THE education sector in India caters for nearly 600 million people up to the age of thirty. It is one of the largest capitalized spaces in India with an annual government spend of 30 billion USD and an annual private spend of 43.2 billion USD. However, the massive annual spend is still not sufficient to satisfy the demand for the 600 million-strong target population. A lot more investment, public and private, is required to reach the desired literacy levels.

The Economic Survey of India (2010-2011) reports that total expenditure on education as a per cent of GDP in 2008-09 was 2.89% with a budget estimate for 2010-11 of 2.98%; while expenditure on education, sports and youth affairs as a percentage of total expenditure on social services and development was 4.04% in 2008-09 with a budget estimate of 4.46% for 2010-11. A further analysis of the spending profile suggests that bulk of the funding (up to 80%) goes towards salaries of teachers and staff and only 1% is invested towards capital expenditure.¹

Unsurprisingly, meeting the needs of some 90 million private school students and 129 million public school students that are attending K-12 classes in over one million schools that differentiate themselves through affiliations to state boards, central boards and international boards poses considerable challenges. Table 1 provides a summary on details on the K-12 system.

Key challenges across both the primary and secondary sub-sectors include: increasing enrolment and completion rates; ensuring that access becomes more equitable; modernizing curricula so that it becomes increasingly appropriate to the needs of a knowledge society; improving the levels of learning achievement; finding alternative means to supplement public financing, given that public funding alone is unable to meet the demands for additional places; and increasing efficiencies in the use of resources.

While the public sector remains the most important player in providing education services, there is a realization that making high quality education accessible for all in the country will require innovative programmes and initiatives in addition to public resources and leadership. Hence the GoI has been seeking new ways in which both the public and private sectors can join together to complement each other’s strengths in providing education services in order to help the country attain the Millennium Development Goals for education as well as improve its learning outcomes. These public-private partnerships (PPPs) can be tailored and targeted specifically to meet the needs of low-income communities.

 

The concept of a PPP recognizes the existence of alternative options for providing education services besides public finance and public delivery. There are many forms of PPPs – all of which are to be found within the country – ranging from examples of private organizations supporting the education sector through philanthropic activities, to situations where the government guides policy and provides financing while the private sector delivers the education services to students.

PPPs involve the public and private sectors working together to achieve important educational, social and economic objectives. They represent a move away from the traditional model of government procurement for the delivery of public services. Despite the expansion of PPPs and the increased attention they have received in recent years, there is little agreement about what constitutes a PPP or how they are defined. PPPs can be defined narrowly to include only formal arrangements such as sophisticated infrastructural initiatives or they can be defined more broadly to cover all manner of partnership between the public and private sector. Table 2 provides an indicative range of PPPs in education options.

Public Private Partnerships have been promoted for the implementation of infrastructure projects across the following seven investment sectors – telecommunications, electric power, water transport, road, rail, air, water supply as well as irrigation. Yet, despite this expansion of PPPs in other sectors, the increasing emphasis placed by the Ministry of Human Resource Development on PPPs in school education and the large and growing role the private sector already plays across the K-12 education sector, there has been little actual progress under the 11th plan in using some of the ‘PPPs in education’.

 

This note identifies seven particular challenges to the establishment of PPPs in the education sector, each of which continues to limit the scope for designing such contracts as well as acts as a deterrent to enabling a greater number of private sector incentives to invest in education. These challenges include:

i) The low level of capacity for implementing PPPs in the education sector in many countries.

ii) The difficulty of determining appropriate outcome or performance measures. Since there are so many different factors that affect school outcomes, it is difficult to set up frameworks under which non-state providers can be held accountable.

iii) The costs of contracting with the private sector are high relative to the scope and size of the potential partnership project.

iv) Apprehension from both parties – for the public sector, education is seen as a ‘non-commercial’ activity while for the private sector there is concern that policy reversals may reduce the benefits arising from such a partnership arrangement.

v) The partners have different aims, constituencies and ways of working and it is difficult to harness their respective demands and requirements for working with each other.

vi) There are considerable differences in power that the respective partners can wield.

vii) There are a significant variety of organizational modes that fall under the term partnership, ranging from PPPs that are formed for implementation or operational purposes to those that are formed for gathering and disseminating knowledge.

 

Ultimately, success for PPPs in education must be measured by the degree that the PPPs have improved teaching and learning, provided improved facilities and introduced improved means of management and enabled the wider community to participate in the process of education and training. Certain themes that have been identified in the literature as key to the success of a PPP are:

1. Needs: It is important to ensure that a needs assessment is carried out that includes not just the partnership’s providers but also the partnership’s end users. Further, it is necessary for this assessment to place any PPP within the context of the overall national education sector plans and for all the partners to be clear about the transaction costs that will be incurred in maintaining the partnership.

2. Ownership: Following on from the needs, it is essential to ensure that the end users are involved in the conception, planning and implementation stages of the endeavour. In addition, there needs to be an appropriate balance that can allow for the PPP to be directly accountable for its actions and for each of the partners to be able to satisfy their own constituency in its terms of accountability.

3. Impact: Although it is difficult to ascribe effects of change in the education sector, it is important to establish impact assessments on the partnerships and, again, to use the end users in this process of gathering the requisite evidence of impact.

4. Accountability: Unfortunately regulation and accountability concerning partnerships is still sparse and weak. But this regulatory vacuum makes it even more imperative that measures are in place to ensure transparency regarding the management, financial structures, processes and results. A focus on outcomes is paramount and it is important from the outset to have and maintain an instrument that can share information and results regarding these outcomes among the stakeholders.

 

There are many reasons why governments are increasingly opting for PPPs to assist in meeting their policy objectives at the K-12 levels. In particular, well-designed PPPs can:

* Increase the level of financial resources committed. Private sector philanthropic initiatives have the additional benefit that private funding is generally more flexible than public sector funding, the bulk of which is committed to teacher salaries.

* Supplement government schools’ limited capacity to absorb growing numbers of children, thereby expanding access and helping reduce class sizes in government schools.

* Increase the level of private sector knowledge, skills and innovation – whether pedagogic, technical or management related – that may not be available in the education sector.

* Allow government education authorities to focus on core functions such as policy and planning, curriculum development and quality assurance where they have a comparative advantage over the private sector, rather than devoting resources to areas where they may not have such an advantage.

* Allow for much greater innovation in the delivery of education by focusing on the outputs and outcomes desired from an educational provider, rather than specifying how those outcomes should be achieved.

* Allow governments to circumvent unnecessarily restrictive employment laws and outdated government pay scales that limit governments’ ability to hire appropriate staff and organize delivery in the manner required.

* Introduce a longer time horizon into public private relationships and better align the interests of the public and private sectors.

* Reduce the politicization of schooling and reduce the degree of corruption in the education sector.

* Make the cost of services more transparent through the use of explicit contracts and improved costing mechanisms.

* Sharpen competitive pressures in the education sector, thus generating efficiency gains and spurring greater innovation in education delivery.

Unsurprisingly though there are also ‘constraints’ that make attainment of PPPs challenging, such as those that have been itemized by the Department of Economic Affairs PPP Cell.

 

There is no definitive answer and the debate will continue to rage, although the data below regarding attainment of the Education For All goals provides a robust argument in support of a drastic need for greater partnership.

One third of the world’s population lives in countries where the ‘Education for All’ goals of universal access, completion and learning cannot be reached by 2015 solely through the linear expansion of existing public school systems. History clearly indicates that the growth of public schooling proceeds very slowly and inequitably. Data from 90 countries indicate that increasing enrolment from 50 to 90% required on average 58 years and there are as yet no recorded examples of countries climbing from 80% to 95% enrolment in 15 years.

 

The answer as to hope or hype will probably continue to be decided on the basis of values and political might than of evidence as to which is ‘superior’. However, regarding public-private partnership experiments and experiences in the context of cost and quality performance, equity, access and accountability, we can perhaps draw the following observations.

a) Theory vs. practice: Authentic partnering, in theory, involves close collaboration and the combination of the strengths of both partners. But anticipating success or failure in advance of implementing the partnership is difficult and monitoring partnerships for impact and performance over time is critical.

b) Cost and quality: Non-state provision is possibly more cost effective than state provision but arguably this cost advantage is lost once the externalities of monitoring and regulating of non-state provision are factored in.

c) Equity and access: Assessments of the performance of partnerships on equity are mixed, the only clear point perhaps is people’s expectation and perception that the public sector is more equitable. This lack of clarity is further complicated by the question as to whether or not equity concerns are less of a problem when the partnerships involve public/not for profit providers rather than public/for profit providers.

d) The vulnerable population: There is currently insufficient evidence to support the case that the difficulties of vulnerable populations with regard to access and equity are ameliorated within the non-state environment. This is a case where societal values regarding policy should take precedence over a strict cost calculation. Further, there is consensus that there is a vulnerable population for which protective government measures are necessary.

e) Regulation: Evidence to date indicates that PPPs do not seem to reduce regulation since the role of the government has changed to become both a partner in the provision of services and the monitor of the marketplace. Yet, will we ever be able to determine the degree of regulation that is required to assure fair competition between private and public service providers?

f) Accountability: The PPPs must be accountable if they are to fulfil their policy objectives successfully since the basic provision of education, health, water and sanitation is an essential service. Again, however, there is no specific solution to the accountability challenges, although there is a clear trend that indicates that the partnership must be structured with partners receiving specific incentives, resources, along with responsibilities.

g) Conflicts of interest: The rationale for embarking upon a partnership is that the two complement one another and are strengthened through combination. But how can one best align the interests of the respective parties? Again, the trend shows that partnering for a policy goal is most likely to minimize conflicts of interest, most particularly when the terms of the partnership are designed to fulfil public objectives, within the limits of available public resource constraints.

 

There is neither any ‘one size fits all’ public-private partnership approach nor a universal prescription for success or for the process itself. Similarly, there is no inherent reason why public intervention correlates merely with public provision, or that privatization solely implies the outright sale of public assets to private entrepreneurs. Rather there are different forms of private activity and PPPs that offer a range of different types of intervention.

Fiscal constraints, cost escalation and poor performance are propelling the force of the partnership wave. Governments realize that they cannot finance their current services, let alone afford the future demands while the customer exhibits growing dissatisfaction with the service that is presently being delivered. A range of participants is required to increase non-state participation in the basic services sectors. This participation can be manifest through a variety of forms and at different extremes of intervention ranging from (i) management contracts, where management of the state organizations is transferred to non-state hands; (ii) outsourcing, where provider organizations procure services from non-state entities; (iii) financing demand, where the state procures core and non-core services from the NSA; to (iv) corporatization, whereby the government becomes the purchaser and the operational control moves from the state to a non-state organization.

Over half a century ago ‘Education For All’ was stated to be an ambition of the international development community. Yet, while progress has undoubtedly been made, 72 million children still lack access to school and an even larger number leave school without the requisite minimum education and training skills. Nearly two decades ago at Jomtien, participants recognized that the classic approach of partnership between donors and recipient governments was both inadequate to meet the challenge and that ‘new and revitalized partnerships at all levels will be necessary’ and that these partnerships would need to involve ‘government, non-governmental organizations, the private sector, local communities, religious groups, and families.’²

 

Partnerships range from large international alliances such as the World Economic Forum’s Global Education Initiative to local coalitions that are advocates for a particular cause. Partnerships involve a semantic minefield in that they can refer to a contractual arrangement to work together over a long time period to a loose arrangement that comes together for a particular short-term purpose. PPPs embrace public, private and civil society stakeholders and, within this partnership, there are two types of partners – those that are the actors or doers and those that are the stakeholders or recipients that are affected by the initiatives.

In recent years a number of factors have combined to lead governments and development assistance agencies to seek the support of the business and civil society actors. These factors include a focus on programmatic rather than discrete project approaches, an increased commitment to joint funding and sector-wide approaches, and the use of medium-term expenditure frameworks for tracking on impact and expenditure. The welcome consequence of these factors has been an appreciation that increased involvement for the business and civil society partners is vital if the EFA and Millennium Development Goals are to be achieved.

 

The following four overarching lessons have been learnt about PPPs in education: (i) Not all situations are suitable for PPPs and it is important to determine from the outset how the objectives of all the partners – the doers and the recipients – are mutually attainable. (ii) Regulation and accountability systems are still lacking, making it important to establish clear guidelines and detailed agreements on each of the partners’ roles and responsibilities, as also what the penalties will be for non-compliance. (iii) There needs to be a wider assessment of the needs and agreement as to the desired results and outcomes that embraces all shareholders from the implementers to end users. (iv) The benefits of PPPs range from enhancing of capacity, leveraging of greater resources, broader ownership by all the actors including the sharing of risks. Yet, there are also obviously risks to PPPs that range from loss of interest, to higher transaction costs and failure to meet mutual obligations.

 

Within the Indian context, there are five potential areas for reform in order to ensure that under the twelfth five-year plan there will be greater progress made in the delivery of PPPs such as the MHRD’s Model School programme.

The objective of this scheme is to set up 2,500 schools through Public Private Partnership (PPP) for providing world-class education to about 40 lakh children, of which 25 lakh would be from socially and economically disadvantaged categories (the ‘select students’). These schools will reach out to the underprivileged children and educate them with a view to enabling them to avail of the opportunities offered by growth and development. This scheme should not be viewed as a means to reform the entire system of school education. It should only be viewed as an initiative that would create some centres of excellence in support of the wider agenda for reform in school education.³

The five reforms proposed here recognize that the GoI has a number of policy instruments at its disposal in order to meet its educational and wider public policy objectives – funding, regulation, ownership of schools and provision of information. The five reforms are: (i) improving the way private schools are regulated; (ii) improving information available to students, parents and regulators to support informed educational decision-making; (iii) improving the way private schools are funded; (iv) strengthening the capacity and capability of the public sector to deliver PPPs; and (v) financing educational opportunities, including cost-recovery.

 

Footnotes:

1. See ‘New Partnerships for EFA: Building on Experience’, International Institute for Educational Planning, 2008, for further details on these factors.

2. Article 7 of the World Conference on Education for All, 1990.

3. Report of the Sub-Group of the Round Table on ‘School Education Scheme for Augmenting School Education through Public Private Partnership.’ MHRD, May 2010.