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Shades of Kafka on a gloomy day

Imagine you are running a business. The Government closely dictates the processes you must use to achieve outputs. It publishes comparisons of your products with those of other businesses with very different inputs. Another, separate, bureaucracy determines precisely how much your company may spend in total on day-to-day items. A third official body sets pay rates. Investment in capital is set - by the Government - well below the level necessary to maintain your asset base.

Worse still, the media and leading politicians publicly demand that your company should employ as many specialist workers per unit of output as possible. Decisions about each year's spending and pay are never made until just before (or even during) the financial year. Government inspectors visit the site from time to time, publishing periodic attacks on the capabilities of your industry's workforce for failing to implement a national plan.

A description of enterprise in the Soviet bloc before Gorbachev? Kafka on a gloomy day? Conservative party election broadcast in 1979? In fact, this is how schools in Britain have to operate today.

But unlike the shambling administration of the ex-communist countries, Britain's civilised bureaucrats can actually deliver the top-down control so beloved of ministers.

With last week's report from the School Teachers' Review Body on pay, schools and local authorities got another piece of the bureaucratic jigsaw that will allow them to start to put together next year's funding picture. The pay review body's outpourings suggested that teachers should receive 3.3 per cent in 1997-98. It is fascinating that independent reviews of this kind come up with politically sensitive above-inflation pay proposals in the months just before a general election. You might think that the independent-minded government appointees sensed the political climate without having to be told formally of what was in the Government's best interests.

That is, an above-average pay settlement may be useful to a government wishing to avoid awkward pay disputes involving schools in the run-up to an election, though the same proposals hardly fit with the Chancellor's tough public spending policy. Remember, local government spending caps will rise by just 2.3 per cent in 1997-98. Even allowing for the staging of the pay award (which should bring the full-year cost down to about 2.5 per cent) in many authorities there will be a gap between the teachers' pay rise and what schools can afford.

Many authorities have spending caps that will constrain their spending to a rise below 2.3 per cent. The metropolitan districts will, on average, be allowed to spend 1.8 per cent more in 1997-98 than in 1996-97. The capped spending figure for Manchester, Sheffield, Gateshead and Newcastle has been set at a 1.0 per cent increase. In Hammersmith Fulham it will be zero. These authorities will be faced with a pay bill - for teachers and doubtless other employees - that rises by more than the amount allowed by the Government.

Reduced teacher numbers are almost unavoidable in such a situation.

The Government can, with the mechanisms now in place, have things both ways. On the one hand, the state-appointed pay review body can opine "it is difficult to envisage how significant further savings can be generated in schools through efficiency gains or productivity improvements. Teacher numbers remain central to the maintenance of educational standards and we support the Secretary of State's continuing wish to see an increase to match the rate at which pupil numbers are rising".

Yet at the same time, the Government continues to put pressure on councils - via capping and exhortation - to hold down or reduce spending. One can easily imagine, in a quote similar to the one above about "teachers", inserting the words "firefighters" or "police officers". Service departments and their agencies imagine that theirs is the only service that has to be funded. The reality is that all local government services face growing demands and inflationary pay rises.

Pay review bodies are a long way from the kind of free collective bargaining one might have expected from a market-oriented Conservative government.

Indeed, the whole process of pay negotiation in schools - involving national guidelines, appointed advisory bodies and ministerial decisions - has an amazingly 1960s feel to it.

As with so many other aspects of public policy, it is hard to believe things would be much different under Labour. Capping of local government spending, the national curriculum, league tables, local authority budgets, capital controls, the Office for Standards in Education and the School Teachers' Review Body are all certain to continue if there is a change of government.

The educational command economy is here to stay.

Tony Travers is a member of the Greater London Group at the London School of Economics

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