


For the purposes of this scenario it is assumed that although growth in student enrolments will continue at a slower rate (see scenario 1), there will be an increase in the proportion of the 15 – 19 year old population that complete senior secondary schooling (see scenario 2). The depth of participation remains consistent with the assumptions in scenario 3. In the absence of specific forecasts about changing demand for VET in Schools courses by certificate level, it is assumed that there will be a reasonable amount of growth in the number of students undertaking Certificate Level III, which has been modelled at 10 per cent over the period, and a smaller amount of growth in the number of students undertaking Certificate Level IV, which has been modelled at 5 per cent. Table 5.13 shows the impact of these assumptions on the proportion of students undertaking VET in Schools courses by certificate level from 2002 to 2010.

Table 5.13: Participation in different certificate levels of VET in Schools courses

2002 2010 Certificate level I 22.36% 18.68% Certificate level II 68.71% 57.40% Certificate level III 8.34% 18.34% Certificate level IV and higher 0.58% 5.58%

Source: NCVER, Australian Vocational Education and Training Statistics, Students and courses 2002.

In the course of this project it has not been possible to identify existing information on the different costs incurred by schools to deliver different certificate level courses. The Cost of VET in Schools47 report indicated that higher costs were associated with higher level certificates due to their characteristics of:

• smaller average class sizes; • increased infrastructure investment at the school; • teacher professional development costs; or • entering arrangements with other training providers.

47 The Allen Consulting Group, Deloitte Touche Tohmatsu, NCVER (2003), op. cit., p130.



For the purpose of the modeling exercise it has been assumed that the higher the certificate level, the greater the delivery cost for schools. It has been assumed that over the eight year period from 2002 to 2010, the cost of certificate level III VET in Schools courses will increase by 10 per cent per student hour (i.e. $7.05 per student hour), while the cost of certificate level IV courses will increase by an additional 5 per cent per student hour (i.e. $7.40 per student hour).

Results

The results of modelling scenario 4 are summarised in Table 5.14 and Table 5.15. Table 5.14 illustrates how the average number of student per certificate level changes over the eight-year period from 2002 to 2010. In 2010, more than 350,000 students will be participating in VET in Schools due to a retention rate of 90 per cent for senior secondary students.

Table 5.14: Student participation by certificate level in VET in Schools courses

Certificate level I

Certificate level II

Certificate level III

Certificate level IV and higher

2002 41,489 116,682 15,478 1,075 2003 46,343 142,392 20,296 2,548 2004 48,719 149,695 24,634 4,157 2005 51,192 157,293 29,501 5,989 2006 53,762 165,192 34,951 8,068 2007 56,430 173,393 41,043 10,421 2008 59,331 182,307 47,949 13,106 2009 62,343 191,565 55,665 16,139 2010 65,467 201,168 64,276 19,556


The total and differential cost of the future delivery of VET in Schools according to scenario 4 is summarised in Table 5.15.

Assuming that the SS-Base cost psh and the VET in Schools psh cost remain constant over the period, the higher proportion of students undertaking Certificate Levels III and IV will have the following impacts on school costs:


• If the students undertaking VET in Schools were instead all undertaking general education subjects the estimated cost to the schools would have been $176.3 million in 2001 and increased to $458.7million in 2010.

• The additional costs to schools associated with students undertaking VET in Schools rather than general education subjects increases from $31.8 million in 2001 to $97.3 million in 2010.

Table 5.15: Estimated direct delivery cost of VET in Schools - Scenario 4


Base cost— $m Differential cost — $m

2001 208.1 176.3 31.8 2002 239.6 203.0 36.6 2003 279.8 236.7 43.1 2004 307.8 259.9 47.9 2005 338.9 285.5 53.4 2006 373.3 313.5 59.8 2007 411.3 344.2 67.1 2008 454.6 378.8 75.8 2009 502.6 416.8 85.8 2010 556.0 458.7 97.3




5.6 Detailed Findings - (iii) Obtaining consistent quality in VET in Schools delivery

The purpose of this component is to identify those factors which are most influential on quality in VET in Schools, and provide an estimate of the cost of obtaining consistent and high quality in VET in Schools delivery. Achieving high quality VET in Schools is a critical issue for the education and training sector, for industry, unions and students. All parties have an interest in ensuring that VET in Schools programs provide equivalent quality training to VET delivered by the training sector.

5.6.1 Background

A number of factors are commonly identified as impacting on the quality of VET in Schools. The report the Cost of VET in Schools48 surveyed teachers and selected unions, industry groups and ITABs and asked them to identify the top three factors that make the greatest contribution to the delivery of high quality VET in Schools. The most commonly reported factors identified by teachers were:

• The quality of teacher training; • The commitment to VET in Schools by teachers and the school; • Industry placement/participation.

Although a small response rate from union, industry and ITABs did not allow strong conclusions, responses from these organizations did emphasis the importance of the experience and training of teachers, physical resources and work placements in contributing to high quality VET in Schools.

The importance of achieving consistent and high quality delivery of VET in Schools has been brought into sharp focus through some recent concerns expressed by some industry sectors. ANTA, through the National Training Quality Council has examined these concerns and could not conclude that there was a substantive basis for these concerns.49 However, the report did identify a number of challenges facing VET in Schools including:

• An on-going program of quality improvement for school teachers delivering VET in Schools; and

• A need to establish more clearly the purpose and desired outcomes of VET in Schools, possibly by developing a new suite of qualifications.

In discussing quality issues, acknowledging the complexities is important. Such complexities include:

• VET in Schools inputs can be used in different combinations to achieve quality outcomes; • some suggest that the nature of VET where students aim to achieve competencies makes

the notion of quality difficult to conceptualise; • specific input mixes may reflect different administrative arrangements for the delivery of

VET in Schools across States and Territories; • the variety of delivery modes options; and • school and student characteristics.

5.6.2 Factors that support consistent high quality VET in Schools delivery

Existing research suggests that there are a number of key factors associated with the delivery of high quality VET in Schools. These are:

Teacher professional development and training

The ability and knowledge of teachers has a significant influence on the learning outcomes of students. This is true for VET in Schools as well as general education. Workplace training and professional development is important for the on-going development of quality teaching in VET in Schools. It is recognised that where teachers have completed workplace training units, their

48 The Allen Consulting Group, Deloitte Touche Tohmatsu, NCVER (2003), op. cit., pp141-3. 49 KPA Consulting (2003), a Report to Australian National Training Authority, Quality in VET in Schools Project, Final Report July 2003.



understanding of competency based training is higher.50 As identified above, a survey of teachers identified that the quality of teacher training was the most important influence on the quality of VET in Schools.51 For VET in Schools, teacher professional development includes on-going professional development to allow teachers to keep up-to-date with the changes and demands of industry.

Access to work placements for students Between 1996 and 2002, strong growth was recorded in students participating in work placement. The average number of students participating in structured workplace learning increased from around 27 per cent of all VET in Schools students in 1997 to more than 61 per cent in 2002 and the total number of hours in workplace learning increased from 2.3 million to 7.4 million in the same period.52 While more students are undertaking structured workplace learning as part of the VET in Schools program, the average number of hours per student in workplace learning has decreased from 89 hours in 1999 to 70 hours in 2001.53

Given the inherent industry focus of VET in Schools courses, the ability of students to access work placements can have a significant influence on student outcomes. Organising, co-ordinating and monitoring work placements involves the time of VET co-ordinators, teachers and specialist work placement co-ordinators.

Maintaining up-to-date VET in Schools curriculum

VET in Schools curriculum requires updating of course material to be consistent with changes made to industry Training Packages. The rate of change is reputedly greater than for general education subjects in the senior secondary curriculum.

Maintaining links to industry training needs

Maintaining links to industry provides a basis for analysis of future industry training needs, which can be reflected in both course content and course selection. Developing strong linkages between VET in Schools providers and industry also assists in other aspects of VET in Schools delivery such as work placements. Linkages are important at both the system and school level.

Maintaining information on AQF credentialing and archiving

Maintaining the credibility of qualifications earned by students of VET in Schools is important for the overall quality of the courses. Maintaining information on credentials ensures that industry can be confident of the credentials of potential employees. While such information is kept at a system level, there are responsibilities at the school level for the maintenance of up-to-date information. This includes complying with the AVETMIS Standard for VET data collection and reporting.

Compliance with AQTF requirements

The AQTF is the framework to ensure national consistency in VET qualifications through establishing prescribed standards for program implementation and assessment. It therefore underpins the quality of all VET, including where the school is the RTO and is directly responsible for meeting AQTF standards for some or all of its VET in Schools programs.

Physical infrastructure

While there is considerable variation in the material requirements for VET in Schools courses, it can be said that the majority of courses require access to some training materials, often at a level higher than standard courses taught in schools. The quality and accessibility of these resources is likely to have an influence on the overall quality of the course.

50 KPA Consulting (2003), op. cit. 51 The Allen Consulting Group, Deloitte Touche Tohmatsu, NCVER (2003), op. cit. 52 MCEETYA (2003), National Data on Participation in VET in Schools Programs for the 2002 School Year; and ANTA, Future Funding Options for VET Schools. 53 MCEETYA (2003), op.cit.



5.6.3 Approach

The approach to examining what is required to achieve consistently high quality VET in Schools was to gather information around the key questions of:

• What is the relative importance of factors that influence the delivery of consistent high quality in VET in Schools? and

• How can resources be most effectively directed to achieve high quality in VET in Schools?

Information to help address these questions was obtained from jurisdiction members of the MCEETYA Transitions from Schools Taskforce through responses to a consultation paper. These responses provide the basis for the analysis in this chapter. All jurisdictions provided a response to the consultation paper.

The questions in the consultation paper focus on the following aspects of quality in VET in Schools. Specifically, information was sought from the jurisdiction taskforce members on:

• The relative importance of quality factors — this allowed quality factors (as described above) to be ranked by their influence on the delivery of consistent high quality in VET in Schools.

• Weighting of quality factors — this allowed analysis of how additional resources should be distributed within schools to underpin consistent high quality of VET in Schools.

• Regional and rural VET in Schools delivery — this identified additional costs that are specific to the delivery of VET in Schools in rural and regional schools.

• Achieving consistent high quality delivery of VET in Schools — this supported analysis of the quantum of resources required to achieve greater consistency in the quality of VET in Schools delivery, including any differences to achieve this objective in metropolitan and rural and regional schools.

• Increasing the quality of VET in Schools — this supports analysis of the quantum of resources required to achieve a 5 per cent improvement in the quality of VET in Schools delivery. Again, separate estimates were requested for metropolitan and rural and regional schools.

5.6.4 Key Factors for quality delivery of VET in Schools

As discussed above, the factors that are recognised in the current research and literature to have significant influence on quality are:

• teachers professional development and training; • access to work placements for students; • maintaining up-to-date VET in Schools curriculum; • maintaining links to industry training needs; • maintaining information on AQF credentialing and archiving; • complying with the AQTF requirements; and • physical infrastructure.

Of the seven quality factors identified in the consultation paper, jurisdiction taskforce members were invited to add other factors that they considered contributed to delivery of high quality VET in Schools and then to rank factors in order of their influence on quality delivery of VET in Schools.

The results indicate that teacher professional development is the most important factor, with 75 per cent of respondents rating it as very important (rankings 1 and 2) and the remaining 25 per cent rating it as important (rankings 3 and 4). Access to work placements was also rated highly and like teacher professional development was always ranked as either very important or important. Physical infrastructure was ranked by all as either important or moderately important (rankings 5 and 6). There were mixed views on the relative importance for other quality factors: maintaining curriculum, links to industry, AQF credentialing and archiving and AQTF compliance. Each of these factors



received rankings from very important to less important. AQF credentialing and archiving were generally ranked as the least important factor influencing quality (see Figure 5.3)

Figure 5.3: Relative importance of factors influencing quality in VET in Schools

Source: Data from consultation with jurisdiction representatives on the MCEETYA Schools Transitions Taskforce

In providing these rankings, jurisdiction taskforce members were invited to include additional factors which they considered also influenced the quality delivery of VET in Schools. Six additional factors were identified as affecting the quality of VET in School provision (see Table 5.16). These factors were generally rated as moderate or less important although two, 'equitable access to a broad range of appropriate VET courses' and 'schools allocating adequate time to VET in school coordination', were ranked as very important or important (with a ranking of 2).

Table 5.16: Additional factors which influence quality in VET in Schools

Factors

i) Schools allocating adequate time to VET in school coordination ii) Provision of up-to-date information and support from education departments iii) Equitable access to broad range of appropriate VET courses to meet industry needs and student

aspirations - (eg through access to TAFE or shared delivery) iv) Smaller class sizes v) Special needs provision vi) Access in geographically isolated areas

Source: Data from consultation with jurisdiction representatives on the MCEETYA Schools Transitions Taskforce

The ranking of factors provides an indication of the relative importance of factors. To provide further depth to the result above, taskforce members were asked to weight the factors by considering how



they would allocate an additional 100 units of resources - with the objective of improving quality in VET in Schools.

As shown in Figure 5.4, teacher professional development and training was the factor with the greatest average allocation of additional resources (22 per cent) - indicating that it is considered the activity with the greatest potential to improve the quality in VET in schools. Access to work placements is a clear second with 19 per cent of additional resources. These results are consistent with those from the ranking of factors, and also indicate that together, these two factors would account for 41 per cent of any additional VET in School resources.

An interesting result is the high allocation of resources to physical infrastructure (14 per cent of additional resources), given its relatively lower ranking for quality. This perhaps indicates that there is higher level of resources necessary for physical infrastructure relative to the other factors, in order to achieve the same influence on quality. Additional costs for physical infrastructure are unable to be calculated through this analysis, due to the fact that the VET cost psh does not include this cost item.

Figure 5.4: Weighting of factors with the greatest influence on quality in VET in Schools

Note: ‘Other’ includes Schools allocating adequate time to VET, AQF credentialing and archiving, Information and support from education departments, Trainer professional develoment, Access in geographically isolated areas and special needs provision. Source: Data from consultation with jurisdiction representatives on the MCEETYA Transition from Schools Taskforce.

5.6.5 Key factors influencing quality of delivery of VET in Schools in rural and regional schools

The delivery of VET in Schools in rural and regional areas faces specific challenges associated with geographic location. Jurisdiction taskforce representatives were asked to identify any specific additional costs that schools in rural and regional areas incur for delivery of VET in Schools.

Rural and regional schools face different challenges to those schools in metropolitan areas. These challenges also apply to the delivery of VET in Schools. Taskforce members were asked to identify the additional costs related to the delivery of VET in Schools by schools in rural and regional areas that are specific to the provision of VET in Schools, rather than those which are common to both general education and VET in Schools. Responses identified a number of cost items, but focused heavily on travel costs and identified multiple ways in which these costs were incurred to deliver VET in Schools in rural and regional locations.



Table 5.17: additional cost factors incurred to delivery of VET in Schools in rural and regional locations

Factors

• AQTF compliance – additional travel costs and time for internal and external audits • Additional time and travel costs of professional development and industry contact • Additional travel cost for students, teachers and workplace coordinators for work placements • Additional costs of student travel to TAFE courses or other schools to undertake courses not delivered

within the home school. Many VET courses (eg automotive) are delivered only by TAFE and small rural schools may have insufficient numbers to form classes.

• There are additional resources required for finding appropriate Registered Training Organisations willing to deliver training to indigenous youth in remote locations.

• Cost of development and curriculum provision to enable online and flexible delivery. • Additional costs related to networking with the business community.

Source: Data from consultation with jurisdiction representatives on the MCEETYA Transition from Schools Taskforce

5.6.6 Achieving consistent quality in the delivery of VET in Schools

As discussed above, a key issue for VET in Schools is achieving consistency in the quality of delivery across schools and systems. Jurisdiction taskforce members were asked to nominate the quantum of additional resources required to achieve a more consistent delivery of high quality VET in Schools for the seven identified quality factors. The possible responses were:

• No cost increase 0%; • A small increase 1-5%; • A moderate increase 6-10%; • Substantial increase 10-30%; or • Very substantial increase more than 30%.

Separate responses were obtained for metropolitan and rural and regional schools.

5.6.7 Survey results

For metropolitan schools the area identified as needing the greatest additional resources was teacher professional development, with an estimated 16.4 per cent increase needed (see Table 5.18). Compared to metropolitan schools, the results identify that rural and regional schools would require a notably higher level of resourcing to improve consistency in the quality of VET in School delivery in the areas of compliance with AQTF requirements and maintaining information on AQF credentialing and archiving, and maintaining links to industry training needs.

Table 5.18: Required Increase in resources to achieve consistent quality in VET in Schools

Increase in resources to achieve consistent quality (%)

Metropolitan Schools

Rural and Regional Schools

Teacher professional development and training Substantial -16.4% Moderate - 9.7% Access to work placements for students Moderate - 8.9% Moderate - 8.6% Maintaining up-to-date VET in Schools curriculum Small - 3.5% Small - 4.0% Maintaining links to industry training needs Moderate - 5.4% Moderate - 8.6% Maintaining information on AQF credentialing and archiving Small - 2.9% Moderate - 5.1% Compliance with AQTF requirements Moderate 7.3% Substantial 15.4% Physical infrastructure Moderate 7.8% Moderate 6.9%

Source: Data from consultation with jurisdiction representatives on the MCEETYA Transition from Schools Taskforce.

5.6.8 Implications for resourcing

These estimates of necessary increases in resources to achieve consistent quality in VET in Schools can be applied to cost data from the Cost of VET in Schools report to provide a dollar estimate of



total additional expenditure. This is done using estimates for total cost of VET in Schools per student hour and applying the percentage increases for the quality factors in Table 5.18.54

The results show that in metropolitan schools the cost of achieving greater consistency in the quality of VET in School delivery is $0.13 psh or a 2 per cent increase in the total psh cost. As expected, the cost to achieve the same outcome is higher in rural and regional schools where it is estimated that to achieve the same outcome would require $0.16 psh or a 2.5 per cent increase in the total psh cost. As noted previously, the VET cost psh does not include the costs of physical infrastructure and therefore additional costs for physical infrastructure are not reflected in the results in Table 5.19 or Table 5.20.

Table 5.19: Direct cost of achieving consistent quality in delivery in VET in Schools - Metropolitan schools

Current cost

psh

$ increase

psh

Updated Cost

psh

Teacher professional development and training $ 0.15 $ 0.02 $ 0.17 Access to work placements for students $ 0.51 $ 0.05 $ 0.56 Maintaining up-to-date VET in Schools curriculum $ 0.16 $ 0.01 $ 0.17 Maintaining links to industry training needs $ 0.54 $ 0.03 $ 0.57 Maintaining information on AQF credentialing and archiving $ 0.11 $0.00 $0.11 Compliance with AQTF requirements $ 0.26 $0.02 $0.28 Physical infrastructure Total cost for quality factors $1.73 $0.13 $1.86

Total Cost per student hour $6.41 $0.13 $6.54

Source: The Allen Consulting Group, Deloitte Touche Tohmatsu, NCVER, The Cost of VET in Schools: An analysis of the costs of delivering VET in Schools including an analysis of cost efficiencies, Final Report to the Department of Education, Science and Training, June 2003 and data from consultation with jurisdiction representatives on the MCEETYA Transition from Schools Taskforce.

Table 5.20: Direct cost of achieving consistent quality in delivery in VET in Schools - Rural and Regional schools

Current cost $ increase Updated Cost

Teacher professional development and training $0.15 $0.01 $0.16 Access to work placements for students $0.51 $0.04 $0.55 Maintaining up-to-date VET in Schools curriculum $0.16 $0.01 $0.17 Maintaining links to industry training needs $0.54 $0.05 $0.59 Maintaining information on AQF credentialing and archiving

$0.11 $0.01 $0.12

Compliance with AQTF requirements $0.26 $0.04 $0.30 Physical infrastructure Total $1.73 $0.16 $1.89 Total cost per student hour $6.41 $0.16 $6.57


The implications of an increase in the cost psh of delivering consistent high quality VET in Schools can be seen by examining the impacts that this additional cost would have on the results of the scenarios in chapter 4. A weighted average of metropolitan and rural and regional resources to achieve consistent high quality delivery of VET in Schools is $0.14.55

The cost differential per student hour between the Base cost and the VET in School delivery cost would increase to $1.12 (see Table 5.21). This is a substantial increase and the impact on the resource requirements in 2010 are in Table 5.22. For example, in scenario 1 the resources to achieve current quality in 2010 were estimated to be $31.8 million in 2001 increasing to $56.4 million in 2010. If additional resources were provided to achieve consistent high quality delivery of VET in

54 Data of total cost per student hour is derived from The Allen Consulting Group, Deloitte Touche Tohmatsu, NCVER (2003), op. cit. 55 The weighted average is based on 65% of schools being located in major cities and 35% being located outside major cities which is consistent with the location of teaching staff (Source: Australian Bureau of Statistics, Australian Social Trends 2003).



Schools the resource requirements would be $36.4 million in 2001 increasing to $64.4 million in 2010.

Table 5.21: Direct cost differential between senior secondary Base cost psh and VET in Schools psh to achieve consistent high quality delivery

SS –Base cost psh Scenario 1 - VET in Schools cost psh

VET in Schools cost psh to achieve

consistent high quality delivery

Cost differential SS – Base cost and VET in

Schools psh

$5.43

$6.41

$6.55

$1.12


Table 5.22: Comparison of the school level resources to achieve current quality and consistent high quality delivery of VET in Schools, 2001 and 2010

Scenario Resources to achieve current quality ($m)

Resources to achieve consistent high quality ($m)

2001

2010 2001 2010

1 – Base case 31.8 56.4 36.4 64.4 2 – Increasing retention rate

31.8 69 36.4 78.9

3 – Increasing VET in School hours

31.8 82.7 36.4 94.6

4 – Increased uptake of high level certificates

31.8 97.3 36.4 109.5


5.7 Detailed Findings - (iv) Increasing quality of delivery in VET in Schools

This section considers the quantum of additional resources needed to achieve an across the board increase in quality. Jurisdiction taskforce members were asked to consider the necessary increase in resources to achieve a 5 per cent increase in quality in VET in Schools. As for the question about consistency above, possible responses were:

• No cost increase 0%; • A small increase 1-5%; • A moderate increase 6-10%; • Substantial increase 10-30%; or • Very substantial increase more than 30%.

5.7.1 Survey result

Table 5.2.3 indicates that, for metropolitan schools, the key factor identified for achieving increased quality was access to work placements. This was allocated a considerably higher increase than any other factor. These results differ to those reported above in relation to obtaining consistent high quality delivery of VET in Schools where teacher professional development and training was clearly the most significant factor. Rural and regional schools were identified as needing a greater increase in resources to achieve an increase in quality than metropolitan schools, except for physical infrastructure. Specifically, in rural and regional schools, four factors - teacher professional development, access to work placement, compliance with AQTF and maintaining links to industry training needs - were all considered to require a substantial increase in resources to achieve a 5 per cent increase in quality.



Table 5.23: Required increase in resources to achieve a 5 per cent improvement in quality in VET in Schools

Increase in resources to achieve consistent quality (%)

Metropolitan Schools

Rural and Regional Schools

Teacher professional development and training Moderate - 8.4% Substantial - 11.4% Access to work placements for students Substantial -14.1% Substantial - 11.4% Maintaining up-to-date VET in Schools curriculum Small - 4.3% Moderate - 5.7% Maintaining links to industry training needs Moderate - 5.3% Substantial - 10.3% Maintaining information on AQF credentialing & archiving Small - 3.6% Moderate - 5.1% Compliance with AQTF requirements Moderate - 8.3% Substantial - 10.9% Physical infrastructure Moderate - 8.4% Small - 1.2%


5.7.2 Implications for resourcing

As with the assessment of consistent quality in VET in Schools, these estimates for an increase in quality in VET in Schools can be applied to cost data to get an estimate of the necessary increase in expenditure.

Table 5.24 and Table 5.25 indicate the cost implications of the necessary increases in resources identified in Table 5.23. There is a slightly higher cost increase required for rural and regional schools, with the main difference being greater resources required for maintaining links to industry.

The results show that in metropolitan schools the cost of achieving a 5 per cent increase in the quality of VET in School delivery is $0.15 psh. Again, the cost to achieve the same outcome is higher in rural and regional schools where it is estimated at $0.17 psh. As discussed earlier in the report, the VET cost psh does not include the costs of physical infrastructure and therefore additional costs for physical infrastructure are not reflected in the results in table 5.9 and 5.10.

Table 5.24: Direct cost of increasing quality in delivery in VET in Schools - Metropolitan schools


Teacher professional development and training $ 0.15 $ 0.01 $ 0.16 Access to work placements for students $ 0.51 $ 0.07 $ 0.58 Maintaining up-to-date VET in Schools curriculum $ 0.16 $ 0.01 $ 0.17 Maintaining links to industry training needs $ 0.54 $ 0.03 $ 0.57 Maintaining information on AQF credentialing and archiving $ 0.11 $ 0.00 $ 0.11 Compliance with AQTF requirements $ 0.26 $ 0.02 $ 0.28 Physical infrastructure Total $1.73 $0.15 $1.88 Total cost per student hour $6.41 $0.15 $6.56

Source: The Allen Consulting Group, Deloitte Touche Tohmatsu, NCVER, The Cost of VET in Schools: An analysis of the costs of delivering VET in Schools including an analysis of cost efficiencies, Final Report to the Department of Education, Science and Training, June 2003 and data from consultation with jurisdiction representatives on the MCEETYA Transition from Schools Taskforce. Increase data provided by members of the MCEETYA Schools Transitions Taskforce.



Table 5.25: Direct cost of increasing quality in delivery in VET in Schools - Rural and Regional schools


Teacher professional development and training $ 0.15 $ 0.02 $ 0.17 Access to work placements for students $ 0.51 $ 0.06 $ 0.57 Maintaining up-to-date VET in Schools curriculum $ 0.16 $ 0.01 $ 0.17 Maintaining links to industry training needs $ 0.54 $ 0.06 $ 0.60 Maintaining information on AQF credentialing and archiving $ 0.11 $ 0.01 $ 0.12 Compliance with AQTF requirements $ 0.26 $ 0.03 $ 0.29 Physical infrastructure Total $1.73 $0.17 $1.90 Total cost per student hour $6.41 $0.17 $6.58


As with the analysis of achieving consistently high quality, the implications of an increase in the cost psh of delivering higher quality VET in Schools can be seen by examining the impacts that this additional cost would have on the results of the scenarios mentioned above. A weighted average of metropolitan and rural and regional resources to achieve consistent high quality delivery of VET in Schools is $0.16.

The cost differential per student hour between the Base cost and the VET in School delivery cost would increase to $1.14. The impact on the resource requirements in 2010 are in Table 5.26. For example, in scenario 1 the resources to achieve current quality in 2010 were estimated to be $31.8 million in 2001 increasing to $56.4 million in 2010. If additional resources were provided to achieve consistent high quality delivery of VET in Schools the resource requirements would be $37.0 million in 2001 increasing to $65.6 million in 2010.

Table 5.26: Comparison of the school level resources to achieve current quality and a 5 per cent increase in quality delivery of VET in Schools, 2001 and 2010

Scenario Resources to achieve current quality

($m)

Resources to achieve consistent high quality ($m)

2001 2010 2001 2010 1 – Base case 31.8 56.4 37.0 65.6 2 – Increasing retention rate

31.8 69 37.0 80.3

3 – Increasing VET in School hours

31.8 82.7 37.0 96.2

4 – Increased uptake of high level certificates

31.8 97.3 37.0 111.2


Resourcing The National Goals Additional Resourcing Need: ICT in Schools


Chapter 6 Additional Resourcing Need: ICT in Schools

Total Current ICT Costs

• The total national expenditure by jurisdictions on ICT in government schools for 2003 was $545m, comprising Connectivity ($466m), Content ($28m)56 and Professional Development ($51m).

• The total expenditure and the per-student expenditure grew at an average annual rate of 16% (excluding Professional Development) over the period 2001 -2003.

• The national per-student average ICT expenditure for 2003 was $241.

Future ICT Costs

• Future costs were estimated by the following three complementary methods:

o For reference, future ICT costs were first estimated on the basis of projections from historical costs

o Jurisdiction predictions based on known costs and needs were then compiled

o Additional requirements to enable the achievement of the National Goals were broadly identified, and an independent estimate of the cost was developed.

• The figure below indicates the comparison between these estimates

Figure 6.1: Estimated National ICT Expenditure ($m)

Future Additional Resourcing Need

• Based on the independent estimate of total required future resources, an estimate was made of the cost of the future Additional Resourcing Need arising from the target of achieving the National Goals for Schooling.

Table 6.1: Additional resources required for achievement of the National Goals

56 In addition there was a Commonwealth contribution of $7.3m to The Le@rning Federation.

Key Findings

545 650

802

1,030

545 638 670 693 545

650 772

871

0

200

400

600

800

1,000

1,200

2003 2004 2005 2006

Historical Projection Jurisdiction Estimate Independent Estimate



2003 2004 2005 2006 Expenditure for achievement of National Goals ($m p.a.) 545 650 738 871 Additional Resourcing over 2003 level ($m p.a.) 105 227 326 Per-Student Average Resourcing ($ p.a.) 241 287 341 385 Additional Per-Student Resourcing over 2003 level ($ p.a.) 46 100 144 Increase on 2003 expenditure 19% 42% 60%

6.1 Introduction

This section is based upon a report commissioned by the SRT in 200357 on the current and future costs of information and communications technologies (ICT) in Australian government schools. The SRT secretariat provided detailed terms of reference specifying a recommended analytical approach and methodology which was largely followed by the contractors with some minor and useful modifications. The focus of enquiry for this report was on the cost of the ICT related future Additional Resourcing Need (future ARN) for assisting all students to attain the National Goals for Schooling. Resource implications were examined only as far as ICT relates to the costs of teaching and learning in schools - not the costs of ICT in general central or school level administration.

Current requirements, historical trends and costs were studied for three main Priority Areas, endorsed by the Ministerial Council on Education, Employment, Training and Youth Affairs (MCEETYA) in 2000:

• Connectivity issues • Online Content, and • Professional Development.

A view was developed of future ICT provisions, with associated costs, in the three Priority Areas which would be required to enable achievement of the National Goals for Schooling within a planning horizon of two to three years.

6.1.1 Methodology

Priority Areas Both current and future cost and resourcing requirements were studied for three main Priority Areas:

• Connectivity issues • Online Content, and • Professional Development.

Resource implications were examined only as far as ICT relates to the costs of teaching and learning in schools. Costs of ICT in general administration at the central or school level were not included in the study. Both capital and recurrent costs were included. The cost of telephone communications was not studied, since it had been included in Stage 1 of the project. The study did not encompass Catholic Schools or Independent Schools.

The Current Situation and Future Requirements

The current situation and future requirements were considered for ICT in schools.

Analysis of the current situation at a national level for each of the three Priority Areas (Connectivity, Content and Professional Development) included a statement of the policy framework, a statement of the current major issues driving change in the provision and use of ICT in schools; and costs for each Priority Area.

57 Consultel IT&T Pty Ltd (2004, unpublished) Resourcing the National Goals for Schooling - Information and Communications Technologies in Schools, March



A view was then developed of future ICT provisions in the three Priority Areas which would be required to enable achievement of the National Goals for Schooling within a planning horizon of two to three years.

Consultations Contacts for each jurisdiction, nominated by the SRT Steering Committee, were requested to provide data, and were visited by the project team. A meeting of Chief Information Officers was attended, in addition to a half day technical workshop convened in Sydney with representatives of all jurisdictions except the Northern Territory. Representatives from the following were also consulted:

• The Le@rning Federation • Centre For Teaching and Learning Technology • MCEETYA ICT in Schools Taskforce and • MCEETYA Taskforce on Indigenous Education, Employment, Training and Youth.

Assumptions and Limitations Several factors applying across the sector affected the clear and accurate presentation of costs:

Structural Issues In most jurisdictions, the relevant Government Department had a range of responsibilities extending beyond schools, and it was difficult in some cases to accurately separate some central cost items such as, for example, sector-wide Internet contracts, shared between administrative areas of departments and schools.

Accounting Methods Data provided by jurisdictions was a mix of cash and accrual accounting, and a mix of academic year and financial year data, although this was interpreted in terms of calendar years. Budgets for schools provided useful information on resourcing intentions. However, in most if not all jurisdictions, school principals had wide discretion as to the actual use of resources, so that budgets did not reliably indicate ICT costs. The charts of accounts used to capture details of expenditure in schools were in most cases structured along traditional lines and were unable to provide useful information on ICT costs. School ICT infrastructure generally supports both administrative and teaching activities. The breakdown of capital and recurrent costs was considered, however the majority of expenditure was found to be recurrent since in most cases equipment was leased, and salaries, software, network services and consumables were treated as non-capital expenses. Therefore no distinction was made between capital and non-capital expenses for this report.

Costs for Professional Development Whilst costs (or budgets) for ICT-related Professional Development were able to be provided by jurisdictions for most centrally-funded programs and initiatives, it was generally the case that the extent of school expenditure on Professional Development was not being systematically reported, nor the proportion which relates to ICT.

Categorising Cost Items There were some instances where cost items could not be divided in a simple way, and some compromise was involved, as in the following examples:

• Costs for trials of access to digital content were regarded as primarily for infrastructure and communications, and therefore attributed to Connectivity.

• In some projects where digital content was being developed, there was a significant associated benefit in terms of professional development. The costs of these projects were however attributed to Content, but because of low teacher numbers, this effect was considered to be small.



• A single total for school and central software costs was presented as an element of Connectivity.

• Software of a general or administrative nature was not considered relevant, but software identified as being associated with student information systems was included on the basis that it is intimately related to teaching and learning.

Student and Teacher Numbers As a basis for calculating per-student costs, the study used the MCEETYA58 primary and secondary FTE enrolment totals for 2001 and 2002. For 2003 the study used an average of MCEETYA’s numbers for 2002 and 2003. Teacher numbers used to determine average expenditure on Professional Development were from the same MCEETYA report.

Analysis of Historical Cost Data

Connectivity, Content and Professional Development cost totals and trends were developed for the three years 2001, 2002 and 2003.

All eight jurisdictions were able to provide historical cost data for 2003 in the available time, but only five for 2002, and four for 2001. To preserve trends, annual averages of later year costs were included in the Cost Summary Tables in earlier years where data were not provided59. The assumption implicit in this method of assessing trends where averages are used is that of zero annual variation: that is, the trend is flat. Thus although variations may not be seen in items for which averages have been included, importantly the actual variations inherent in the given data have been brought into clear view.

Estimations of Future Costs60

Future costs were estimated using three complementary methods:

(i) Projections from Historical Costs A view of future costs was developed for reference by projecting the historical costs on the assumption that average cost trends for 2001-2003 would remain unchanged between 2004 and 2006. Each cost element of Priority Areas was projected at its three-year average growth rate, and then the elements were added to give an annual total.

(ii) Analysis of Jurisdiction Data on Future Costs All jurisdictions provided estimates of known costs associated with current plans for 2004. Six jurisdictions provided estimates for 2005 and 2006 for known costs for current plans, and predicted61 expenditure for 2004-2006 comprising additional resourcing requirements for existing programs and for new initiatives not yet appearing in approved budgets. Predicted cost data were rationalised by removing any repetition of known cost items and ensuring that only additional costs were included. Known and predicted jurisdiction costs for each year were added, and the sum was scaled on the basis of student numbers62 to produce an estimated national total for each year. No account was taken of inflation.

(iii) Independent Estimate of Future Costs Information provided by jurisdictions on current and future plans and costs was reviewed with reference to agreed national goals and strategies to independently develop indicative future cost estimates.

58 MCEETYA (2001/2002) - National Schools Statistics Collection, Provisional (unpublished) report. Summary Tables 4.1 to 4.5. 59 Additional details appear in Appendix 6 60 Additional detail appears in Section 6.7, below. 61 Jurisdictions were asked to base predictions on the premise of meeting the national goals for schooling without regard to current budget constraints. 62 MCEETYA (2001/2002), op. cit.



6.1.2 Policy Background for ICT in Schools

National Policy63 The study analysed data in the light of policies which have particular significance for ICT in schools. These included the National Goals for Schooling64 (the Adelaide Declaration), the MCEETYA Ministers’ Joint Statement on Education and Training in the Information Economy65, and Learning In An Online World: The School Action Plan For The Information Economy66.

Learning in an Online World affirms the highest priorities for schools to be Bandwidth, Professional Development, and Online Content.

Jurisdiction Policy Those strategic plans and policies that were made available for this study were invariably provided on a confidential basis, reflecting in some cases sensitivities associated with the documents, and in other cases uncertainties concerning the impact of budget or staff changes or the outlook for final approval. However no significant inconsistencies with the broad framework of the national policies mentioned above were identified.

6.1.3 Issues Driving Change for ICT in Schools Changing approaches to pedagogy and opportunities to take advantage of new technologies are driving the increased use of ICT in schools. Among others, the following67 are particularly important:

• Implementation of Online Learning • Increasing Use of the Internet • New Knowledge and Skills • Broadband Wide Area Networking • Technological and Market Changes

63 Additional details appear in Appendix 6 64 MCEETYA (1999) The Adelaide Declaration on National Goals for Schooling in the Twenty-First Century 65 MCEETYA (2000) Ministers Joint Statement on Education and Training in the Information Economy, December http://www.dest.gov.au/archive/ministers/kemp/dec00/k0249_061200.htm 66 EdNA Schools Advisory Group (2000) Learning in an online world: the school education action plan for the information economy http://www.edna.edu.au/edna/file12665 67 Additional details appear in Appendix 6



6.2 Priority Area – Connectivity

Key Findings for Connectivity

• The total national reported expenditure on Connectivity for 2003 was $466m. • The national per-student average expenditure for 2003 was $206. • The per-student expenditure for 2001-2003 grew at an average rate of 14% • The distribution of Connectivity-related expenditure for 2003 was as follows:

Figure 6.2: Connectivity - National expenditure allocation for 2003 ($m)

Figure 6.3: Connectivity - National expenditure allocation for 2003 (%)

43%

19%

16%

11% 7% 3% 1%

School Infrastructure WAN/VPN ICT Support Centralised ICT Software Internet

Other

$195.8

$89.4

$74.0

$52.5 $34.1 $16.2 $4.2

School Infrastructure WAN/VPN ICT Support Centralised ICT Software Internet

Other



6.2.1 Elements and Costs of Connectivity A total cost estimate for Connectivity in schools was developed on the basis of the following broad groupings68:

• ICT infrastructure in schools; • Wide-area network services; • ICT support in schools; • Centralised ICT infrastructure and services; • Software; and • Internet services.

The growth trend for 2001-2003 averaged 14% per annum. This trend was derived from a relatively broad base of numbers, and generally reflects the underlying growth trends in the component groupings as is seen from the annual breakdown and the accompanying table (Figure 6.4and Table 6.2, below).

Figure 6.4: Connectivity - National expenditure annual breakdown ($m)

Table 6.2: Connectivity - National expenditure annual breakdown ($m)

2001 2002 2003 School Infrastructure 164.9 189.8 195.8 WAN/VPN 42.9 47.6 89.4 ICT Support 72.3 71.8 74.0 Centralised ICT 35.9 36.6 52.5 Software 30.3 31.4 34.1 Internet 10.1 11.5 16.2 Other 3.0 3.8 4.2 Total Of Connectivity 360 393 466

All jurisdictions reported increasing expenditure on connectivity, but significant differences between jurisdictions were seen in the per-student averages by jurisdiction for 2003. These averages spanned a range from $135 to $406 per student per annum, and average expenditure generally decreased with

68 These are described in greater detail in Appendix 6

466

393 360

0

50

100

150

200

250

300

350

400

450

500

2001 2002 2003

Other

Internet

Software

Centralised ICT

ICT Support

WAN/VPN School Infrastructure



increasing jurisdiction enrolments. In this context it needs to be borne in mind that a lower figure does not necessarily imply a lower standard of infrastructure.

Figure 6.5: Connectivity - National average cost per student ($)

.

The six groupings comprising the Connectivity cost are discussed below.

6.2.2 ICT Infrastructure in Schools The cost of infrastructure in schools was principally associated with computers, other terminals such as printers and scanners, and local area networks comprising cabling, hubs, switches, servers, proxy servers and routers69. There was a variety of other equipment, mostly network-connected, which represented a small proportion of the overall total.

Cost of ICT Infrastructure in Schools Total reported national expenditure on ICT infrastructure in schools for 2003 was $195.8m, while the per-student expenditure on infrastructure in schools grew at an average annual rate of 9.0%.

Figure 6.6: ICT Infrastructure in Schools - National average cost per student

69 Additional detail appears in Appendix 6

73 84 86

$0

$50

$100

$150

2001 2002 2003

159 173 206

$0

$50

$100

$150

$200

$250

2001 2002 2003



6.2.3 Wide Area Networks

Costs for wide area networks70 comprise Access Network telecommunications costs and VPN-related costs.

Total reported national expenditure on networks including VPN costs for 2003 was $89.4m. The national per-student average cost of networks for 2001-2003 is as shown in the figure below.

The large expenditure on both access bandwidth and VPN implementation produced a strong cost increase in this element of connectivity, almost all in 2003.

Figure 6.7: Wide Area Networks - National average cost per student

19 21

39

$0

$10

$20

$30

$40

$50

2001 2002 2003

The average growth rate for 2001-2003 was 44%, but an increase of 88% was reported in 2003, reflecting the rollout of broadband services to large numbers of schools in most jurisdictions in the last two years.

6.2.4 ICT Support in Schools Total reported national expenditure on ICT support in schools for 2003 was $74.0m.

The national per-student average for 2001-2003 is as shown in Figure 6.8, below:

Figure 6.8: ICT Support in Schools - National average cost per student

Negligible growth was reported in support costs for 2001-2003.

The stability of support costs appears to reflect the practice in most jurisdictions of maintaining relatively fixed support staff numbers which serve particular geographical areas, resulting in costs which do not change in response to marginal changes in demand for support services. Nevertheless

70 Additional detail appears in Appendix 6

32 32 33

$0

$10

$20

$30

$40

$50

2001 2002 2003



jurisdictions generally reported difficulties in providing adequate ICT support for systems and for teachers, with some jurisdictions evaluating centralised remote management techniques with the potential to significantly reduce routine systems administration costs. It is important to note that it can be difficult to separate ICT support between school and central levels. There can be significantly different practices across states in how the ICT support for schools is delivered and this can significantly affect cost calculations.

6.2.5 Centralised ICT Infrastructure and Services

Total reported national expenditure on centralised infrastructure and services for 2003 was $52.5m.

The national per-student average cost of centralised infrastructure and services for 2001-2003 is as shown in Figure 6.9, below:

Figure 6.9: Centralised Infrastructure & Services - National average cost per student

Significant expenditure was reported on centralised shared ICT infrastructure and online services delivered to schools via WANs and VPNs. These costs are associated with a wide range of projects which have not been reviewed in detail, but were reported by jurisdictions as being ultimately associated with delivery of services at the school level, and have therefore been included in the Connectivity cost in this report. The average growth rate for 2001-2003 was 21%, but a substantial increase was reported in 2003, which appears to reflect the adoption of VPNs and a centralised approach to delivery and management of information and services to teachers, students, and school networks in most jurisdictions.

6.2.6 Software Software costs arise at the school level for school computers, servers, and proxy servers. Centralised systems including major software platforms are used to support access and to deliver services to schools71. The costs of software relating to teaching and learning were regarded as relevant to the study, but not costs associated with software for general administration at a school or central level.72

Computer software licences including Windows and basic applications are closely related prima facie to the costs of school ICT infrastructure. However, since in most jurisdictions the

71 Additional detail appears in Appendix 6 72 Additional detail appears in Appendix 6

16 16

23

$0

$10

$20

$30

2001 2002 2003



corresponding fees were negotiated and funded centrally, a single total for the cost of school and central software is presented. Total reported national expenditure on software for 2003 was $34.1m.

The national per-student average cost of software for 2001-2003 is as shown in Figure 6.10, below:

Figure 6.10: Software - National average cost per student ($)

Growth in reported software expenditure for 2001 - 2003 was 6.1%. Software licensing costs in some jurisdictions are based on a notional number of users, so that the recent growth in computers in schools did not lead to a significant increase in related software costs in those cases.

6.2.7 Internet Services73 A variety of approaches to Internet service provision was reported. In most cases, Internet access is being provided under jurisdiction-wide contracts, while in some jurisdictions, commercial arrangements are made by some schools on their own behalf. Wherever access bandwidth is being increased, large growth in download volumes is also being experienced, with the potential for corresponding cost increases. Student demand for Internet access is now being actively managed. Changing classroom practices linked to the use of the internet are also generating cost pressures on school level infrastructure such as cabling and power supply. A single power point for a classroom is not a contemporary design standard. Total reported national expenditure on Internet charges for 2003 was $16.2m. The national per-student average cost for Internet charges for 2001-2003 is as shown in Figure 6.11:

Figure 6.11: Internet charges - National average cost per student

The average growth rate for 2001-2003 was 26%.

73 Additional details appear in Appendix 6

13 14 15

$0

$5

$10

$15

$20

2001 2002 2003

4.5 5.1

7.1

$0

$5

$10

2001 2002 2003



The average cost increased substantially in the same period when broadband access was being implemented widely. Although very large increases in download volumes were reported, the cost increase was limited by the low rates delivered by jurisdiction-wide contracts, and by the fact that most such contracts were based on a fixed price for a notional annual volume.



6.3 Priority Area - Content

Key Findings for Content

• Total national expenditure reported by jurisdictions on Content Development for 2003 was $27.9m. • This figure excludes the Commonwealth Government and New Zealand Government contributions to

the Le@rning Federation, which for 2002/3 were $7.4m and $1.21m respectively. • The national per-student average expenditure for 2003 was $12.30 (excluding Commonwealth and

New Zealand contributions to the Le@rning Federation which together amounted to $3.80 per student in calendar year 2003).

• The per-student expenditure for 2001-2003 grew at an average rate of 96%:

6.3.1 A Framework for Development and Use of Digital Content Learning In An Online World: The School Action Plan For The Information Economy74 sets out goals and a strategic framework for e-learning in Australia. The forthcoming Contemporary Learning – Learning in an online world 2003-0675 will also deal with content issues under the heading of Curriculum Resources and Services.

6.3.2 Online Content In this study, references to online content refer to specialised digital resources accessible by teachers and students through a computer-based interface, and the study did not distinguish between content which is accessed locally and that accessed remotely through wide-area networks.

Content from the Le@rning Federation76 The Le@rning Federation is a major national initiative for development of online educational content and is intended to be a key source of specialised digital content in the early twenty-first century77. Content produced by the Le@rning Federation in the form of learning objects is being compiled in a central online repository for online access by all states and territories. Each jurisdiction is responsible for the development of the infrastructure to deliver the learning object to its schools. Following work by the Le@rning Federation Steering Group during 2003 on issues78 relating to sustainable development of content beyond 2005, AESOC agreed to forward to MCEETYA for consideration a proposed Content Strategy79 and a range of funding models taking into account a recently commissioned study80 on the cost-effectiveness of shared development of content.

All jurisdictions contribute financially to The Le@rning Federation, and their reported contributions are included in the Australian school sector costs presented below. In addition, resources are received from the Commonwealth and from the Government of New Zealand, increasing cost-effectiveness for jurisdictions. There are two other important sources of digital content: the teachers and students in Australian schools, and the content development initiatives of jurisdictions.

74 EdNA Schools Advisory Group (2000) Learning in an online world: the school education action plan for the information economy http://www.edna.edu.au/edna/file12665 75 To be published by MCETYA in 2004 76 Additional detail appears in Appendix 6 77 The Le@rning Federation (2003) Phase Two Plan 2003-2006 78 The Le@rning Federation Steering Group (2003) Sustainable Provision of Online Curriculum Content Beyond 2005, November www.thelearningfederation.edu.au/repo/cms2/tlf/published/9929/sustainable_provision.pdf 79 AESOC (2004, unpublished) Agenda Item 3.11, Content Strategy - Learning In An Online World 80 Murray, C., (2004) Cost-Effectiveness Of Shared Development Of Online Curriculum Content Beyond 2005, The Le@rning Federation, January



Content Produced by Teachers and Students The importance of capturing the wide range of educational material already being produced in schools by teachers and students is well recognised in the sector. The development and deployment of tools to facilitate the capture, indexing, compilation and bringing online of this material being created in schools on a daily basis is regarded by many as of importance comparable with the more specialised and more focused products from The Le@rning Federation. At present the tools required to achieve this are still emerging and not in wide use.

Content Developed by Jurisdictions Trials have taken place of The Le@rning Federation products in each jurisdiction both in respect of the first-release digital learning objects themselves, and the trial hosting and access arrangements supported by the Le@rning Federation’s Basic e-learning Tool Set (BELTS) software. In addition, many pilot and development projects under way and planned at a jurisdictional level complement the work of The Le@rning Federation. They serve a range of jurisdiction objectives, including the need for specialised content such as, for example, for the teaching of particular languages in some areas, to undertake research, to raise levels of skill amongst specialist teachers and support staff, and to explore technical implications of online learning.

6.3.3 Costs The costs of content-related initiatives were reported by jurisdictions and included in the totals presented here, subject to the limitations mentioned above concerning the challenges in reporting separately on Content, Connectivity and Professional Development components of jurisdiction e-learning projects. The national total and per-student average expenditure reported by jurisdictions on content development for 2001-2003 are as shown below, reflecting the following:

• Consistent with the methodology described above, calendar year totals were derived from the Le@rning Federation agreed funding financial year totals, and therefore display a different growth profile;

• Jurisdictions' reported contributions to The Le@rning Federation are shown; • The Commonwealth Government contribution, which matches jurisdiction contributions, is

not included in Figure 6.12 but is shown separately in Table 6.3. For 2002/3 this was $7.2M, and amounted to $3.22 per student per annum in calendar year 2003; and

• The New Zealand Government also contributed, commencing with $1.18M in 2002/3, equivalent to $0.53 per student per annum in calendar year 2003.

Figure 6.12: Content Development - National average cost per student ($)

2.2 4.1

9.1 26

3.2

1.0

12.3

6.7

3.2

0

5

10

15

2001 2002 2003

Le@rning Federation

Jurisdiction Projects



Table 6.3: Average national cost of Content

2001 2002 2003 Jurisdiction Projects 2.2 4.1 9.1 Le@rning Federation 1.0 2.6 3.2 Total before Commonwealth Contribution

3.2 6.7 12.3

Commonwealth Contribution 1.0 2.6 3.2 Average Cost per Student ($)

Total with Commonwealth Contribution

4.2 9.2 15.6

Jurisdiction Projects 5.0 9.2 20.6 Le@rning Federation 2.3 5.9 7.3 Total before Commonwealth Contribution

7.2 15.1 27.9

Commonwealth Contribution 2.3 5.9 7.3 Total National Expenditure ($M)

Total with Commonwealth Contribution 9.5 20.9 35.2

Overall annual growth in the per-student national average for 2001-2003 was 96%.

Significant differences between jurisdictions are seen in the per-student averages by jurisdiction for 2003. These averages span a range from $4 to $22 per student per annum, and average expenditure generally decreases with increasing jurisdiction enrolments.

Jurisdiction project averages increased by 103%, and contributions to the Le@rning Federation by 80%.

It was reported by some jurisdictions that their own content development initiatives, while benefiting in the near term from the contribution of the Le@rning Federation, would in time become the primary source of new specialised content for their own online learning purposes. Other jurisdictions identified the important ability of the Le@rning Federation to act as a vehicle for collaboration, with benefits in synergy, standardisation and cost-effectiveness, and were scaling down their own content development projects in 2004.

It should be noted that just prior to the finalisation of this report, AESOC agreed to forward to MCEETYA for consideration a proposed Content Strategy81 and a range of funding models taking into account a recent commissioned study82 on the cost-effectiveness of shared development of content. If approved by MCEETYA, this may lead to further funding for The Le@rning Federation.

The current funding commitments for The Le@rning Federation plateau at approximately $16M for financial years 2003/04 to 2005/06.

81 AESOC (2004, unpublished), op.cit 82 Murray, C., (2004), op.cit.



6.4 Priority Area - Professional Development

Key Findings for Professional Development

• It was not possible to identify a large proportion of the national expenditure on Professional Development for ICT because it is spent through school budgets and was not able to be reported by most jurisdictions.

• The total national reported expenditure on Professional Development for 2003 excluding the Australian Capital Territory was $16.8m.

• Reported expenditure is comprised mainly of readily-identifiable central programs ($13.9m), with a smaller amount ($2.9m) of reported schools expenditure.

• Actual school expenditure was, however, estimated at $37m, including the $2.9m reported amount.

• Consideration of all reported and estimated unreported costs implies an indicative estimate for total national expenditure of $51.1m.

• This implies a per-student average of $23 and a per-teacher average of $336.

6.4.1 Professional Development This report is concerned with professional development of principals and teachers in connection with the use of ICT in teaching and learning in schools. Professional development needs of staff engaged in the planning, implementation and management of ICT infrastructure and services within jurisdictions were not studied.

6.4.2 Current Skill Levels The ability of teachers to use ICT effectively to support learning outcomes was generally reported to be developing from a low base and was a specific priority for most jurisdictions. It was also clear that the current capabilities of teachers to use ICT varied widely in the sector.

Making Better Connections83, a major study recently commissioned by the Department of Education, Science and Training, suggests a framework for ICT presented in terms of four types of educational outcomes currently being sought both in Australia and overseas through the use of ICT in classrooms:

• Type A: encouraging the acquisition of ICT skills as an end themselves; • Type B: using ICT to enhance students’ abilities within the existing curriculum; • Type C: introducing ICT as an integral component of broader curricular reforms that are

changing not only how learning occurs but what is learned; and • Type D: introducing ICT as an integral component of the reforms that alter the organisation

and structure of schooling itself.

Although that report did not focus on costings, it presented an example of estimated training requirements, in terms of hours needed for outcomes of Type A, developed as part of a national program for Hong Kong84.

83 Department of Education, Science and Training (2001) Making Better Connections. A report to DEST by Downes, T., Fluck, A., Gibbons, P., Leonard, R., Matthews, C., Oliver, R., Vickers, M., and Williams, M http://www.dest.gov.au/schools/publications/2002/professional.htm 84 A well-defined national CPD program was developed for training 80,000 teachers in technical and pedagogical skills at an estimated cost of HK$514M in DEST (2001) op.cit.



Further issues for future professional development of teachers are raised in a recent major Commonwealth Government report Australia’s Teachers: Australia’s Future85 which comprehensively addresses innovation and the teaching of science, technology and mathematics.

6.4.3 Leadership

The role of school principals and executive management teams in achieving the necessary levels of skill is of critical importance. School Principals and Executive Management Teams can foster the development of online learning by providing intellectual and managerial leadership in continuing professional development for their teachers and specialist staff.

Appropriate executive action by principals in connection with resources in schools, including budgets, equipment and staff is of fundamental importance. The professional development programs of all jurisdictions have centralised elements which in some cases include tied funding. Nevertheless, discretionary expenditure through school budgets to meet school needs for teacher training and to permit the release of teachers to participate in training and other development activities is a basic requirement for improved teacher skill outcomes.

6.4.4 Resourcing Mechanisms

While overall expenditure on professional development was not studied, jurisdictions estimated that the ICT component ranged between about ten percent and fifty percent of the total.

There are two main mechanisms for the resourcing of professional development in ICT.

The first mechanism is through school budgets, with the largest item being leave relief to allow teachers to attend training courses. Schools in some cases also fund a range of related expenses, such as specialist ICT support staff or nominated specialist teachers who act as champions or mentors, externally-provided training, and travel for teachers to attend conferences, workshops and courses. In some cases the budget provision for professional development is “tied” and payable only for the budgeted purpose, but in general expenditure is made from school budgets at the Principal’s discretion according to the needs of the particular school.

The second mechanism is a range of centrally-funded targeted initiatives such as workshops, internal and external training sessions, the teacher learning components of content development and e-learning projects, and the development of after-hours learning packages which may be supported by online discussion groups and trained facilitators. The costs of these initiatives are readily identifiable, although the relevant component of projects and trials is often difficult to quantify.

6.4.5 Reported Expenditure

Expenditure on professional development for ICT was clearly under-reported.

The total national expenditure on Professional Development reported by jurisdictions for 2003 was $16.8m, excluding the Australian Capital Territory86. A large proportion of professional development costs is funded by untied grants spent through school budgets according to needs, and were not reported by most jurisdictions. Therefore most of this unreported component of the cost, which is believed to be the majority, was not included in the national total of $16.8m reported by jurisdictions (refer following section).

For the costs as reported:

• The per-student averages were $3.80 in 2001, $4.50 in 2002 and $7.52 in 2003; • The reported per-student expenditure for 2001-2003 grew at an average rate of 40%; • The reported per-teacher average annual expenditure for 200387 was $110.

85 Department of Education, Science and Training (2003) Australia’s Teachers: Australia’s Future, produced under the Backing Australia's Ability Program. 86 In the ACT, Professional Development is funded through school budgets and costs could not be reported separately. 87 MCEETYA (2001/02) National Schools Statistics Collection, Provisional (unpublished) report. Summary Tables 3.1 - Full Time Equivalent Teachers. Teacher numbers for 2001 were the latest quoted.



• The per-student averages for 2003 show wide variation between jurisdictions, spanning a range from $1 to $62 per student per annum, but only one jurisdiction spent more than $17.

• The average expenditure per FTE teacher ranged from $14 to $811, but only one jurisdiction spent more than $240. In general, the largest jurisdictions reported spending least on professional development on a per-teacher basis.

6.4.6 Independently Estimated Expenditure

Four jurisdictions, which together accounted for 37% of the reported expenditure of $16.8M, were able to provide estimates of the amounts spent on ICT professional development in schools in 2003, relying on the assumption that budgets were being spent for the intended purpose. These jurisdictions spent on average 27% of their ICT professional development resources centrally, and 73% at the school level. If this is assumed to be typical of all jurisdictions, and based on the $13.9M of reported national expenditure which was spent centrally, it is possible to infer a broad indicative estimate of $37M for the actual school expenditure, and $51M for total expenditure.

Thus it is estimated that national expenditure on Professional Development in 2003 was approximately $34.3M higher than reported.

Table 6.4: Expenditure for Professional Development for 2003 ($m)

Reported ($m) Estimated ($m) Difference ($m)

Central Expenditure 13.9 13.9 -

School Expenditure 2.9 37.2 34.3

TOTAL 16.8 51.1 34.3

The indicative estimate of $51M for total national expenditure for 2003 equates to a per student average of $23 and a per teacher average of $336.



6.5 School Related Factors

Key findings for School Related Factors

• Results need to be viewed with caution because they represent a snapshot in a particular area based on data which had not been audited.

• For primary schools, the expected apparent diseconomy of scale affecting smaller schools (which in many cases are the more remote schools) can be clearly seen.

• In the case of secondary schools, the same apparent diseconomy of scale is also implied.

• Analysis of unaudited data suggests that the level of private resources can be substantial but is likely to vary widely across the sector.

6.5.1 School Size as Additional Cost Factor

To investigate the relationship between ICT costs and school size, expenditure was considered in one jurisdiction in 2003 for 971 primary schools and 182 secondary schools. Combined and special schools were excluded.

ICT costs per school were estimated from per-school data on School ICT Grants for February 2003 and Oct 2003 amounting to $25.2m (primary), and $ 10.7m (secondary).

In this analysis, approximately $5m in centrally-funded initiatives relating to infrastructure and e-learning were ignored.

The results of this analysis need to be viewed with caution because it represents a snapshot in a particular area based on data which had not been audited. However, for primary schools, the expected apparent diseconomy of scale affecting smaller schools (which in many cases are the more remote schools) can be clearly seen.



Figure 6.13: ICT cost per student vs school size - Primary

The same data presented in terms of the bands used in the context of national grant funding are shown inFigure 6.14.

Figure 6.14: ICT cost per student vs school size - Primary school bands

In the case of secondary schools, the same apparent diseconomy of scale is also implied, despite a lack of data points at the low end because of the small number of high schools with enrolments of fewer than about 100.

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

0 200 400 600 800 1000 1200 1400 School Enrolment

825

357 222 135 95 69

$0

$500

$1,000

0 - 29 30 - 59 60 - 99 100 - 199 200 - 349 > 350 School Enrolment



Figure 6.15: ICT cost per student vs school size - Secondary

The same data presented in terms of the bands used in the context of national grant funding are shown in Figure 6.16. The 0-99 and 100-149 bands conform to the trend, but are based on a sample of only five schools and are therefore not shown.

Figure 6.16: ICT cost per student - Secondary school bands

6.5.2 ICT Resources

It was reported that in some areas, the contribution of community and parent groups to ICT resourcing in schools was a substantial proportion of the total. However, jurisdictions were generally unable to specify the sources of funds.

As an indicative example, expenditure was considered in two districts in one jurisdiction in 2003, each containing approximately 40 primary and secondary schools for which detailed information was available. Combined and special schools were excluded.

Spending in terms of core grants, special grants and private funding was calculated on a per-student basis. Although these data had not been audited and reflect the situation only at two specific locations which may not be typical, the analysis suggests that the level of private resources can be substantial but is likely to vary widely across the sector.

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

0 500 1000 1500 2000 2500 School Enrolment

180 105 88 62

$0

$100

$200

$300

0 - 99 100 - 149 150 - 199 200 - 499 500 - 799 > 800 School Size



Figure 6.17: Total resources for ICT per school ($)

$10,849$7,293

$19,349

$11,728

$11,693

$17,791

$6,907

$999

$189

$2,000

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Area 1 Area 2

Selected Districts

Partnerships/Other

P & C Funding

AdditionalSchool Grant

Oct 2002 Grant

Feb 2003 Grant

Figure 6.18: Total resources for ICT per school (%)

19% 23%

34%

37%

31%

37%

12%3%

4% 1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Area 1 Area 2

Selected Districts

Partnerships/Other

P & C Funding

Additional SchoolGrant

Oct 2002 Grant

Feb 2003 Grant



6.6 Overview of Future ICT Requirements

Ongoing jurisdiction programs in connectivity, content and professional development were in varying stages of development in terms of their ability to meet the agreed national ICT goals. future ICT provisioning was reviewed with reference to the current situation in terms of Priority Areas to assess what the investment requirements should be over the next three years in order to meet these goals.

It is acknowledged that the planning, design, procurement, implementation and operation of the systems and facilities requirements described below would involve significant commitment by jurisdictions of managerial and specialist staff resources. However, as already stated, these costs are not reflected in this report.

6.6.1 Connectivity

ICT Infrastructure in Schools

Computers In general the rate of acquisition of additional school computers is now falling, but expenditure continues on laptops for teachers and the ongoing replacement of school computers. While computer unit pricing is on a slight downward trend, ongoing expenditure on replacement will be required but at a level which is relatively stable in real terms for the foreseeable future.

Local Networks88

Although most school computers are now network-connected, some capital investment in cabling will be required in many areas to improve coverage and ensure that all computers can be networked. Wireless networks will increasingly be adopted to allow more flexible use of learning spaces but are growing from a low base and will be a small proportion of connectivity costs.

Worthwhile amounts of online content require both increased bandwidth and the implementation of relatively large integrated software systems. The requirement for student-related information and increased Internet use also makes demands on school network infrastructure.

Just as for computer workstations, school servers and proxy servers will require continuous upgrading or replacement at approximately three to five years.

Wide Area Networks

Although access bandwidth enhancement programs were in place in all jurisdictions, the degree of completeness varied amongst jurisdictions.

In some jurisdictions, investment in currently-planned access bandwidth for some schools of less than 1 Mbit/s appear insufficient for the requirements of expected Internet demand and online learning, and expenditure on true broadband or xDSL services need to be brought forward.

Recurrent costs for access will continue to rise substantially for at least the next two years and probably through to 2006 as broadband or near-broadband access is extended to all urban and most regional schools.

ICT Support in Schools Negligible growth was reported in support costs for 2001-2003, but jurisdictions generally reported difficulties in providing adequate ICT support for systems and for teachers. Costs increases for systems support will be moderated by centralised remote management techniques in some larger jurisdictions, but some on-site support will continue to be required. The predicted increases in ICT professional development, teacher participation in online learning, and the associated introduction of a range of additional software applications will increase the requirements for teacher support mechanisms. Overall, costs are expected to increase at a moderate rate from 2005.

88 Additional details appear in Appendix 6



Centralised ICT Infrastructure and Services89 Centralised shared ICT infrastructure and online services delivered to schools via WANs and VPNs include the centralised systems for the delivery and management of online learning. Significant expenditure increases took place to 2003, and the required further development of facilities to streamline networks and to support online learning will result in substantial growth over the period of interest.

Software90 The whole-of-jurisdiction annual licensing arrangements for Windows and basic applications described above allow school computers to be upgraded or replaced without substantial additional software cost. Therefore these costs will remain relatively steady in real terms, however substantial effort and expenditure is required from 2004 to 2006 to implement software systems with the functionality and performance required to meet goals for online learning.

Internet Services91 Use of Internet services including email, web and collaborative modes is increasing on a per-user basis, the increasing size of file attachments and downloaded files has been widely reported, and school bandwidth restrictions are being rapidly eased. Very large growth in Internet download volumes was reported wherever increased bandwidth has been provided, and significant cost increases were reported to 2003. Volume management arrangements will soon have been implemented in some form in all jurisdictions, which will tend to moderate inappropriate or excessive use, but should not limit the main stream of teaching and learning use, for which the underlying demand continues to increase. The recurrent costs for Internet use are expected to rise significantly over the period to 2006.

6.6.2 Content Annual expenditure to 2003 reported by jurisdictions on further content development to meet their particular needs is greater than the current funding commitments for the Le@rning Federation, and is expected to grow considerably to at least 2006. This is consistent with the intention of most jurisdictions to build on the work of the Le@rning Federation and continue to develop new content meeting a large proportion of their needs.

6.6.3 Professional Development Almost all jurisdictions stated an intention to focus their professional development programs on developing teachers’ abilities to use online learning techniques and resources effectively in the classroom. However, there are many teachers who will need to acquire a basis of knowledge and confidence with ICT and then with a suite of online learning tools before addressing pedagogical aspects of online learning in the classroom. It appears that a substantially increased management focus and expenditure on professional development is required if teachers as a group are to be in a position to utilise the networks, content and first-generation tools which are likely to be substantially in place in most jurisdictions by the end of 2006. The recent Commonwealth review92 of teaching and teacher education considered the needs of the teacher workforce in science, technology and mathematics, and recommends 54 actions, of which a number address needs for teacher learning in ICT, although no assessment is provided of costs.

Although reported historical expenditure levels varied widely amongst jurisdictions, increased priority and increased future investment for professional development were consistently reported, and national expenditure will increase substantially to 2006. A substantial proportion of the cost will

89 Additional details appear in Appendix 6 90 Additional details appear in Appendix 6 91 Additional details appear in Appendix 6 92 Department of Education, Science and Training (2003) op.cit.



continue to be the release of teachers from classrooms to participate in training, and courses and digital content are already available for the earlier stages of ICT training, so that immediate and effective use can be made of additional resources without waiting for new courses to be developed.

6.7 Future Cost Estimates

Summary of Future Cost Estimates - (i) Total Costs • Future costs were estimated by the following three complementary methods:

o For reference, future ICT costs were first estimated on the basis of projections from historical costs o Jurisdiction predictions based on known costs and needs were then compiled o ICT requirements to enable the achievement of the National Goals were broadly identified, and an

independent estimate of the cost was developed.

Figure 6.19: Estimated national ICT expenditure ($m)

Table 6.5: Independent estimate of future costs ($m), by Priority Area

Note 1: Growth is average annual growth from 2003 Note 2: Note also the Commonwealth contribution matching jurisdiction contributions to The Le@rning Federation Note 3: Includes the estimated $34.3M unreported component of profession development

2003 2004 2005 2006 Growth1 Connectivity 466.1 557.7 660.8 740.8 16.7% Content 27.9 28.6 32.6 34.1 6.9%2

Professional Development 51.1 63.3 79.0 96.4 23.6%3 Total 545 650 772 871 16.9%

545 650

802

1,030

545 638 670 693

545 650

772 871

0

200

400

600

800

1,000

1,200

2003 2004 2005 2006




Summary of Future Cost Estimates - (ii) Additional Costs

Table 6.6: Additional resources for achievement of the National Goals (no adjustment for inflation

2003 2004 2005 2006 Expenditure to meet National Goals 545 650 772 871 Additional Resources Required (over 2003) ($m p.a.)

105 227 326

Per Student Average Resourcing ($p.a.) 241 287 341 385 Additional Per Student Resourcing ($ p.a.) 46 100 144 Increase on 2003 Expenditure 19% 42% 60%

While costs and average annual growth rates are presented in this section to three significant figures, they are based on estimates of future costs and therefore, even where they are accurate summaries of data provided by jurisdictions, they must be regarded as indicative.

6.7.1 Future Cost Estimates Based on Historical Trends A view of future costs was first developed by projecting the historical costs reported by jurisdictions for the period 2001-2003 on the basis of cost trends for 2001-2003. Each cost element of the Priority Areas was projected at its average growth rate93, and the elements were added to give an annual total.

Figure 6.20: Future ICT costs projected from historical data ($m)

Note 1: The Le@rning Federation component of content was determined by reference to the agreed funding program.

Note 2: The estimated $34.3 in unreported professional development costs was included but not subject to growth since no historical data were available for this component.

93 Excluding the Le@rning Federation component of Content, which is determined by an agreed funding program.

545 650 802

1,030

0

500

1,000

1,500

2003 2004 2005 2006



Table 6.7 Future costs - projected from 2003, by Priority Area ($m)

Growth p.a. 2003 2004 2005 2006 Connectivity School

Infrastructure 9.0% 195.8 213.3 232.5 253.3

WAN/VPN 44.4% 89.4 129.0 186.3 268.9 ICT Support 1.1% 74.0 74.8 75.7 76.5 Centralised

ICT 20.9% 52.5 63.5 76.8 92.8

Software 6.1% 34.1 36.2 38.4 40.7 Internet 26.2% 16.2 20.4 25.7 32.5 Other 18.4% 4.2 5.0 5.9 7.0 Sub-total 13.9% 466.1 542.2 641.2 771.7

Content Jurisdiction

Projects 103.3% 20.6 42.0 85.3 173.5

Le@rning Federation

(1) 7.3 7.5 7.6 3.9(2)

Sub-total 96.4% 27.9 49.4 92.9 177.4 Professional Development Sub-total(3) 40.5% 51.1 57.9 67.4 80.8 TOTAL

( 4)

16.7%

545

650

802

1030

Note 1: These calendar year totals are derived from agreed financial year funding totals. Note also the Commonwealth contribution matching jurisdiction contributions.

Note 2: Current Le@rning Federation funding commitments end in 2005/2006. At the time of this report, AESOC was considering future funding options.

Note 3: Totals include the estimated $34.3M unreported component of Professional Development. Growth rate is shown for reported costs only.

Note 4: Total growth rate is for reference. Totals are the sums of the projections.

While a number of the elements of cost shown above will continue to grow strongly, several large elements will not continue to grow at historical rates. For example, as the current bandwidth improvement programs and school network upgrades reach completion, the corresponding costs will tend to plateau at a new high level determined by the recurrent costs of broadband telecommunications network contracts and technology refreshment cycles for infrastructure. Therefore the projected costs can be seen as representing an upper bound to likely cost outcomes. However, there is the possibility that the levelling of costs will be only tempoarary, appearing as a step before a further round of increases driven by another quantum increase for bandwidth through changes in internet use.

6.7.2 Future Costs Based on Jurisdiction Estimates Total estimated national ICT expenditure for 2004-2006 based on known costs for current plans and predicted expenditure based on needs is shown below. Reported historical costs are shown to 2003 for comparison.



Figure 6.21: Predicted national expenditure based on jurisdiction estimates ($m)

The breakdown in terms of Priority Areas is as follows:

Table 6.8: Details of predicted national expenditure based on jurisdiction estimates ($m)

2003 2004 2005 2006 Growth ( 1) Connectivity 466.1 557.1 570.2 576.8 7.4% Content ( 2) 27.9 25.2 28.1 23.2 -6.1% ( 3) Professional Development 51.1 55.3 71.2 93.0 22.1% ( 4) Total 545 638 670 693 8.3%

Note 1: Growth is annual average growth from 2003

Note 2: Note also the Commonwealth contribution matching jurisdiction contributions to The Le@rning Federation

Note 2: Decrease in 2004 relates to one large jurisdiction and in 2006 to assumption about funding for the Le@rning Federation. See below

Note 3: Includes the estimated $34.4m unreported component of Professional Development

The following observations are made on the above costs: • Connectivity costs are consistent with the combination of major cost elements (bandwidth

and school infrastructure) reaching a plateau and smaller cost elements continuing to grow over the period;

• The decrease in Content in 2004 is associated with the planned transfer of substantial resources from content development budgets to professional development in the case of one large jurisdiction.

• The decrease in Content in 2006 results from the fact that the current funding agreements for the Le@rning Federation end in financial year 2005-2006 and no assumption has been made concerning continuity.

• In other respects the costs indicate that most jurisdictions will invest in content development at a steady or slightly increasing level.

6.7.3 Independent Estimate of Future Costs

Information provided by jurisdictions on current and future plans and costs was reviewed with reference to agreed national goals and strategies, to independently develop indicative future cost estimates.

In particular, jurisdictions’ future cost estimates were reviewed to determine where additional expenditure was required to fund programs and projects and to bring forward the completion of

545 638 670 693

0

500

1000

2003 2004 2005 2006



existing and planned programs and projects in order to enable the achievement of the National Goals for Schooling within the 2004-2006 period as far as reasonably practicable.

The areas where significant additional resourcing was considered necessary are those which support the following purposes:

Table 6.9: Areas requiring additional resources, by Priority Area

The following assumptions were made in determining the timing of additional expenditure:

• Effective use can be made of additional resources for professional development from 2004 without inefficiencies arising;

• Digital content available over the period will be regarded by most jurisdictions as sufficient to justify proceeding to implement online learning;

• Integrated systems adequate for the integration of online learning into schools can be implemented by 2006 in most jurisdictions.

The independent estimates of total cost are as follows:

Table 6.10: Independent estimate of future ICT costs ($m)

Note 1: Growth is annual average growth from 2003

Note 2: Note also the Commonwealth contribution matching jurisdiction contributions to The Le@rning Federation

Note 3: Includes the estimated $34.4m unreported component of Professional Development

Area Purpose

Connectivity

• Upgrading of narrowband access to true broadband rates (at least 1 Mbit/s) in all jurisdictions for all but the smallest metropolitan and regional schools

• Acceleration of bandwidth improvements for distance education • Completion of bandwidth improvement to broadband rates by the end of 2006 • Completion of school network upgrading for online learning by mid-2006 • Integrated systems for managed online learning in most jurisdictions by end 2006

Content • A meaningful level of content development maintained in all jurisdictions with emphasis on

local requirements


• Updating where required for principals and ICT specialists/champions by mid-2005 • Programs where required for all teachers in basic ICT by mid-2005 • Most teachers to be confident users of their jurisdiction’s online learning suite by 2006 • Broadly-based and significant integration of online learning in classroom processes

2003 2004 2005 2006 Growth 1 Connectivity 466.1 557.7 660.8 740.8 16.7% Content2 27.9 28.6 32.6 34.1 6.9% Professional Development

51.1 63.3 79.0 96.4 23.6%3

TOTAL 545 650 772 871 16.9%



A comparison of independent, jurisdiction and projected costs, is shown in Figure 6.22:

Figure 6.22: Comparison of estimates of national ICT expenditure ($m)

6.7.4 Future Additional Resourcing Needs

Overall Additional Resourcing Needs Compared to 2003 levels of expenditure, the additional resources required to enable the achievement of the National Goals for Schooling were independently estimated as follows in Table 6.11:

Table 6.11: Additional resources (over 2003 levels) required for achievement of the National Goals

2003 2004 2005 2006 Expenditure To Meet National Goals ($m p.a.) 545 650 772 871 Additional National Resourcing ($m p.a.) 105 227 326 Per-Student Average Resourcing ($ p.a.) 241 287 341 385 Additional Per-Student Resourcing ($ p.a.) 46 100 144 Increase on 2003 expenditure 19% 42% 60%

Additional Resourcing Requirements in Priority Areas The independent estimate of additional expenditure over 2003 levels was analysed by Priority Area as follows in Table 6.12:

Table 6.12: Additional resources required for Priority Areas

2003 2004 2005 2006 Connectivity 466.1 557.7 660.8 740.8 Additional National Resourcing ($m p.a.) 91.6 194.7 274.7 Per-Student National Expenditure ($ p.a.) 205.8 246.3 291.8 327.2 Additional Per-Student Expenditure ($ p.a.) 40.5 86.0 121.3 Increase on 2003 expenditure 19.7% 41.8% 58.9% Content 27.9 28.6 32.6 34.1 Additional National Resourcing ($m p.a.) 0.7 4.7 6.2 Per-Student National Expenditure ($ p.a.) 12.3 12.6 14.4 15.1 Additional Per-Student Expenditure ($ p.a.) 0.3 2.1 2.7 Increase on 2003 expenditure 2.5% 16.8% 22.2% Professional Development 51.1 63.3 79.0 96.4 Additional National Resourcing ($m p.a.) 12.1 27.9 45.3 Per-Student National Expenditure ($ p.a.) 22.6 27.9 34.9 42.6 Additional Per-Student Expenditure ($ p.a.) 5.4 12.3 20.0 Increase on 2003 expenditure 23.8% 54.6% 88.7% Total National ICT Costs 545 650 772 871

545 650

802

1,030

545 638 670 693

545 650

772 871

0

200

400

600

800

1,000

1,200

2003 2004 2005 2006


Resourcing The National Goals National School Resourcing Standard


Chapter 7 The National School Resourcing Standard (NSRS) – a national integrated approach to school resourcing

7.1 Rationale

The present national system of school resourcing is the subject of controversy. It is considered by advocates of many schools and systems to be inadequate for a variety of different reasons. A key factor behind the controversy is the shared responsibility for the public funding of schools by national, state and territory governments. Policy difference on school funding between levels of government has greatly contributed to incoherence in the final settlement of the total amount and distribution of funds across schools. As a consequence, it is not possible to properly measure the quantum of all public funds for schooling (or resource distribution) against student need and the attainment of expected learning objectives for children.

The National School Resourcing Standard (NSRS) has been designed as a cost framework to enable governments, education systems and schools to focus more effectively on the following objectives:

Improved student learning outcomes - the NSRS is based directly on a calculation of the costs of achieving student learning outcomes. It is a reference point for understanding the relationship between outcomes and resource allocations. Other needs frameworks rely on de-facto measures of student learning needs without due consideration to targeted learning outcomes.

Funding for equitable outcomes - the NSRS specifies the total amount of resources required so that important (and measurable) learning and participation objectives can be realistically attained by all students.

Improving the efficiency of school operations - the NSRS identifies the required minimum expenditures to enable all students to attain specified learning and participation objectives. The cost projections are therefore on the basis of the most efficient use of resources.

The NSRS can be used to serve a number of purposes, including; • A national resourcing benchmark against which the total public funding of schools can be

measured. • A national framework for the development of macro-level funding policies for schools

irrespective of sector. • An analytical framework and information base for school systems to assist in their internal

allocation of funds across schools, levels of schooling and across sectors. • A rational basis for funding negotiations between the Commonwealth, the States and the

non-government sector.

7.2 The NSRS Cost Framework

The NSRS is a cost framework for determining the actual recurrent costs of schooling in order to meet specified learning objectives derived from the National Goals for Schooling adopted by Ministers (MCEETYA, 1999).

The NSRS is a ‘next generation’ funding approach to schooling. It defines actual required expenditure for schooling according to the level of school resourcing that will enable the attainment and distribution of specified learning outcomes.

Previous funding formulae and programme funding approaches in Australia (and most other countries) have been based on a combination of the following:

(i) historical funding patterns linked to annual cost indexation and available funds,

(ii) costing total funding on the basis of a basket of deemed essential inputs (such as the Community Standard adopted by the Commonwealth Schools Commission, 1984),



(iii) apportioning a politically determined amount of funds designated for schooling based on the weighted learning needs of individual students and cost profiles of schools (as applied in different ways by most states in Australia).

The NSRS framework makes an essential link between efficiency and effectiveness in the delivery of schooling. The NSRS aggregates at the national level detailed cost information about effective schooling practices. This enables the construction of funding formulas for the allocation of resources to different schools.

The cost framework integrates the results of two cost analyses – (i) Base costs, and (ii) future Additional Resourcing Needs.

7.2.1 Base cost of schooling

The Base cost (recurrent) of schools is an empirically based estimate of existing least cost for primary and secondary schools where (i) they are operating in middle-range SES communities, (ii) have a school and student profile that attracts very limited (if any) additional targeted resourcing from government, and (iii) have students meeting a set of specified participation and learning benchmarks. The Base cost estimate, termed the Existing Least Cost (ELC), was calculated as part of the Resourcing the National Goals project during 2002-2003. Data was collected from all states and territories except for the Northern Territory. This data was subjected to statistical and cost analyses and the results and conclusions are presented in Part 1 of this report.

7.2.2 Additional Resourcing Needs

Future Additional Resourcing Needs are composed of (i) currently funded provisions, and (ii) estimates of currently unfunded future additional resourcing needs.

Based on the findings of this study, it is broadly estimated that 15% of actual recurrent funding is for additional resourcing needs covering student, school and other factors. This funded additional expenditure meets the specific needs of schools that do not fit least cost operating conditions required by the base cost scenario.

Current funding levels for additional needs are the difference between the Base cost estimate of schooling and the aggregate recurrent expenditure for schooling across the nation. The actual national aggregate recurrent expenditure is measured on a consistent basis by government systems across states and reported annually in the Annual National Report of Schooling (ANR).

The operational reality of the overwhelming number of Australian schools is not reflected and cannot be accommodated by the resourcing of a base cost scenario. First, there are non-discretionary factors – inherent attributes of the students or the school outside the control of school management, that generate additional resourcing requirements above the Base cost provisions. Second, additional resource demands are generated by an expanded curriculum. In addition, the usefulness of the NSRS rests partly on its reliability in predicting the additional and growing demands on schooling. The existing least cost of schools does not capture the ambitions of the education community for student learning in the future.

This study has grouped additional resourcing needs into three categories for analysis:

i) Student-related;

ii) School-related;

iii) Curriculum-related.

7.2.3 Additional and uncosted variables

There are a number of ways in which the NSRS can not claim to be a final measure of all future school resourcing needs. The SRT is aware of a number of cost variables that have not been included in the analysis.

The significant resourcing needs generated by students with disabilities have not been costed as part of this phase of research. A separate costing exercise that comprehensively examines the resourcing needs of these students in relation to the National Goals of schooling will be undertaken during 2004. The base cost calculations and additional funding required for the effective schooling of



children with disabilities will be able to be inserted into the analysis of future Additional Resourcing Needs to present the complete calculations for the NSRS cost framework.

The target learning outcomes which form the platform for calculating costs are generally the minimum Benchmarks adopted by Ministers against the National Goals. The costings therefore do not reflect the higher ambitions held by Ministers and the educational community for all students. They do not reflect the cost of improving the whole range of student learning outcomes.

A number of quality elements are not specifically accounted for. Most notably the cost of ensuring an appropriate level and distribution of teacher quality is not directly addressed, except to the extent that it is factored into the base cost estimate of schooling. There is a large element of teacher quality in base cost estimates as these costs are for schools that are currently effective. There is, however, an evolving understanding of what constitutes teacher quality and how it can be guaranteed for all students. This is likely to have resource implications that are currently not quantified. The work of the Teacher Quality and Educational Leadership Taskforce (TQELT) in establishing a national framework for teacher standards is a substantial step toward a national approach to accounting for teacher quality. This will allow a future oriented calculation for the reproduction and equitable distribution of this critical variable.

7.3 NSRS Headline Costs

The macro-level cost estimates of the NSRS are expressed through three types of headline cost figures – national aggregate costs to attain the NSRS, additional expenditure required to attain the NSRS, and per student unit cost estimates of the NSRS. All cost estimates are indicative in nature and based on the preliminary costings that are possible from this phase of the Resourcing the National Goals project. All costs refer only to government schooling.

7.3.1 Aggregate NSRS Costs

These represent the total national expenditure required to enable all students in government schools to have a realistic chance of attaining the National Goals. The costs are presented for the primary and secondary levels separately and as a national total for the two, and are an aggregate of the currently funded and unfunded resourcing needs of schools.

7.3.2 Additional Expenditure Required for Schooling

The additional future expenditure required for schooling is the sum total of currently unfunded component of costs calculated in this report that examined the additional resourcing needs of schools. Earlier sections of this report showed that government school systems already distribute in the order of 15% of their school level funds for student and school related additional resourcing needs. This includes additional expenditure for (i) student related factors such as disabilities, low SES, ESL, and student of Indigenous background, and (ii) school factors related to size and location. Beyond this existing provision for additional resourcing needs, a detailed estimate has been produced in this report of the further currently unfunded future resourcing requirements of government schools. These are directly related to the outstanding needs associated with student related factors (excluding disability needs) and the future resourcing demands of emerging strategic imperatives in ICT and VET.

7.3.3 NSRS Unit Costs (government schooling)

The aggregate NSRS costs can also be expressed as standardised costs per government school student at the primary and secondary levels. This standardisation cannot be understood as the average unit cost for each government system. Significant unit cost deviations from the national average occur where a state system (most notably Northern Territory) has a student and school profile imposing future additional resourcing needs that are significantly higher than the national average. The NSRS unit cost figure cannot be applied automatically to other school systems or individual schools. As a unit cost estimate it would form an upper bound estimate of NSRS unit costs for any other system.

The unit costs of individual schools will deviate significantly around this national unit cost estimate. However, any school that (i) is not in a remote location, (ii) is catering for an average SES profile



community, and (iii) has minimal enrolees with disabilities, will have a NSRS unit cost that will be somewhere between the base cost estimate produced as Part 1 of this report and the national NSRS unit cost estimate.

NSRS - The Headline Costs

Aggregate NSRS Costs (government schooling) • National Required Expenditure for Primary Schooling • National Required Expenditure for Secondary Schooling • Total National Required Expenditure for Schooling Additional Expenditure Required for Schooling • Additional Expenditure Required, primary level • Additional Expenditure Required, secondary level • Total Additional Expenditure Required NSRS Unit Costs (government schooling) • NSRS Primary Student Cost • NSRS Secondary Student Cost

7.4 Key Features of the NSRS

7.4.1 A school resourcing standard based on delivering learning outcomes

The NSRS is a cost framework applying to the recurrent costs of schooling. The Standard can be expressed as a single figure macro-level estimate of the recurrent costs of schooling based on delivering specified learning outcomes at the primary and secondary levels of schooling. The Standard can also be expressed as an average per student cost for the primary and secondary levels of schooling.

The Standard makes use of the advances in student and school performance measurement that are now being consistently applied nationally. It links this performance data with student and school profiles, and school cost data. These data linkages enable a macro level estimate of the aggregate resourcing needs of the school sector. Most importantly, and for the first time, school resourcing need is measured in terms of what is required by schools nationally so that key learning and participation objectives can be realistically attained by all students.

7.4.2 An integrated national approach to measuring school resourcing needs

The Standard specifies the aggregate costs of schooling across government sectors in all states. The internal calculations of the Standard do take into account the differential resourcing needs of students and schools in relation to specified learning and participation outcomes. These calculations have been based on (i) current costs, (ii) cost projections for emerging strategic priorities, and (iii) estimates of future additional resourcing needs to enable the required learning outcomes for all schools and students.

7.4.3 An evidence based approached to measuring school needs

The Standard represents the most informed judgment of the actual costs of meeting the common commitments of government in the near future. The research underpinning the framework is the only common and objective evidence available for developing a detailed national resourcing data base and analysis in the interests of students and the community. The approach allows for evidence based resourcing policy, for the first time and on a national basis.



7.4.4 A future oriented standard

All costs are future oriented: they represent the investments that are currently foreseeable as necessary for achieving the National Goals. The costs and calculations, and therefore the Standard, are dynamic. The Standard changes as understanding of student learning needs increases and community expectations change.

7.4.5 Meeting the human resource needs of Australia

The Standard has been framed in relation to the student, parent and community expectations for a quality education system for all. The future-based orientation of the Standard also takes into account the human resource needs of Australia. These human resource needs are increasingly being defined by the demands of an intensely competitive global economy that places a high premium on the skill base of available human resources. The competitive pressure on the Australian economy is one underlying dynamic that may require a continuing re-assessment of the Standard.

7.4.6 Need based funding for schools

The NSRS will support understanding of policies for needs based resourcing of Australian schools into the future. The standard could not in itself constitute a needs framework - it would however provide a common and accepted reference point for understanding relative student resourcing need across all schools.

7.4.7 Effective education as the first priority

The NSRS necessarily focuses on school and system effectiveness in delivering the National Goals of Schooling. The NSRS has regard to the variability in school effectiveness in meeting student learning outcomes and ensures that cost projections are adjusted to reflect only expenditures required to achieve effectiveness.

7.5 NSRS - Indicative Cost Estimates

Indicative cost estimates have been calculated for recurrent funding of the NSRS for government schools across Australia.94 These represent the expected average recurrent costs for the implementation of the NSRS in the foreseeable future. Cost estimates are referred to as ‘adjusted recurrent costs’. These have been accounted for on an accrual basis consistent with ANR and NSSC tables, but exclude the cost items (i) user cost of capital, (ii) transport costs, and (iii) payroll tax. The necessary adjustments have been made to ANR and NSSC data to ensure comparability with the NSRS calculations. All NSRS costs have been adjusted where necessary so they are consistently expressed in 2003 constant prices. Appendix 7 specifies the data sources and formulae used for the calculations presented in this section.

The total additional expenditure required to meet the NSRS is approximately $2.4 billion per annum in 2003 prices. This represents a 13% growth on estimated recurrent public expenditure (accrual basis, excluding user cost of capital, transport and payroll tax) on government schooling for 2003.

94 The application of the NSRS to non-government schools is also possible but has not been attempted as part of this report because of data limitations. This is discussed later in the report.



Table 7.1: Additional expenditure required to meet NSRS, government schools*

School Level National Additional Required Expend. ($ m per annum)

Percentage Growth on existing recurrent

Public Expenditure

Additional Unit Cost Per FTE student($)

Primary level, Projected Additional Expenditure,

$ 1,160

12% 835

Projected Additional Expenditure, secondary level

$ 1,213

15% 1385

Total Additional Expenditure $ 2,373

13% 1048

* Adjusted annual recurrent costs, 2003 prices (in-school and out of school, accrual basis accounting). Excluding user costs of capital, transport, payroll tax.

A breakdown of the additional expenditure required for future ARN by primary and secondary levels is presented in the table below. Estimates are also provided of current national public expenditure by ARN type.

Total ARN recurrent expenditure for 2003 was estimated nationally at nearly $3 billion. Additional required expenditure for future ARN is estimated at nearly $2.4 billion per annum which is almost an 80% growth on 2003 national public expenditure allocations.95

The greatest portion of additional required expenditure is for student related future ARN. Additional required public expenditure needs to grow by approximately $2 billion per annum. This is an approximate 90% increase on the estimated 2003 national allocations ($2.2 billion per annum).

ICT and VET related expenses also need strong growth to meet NSRS levels (56% and 38% respectively) but these are coming off a much lower base of expenditure and do not pose as significant additional cost burdens.

These estimates have been derived from the analysis of future ARN expenditure in this report. The estimate of current student related expenditure has been obtained by deducting current school related, ICT related and VET related expenditure from total current expenditure. The future school related needs are not shown because no estimate has been produced of any outstanding needs.

Table 7.2: Current and future additional expenditure required by ARN type*

Student related School related** ICT related VET related Total Level of Education

Current ($ m)

Additional ($ m)

Current ($ m)

Additional ($ m)

Current ($ m)

Additional ($ m)

Current ($ m)

Additional ($ m)

Current ($ m)

Additional ($ m)

Primary 1,150.6 972 366.3 0 334.2 187.7 0 0 1851.1 1160 Secondary 539.7 1062 304.0 0 210.8 118.4 84.5 32.3 1139.0 1213 Total 1,690.3 2034 670.3 0 545 306.1 84.5 32.3 2990.1 2373

* Annual recurrent costs, 2003 prices (in-school and out of school, accrual basis accounting). Excluding user costs of capital and transport. Payroll tax incorporated in some elements of ICT and VET related.

** No provision made for additional school related future ARN expenditure (see discussion in report)

The total cost of funding the NSRS is approximately $21.3 billion per annum in adjusted recurrent costs. This includes public expenditure and the continuation of estimated current levels of school generated revenues from non-public sources.

The total NSRS is 116% of estimated actual recurrent expenditure for government schooling. This includes the school generated revenues and the required additional expenditure to provide for the NSRS.

National public expenditure for government schooling would need to grow by 13% in real terms to meet the funding levels required by the NSRS.

95 Figures do not include a portion of expenditure for these categories that may have been included as part of the Base cost figures. This is most likely to apply to the student related ARN type. For example, schools that satisfied the Base criteria may have incorporated an element of expenditure for literacy or numeracy programs that enabled them to perform effectively.



Table 7.3: Indicative total cost of NSRS*, government schools (adjusted annual recurrent costs, 2003 prices)

School Level/Cost Type Actual Recurrent

Expenditure 2003 ($ m per

annum)*

Actual Recurrent

Expenditure per FTE

student ($)

NSRS Recurrent

Cost ($ m per annum)

NSRS Unit Cost Per

FTE student ($)

Percentage of 2003 public expenditure

for govt schooling

Primary Level Public Expenditure for Primary Schooling 9,973 7,181 11,132 8,016 112% School generated revenues for Primary Schooling**

347 250 347 250 3%

Total Expenditure for Primary Schooling 10,320 7,431 11,479 8,265 115% Secondary Level Public Expenditure for Secondary Schooling 8,294 9,474 9,507 10,859 115% School generated revenues Secondary Schooling**

286 327 286 327 3%

Total Expenditure for Secondary Schooling 8,580 9,801 9,793 11,186 118% Total Total Public Expenditure for Schooling 18,267 8,067 20,639 9,115 113% Total school generated revenues for Schooling 633 280 633 280 3% Total Expenditure for Schooling 18,900 8,347 21,273 9,395 116%

* Estimates based on published ANR data, with projected growth in expenditure using average AGSRC indexation for previous three years. Excluding - user costs of capital, transport, payroll tax.

* * Based on project estimates of national average for school generated resources at primary and secondary levels for school year 2003

The additional expenditure on future ARN proposed by the NSRS will see the Base cost share of total expenditure decline to 80% for primary schooling (down from 83%) and to 82% for secondary (down from 87%).

Table 7.4 Base Cost as proportion of aggregate cost, government schooling *(%)

Primary Secondary Base Cost ($ per capita) 6,467 9,130 NSRS ($ per capita) 8,016 11,186 Base cost as % of NSRS 80% 82%

*Recurrent cost only. Includes public and school generated sources of revenue. Base cost includes payroll tax.

These estimates have been developed based on some definitions, parameters and assumptions specified below;

• Annual recurrent costs refer to ‘in-school’ and ‘out of school’ costs as defined by MCEETYA

• Costs are expressed in terms of 2003 constant prices, with no provision for salary or other price changes

• Estimate of 2003 prices for currently funded costs is based on AGSRC indexation of financial figures published in ANR 2001. Indexation equal to actual AGSRC increase for 2001-2002 and 3 year average for 2002-2003.

• Estimates for the ICT and VET cost components of future additional resourcing needs refer to forward estimates for the next several years.

• Costs are ‘indicative’ as they are based on a first iteration of a complex cost analysis of student related resourcing needs.

• Capital costs have not been included in the costings (except for ICT where these could not be extracted).



• The number of actual primary school enrolments in the government sector remains unchanged from those reported in 2001.

• An incremental increase in secondary school enrolments at years 11 and 12 consistent with return on investment at the secondary level for the first three years of the introduction of the NSRS.

• Cost estimates include current provision for disabled students. No calculation is possible at this stage for unfunded future additional resourcing needs of disabled students.

Resourcing The National Goals Appendices


Appendices

1. THE NATIONAL GOALS FOR SCHOOLING ...............................................................................................................135 2. TERMS OF REFERENCE FOR PROJECT .....................................................................................................................137 3. COMMITTEE STRUCTURE FOR PROJECT MANAGEMENT ........................................................................................138 4. CONSULTATION WITH INTEREST GROUPS .............................................................................................................140 5. ADDITIONAL RESOURCING NEED: STUDENT RELATED .........................................................................................141 6. ADDITIONAL RESOURCING NEED: ICT IN SCHOOLS...............................................................................................146 7. NATIONAL SCHOOL RESOURCING STANDARD: COST CALCULATIONS - DATA SOURCES AND FORMULAE ..........154 8. LIST OF TECHNICAL PAPERS AND DOCUMENTS HELD BY SRT SECRETARIAT .......................................................157

Resourcing The National Goals Appendix 1:The National Goals for Schooling


Appendix 1 The National Goals for Schooling

This statement of the National Goals for Schooling provides broad directions to guide schools and education authorities in securing agreed outcomes for students, as set out in detail below:

1. Schooling should develop fully the talents and capacities of all students. In particular, when students leave schools they should: 1.1 have the capacity for, and skills in, analysis and problem solving and the ability to communicate ideas and information, to plan and organise activities and to collaborate with others 1.2 have qualities of self-confidence, optimism, high self-esteem, and a commitment to personal excellence as a basis for their potential life roles as family, community and workforce members 1.3 have the capacity to exercise judgement and responsibility in matters of morality, ethics and social justice, and the capacity to make sense of their world, to think about how things got to be the way they are, to make rational and informed decisions about their own lives and to accept responsibility for their own actions 1.4 be active and informed citizens with an understanding and appreciation of Australia's system of government and civic life 1.5 have employment related skills and an understanding of the work environment, career options and pathways as a foundation for, and positive attitudes towards, vocational education and training, further education, employment and life-long learning 1.6 be confident, creative and productive users of new technologies, particularly information and communication technologies, and understand the impact of those technologies on society 1.7 have an understanding of, and concern for, stewardship of the natural environment, and the knowledge and skills to contribute to ecologically sustainable development 1.8 have the knowledge, skills and attitudes necessary to establish and maintain a healthy lifestyle, and for the creative and satisfying use of leisure time.

Summary of the National Goals for Schooling

• Schooling should develop fully the talents and capacities of all students • In terms of curriculum, students should have attained high standards of knowledge, skills and

understanding through a comprehensive and balanced curriculum in the compulsory years of schooling encompassing the agreed eight key learning areas; attained the skills of numeracy and English literacy; participated in programs of vocational learning and participated in programs and activities which foster and develop enterprise skills.

• Schooling should be socially just.

Resourcing The National Goals Appendix 1:The National Goals for Schooling


2. In terms of curriculum, students should have: 2.1 attained high standards of knowledge, skills and understanding through a comprehensive and balanced curriculum in the compulsory years of schooling encompassing the agreed eight key learning areas:

• the arts; • English; • health and physical education; • languages other than English; • mathematics; • science; • studies of society and environment; • technology; • and the interrelationships between them

2.2 attained the skills of numeracy and English literacy; such that, every student should be numerate, able to read, write, spell and communicate at an appropriate level 2.3 participated in programs of vocational learning during the compulsory years and have had access to vocational education and training programs as part of their senior secondary studies 2.4 participated in programs and activities which foster and develop enterprise skills, including those skills which will allow them maximum flexibility and adaptability in the future.

3. Schooling should be socially just, so that:

3.1 students' outcomes from schooling are free from the effects of negative forms of discrimination based on sex, language, culture and ethnicity, religion or disability; and of differences arising from students' socio-economic background or geographic location 3.2 the learning outcomes of educationally disadvantaged students improve and, over time, match those of other students 3.3 Aboriginal and Torres Strait Islander students have equitable access to, and opportunities in, schooling so that their learning outcomes improve and, over time, match those of other students 3.4 all students understand and acknowledge the value of Aboriginal and Torres Strait Islander cultures to Australian society and possess the knowledge, skills and understanding to contribute to and benefit from, reconciliation between Indigenous and non-Indigenous Australians 3.5 all students understand and acknowledge the value of cultural and linguistic diversity, and possess the knowledge, skills and understanding to contribute to, and benefit from, such diversity in the Australian community and internationally 3.6 all students have access to the high quality education necessary to enable the completion of school education to Year 12 or its vocational equivalent and that provides clear and recognised pathways to employment and further education and training.

Resourcing The National Goals for Schooling Appendix 2 Terms of Reference for Project


Appendix 2 Terms of Reference for Project

The MCEETYA Taskforce on Schools Resourcing is to report to each meeting of the Council on approaches to the resourcing of schools that will ensure the achievement of the agreed National Goals for Schooling. Specifically, the Taskforce will provide detailed advice on:

• the costs associated with providing high quality education to students in Australia, with

particular emphasis on cost variations generated by factors such as geographic location, socio-economic background, special needs, cultural background and language skills. The analysis should cover in detail all levels of schooling

• current funding levels for schools education in Australia by source of funding, school sector (State, Catholic and Independent) and the nature of school population

• principles for government funding of schooling to ensure efficient, effective and equitable schooling provision for all students, based on an understanding of each government’s responsibilities to the government and non government sectors

• funding models that enhance the completion of Year 12 (or equivalent), particularly by the students who are at high risk of not completing Year 12 (or equivalent)

• models of and protocols for funding arrangements for schools in the context of changing revenue and expenditure arrangements between Commonwealth and State governments generally

• the management of related resources such as intellectual property • international benchmarking (best practice).

The Taskforce will work collaboratively with the Taskforce on Performance Measurement and Reporting.

Resourcing The National Goals for Schooling Appendix 3 Committee Structure for Project Management


Appendix 3 Committee structure for project management 1 Schools Resourcing Taskforce (SRT)

Organisation/State/Territory Representative Chair and NSW Mr Andrew Cappie-Wood * NSW Ms Leslie Loble Victoria Mr Michael Kane Queensland Ms Rita Logan ** Northern Territory Mr Ken Simpson South Australia Mr Gino DeGennaro *** Tasmania Mr Simon Barnsley ACT Mr Rob Donelly **** Western Australia Mr Peter Mc Caffrey ***** NCEC Mr Geoff Joy ****** NCISA******* Mr Bill Daniels DEST Mr Chris Evans MCEETYA Secretariat Mr Maurice Wenn Executive Officer Mr Tom Alegounarias

* Replaced Ms Jan McClelland ** Replaced Dr Ian Cosier *** Replaced Ms Helga Kolbe **** Replaced Mr Trevor Wheeler ***** Replaced Mr Ron Mance ****** Replaced Ms Therese Temby ******* Subsequently known as ISCA

2 Schools Resourcing Taskforce Secretariat

Principal Analyst – conceptualisation & project management Mr Adam Rorris Senior Project Officer Mr Andrew Dowling Project Officer Ms Susan Wright

Resourcing The National Goals for Schooling Appendix 3 Committee Structure for Project Management


3 SRT Project Steering Committee

Organisation/State/Territory Representative

Chair and NSW Mr Tom Alegounarias Victoria Mr Robert Macbeth Queensland Dr Ian Cosier* South Australia Mr Mark Witham** Tasmania Mr Simon Barnsley ACT Mr Andrew Clarke*** Western Australia Mr Keith Sullivan NCEC Ms Therese Temby**** NCISA***** Mr Bill Daniels DEST Mr Chris Evans SRT Secretariat Mr Adam Rorris

* Replaced subsequently by Ms Rita Logan ** Replaced subsequently by Mr Phil Campbell *** Replaced subsequently by Mr Stephen Tregea-Collett, Mr Rob Donelly **** Replaced subsequently by Mr Geoff Joy ***** Subsequently known as ISCA

4 SRT Project Reference Group

Organisation/State/Territory Representative Chair and NSW Mr Tom Alegounarias New South Wales Mr Doug Newton New South Wales Mr Vince Blackburn New South Wales Mr Paul Wheelan New South Wales Mr Ray Gillies South Australia Mr Mark Witham Queensland Dr Ian Cosier CEC Queensland Mr Vic Lorenz DEST Mr Chris Evans DEST Ms Dominique Oriel Western Australia Mr Keith Sullivan Northern Territory Ms Nicole Hurwood Victoria Mr Robert Anderson Victoria Ms Pam Keating ABS Mr John Fahy AIS NSW Mr Ray Whitfield CEC Victoria Mr David Wilkes NCISA Ms Pauline Nesdale SRT Secretariat Mr Adam Rorris

Resourcing The National Goals for Schooling - Appendices Appendix 4 Consultations with Interest Groups


Appendix 4 Consultations with Interest Groups

Interest Group Date of Consultation Nature of Consultation Independent Education Union Monday 17 February 2003 Meeting with representatives Australian Education Union Monday 17 February 2003 Meeting with representatives Australian Primary Principals' Assoc Wednesday 19 Feb 2003 Meeting with representatives Australian Council of State School Organisations Wednesday 19 Feb 2003 Meeting with representatives Australian Secondary Principals' Association Thursday 20 February 2003 Meeting with representatives Council of Catholic School Parents Thursday 20 February 2003 Meeting with representatives Australian Parents Council Monday 24 February 2003 Meeting with representatives National Council of Independent Schools Associations*

Wednesday 26 March 2003 Presentation to members at NCISA meeting

Australian Government Primary Principals Association

February 2003 Telephone discussions with President

Australian Primary Principals Association 8 March 2003 Presentation to members at APPA meeting * Subsequently known as Independent Schools Council of Australia

Resourcing The National Goals for Schooling Appendix 5 Additional Resourcing Need: Student Related


Appendix 5 Additional Resourcing Need: Student Related Initiatives included in the analysis

Type of Initiative

Name of Initiative

Brief Description

Whole System

Early Learning Initiative

The ELI is a Commonwealth funded initiative focused on improving literacy achievements for students in participating low socio-economic status schools through professional development support for teachers in the kindergarten to Year 3 years.

Literacy Net

Literacy Net is a project that recognises that the area of assessment and diagnosis in Literacy is problematic for many primary teachers. Literacy Net is a support program developed by the Department of Education and Training in WA to assist teachers from Yr 4-7 in monitoring student progress in Literacy, identifying students at risk and developing appropriate learning programs focused on the particular needs of students.

Literacy Advance

The Literacy Advance Strategy is the sector-wide strategic literacy plan being implemented by the Catholic Education Commission of Victoria (CECV). The strategy was introduced in 1998 as a systematic approach to improving literacy teaching and student achievement in Victorian Catholic Schools. The development of the strategy in recent years has focused on the changing needs of schools implementing the Children’s Literacy Success Strategy (CLaSS), Literacy in Years 3 to 4 and Middle Years Literacy (5-9). Literacy Advance has a particular focus on ensuring success in the early years of schooling (p-2). The Children's Literacy Success Strategy (CLaSS) is a major project of Literacy Advance

Success in Numeracy

Success in Numeracy Education has been developed to assist school communities to reflect on their current numeracy provision and to support them in lifting the numeracy achievement of all students, especially those who may be at risk. SINE 5-6 concentrates on the upper primary grades, years 5 & 6. The SINE strategy trains 2 numeracy focus teachers in each school to deliver spaced numeracy modules to whole school staff.

Middle Years Reform

The Middle Years Reform Program provides funding for additional classroom teachers in secondary and P-12 schools to support students in Years 7-9 to improve their literacy levels and attendance and retention levels. Nine briefing days (one per region) were held for schools in 2001.

Discovering Democracy

A multiple perspectives model has been developed to link CCE to other curriculum perspectives aimed to increase the take-up and sustainability of the program. This conceptual framework for exploring the place of multiple perspectives in curriculum is being developed by the Catholic Education Office, Melbourne. Central to this model is the ‘ideal community’, one that acknowledges the past, engages critically with the present and creates inclusive and preferred futures.

ESL Professional Support

Provision of targeted ESL professional support to primary and secondary teachers of ESL students (specialist ESL and class teachers) through ESL teacher orientation programs, ESL in the Mainstream courses, professional update seminars, ESL syllabus support programs, school based professional action learning projects, teacher professional support networks and provision of targeted curriculum development support .

Multi-Cultural Education Policy and Resources

Development and provision of multicultural and anti-racism education resources. Provision of targeted anti-racism professional support to teachers and implementation of community harmony initiatives.



Type of Initiative

Name of Initiative

Brief Description

Indigenous Education Strategic Initiative Program

The Indigenous Education Strategic Initiative aims at improving the quality of education leading to improvement in the learning outcomes of Indigenous students.

Indigenous Literacy and Numeracy

A teacher provides professional support for teachers of Indigenous students with strategies to enhance literacy and numeracy learning. Assistance is also provided in the development of individual learning plans where necessary.

Targeted Schools

Getting it Right Literacy and Numeracy Strategy State-funded initiative

Specialist Teacher FTE allocated to schools with identified needs. 21 days of PD provided over two years to Specialist Teachers. Specialists focus on literacy OR numeracy over a minimum of two years, working shoulder-to-shoulder with classroom colleagues to address the needs of children who are struggling. Participating schools set improvement targets, and report progress in relation to those targets through annual quality assurance procedures. Specialist Teacher FTE rolled-out over 4 years, reaching 200 FTE by 2005.

Commonwealth Literacy and Numeracy Program

Direct grants made to schools at which the 50% of children whose socio-economic circumstances reflect disadvantage. School allocations based on magnitude of disadvantage (evident through H-index) factored against school enrolment with weighting for P and yr 1 to reflect focus on early years. Schools determine nature of program based on local knowledge of needs and opportunities. Exact nature of programs not centrally collected, but an evaluation to determine spread and prevalence of programs due to report in December 2003.

Year 5 intervention

Schools provided with additional funds to provide intervention programs targeted at the lowest 15% of students on year 5 tests in literacy and numeracy.

Priority Schools Funding program

Program to support 541 PSFP schools serving the highest concentrations of students from low socio-economic status families. Funding is applied to direct financial assistance to PSFP schools, consultancy support, training and development, school network meetings and projects. An additional 280 teachers are provided by the state to PSFP schools to assist with literacy and numeracy learning. Training and development support focuses on improving literacy, numeracy and participation through quality teaching and learning, home, school and community partnerships and classroom and school organisation and school culture.

Assessing Numeracy in Primary Schools

Commonwealth funded numeracy research project. Action research in 10 schools across government, Catholic and independent jurisdictions.

Flying Start

The Flying Start resource is a staffing allocation made to schools to support literacy teaching and learning for Years K - 2. Teachers in these years are supported by District Literacy Officers who provide support to Flying Start teams and co-ordinate and facilitate district and school-based professional learning.

Count Me in Too

This initiative is trialing in 16 urban, rural and remote schools within the Territory. Numeracy Project Officers and Early childhood teaching teams within schools are assessing students’ numeracy learning needs and planning programs of work based on the assessment data.



Type of Initiative

Name of Initiative

Brief Description

After Hours HSC Coaching

Students studying for their HSC can participate in free tutorial sessions in a number of HSC subjects. Funds are provided to qualified tutors to give individual or small group tuition, additional to the regular teaching program.

Access to Excellence

The Access to Excellence initiative provides funding for 300 teachers in 118 schools to provide additional support for students in Years 7-10 who are at particular risk of not achieving expected levels in literacy and numeracy or who have high rates of absence or may be at risk of not completing Year 12 or its equivalent. Access to Excellence teachers attended a statewide professional development day (held over three days to accommodate all participants). The days highlighted where teachers could seek additional support for the initiative.

Targeted Groups

Aboriginal literacy and numeracy

This program provides a suite of initiatives to improve the literacy and numeracy achievement of Aboriginal students. It includes direct financial assistance to schools, training and development, consultancy services and school network meetings.

Koorie Middle Years Link Project

In 2002 there was a proposal for Enrolment Benchmarking Adjustment funding to establish a Numeracy Links Project along the lines of the Koorie Literacy Links Project. Funding was received for 9 schools to be involved to improve the numeracy outcomes for Koorie students in Years 5-6 using videoconferencing technology. It has been continued as a National Indigenous English Literacy and Numeracy Strategy initiative for the 2001-2004 period. Each of the 8 schools has a School Community Action Team that is made up of a Koorie Educator, Middle Years Numeracy Co coordinator, Local Aboriginal Education Consultative Group (LAECG) Chairperson, Koorie Education Development Officer and at least one teacher. Each School Community Action Team is also required to develop a School Community Action Plan (SCAP) that identifies key strategies designed to engage participants in creative, collaborative, numeracy focused teaching and learning activities. The school communities are located across the state from areas as far apart as Mildura, Grasmere and Bairnsdale.

Koorie Literacy Links Project

This project was first implemented as a Strategic Results Project in 1998. It has been continued as a National Indigenous English Literacy and Numeracy Strategy initiative for the 2001-2004 period. The project involves the use of Video Conferencing as a tool in improving Literacy Outcomes. 14 schools are involved within the Project. Each school has a School Community Action Team, that is made up of a Koorie Educator, Early Years Co ordinator, Local Aboriginal Education Consultative Group (LAECG) Chairperson, Koorie Education Development Officer and at least one Teacher. Each School Community Action Team is also required to develop a School Community Action Plan (SCAP) that identifies key strategies that incorporate the use of video conferencing to improve literacy outcomes and engage students in creative, collaborative, literacy focused projects. 12 government schools and 2 Catholic schools are participating across the state in areas such as Mildura, Heywood and Lakes Entrance.

Koorie Numeracy Links

In 2002 there was a proposal for Enrolment Benchmarking Adjustment funding to establish a Numeracy Links Project along the lines of the Koorie Literacy Links Project. Funding was received for 9 schools to be involved to improve the numeracy outcomes for Koorie students in Years 5-6 using videoconferencing technology. It has been continued as a National Indigenous English Literacy and Numeracy Strategy initiative for the 2001-2004 period. Each of the 8 schools has a School Community Action Team, that is made up of a Koorie Educator, Middle Years Numeracy Coordinator, Local Aboriginal Education Consultative Group (LAECG) Chairperson, Koorie Education Development Officer and at least one teacher. Each School Community Action Team is also required to develop a School Community Action Plan (SCAP) that identifies key strategies designed to engage participants in creative, collaborative, numeracy focused teaching and learning activities. The school communities are located across the state from areas as far apart as Mildura, Grasmere and Bairnsdale.

Gateways The program supports young people in the Fairfield school district to complete high school with an integrated set of strategies that includes case management, individual education plans, mentoring, vocational and life skills courses, family and community development and staff development.



Type of Initiative

Name of Initiative

Brief Description

Multicultural Education Aides

Provision of multicultural education aides to support ESL learners in classrooms, and facilitate better communication between schools and parents/guardians who do not speak English.

Working Together for Indigenous Youth

To assist 1,600 Indigenous students to stay on and complete Year 12 or move into further education, training or paid employment.

Plan It Youth Mentoring Program

The program matches trained adults from the local community to mentor young people at risk. The community mentors help the young people to plan their education and training pathways and to deal with the challenges of school and relationships with peers and teachers.

Aboriginal Education Assistants

Aboriginal people are employed as Aboriginal Educations Assistants (AEAs). They assist classroom teachers with a special focus on improving the literacy and numeracy outcomes of Aboriginal students. AEAs also provide liaison services between the schools and their local Aboriginal communities. 312 positions have been established in primary, central and high schools where there are relatively large numbers of Aboriginal students. There is considerable unmet demand from schools with a similar Aboriginal population but unable to be allocated an AEA because of resource availability.

PSFP Cineliteracy Project

This state-initiated innovative project aims to develop traditional literacy skills and increase student engagement and participation through film production. That is, in making short films, the students learn reading, writing, speaking and listening literacy skills using a wide range of printed and visual texts. A draft Cineliteracy teaching resource and a Cineliteracy case study and evaluation report have been developed as a result of this project. It is anticipated that teaching resource materials will be published in 2004. The Cineliteracy project was conducted in Clarence/Coffs Harbour, Port Macquarie, Dubbo Shellharbour and Port Jackson Districts.

Indigenous Education Student Support Program

Services in this area are aimed at improving learning outcomes for Indigenous students. Key elements of NIELNS and IESIP drive the initiatives. Culturally inclusive curricula is promoted via teacher PD in Network days (up to 4 per year) aimed at improving teacher knowledge and awareness. Literacy initiatives are met via Pd on the Guiding Tracks resource developed by the CECV, while numeracy research has been undertaken and delivery will commence via main-stream provision. Student support is provided via grants to schools, the employment of Koorie Education Workers, Indigenous Education Officers, Support advisors, and teacher aids at the school level. Print and digital resources have been developed to support all of the above. Links to community are fostered in all the work undertaken including links to VAEAI.

ESLTargeted Support

Provision of targeted curriculum-based English language and literacy assistance to students with English as a second language and literacy learning needs through teaching programs delivered in groups, classes, courses and cross-school professional support programs in primary and secondary schools.

Targeted Individuals

Introductory English

The 4 IECs provide intensive English tuition to students with minimal English prior to entering mainstream schools. Classes are based on ratio of 12 students to 1 teacher and resourced by a bilingual special teachers' assistant.

Intensive English for New Arrivals

On arrival provision of curriculum-based English language instruction to secondary aged newly arrived students with little or no English through secondary Intensive English centres and the Intensive English High school.

Isolated ESL Learner

New arrivals program - Isolated ESL Learner Support



Type of Initiative

Name of Initiative

Brief Description

Reading Recovery

The Reading Recovery program is an early intervention program for year 1 students who are experiencing difficulties to read and write. Reading Recovery is designed to target the lowest 20% of literacy performers in a school. Students in the program receive one to one tutoring, by specially trained teachers, five days per week for 30 minutes each day for 12 to 20 weeks.

Accelerated Literacy

A joint trial between the University of Canberra's Scaffolding Literacy in Schools Project and DEET. The project commenced in July 2001 in two schools, and is now being implemented in six schools in both urban and remote contexts in the NT. The project has a strong focus on teacher development and gathering evidence of the effectiveness of the approach to improve student outcomes. The methodology is a highly supportive approach that 'scaffolds' students to read age appropriate texts through extensive book orientation activities. These involve discussion and learning negotiations that aim to develop common knowledge between students and teacher about the author's intentions and the meaning and structure of language features in the text. Once students can read a passage from the class text this is used as a model text to teach them about spelling and writing, including the choices made by authors to realise their intentions in the writing.

Pilot Mentor Program

Commonwealth funded Indigenous student mentor program for students of around 15 years of age; adult volunteer Indigenous mentors

Year 12 Mentor Program

Commonwealth funded mentor program for Year 12 Indigenous students leaving school, to assist them to consider pathways to further education, training or careers

ESL for Indigenous Language Speaking Students

This project supports intensive oral English language program for eligible Indigenous language speaking students in their first year of formal schooling in the NT. This project provides additional teachers in schools, resource and Part time Instructor grants to schools and regional, central and school based professional development in the teaching and assessing of oral English language for Indigenous language speaking students. 3 ESL Advisors are employed through the project.

Restart

This initiative is aimed at Year 7 students most at risk of not achieving satisfactory literacy achievement levels in selected schools. The initiative provides additional funding for 100 extra teachers in 101 schools to enable trained teachers to provide intervention for identified year 7 students. One briefing day was held for Restart school principals and teachers in February 2002. A professional development program on analysis of testing data was held for regional support staff in 2002. Two professional development programs for Restart teachers were held in five locations in 2002 and in five locations in 2003.

Resourcing The National Goals for Schooling Appendix 6 Additional Resourcing Need: ICT in Schools


Appendix 6 Additional Resourcing Need: ICT in Schools 1 Towards a National Framework for Cost Data

The development of an agreed framework for the identification of the key areas of ICT costs would have substantial benefits for resource planning in the schools sector:

• It would allow jurisdictions to gradually improve their systems for identifying and

summarising costs; • It would assist jurisdictions to provide cost breakdowns in a more systematic way with less

effort; and • It would further increase confidence in the reported costs.

Particular improvement could be achieved in the area of professional development, where there is significant uncertainty about actual levels of expenditure.

2 Analysis of Historical Cost Data

Consideration was given to developing estimates of the true national cost trends on a normalised basis with respect to student numbers by including costs and corresponding student numbers only for jurisdictions providing data for a given year. However, the inclusion in later years of cost and enrolment data from jurisdictions in which the expenditure per student differs significantly from the earlier averages tends to skew the average and therefore the trend. Therefore annual averages of later year costs were included in the Cost Summary Tables in earlier years where data were not provided.

3 National Policy on ICT in Schools The National Goals for Schooling

The goals of The Adelaide Declaration (1999) on National Goals for Schooling in the Twenty-First Century96 which have specific relevance to the ICT area are the following:

• Schooling should develop fully the talents and capacities of all students. In particular, when students leave schools they should “... be confident, creative and productive users of new technologies, particularly information and communication technologies, and understand the impact of those technologies on society.”

• In terms of curriculum, students should have “... attained high standards of knowledge, skills and understanding through a comprehensive and balanced curriculum in the compulsory years of schooling encompassing the agreed eight key learning areas, including Technology.”

MCEETYA Ministers Joint Statement on Education and Training in the Information

Economy

In December 2000, MCEETYA Ministers presented a Joint Statement on Education and Training in the Information Economy97 which outlined a number of areas for cooperation between the school sector, the VET sector, the higher education sector and the Commonwealth.

96 The Adelaide Declaration (1999) on National Goals for Schooling in the Twenty-First Century. MCEETYA (1999) http://www.curriculum.edu.au/mceetya/nationalgoals/index.htm 97 MCEETYA Ministers Joint Statement on Education and Training in the Information Economy (December 2000) http://www.dest.gov.au/archive/ministers/kemp/dec00/k0249_061200.htm



Ministers agreed that the following were the highest priorities for cooperation during 2001-2003: • Ensuring that the education and training sector is able to provide all learners with

opportunities to develop their ability to use technology confidently and creatively, and to develop the specialist skills needed to service the needs of the information economy.

• Supporting education and training workers, especially teachers, to acquire and maintain the skills needed to take full advantage of the potential of ICT to transform learning.

• Providing effective and affordable access to the Internet for all learners, regardless of their geographic location.

• Promoting collaboration in the development and dissemination of high quality digital educational content, services and applications that enable Australian learners to gain maximum education benefits from the online revolution, while also developing a market and generating export income.

• Sharing leading practice and research on ICT issues. • Working across agencies at all levels of government to ensure the development of a policy

and regulatory framework that supports the uptake of ICT in education and training. Learning In an Online World

With reference to the broader requirements for ICT in education, Learning for the Knowledge Society98: an education and training plan for the information economy, was launched as a focus for change. It comprises an action plan for the education and training sector as a whole. Learning in an Online World: A School Education Action Plan for the Information Economy is the schools’ sector component of Learning for the Knowledge Society.

The action plan was developed by the Education Network Australia (EdNA) Schools Advisory Group and endorsed by MCEETYA at its March 2000 meeting. It sets out priorities, responsibilities and key action areas for ICT in schools, and in particular for Connectivity, Content and Professional Development requirements in the school sector, and is supported by several key documents, particularly the MCEETYA ICT in Schools Taskforce Learning Architecture Framework99, and Bandwidth Action Plan100.

Learning in an Online World affirms the highest priorities for schools to be Bandwidth, Professional Development, and Online Content, and identifies the following overarching strategies:

• Strengthen programs for schools to adopt new paradigms of learning using information and communication technologies (ICT).

• Commit resources to the three key areas of professional development, infrastructure and curriculum content in a balanced and integrated way.

• Undertake and disseminate research related to the links between the use of ICT and learning outcomes.

Of the ICT goals set out in Learning in an Online World, all have some degree of cost impact in the schools sector. Those goals considered directly relevant to the costs at a school level which were the subject of this study are set out below for the three Priority Areas as a point of broad reference with respect to future requirements:

98 Learning for the Knowledge Society: an education and training plan for the information economy http://www.dest.gov.au/edu/edactplan.htm 99 Learning Architecture Framework, MCEETYA ICT in Schools Taskforce, August 2003, Curriculum Corporation: http://icttaskforce.edna.edu.au/documents/learning_architecture.pdf 100 Bandwidth Action Plan, MCEETYA ICT in Schools Taskforce, August 2003, Curriculum Corporation http://icttaskforce.edna.edu.au/documents/bandwidth/bandwidth_plan.pdf



Bandwidth

• Sufficient bandwidth must be available at affordable rates, to enable all schools to integrate online services into their curriculum practice.

• All school education providers will have access to adequate levels of bandwidth to support teaching and learning and business processes.

• School sector telecommunications costs will be comparable with Australia’s international competitors.

• The hardware, technical tools and technical support will be provided to integrate information and communication technologies into school curriculum practice and to provide services to students in open and distance learning.


• Effective pre-service teacher education and ongoing development for all members of the teaching profession are critical to achieving the student outcomes required.

• All teachers will be competent users of information and communication technologies and able to apply these technologies to improve student learning.

• All educational leaders will understand how information and communication technologies impact on learning and will have the confidence and capabilities to lead and manage the changes required to maximise the benefits of these technologies in school education.

Online Content • All school teachers and students must have access to quality digital education resources

that support curriculum outcomes. The development of such resources must support Australia’s unique identity in the global information economy.

• A viable market will be established for the generation of quality online curriculum content for Australian school education.

• All students will have access to quality digital education materials that support Australian school curricula and that optimise opportunities provided by new technologies for learning.

• Schools and schooling systems will provide education services using efficient and effective online business practices.

ICT in VET in Schools

Under the auspices of ANTA, the national Information Technology and Telecommunications Industry Training Advisory Board (IT&Titab) coordinates vocational education and training (VET) strategies and activities for the Australian IT&T industry101. It has an interest in the provision of quality training in the ICT field in VET, as more than 95 per cent of Australia’s secondary schools offering senior secondary programs now offer vocational education and training (VET) to their senior students, with almost 9,500 students undertaking IT&T training in VET in school programs.

4 Issues Driving Change for ICT in Schools

Changing approaches to pedagogy and opportunities to take advantage of new technologies are driving the increased use of ICT in schools.

The adoption of a framework of national policies favouring the use of ICT as a tool for transforming teaching and learning has led in recent years to the provision of substantial numbers of computers in schools and their interconnection through networks at the school level and across each jurisdiction, initially at narrowband speeds generally using ISDN services.

101 Executive Summary National VET Plan for Industry Information Technology and Telecommunications Industry http://www.anta.gov.au/images/publications/IT_T_final_version_Exec_Summary.pdf



Further developments will be guided by the agreed priority action areas of Contemporary Learning – Learning in an online world 2003-06102 to be published in 2004.

Discussed below are several aspects of this increasing adoption of ICT which are currently key drivers of change in the provision and use of ICT in Australian schools.

Implementation of Online Learning

To meet the fundamental requirements of teaching and learning, including in particular the need to manage the learning process and to evaluate the outcomes, a highly integrated approach is required103 to the design and development of the necessary systems, including information and communications systems. Further development of standards for ICT in the sector and the achievement of their wide adoption are of fundamental strategic importance in maintaining efficiency, controlling costs, and allowing inter-operability as the development of e-learning systems proceeds. The design, development, implementation and management of the software and infrastructure required to successfully introduce e-learning to schools on a significant scale is a major challenge for the sector.

Increasing Use of the Internet

The Internet has only begun to have a significant impact in school-based education since about the mid-1990s. The rapidly growing universe of material on the Worldwide Web, although an undisciplined resource of variable quality, has become the most common current online teaching and learning resource available in schools. The demand for access to information through the Internet for teaching and learning has been the principal driver for the ongoing development of ICT infrastructure and access bandwidth in the school sector, and is laying the foundation for the delivery and use of pedagogical resources and tools for online learning.

Student and teacher e-mail is growing rapidly as a tool for personal and group interaction in an educational context at all levels from local school communication to international contact.

New Knowledge and Skills

In addition to basic computer familiarity and skills, there are distinct skill sets required for teachers for the use of e-learning tools and network resources, and for their effective utilisation in new approaches to teaching and learning. The way in which the school sector addresses the professional development requirements associated with online learning will have a significant impact on both the success and the speed with which general adoption of the emerging tools and techniques can take place in line with national goals.

Broadband Wide Area Networking

A range of broadband and near-broadband DSL services emerging recently in the Australian market assist in meeting demands for information and communications for teaching and learning purposes and are being adopted as the basis of the bandwidth improvement programs currently under way throughout the sector, which are laying a strategic foundation for increased future delivery of online content.

Complementary improvements in school network infrastructure are being undertaken to exploit the potential of broadband access, particularly the cabling and server/proxy server infrastructure in schools.

Several State/territory Government Departments of Education have created true broadband State-wide Virtual Private Networks with any-to-any connectivity, along with a central data centre with

102 To be published by MCEETYA in 2004. 103 See, for example Learning Architecture Framework, Learning In An Online World, MCEETYA 2003



ASP-style104 applications. In some jurisdictions, a large number of analogue and ISDN connections are being upgraded in 2003 using ADSL connections. ADSL has limitations in heavy use situations because it is generally not provided with stringent service level guarantees.

In remote areas of Australia, only a few schools have access to true broadband, whilst the majority are now using one-way or two-way satellite. In the case of Northern Territory, all schools use a two-way satellite connection to the VPN.

The five jurisdictions105 which run Schools of the Air have recently been transitioning from HF radio and basic services to completely new modes of service delivery using two-way satellite combined with a studio using a proprietary product for class management.

The new broadband services support shared access at bandwidths which typically approach an average of 10 kbit/s per student online. While user access at these speeds will not meet all requirements in the sector, assuming school networks are adequate it will transform the Internet experience for students and teachers previously labouring at ISDN or modem speeds.

Other Technology and Market Changes

Jurisdictions identified many lesser factors arising from change in both technologies and markets as issues for the planning and management of ICT, including the following:

• availability of low-cost IP-based services; • availability of ‘dark’ fibre; • new-generation satellite services as a real alternative to terrestrial services; • availability of wireless local area networks; • commencement of wireless broadband services; • changing cost structures, including whole-of-government contracts and market price

discontinuities created by new regional carriers; • new projects associated with online content delivery; • recognition of the need for more professional development; • trials of remote systems management technology; • need for more ICT support; • rising Internet costs despite the downward trend in rates; • requirements of software licensing including, for example, spam and virus protection; • increasing use of commercial online services; and • the increasing use of video technologies in schools.

5 Priority Area – Connectivity Elements and Costs of Connectivity

ICT Infrastructure

Computers

All jurisdictions reported substantial investment in computers in the last several years, leading to a situation where most teachers and students now have ready access to a computer at school. Significant expenditure was reported on improvements to school electrical mains wiring to support continuing ICT development. A small number of government schools were pursuing an objective of providing computers for all students or all senior students, but in general the rate of acquisition of additional computers to increase connectivity has peaked and is now falling.

Expenditure continues, however, on the ongoing replacement of computers at an age of typically three to five years depending on use and jurisdiction policy. The downward trend in computer unit

104 Application Service Provider 105 NSW, NT, Qld, SA, WA.



pricing indicates that ongoing expenditure on replacement will remain relatively stable for the foreseeable future.

Local Networks

In larger jurisdictions, most schools had usable cabling systems which linked workstations clustered in computer laboratories and selected other locations to servers and to external networks. However, investment will continue in many areas to improve coverage and ensure that all computers can be networked, giving them access to school file servers, the Internet and to school sector VPNs (virtual private networks) in most jurisdictions.

At the same time, the ability of wireless LANs to allow more flexible use of classroom space and increased participation with computers, especially laptops, is increasingly appreciated and is beginning to be exploited.

Experience with recent e-learning trials and ongoing study of future network requirements indicated clearly that to bring online worthwhile amounts of content to facilitate e-learning on a significant scale will make very large demands on the capacity and performance of local school networks and access networks.

Access Networks

Substantial increases in access bandwidth are being delivered through bandwidth-improvement programs in most jurisdictions. In some locations, including the outer suburbs of some major cities, ISDN or satellite links remain the only options, however, there were substantial projects under way around Australia to take advantage of a number of cost-effective broadband and near-broadband services including ADSL and VLAN Ethernet to provide primary and secondary schools and TAFE colleges with public network or VPN access at speeds from 256 kbit/s to 100 Mbps.

Virtual Private Networks

VPNs Networks are being implemented in a number of jurisdictions in order to achieve a range of benefits including: • efficient, cost-effective centralised provision of management capabilities for virus and spam

protection, Internet content filtering, Internet download administration and access to commercial online services;

• provision of improved security, including authentication for remote access for staff and students; • cost savings from bundling Internet traffic into a single point of access and avoiding the need for

expensive dedicated point-to-point leased circuits; • a unified e-mail environment for the schools sector with reduced costs; and • the potential for establishment of portals or repositories to facilitate easy and low-cost access to

online learning content and other resources.

Software

Centralised systems are increasingly used in a VPN context, and may require additional licences at schools. Software for online learning is provided both at schools and centrally. Access management, anti-virus and anti-spam software are in some cases implemented at schools but are increasingly being centralised as VPNs are implemented.

Internet Services

Large growth in download volumes is being experienced with increase in access bandwidth. One jurisdiction which has upgraded 50% of school sites to broadband access reported that these schools now account for 80% of Internet costs.

Student demand for Internet access is now being actively managed, in some cases by Internet Service Providers (ISPs) on behalf of schools and jurisdictions, and in some cases through VPN capabilities or solutions specific to the education sector such as myinternet.



6 Priority Area – Content Goals for e-learning in Australia

Learning In An Online World: The School Action Plan For The Information Economy106 sets out goals and a strategic framework for e-learning in Australia. Amongst these goals are the following relating to the development and use of digital content:

• a viable market will be established for the generation of online curriculum content for Australian school education;

• all students will have access to quality digital education materials that support Australian school curricula and that optimise opportunities provided by new technologies for learning;

• EdNA Online will support access by educators and students to high quality public domain online resources and services relevant to the Australian curricula; and

• schools and schooling systems will provide education services using efficient and effective online business practices.

Content from the Le@rning Federation

The purpose of the Le@rning Federation is to: • develop a body of nationally-funded curriculum content, suitable for each jurisdiction; • develop this content within a framework of open platform communication and management

tools that support distributed access and IP rights and assist teachers and students to use, customise and integrate the content; and

• in the longer term, use the framework and the content to stimulate further contributions to the pool of material, meeting agreed standards.

The Le@rning Federation aims to provide the best available content in the early twenty-first century107. Current priority areas are:

• Science • Numeracy and mathematics • Languages other than English • Literacy (Students at risk) • Studies of Australia; and • Innovation, Creativity and Enterprise

7 Overview of Future ICT Requirements Connectivity

ICT Infrastructure in Schools

Local Networks

Recent e-learning trials and ongoing study of future network requirements are indicating that to bring online worthwhile amounts of content to facilitate e-learning on a significant scale requires not only increased bandwidth but the implementation of relatively large integrated software systems which make increased demands on the capacity and performance of local school network infrastructure.

The timing of school network upgrading is primarily being determined by bandwidth improvement programs, since the school networks are generally upgraded prior to or at the time of the introduction

106 EdNA Schools Advisory Group, 2000, Learning in an online world: the school education action plan for the information economy http://www.edna.edu.au/edna/file12665 107 Phase Two Plan 2003-2006, The Le@rning Federation, 2003



of access bandwidth upgrades, and these costs will generally be in phase except where upgrading has been carried in advance in some places.

Centralised ICT Infrastructure and Services

Where facilities are intended to assist in the management of Internet access, the expenditure is tending to precede or accompany the bandwidth improvement investments. However, because of the time required to determine requirements and implement systems for online learning in schools, and the need for wider involvement of skilled teachers, investment in this element of central systems will take place slightly later, so that additional expenditure is required through to at least 2005 to bring centralised systems to the level of capability required to meet goals for online learning.

Software

A significant part of this element of Connectivity is the investment in software for the delivery and management of online learning. The specification, acquisition, implementation and management of the software and infrastructure required to successfully upgrade e-learning in schools from a trial basis to a production basis is a substantial challenge for all jurisdictions.

Commercial advantage may be obtained through collaboration on nation-wide systems procurement where jurisdictions have similar requirements.

Internet Services

Cost increases resulting from rapidly growing volumes have been limited by: • filtering and volume management arrangements; • the low rates of charging achieved through jurisdiction-wide contracts; and • by the fact that most such contracts are based on a fixed price for a notional annual volume.

Despite the advantageous commercial arrangements currently in place, the rolling over of such contracts in due course in the presence of rapidly increasing volumes is likely to result in future cost increases, even though Internet usage charges are consistently falling. National collaboration in Internet service procurement could also be of significant advantage.

Resourcing The National Goals for Schooling Appendix 7 National School Resourcing Standard


Appendix 7 National School Resourcing Standard: Cost calculations - Data sources and formulae

1 NSRS Aggregate Costs

1.1 National Required Expenditure for Government Primary Schooling

Type: Aggregate cost Sample frame: Programs from primary schools, all state government systems, some non-

government schools Data sources: ANR, All State jurisdictions, non-government schools Type of cost data: Accrual based public expenditure (excl user cost of capital, transport costs)

cash based expenditure, project estimate for school generated revenue Formula: Sum - Aggregate govt primary accrual based expenditure (base cost +

currently funded additional resourcing needs) + project estimate for school generated revenues + aggregate cost for primary level unfunded future additional resourcing needs (student related, apportioned unit cost ICT related), excl user cost of capital, transport costs

1.2 National Required Expenditure for Government Secondary Schooling

Type: Aggregate cost Sample frame: Programs from secondary schools, State government systems, non-

government schools Data sources: ANR, All State jurisdictions, non-government schools Type of cost data: Accrual based public expenditure (excl user cost of capital, transport costs),

cash based expenditure, project estimate for school generated revenues Formula: Sum - Aggregate govt secondary accrual based expenditure (base cost +

currently funded additional resourcing needs) + project estimate for school generated revenues + aggregate cost for secondary level unfunded future additional resourcing needs (student related, apportioned unit cost ICT related, VET related), excluding user cost of capital, transport costs



1.3 Total National Required Expenditure for Government Schooling


government schools Data sources: ANR, All State jurisdictions, non-government schools Type of cost data: Accrual based public expenditure (excl user cost of capital, transport costs),

cash based expenditure Formula: Sum (National Required Expenditure for Govt Primary Schooling, National

Required Expenditure for Govt Secondary Schooling) 2 NSRS Unit Costs (Government System)

2.1 NSRS Government Primary Student Cost

Type: Unit cost Sample frame: Programs from primary schools, State government systems, non-government

schools Data sources: ANR, All State jurisdictions, non-government schools Type of cost data: Accrual based public expenditure (excl user cost of capital, transport costs),

cash based expenditure Formula: National Required Expenditure for Govt Primary Schooling/ number of

government system primary students (2002-2003 enrolments)

2.2 NSRS Government Secondary Student Cost

Type: Unit cost Sample frame: Programs from secondary schools, State government systems, non-

government schools Data sources: All State jurisdictions, non-government schools Type of cost data: Accrual based public expenditure (excl user cost of capital, transport costs),

cash based expenditure Formula: National Required Expenditure for Govt Secondary Schooling/ number of

government system primary students (2002-2003 enrolments)



3 Additional Expenditure Required for Government Schools

3.1 Additional Expenditure Required, Government system, Primary level

Type: Aggregate cost Sample frame: Programs from primary schools, State government systems, non-government

schools Data sources: All State jurisdictions, non-government schools Type of cost data: Accrual based public expenditure (excl user cost of capital, transport costs),

cash based expenditure Formula: Sum (primary level unfunded future additional resourcing needs - student

related, apportioned ICT related)

3.2 Additional Expenditure Required, Government system, Secondary level


government schools Data sources: All State jurisdictions, non-government schools Type of cost data: Accrual based public expenditure (excl user cost of capital, transport costs),

cash based expenditure Formula: Sum (secondary level unfunded future additional resourcing needs - student

related, apportioned ICT related, VET related)

3.3 Total Additional Expenditure Required, Government system, Primary and Secondary levels

Type: Aggregate cost Sample frame: Programs from primary schools, State government systems, non-government

schools Data sources: All State jurisdictions, non-government schools Type of cost data: Accrual based public expenditure (excl user cost of capital, transport costs),

cash based expenditure Formula: Sum (additional expenditure required primary level, aggregate secondary

level expenditure required)

Resourcing The National Goals for Schooling Appendix 8List of Technical Papers and Documents


Appendix 8 List of Technical Papers and Documents held by SRT Secretariat

1 Technical Papers for Data Collection - Stage One Technical Paper 1 - School Effectiveness Technical Paper 2 - Least Cost Schools Technical Paper 3 - Non Financial Data Spreadsheet Technical Paper 4 - Financial Data Spreadsheet Technical Paper 5 - Financial Data Collection

2 Terms of Reference for Contractors Project brief and tender guidelines - Student Related Project brief and tender guidelines - Information and Communications Technologies Project brief and tender guidelines - Vocational Education and Training in Schools Project brief - School Related 3 Contractors’ Reports Consultel IT&T Pty Ltd (unpublished report to the Schools Resourcing Taskforce, March, 2004) Resourcing the National Goals for Schooling - Information and Communications Technologies in Schools Erebus International (unpublished report to the Schools Resourcing Taskforce, 2003) Resourcing the National Goals for Schooling - Student Related Cost Drivers The Allen Consulting Group (unpublished report to Schools Resourcing Taskforce, 2003) Resourcing the National Goals, Stage 2: Curriculum Related Cost Drivers, VET in Schools 4 Additional Documents Dowling, A. (unpublished, 2003) Literature Review - England’s New Education Funding System Dowling, A. (unpublished, 2003) Literature Review - Technical Note on the New Education Funding System Wright, S. (unpublished, 2003) Literature Review - Charter Schools in the United States Wright, S. (unpublished, 2003) Literature Review - Canadian Studies and Programs: Additional Education

Resourcing Needs, Formulas and Cost Loading Factors Wright, S. (unpublished, 2003) Literature Review - US Studies and Programs: Additional Resourcing Needs,

Formulas and Cost Loading Factors