Free Schools

A bit of cross posting to a blog by me about free schools on Barkingside21

The Whimsy Flesh Forgot

View from Manor Farm at Seaton

In an otherwise excellent post about our recent walk on the South West Coast Path fleshisgrass has missed out on some of the whimsical aspects of the trip. To jog her memory I present,

All the dogs which were either scared or barking at us because we looked a bit weird with our big rucksacks and walking sticks.

The old couple who told us about their son who runs a mud marathon along the section we missed out between Lyme Regis and Seaton. They were rightly very proud of his efforts. We were unsure as to whether using a fire hose was a good alternative to running into the sea to clean of the mud.

The grunting and itchy pigs of Manor Farm Campsite in Seaton. Who were  dangerously affectionate and almost broke through the fence.

How my #swcp was mistaken for a communist acronym http://bit.ly/iASoLh

The flying beast of Dawlish which detained me in the shower block so long I was almost declared missing. I was trying to rescue it but it stubbornly held onto the toilet roll I was using and then attached itself to the doormat.

The Flying Beast of Dawlish

The gull which landed on our tent during our last but one night. I thought it was after the food inside and Flesh thought it was just being very presumptuous. She also maintains gulls don’t have dirty feet so questions where all the mud came from.

The annoying know-it-all local near Dartmouth who proudly told us how long it would take us to get to the ferry at Kingsmear. Much more welcome was the lovely lady who told us how well we had done to get that far.

The not so whimsical sight of the aftermath of a bird of prey taking a baby gull. Feathers everywhere and middle-aged men standing around looking a bit stunned.

Meeting up with Gary in Paignton after getting the steam train and having a ‘lovely bimble around’.

I will update if more come to mind.

Alan Johnson @ The RSA

My current period of unemployment has a number of benefits one of which is that it allows me to participate more fully in the intellectual and political life of the country, something which I really enjoy. Still small scale stuff but something I didn’t manage when I was working 60 hours a week.

So today I went to the RSA for 2 talks one by a politician and one by a journalist. The Journalist was Daniel Hind who was giving a talk about his book ‘The Return of the Public’ this was the second of the talks and I didn’t fully follow the argument however he was basically arguing that the media fails the public and in order to sort that out we need to take control of some of it (click the link for a better summary). Some of it went in though, especially that ‘opinion is cheap but research is expensive’ he also felt citizen journalism wasn’t the whole answer to the problems he highlighted. I am going to do some anyway to find out about the speech made by the first speaker.

The first talk of the day was by Alan Johnson the new Shadow Chancellor it went under the catchy title ‘Beyond Fiscal Fables and Greek Myths – the honest debate about our economic future’ don’t let this fool you though it was an impressive display. Johnson has an engaging style and kept away from powerpoint, he weaved a good story about what the coalition has got wrong and where he believes they are distorting the record of the last Labour Government.

He put forward the following as clear areas where the current Government is a least being disingenuous if not actually lying about why it is doing what it was doing:

1. We have to cut quickly and deeply because of the debt left by Labour
2. Debt which was brought about by a decade of reckless spending

Johnson believes that the Government are using these arguments, which they presents as facts, to allow them to achieve their ideological aim of a smaller state.  I have some sympathy with this argument and certainly  believe there are  alternatives which is the opposite to what George Osborne is telling us.  Johnson then explained why the Government are wrong about Labours record, below I have extracted some  key quotes:

In 2007/8 as the crisis hit, we had the second lowest debt level in the G7 reduced by 14% in the 10 years we’d been in office.

The year before the crisis hit we were borrowing 2.4% of GDP compared to the 3.4% we inherited from Ken Clarke.

UK spending on education as a proportion of GDP was 5.8% in 2007- almost identical to the OECD average of 5.7%.

The year after, spending on the NHS was 7.2% of GDP compared to 8.7% in Germany and 8.1% in France.

The answer to the question “was our expenditure on schools and hospitals excessive given the size of our economy” – has to be a very clear “no”. There was no binge.

So very straightforward then, Labour can be trusted with the economy and the current Government is lying to us. As a Labour member I could leave it there but…..

Thought I might do some of that expensive research, a quick trundle around the internet uncovers a rebuttal from the Spectator Johnson’s deceptions and out-of-date figures in which they cite references which back the claim about the G7 but argue that the Institute for Fiscal Studies report where this comes from shows this isn’t good enough. There are also some comparisons to OECD countries in 1997 and 2007. There is evidence that other Countries paid down debt, and especially structural debt, more than the UK in that decade.  However, we ended the decade of what Osborne called recklessness and debt with a lower structural deficit, as a % of GDP (The Public Finances 1997 to 2010) table 2.1, than Labour inherited.

So what did that research show? Well I think it showed the difference between data and information. Easy to find data and hard to turn it into information and even harder to turn it into meaningful analysis. But I am quite pleased to link the two talks again.

A bit more research led me to sources for the statements about education spending and health spending in comparison with other countries,

• From Education spending in the UK section 3 it can be seen the statement comparing UK to OECD is correct.
• Using OECD again their Health Data 2010 backs up Johnson’s statement

So what have I learnt from this.

The UK structural deficit was not lowered as much the majority of the OECD countries up to 2007. But Labour who are being branded as irresponsible and out of control brought the % down compared to the legacy from the Tories.

The current Government has stated that levels of spending were irresponsible, but it seems some of the key indicators show we were at or below OECD averages. Also if it was that irresponsible why are they sticking to the levels in Health spending?

Having been disappointed with Labour’s response to the CSR I was impressed with Alan Johnson’s performance and they way he has mastered his brief. If he carries on like this I am hopeful that he can be an effective opposition to Osborne and Alexander.

Finally I am beginning to support Daniel Hind’s ideas about public commissioning of journalism more because this is hard work……

Free Schools

So sometime after my last post (all right a long time) I have been moved to post again. Michael Gove’s policy to ‘reform’ the state school system has made me write again because I am really angry about it.

First a bit of background about me, before taking voluntary redundancy earlier this year I worked for a company that delivered services to 1000’s of schools and I was even involved in Building Schools for the Future (BSF). So I know some of the limitations of the current system and have experienced the frustrating level of bureaucracy of BSF.  None of this convinces me that Free Schools is the answer.

Gove believes that Free Schools will improve education because of the freedoms they will be given, these include:

• the ability to set their own pay and conditions for staff
• greater control of their budget
• freedom from following the National Curriculum
• freedom to change the length of terms and school days
• freedom from local authority control.

Apart from the last point, which I will discuss later, I have some sympathy for these ideas.  However, why do schools need to be reorganised and taken outside LA control for a lot of this to happen? The answer is they don’t really.  Although pay and conditions is more difficult to vary I would be happy to sacrifice this anyway, much better that teachers want to be at a school because of it’s high standards.  There is scope to provide discretionary payments which could attract teachers to failing or difficult schools (details can be found in section 5 of NUT guidance on teachers pay structure nb they oppose such payments).  I know from work with different LA’s that some provide a great deal more freedom than others already and the National Curriculum could be changed by the Government.

To quote from his press release,

“The most important element of a great education is the quality of teaching and Free Schools will enable excellent teachers to create new schools and improve standards for all children.”

If the most important thing is the quality of teaching then that is what government should be concentrating on.  Instead they have decided that the most important thing is the governance structure of the school system and how much freedom they have.

So now onto what is wrong with taking Local Authorities (LAs) Currently Local Authorities have a legal duty under the 1996 Education Act to provide primary and secondary education. So understandably they seek to ensure that this duty is discharged by putting in place systems and processes to support, manage and monitor the schools in their area.  This requires a certain amount of bureaucracy and does mean that schools are not completely independent, except for academies and foundations schools but these are basically free schools anyway.

Now I am happy to debate (I am not going to do that right now however mainly because debating with myself would be a worrying trend for someone who is unemployed and on my own in the house a fair bit) how good LAs are at the management of schools and whether there is too much bureaucracy and/or control.  From first hand experience I know there is scope for cost savings and there are a number of areas where schools could be given more control.

However as things stand I believe there are significant advantages to ensuring that schools remaining under LA control. these are listed below but they are subjective and based on my experience.

• Access to professional advice and support on an impartial basis
• Buying power and financial back up of large organisation
• Economies of scale and ability to pool resources
• Resources to help build and maintain networks

For a practical explanation of what this means imagine that the roof of a school fails one year. Unless they are very lucky they won’t have enough money to replace it. It is more likely that the LA will be able to find a way of funding it and actually they have a duty to provide education as explained below.

But the biggest advantage to having schools under some form of LA control is that ultimately elected politicians are responsible for what the LA does. So as a concerned citizen I can can use the democratic system and ultimately register my dissatisfaction by not voting for them. If a free school opened down the road and started teaching or doing things the local population were unhappy with (There have been examples of Academies being sponsored by religious fundamentalists and I fear the same will happen with free schools) what could we do about it?

Who could I hold to account for what happens at the school and how could changes be made? Protesting to my local council and MP is difficult but possible and local pressure groups can make a difference. What are the options with free schools, getting a group of parents together to open our own school if we don’t like the other one is going to be too difficult for the vast majority of people as well as diverting resources unnecessarily.

These changes are not required, they are distracting us from the real issues and are an ideological experiment.

100 years of the state pension

Harry’s Place has departed from it’s favourite theme to look at something which we should all be thinking (worrying?) about – the future of pensions.

Not seen much about this in the media analysis of the current downturn, but it would be interesting to see what the BBC big beasts Flanders and Peston (sounds like a music hall act) have to say about it.  The book this post is inspired by was written by actuaries not economists.

Food for thought.

Why lend to a shorty?

Following on from my last post I now want to explore the murky world of short selling.  I think the principle of how short selling works is pretty straightforward, in a few words it is taking a bet that the value of an asset is going to go down.  The short sellers (shorties or shorters?) borrow the asset from an owner and sell it with the expectation that they will be able to buy it back more cheaply and return it to the lender,  the shorter makes money by pocketing the difference.  Wandering around the blogoshpere you can find numerous more detailed explanations than this, you can also find plenty of people who think that shorters are evil incarnate.  I’m not sure entirely agree with them as it seems to me that if you honestly believe an asset is overvalued you are applying market principles by betting it will go down.  Of course if you short a stock by starting dodgy rumours then you are morally bankrupt and deserve all you get.  But I am not really interested in the shorters motivation, that is obvious as they stand to make a lot of money out of the transaction if they get the bet right, what confuses me and it seems lots of other people is why would the owner of an asset lend it to someone who is trying to make sure it goes down in value?

There seem to be a number of transparent reasons why the lender would provide the service including either they are paid a fee and/or can get some short term cash.  Both of which are very plausible but I feel like I am missing something because although the fee and cash means you are making money out of what is probably an inactive asset you are allowing someone else to potentially destroy a substantial part of the value of that asset.  According to the information on the International Securities Lending Association suggests that a ‘typical’ trade might look something like this,

A shorter borrows 100000 shares at £10/share, giving a loan value of £1M.

The lender might expect to earn a profit in the order of 5% on the loan so if the transaction lasts a month they  could earn 5% * 30/360 * £1.05M = £4300 (approximately).

This all seems straightforward except if the shares are shorted by the borrower and drop by 10% the lenders asset is now worth 10% less or £100,000.

And it’s this discrepancy that I can’t understand, it could be as simple as the lender not knowing or paying attention to who their assest get lent to – but this would be dissapointing.  Or more likely there is something I have missed about how this all works becuase it doesn’t seem like good business on the face of it.

The Fundamental Value of ‘The Long and the Short of It’

First trip to the RSA of 2009 was to see John Kay talk about his new book ‘The Long and the short of It’ I went with Mike who I met though fleshisgrass and who coincidentally joined the RSA at roughly the same time as me, so after a somewhat prolonged absence this has galvanised me to write another post.  Things that tipped the balance included the fact that the economy has got to be worth thinking about, Stephanie Flanders has returned to work and I can’t wade through the 100’s of comments on Robert Peston’s blog to make any sense of what is going on.

The main room at the RSA was packed to the rafters with people who as I found out may have been been there expecting advice rather than education and debate.  Because it seems John Kay has written a self help book for people with money to invest (is this still a large enough target audience?  I wonder sometimes when you read some of the worst predictions about the economy).  Mr Kay believes that the time has come for us to stop relying on the professionals and take responsibility for what happens to our own money.  Difficult to argue with the principle of this but the wilful ignorance that a lot of people have when it comes to finance makes me doubt this will take off in a big way.  However this didn’t stop the event being both educational, interesting and at times amusing.

A slight diversion here to talk about the chair for the evening Peter Jay who is a marvellously posh and well connected chap who must be fairly unique in having a career that spans the Royal Navy, HM Treasury, Journalism, Rupert Maxwell and being UK Ambassador to the United States.  Since 2003 he has been a non-exec at the Bank of England, none of this stopped both Mike and I remarking that he reminded us of the recently departed John Mortimer.  All of this meant that any thoughts about the links between his background and career trajectory were swiftly forgotten about.

Anyway returning to the main business of the evening.  The lecture was structured around explanations of what has caused the current financial crisis, what the Government (or Governments) could do about it and what we can do about it ourselves.

The explanation of how we have got into this mess was one of the clearest I have seen put forward.  We learned the difference between investors who are interested in fundamental value and those who are interested in the current and short term value of assets.  Basically if you invest based on Fundamental Value then it’s a long term game where you are interested in the income stream that asset will bring you over it’s life.  If you are more short  term then you will be into Mark to Market which is the value that people will pay for the asset on the current open market.  To  illustrate the differences in this approach Mr Kay talked about Warren Buffett as the archetypal fundamentalist and George Soros the marked market man.

Whilst these 2 different approaches aren’t necessarily right or wrong – if you want to measure success in financial terms Buffett and Soros have been just as successful as each other – they will deliver different outcomes over different timescales.  And when you start to think about it like that you can see how having complicated financial assets, so complicated nobody understood them, the value of which is based on what people are prepared to pay can very quickly lead to big problems.  Problems that quickly get out of control and seem to bear no relation in scale to the event that triggers them.  This actually has a link to structural engineering where various previous failures, most famously in this country Ronan Point flats in East London,  mean that buildings are now design to avoid disproportionate or progressive collapse.  This means damage to a a small part of the structure should not lead to collapse of all or even a large part of the building.  Now obviously there are limits to this otherwise we would all live and work in concrete bunkers but there are other precautions taken to further protect vulnerable buildings which are exposed to greater levels of risk than normal.  It seems to me that the we could do with something like this type of approach when designing the new regulatory system for the financial sector, the regulation of structural design has not stopped innovation but has provided clear boundaries and guidance on what is acceptable.

The vulnerability of complex financial markets to disproportionate collapse is one thing but John Kay offered an impressive degree of clarity on the main cause of the failure .  Which as with most things in life wasn’t that complicated when all was said and done, a bit like Bill Clinton’s rallying cry ‘it’s the economy stupid’  Mr Kay repeated several times the cause of failure was the banks investment in the international money markets.  A lot of which went spectacularly wrong.  I think this where my point above comes in whilst it was the massive securatisation of debt that is now being acknowledged as the route cause of the problem, what is need now is regulation that prevents  financial structures so vulnerable to progressive collapse following failure of one or two elements – in this case the American sub-prime mortgage market.

Because this post is getting quite long and because he didn’t talk about it very much I won’t be dealing with John Kay’s second point which dealt with what Government or society should do to prevent similar occurrences in the future, although it is probably clear from the statements above that I think there needs to be afundamentally different approach to regulation, governance and oversight.  However, one anecdote did stick with me which was about how when John Varley from Barclay’s complained on the Today Show about poor regulation Mr  Kay felt it was a bit like burglars blaming the police for not stopping them stealing from houses.

The final part of the talk concentrated on what seems like (I say seems because I haven’t read the book yet) the aspect which is most like a self help manual.  This is advice about how we might invest on our own behalf as we are the only ones we can really trust.  I hope Mr Kay didn’t mean this as if I can only trust myself life is going to be quite disappointing.  However, he seemed like a reasonable and sensible chap so I will assume we don’t have to take this too literally.  The real meat of this sections was about how the average member of the audience (of member of the public? as discussion for another time would be comparing the RSA audience to the general public) could manage their investments better than the professionals.  If this sounds interesting I suggest you buy the book where it will be explained much better than I will here.  To my mind however it would have been better to get views on whether there are some more radical options for the future of the financial system.  The worst of the predictions about the state of the economy would mean that a completely different model is required rather than more active engagement from ordinary investors.

During the Q/A Mr Kay managed to avaoid his self imposed rules (don’t make predictions or offer investment advice) for the most part but he did also avoid explanning why the owners of shares would want to lend them to traders who want to short sell them.  The questioner pointed out that by lending your shares to a short seller you are encouraging the destruction of the fundamental value.

I seemed to have ended more critically than intended because this was an informative and interesting talk by the end of which I found myself agreeing with Peter Jay that John Kay is a highly intelligent chap who can explain complex ideas in a engaging, clear and straightforward fashion.  Also I have the topic for another post which will be finding out why owners lend their shares to short sellers.

what no blog

spending too much time on work stuff to muster the the energy for blogging and all the excitement of our party at the weekend took some time to recover from – getting too old for drinking 2 nights on the trot.

Our First Plural City?

The continued lack of TV (the cable box is kaput) means I have returned to the bosom of radio 4 for my entertainment.  So thursday tonight I listened with with interest to a programme about Leicester (sounds unlikely doesnt it!) which described how it was shortly to become Britains first plural city where “no one group” would be in the majority.

I was quite excited about this because there has been an unmitigated stream of bad news recently and my exposure to the boycott campaign, truthers and recently the BNP stuff has somewhat dented my belief in humanity.  The reason I was so hopeful is tied up with my belief that DIVERSITY is good and we should have more of it.  This is  because it makes , systems, species, populations, communities, organisations well just about anything I can think of stronger.

For example research carried out by the Equalities and Human Rights Commission shows that if you aren’t prepared to recruit from the widest possible talent pool there is plenty of evidence that shows you are missing out on tangible business benefits,  I have included below an extract from ‘Talent not Tokenism’ which says it much better than me.

“Yet many of the companies featured here have found that what may have begun as a way of making sure they are doing the right thing either legally or morally has had tangible benefits for their core business. These include:

• Increasing employee satisfaction, which helps attract new staff and retain those already there, reduces recruitment costs, and can increase productivity
• Understanding better how the company’s diverse customers think and what drives their spending habits, or how to access markets they have not previously been able to tap into so effectively
• Finding enough workers to fill skills gaps in areas with tight labour markets, where there are not enough ‘obvious candidates’ for the vacancies they have.”

After a while my brain did finally kick into gear and remember the the internet is a rather good example of a system that is dependent on diversity not just strengthened by it.

Returning to the documentary – Leicester has had large ethnic minority population for over 40 years so much so that in the early 70’s the local paper declared that Leicester was full and couldn’t accept anymore immigrants.  But since then the communities have learnt to live in greater harmony and they city is seen by some as a model for multiculturalism.

So why from the start was I slightly disappointed by the whole thing?  After all we live in a very multicultural street where no two adjacent houses contain people with the same ethic background, I only mention this because, in my white middle class way, this is one of the things I like about our street.

Well at the beggining of the show the reporter was at a regular dinner event called the ‘thursday night club’ this event was full of successful local businessmen we were told.  So far so Radio 4 documentary, but this scene was a microcosm of the whole story really.  We had one successful group (successful Asian businessmen) who had done very well since moving to Leicester, but there was no sign of any women and there didn’t appear to be a great deal of interaction with other groups.

As I write this I wonder am I being unfair and will this just turn into a rant or a whinge?  Well lets hope not and to avoid that I will try to link this back to my thoughts about diversity being good (thank you fleshisgrass for that suggestion) and why I found that vignette  so disappointing.

Even in what is billed as the most plural society in Britain the different groups seemed to get along by not really interacting with each other and then when the new immigrants were not quite a good as the old ones (who seemed to be richer and dare I say it less Muslim) particularly in the view of some of the locals.

The BNP answer to this is that it’s human nature and evidence can be found by the study of primates.  It seems a bit risky the BNP comparing human and ape behaviour but I won’t dwell on that.  When I read that I wasn’t sure whether to laugh or cry.  The point of evolution and society is that we have learnt to subjugate some of our basic animal instincts for personal gain and the common good.

Yes we feel threatened by the ‘other’ and concerned by change but behaving badly in the face of this and blaming it the fact we are descended from apes just won’t wash.  What is needed is help and support for people to accept different groups for what they are and to work together to form strong diverse and thriving communities – not a series of separate communities that don’t have a problem with each other because they never interact.

This probably sounds hopelessly idealistic but I don’t think it is, what it will be is hard work.  What it will need is strong and responsible leadership from central and local government and a lot less scaremongering by the media.

9/11 and the truth movement

I seem to be consistently drawn into arguments with ‘truthers’ who believe in various outlandish theories about the terror attacks carried out in America on 9/11.  In fact during my short blogging and commenting career I have spent more time on this than anything else.  This is partly because as an engineer by training I have some professional interest but also fleshisgrass did mount a campaign to get me involved.

Having done so it has been an education in a number of ways.  I have learnt a lot more about how the twin towers and WT7 actually came to fall down including why they are unique but not surprising events.

But more than that I have been exposed to conspiracy theorists in a way that I hadn’t been previously.  This has at times been entertaining but mostly just frustrating.  Most of the conversations rapidly descend into what feels like one of those conversations with a child where they ask an absolute barrage of questions without considering the answer to the previous one.  As far as I can tell asking questions is the big thing here and if you don’t do that you are either hopelessly naive or a government stooge.

I haven’t seen anything that actually amounts to a consistent theory about why any one would have wanted to put in place such a conspiracy (apart from the terrorists of course who did take the time to admit to this and try and justify it) which is surely the one question they should be asking?

So it just turns into trench warfare with the winner in the comment battle being the side who can keep lobbing refutation bombs longing than the other one.  But still in the end the truthers will not acknowledge any possibility that there isn’t some huge conspiracy to either do something to us or hide something from us.  No evidence is good enough for them and all experts are merely part of the problem.

On the other side those of us who are fighting the truthers don’t appear to spend enough time thinking about their motives or considering different ways of engaging with them.  Why are they desperate to believe their government is conspiring against them?  Why don’t things that seem obvious/rational to us (such as the fact that if a massive building is collapsing there will be loud bangs that could be mistaken for explosions in the confusion) seem the same way to them?

I haven’t reached any conclusions yet but will return to this, I think it is these questions that will help us to win the truth war rather than just the battles.