Implementing the Right to Free and Compulsory Education Bill (and thoughts about Public Private Partnerships in Education) Sam Carlson World Bank

Organization of the Presentation Right to Free and Compulsory Education Act Public Private Partnerships in Education World Bank Research (partial) on PPPs for education World Bank Lending for PPPs in education

“RTE” Approved by Parliament in August 2009, but not yet made official through publication in the Official Gazette and provision of rules. Every child, aged 6-14, has a legal right to free and compulsory education at a neighborhood school till completion of elementary education. Compulsion is on the Government, not the parent, to provide education and ensure enrollment, attendance and completion of elementary education. (“justiciable”)

RTE and Private Unaided Schools Private unaided schools “shall admit in Class I, to the extent of at least 25% of the strength of that class, children belonging to weaker section and disadvantaged group in the neighborhood and provide free and compulsory elementary education till its completion.” Private unaided schools “shall be reimbursed expenditures so incurred by it to the extent of per-child expenditures incurred by the State, or the actual amount charged from the child, whichever is less.”

RTE and PPP If(and that’s a big if) RTE is fully implemented, it will quickly result in the largest education sector PPP in the world. RTE represents a significant operational research opportunity, as disadvantaged children are supposed to be selected for private schools via a lottery. ▫Households can choose to participate in lottery Can expect intense resistance from top private schools, which otherwise will seek ways to “cream” the best. Monitoring is responsibility of National and State Commissions for Protection of Child Rights (not quite prepared for this responsibility)

“The Schedule” Number of Teachers (PTR 30:1) per school; teachers must have minimum qualifications as laid down by an academic authority authorized by Central Government. One teacher for science/math, social studies, languages at upper primary (PTR 35:1) Building: all-weather, barrier-free, separate toilets, drinking water, Mid-Day Meal kitchen, playground Minimum # of working days ( )/instructional hours ( ) Minimum # of working hours/week/teacher (45) Library and Teaching and Learning Equipment Promotion of activity-based, child-centered learning; teacher training; etc. But can’t legislate teacher effort and effectiveness.

Private School Recognition Private schools must obtain certification of recognition from appropriate Government or local authority, to be established OR function. Recognition requires fulfillment of norms and standards specified by the Schedule within 3 years. Operation of school without recognition incurs liability of Rs. 1 lakh, and Rs. 10,000/day thereafter.

Summary: RTE and PPP The stakes are high and the scale is huge. The opportunity exists to improve learning opportunities for millions of disadvantaged students. The “devil is in the details” and the rules for implementation have not been issued. Could be very tough for private schools to adhere to all conditions for recognition, particularly concerning teachers and space, although could pay more and get Government UC reimbursement.

Public Private Partnerships (PPP) Encouraging the private sector is critical. Surveys from several States in India show that private schools are more cost-effective. That is, on average, students from private unaided schools do not perform worse than students from public schools and typically perform better, although private school unit costs are typically much lower. However, there is a very strong student selection “sorting” effect; students in private schools are typically from higher socio-economic households so a strict comparison is neither fair nor analytically correct. PPPs can leverage the incentives of the private sector to achieve public policy objectives. It should be possible to make the current grant-in-aid system (a type of PPP) more efficient, with real performance-related criteria for continued financing.

Opportunity of PPPs Much of the potential of PPPs lies in the ability to align contract incentives with educational outcomes (public policy objectives), and maximize accountability for results. The actual market wage for academically qualified teachers is far below public sector salary levels, so there is an opportunity to achieve lower PTRs, increase cost-effectiveness of public spending and spend more on, e.g. learning materials, through PPPs.

PPP: Range of Possible Private Sector Responsibilities School Facility Services (build and maintain schools) Provide non-educational services (e.g. catering) and support services (e.g. technology) Provide curricula and educational services Provide teacher training services Manage public schools Provide all teaching and non-teaching services at public schools Provide educational services to publicly-funded students at privately-owned and managed schools (Right to Education Act)

PPP: Government-Aided Schools in India Type of PPP – needs reform Financing follows the teacher, not the student (in most cases State pays salary directly into teacher’s back account) No incentive to expand access or improve learning Lack of accountability to parents, head teacher or government Mixed evidence in terms of cost-effectiveness

Bihar Example: Output-Based PPP 1,000 private unaided schools/40,000 students For every student passing the Class 10 Exam – Rs. 3,700 for first division – Rs. 3,200 for second division – Rs. 2,700 for third division – Bonus for girls – Rs. O for failure This deserves to be monitored and evaluated over time for possible scale-up and replication.

World Bank Research and Lending Have committed an initial USD 300,000 to help M&E of implementation of RTE ▫What to do? ▫Discussions underway with National Commission on Protection of Child Rights and MHRD ▫Would like to focus on this PPP clause for 25% of private school seats.

Phase I Feasibility Study for Expanded PPPs at the Secondary Level Independent Survey of 1,400 private aided and unaided secondary schools across 10 States ▫Identified underutilization of existing capacity (about 15-20% on average) ▫Revealed high education and training levels of teachers and generally satisfactory school infrastructure ▫Aided school teachers earn Rs. 14,600/month while unaided teachers earn Rs. 5,000/month, on average ▫Majority of schools are willing to expand and engage in PPP under certain conditions

Phase II of PPP Feasibility Study Follow Up of 200 private unaided schools to analyze financial accounts and calculate fair government financing levels (per student subsidies) for expanded PPPs. Related capital and recurrent costs to student performance on Board exams. ▫Not much difference between costs of low and medium performing schools; high performing schools cost more to build and run. Rs. 5,000 per student/year public financing of “medium performing” (60-95% pass rate on Board exam) private unaided schools would cover both capital and operating costs over 10-year period, compared to government school operating unit costs of Rs. 7-8,000.

Phase II of PPP Feasibility Study (continued) Parents already pay about Rs 12,000/year in transportation, books, uniforms, private tuitions, study equipment/computers, etc. About 40% of parents of children attending government schools would like to send them to private schools because of perceived higher quality of teaching, and would also be willing to pay an additional Rs. 2,500/year to do so.

World Bank Operational Support World Bank now preparing USD 750 million in additional financing for Sarva Shiksha Abhiyan (can be used for RTE if MHRD so chooses) and USD 600 million project in support of Rashtriya Madhyamik Shiksha Abhiyan (RMSA) RMSA: Two Components: ▫Programmatic support of RMSA, which is limited in the framework to government secondary schools ▫Innovations Component (USD 100 M), which can support PPPs and any other State-level innovations (e.g. Bihar’s output-based mechanism) which generate learning for RMSA framework evolution.

Thanks

Types of PPP Contracts What Gov’t contracts for DefinitionContract Type: Management, professional services (input) Gov’t buys private sector services (e.g. IT training) Management or professional services contract Operational Services (process) Gov’t buys school operation services (Grant in aid) Operational contract Education Services (output) Gov’t buys “places” in private schools (RTE) Contract for education of specific students Facility Availability (input) Gov’t buys facility availability (leasing) Infrastructure services contract Facilities and Services (“bundle”) Gov’t buys facility availability and services Infrastructure contract and services contract

Procurement Processes For each of these contract types… a competitive transparent process can be developed which puts extra weight on the quality of services (technical expertise) delivered but includes an incentive to keep costs down… while building in contract performance criteria (validated by third parties) which rewards good performance and penalizes poor performance.