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Education

Significant progress has been made over the past few decades towards increasing access to education at all levels and improving basic literacy. However, there are still major deficiencies in the quality of education at all levels, access to early childhood education, as well as gender equality and access to higher education. 

The United Nations Sustainable Development Goals for education set targets for 2030 that include, among others, full access to high quality schooling from early childhood through secondary, equitable access to affordable technical, vocational and tertiary education, and more investment in education facilities to improve learning environments.  Meeting these challenges will require continued and expanded public commitment of resources and leadership, efforts to encourage innovation and technology, and a consideration for the role of the private sector in achieving public education goals.

Public-private partnerships (PPPs) in education are long-term contractual relationships between the government and a private provider for all or some part of the delivery of education infrastructure and services. They have been used to provide the framing structure through which to bring the public and private sectors together to complement each other’s strengths in the financing and provision of education services.  PPPs can help extend the reach and effectiveness of government funds, encourage innovation in education, increase safety, efficiency, and capacity of physical educational infrastructure, and given the right public policy context, extend access to educational services and parity of services received across a population. They allow government to maintain strategic, financial and regulatory control over public education, allowing them step back from the day-to-day delivery and management of the infrastructure and/or service in situations where their resources are limited.   

PPPs have been widely applied to the delivery of education facilities in the last 15 years. The early generation of PPPs, in the United Kingdom and Europe were focused on supply-side interventions such as improving the construction and maintenance of school infrastructure at the primary and secondary levels. The same concepts were then applied to demand-side constraints to respond to the quality of education management and pedagogy, through concessions for the delivery of education services (school management and teaching), to strengthen equity in access through demand-side financing schemes such as school vouchers, and blended models to address both infrastructure and services such as Charter Schools in the United States or the Academies of the United Kingdom. More recently, PPPs have extended into early childhood education and technical and vocational education and training (TVET), as opportunities for PPPs in these areas are seen as viable and necessary by governments to achieve education for all throughout the education life cycle.

The Infrastructure Journal projects database shows that between 1995 and 2012 a total of 383 PPP transactions have closed in the education sector, a total value of approximately $40 billion. This data does not reflect much of the activity in emerging markets, so actual global volumes are likely to be even higher.

Note that the following set of key issues in the design and delivery of education PPPs, and their success, depend on system accountability that enables checks and balances. For example, indicators should be measured but if there is no accountability mechanism to incentive or penalize performance, then performance measurement is meaningless.

 

Issues

  • Regulatory environment

    A robust education sector stems from a regulatory framework that creates a level playing field and incentivizes the private sector to grow in a manner that contributes to increased access for learners at all levels, while at the same time...

    A robust education sector stems from a regulatory framework that creates a level playing field and incentivizes the private sector to grow in a manner that contributes to increased access for learners at all levels, while at the same time ensuring quality delivery. Regulations should be objective and measurable so as to minimize discretion and limit the scope for corruption; openly published so that they can be accessed without delay; output-focused so as to allow for flexible and diverse delivery approaches; and applied consistently across various levels of government, where registration processes are devolved. 

    The same regulatory framework that supports private sector growth, contributes to the success of education PPPs. Specifically, an enabling regulatory framework should: 

    • generate an active private education market, that reflects strong government and societal acceptance of the role of the private sector;
    • provide clear, efficient and objective accreditation processes;
    • enable a strong and output-focused quality assurance framework; and
    • open effective channels of accountability between citizens and providers, between citizens and policymakers, and between policymakers and providers.
     
  • Performance measurement

    Performance measurement is at the heart of a PPP contract, requiring the private operator to achieve outcomes that reflect government objectives for infrastructure and service delivery. It is typically done through a set of measurable...

    Performance measurement is at the heart of a PPP contract, requiring the private operator to achieve outcomes that reflect government objectives for infrastructure and service delivery. It is typically done through a set of measurable indicators, referred to as key performance indicators (KPIs).

    KPIs are relatively easy to define and measure for education infrastructure PPPs—they reflect the private operators’ ability to maintain the education facilities to a certain standard. They become more difficult to agree upon and measure for service delivery PPPs. In principle, they should reflect the private operator’s ability to achieve the government’s strategic objectives related improved education outcomes. To do this effectively and fairly requires reliable data on student achievement and a method of attributing variance to the operator’s interventions. Change in year-on-year test scores are often used as the best proxy of this, or in the case of tertiary or TVET education, employment outcomes. But neither, even in countries where this data is available, is entirely satisfactory. In cases where data is not available, input based KPIs can be used as an imperfect proxy of education outcomes: examples of these might include teacher absenteeism, contact hours, or student attendance.    

     
  • Budget predictability

    A typical education investment cycle, like any other infrastructure investment, comes with relatively large upfront capital costs, followed by a stream of predictable operating expenses (teacher salaries being the main component in education),...

    A typical education investment cycle, like any other infrastructure investment, comes with relatively large upfront capital costs, followed by a stream of predictable operating expenses (teacher salaries being the main component in education), and capital maintenance costs. Governments often struggle to oversee on-time, on-budget capital works projects and to plan and execute ongoing maintenance and upgrades. This results in higher-than-expected capital costs and unpredictable maintenance expenses throughout the life cycle of the asset.

    Bringing in the private sector through PPPs can eliminate the upfront capital expenditure for the public sector (appearing instead as a component of the annual payment to the private operator) and smooths out operational expenditures. The overall cost may or may not be lower under a PPP model but it does provide budget predictability, allowing the government to plan longer term, creating certainty and yielding higher-quality education infrastructure and services in the longer term. 

  • Affordability

    Early and thorough understanding of the cost of any new project, followed by credible funding commitments is necessary for the long-term success of any project, PPP or otherwise. This is particularly important for education PPPs for which the...

    Early and thorough understanding of the cost of any new project, followed by credible funding commitments is necessary for the long-term success of any project, PPP or otherwise. This is particularly important for education PPPs for which the government is likely bearing most of the funding responsibility. Assessment of project affordability by predicting the annual availability of payments due to the private operator under the contract can be done through early financial modeling using a set of estimations of key capital cost, operating expense and revenue drivers, benchmarked against similar projects. Specifically:

    • estimated capital expenditures: number of students and classrooms, space requirements per student per type of space, construction and equipment costs
    • estimated operating expenses: salary costs, maintenance costs, supplies and utilities
    • revenue drivers: estimated demand, public funding, user-fees if any

     An early estimation of the project costs allows government to consider financial viability, key priorities, and project scoping options. 

  • Innovations in service delivery

    Despite innovation and technological advances in adult education (the advent of the massive open online course being the most striking example), little progress has been made in compulsory K-12 education. PPPs can leverage the private sector’s...

    Despite innovation and technological advances in adult education (the advent of the massive open online course being the most striking example), little progress has been made in compulsory K-12 education. PPPs can leverage the private sector’s ideas and skills as well as introduce innovation and technology in pedagogy, school infrastructure and management.

    Infrastructure and service PPPs, such as charter schools in the United States, have shown how private sector involvement can spur innovation in edcation service delivery that moves away from the classic "talk and chalk" approach. An example of this is Knowledge is Power Program (KIPP), the largest charter management organization in the United States. There are currently 141 KIPP schools, serving 50,000 students and over 86 percent of the students are from disadvantaged backgrounds. An evaluation of 43 KIPP middle schools found an average estimated impact of 0.36 standard deviations in math (representing roughly 11 months of learning). In addition, KIPP schools have had success increasing levels of student and parent satisfaction. 

     

     

     

Resources

    • 2009
    • Harry Anthony Patrinos, Felipe Barrera-Osorio and Juliana Guaqueta
    • World Bank Group (WBG)

    The Role and Impact of Public-Private Partnerships in Education

    Building on previous work, the international literature, the results of recently completed and ongoing impact evaluations, and the World Development Report 2004 framework, this book presents a conceptualization of the issues related to PPPs, a detailed review of studies with rigorous evaluations, and guidelines on how to create successful PPPs in education.

    • 2014
    • Susan L. Robertson, Aantoni Verger, Karen Mundy and Francine Menashy

    Public-Private Partnerships in Education

    New Actors and Modes of Governance in a Globalizing World

    This book brings together both academics and researchers from a variety of international organizations and aid agencies to explore the complexities of public-private partnerships (PPPs) as a resurgent, hybrid mode of educational governance that operates across scales, from the community to the global. The contributors expertly study the different types of partnership arrangements and critique the value of PPPs. Some chapters explore how PPPs, as a policy idea, have been constructed in transnational agendas for educational development and circulated globally, whilst other chapters explore the role and implications of PPPs in developing countries, providing arguments for and against an expanding reliance on PPPs in national educational...

    • 2011
    • Hogan Lovells Lee & Lee

    PPP Projects in the Education Sector

    Key Principles

    This report from an experienced law firm in the delivery of PPPs in education reviews the key principles, risk analysis, bankability, typical concession terms/topics and other issues in education PPPs. 

    • 2009
    • Michael Latham
    • International Finance Corporation (IFC)

    Public-Private Partnerships in Education

    Recent years have seen an expansion and broadening of the private sector‘s role in the financing and provision of education services in many countries. A key trend has been the emergence of more sophisticated forms of non-state involvement in education through PPPs. These PPPs – or multi-stakeholder partnerships for education (MSPEs) – pull together the public sector, business and civil society in a manner that is different from the traditional method of public sector provision. But what are these partnerships and who is involved in them? What do they do and who brings what to this new arrangement?

    • 2006
    • Norman LaRocque and Sena Lee
    • Asian Development Bank (ADB), UNICEF

    Non-State Providers and Public-Private Partnerships in Education for the Poor

    As part of a joint initiative to enhance understanding of the political, legal and institutional mechanisms needed for improving state and non-state engagement in basic service delivery, UNICEF’s East Asia and Pacific Regional Office (EAPRO) and the ADB organized a regional workshop in April 2010. The workshop aimed to enhance the knowledge, capacity and expertise of practitioners working in health, education, water and sanitation sectors as well as of key government officials (e.g., ministries of health, education, finance) to support processes for engaging NSPs, and developing PPPs in the delivery of basic services. This report came into fruition as part of this collaboration, and it is our hope that it will help inform...

    • 2014
    • D. Baum, L. Lewis, O. Lusk-Stover and H. Patrinos
    • World Bank Group (WBG)

    What Matters Most for Engaging the Private Sector in Education

    A Framework Paper

    This paper provides an overview of what matters most for engaging the private sector in basic education. In many countries, private schools educate a substantial and growing share of the student population. The goal of this paper is not to advocate for private schooling, but to outline the most effective evidence-based policies that governments can use to orient these non-state providers toward promoting learning for all children and youth.

    • 2010
    • Allah Bakhsh Malik
    • Asian Development Bank (ADB)

    Lessons Learned from the Punjab Education Foundation

    Public-Private Partnerships in Education

    While PPPs are no panacea, they do offer governments a range of innovative mechanisms for expanding access to education, as well as for improving the quality and efficiency of education at all levels. In an MDG context, PPPs can particularly benefit countries that already have a significant private education sector, as they offer the prospect of rapid scaling up of delivery. As this report shows, turning the promise of PPPs into reality on the ground requires a supportive political environment, good program design, and effective implementation. Governments and development partners can draw many lessons from the Punjab Education Foundation’s experience with the introduction of its PPP programs in the education...

    • 2014
    • Sathya Sriram, Ramya Venkataraman and Li-Kai Chen
    • McKinsey & Company

    Partnering for Outcomes

    Public-Private Partnerships for School Education in Asia

    In this paper, the authors describe why public-private partnerships (PPPs) should be considered as a potential approach for improving education outcomes in Asia. Theyhighlight several interesting models that are emerging across the region, including case examples from Malaysia, Pakistan, Hong Kong and India, as well as the neighbouring geographies of Australia and New Zealand. Further, the authors describe the challenges that PPP models often encounter, especially in Asia. Finally, they outline some key success factors to consider as government and private players increasingly engage in such partnerships, drawing on learnings from within Asia and other parts of the world.

    • 2006
    • Norman LaRocque
    • Harvard University, World Bank Group (WBG)

    Contracting for the Delivery of Education Services

    A typology and international examples

    Education sectors the world over are facing a number of social, economic and policy challenges. Governments have responded – to varying degrees – to these challenges by introducing market-based policies that emphasize choice, managerial autonomy for schools and accountability for results. Contracting with the private sector for the delivery of ancillary services such as catering and school transport is relatively common in the education sector. A more recent trend has seen governments contracting with the private sector for the delivery of core education services. While such contracting is not widespread, there are a number of examples in operation in the United States and around the world. This paper provides an overview of...

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