Customer choice key to British education reform

London Briefing: Many backbench Labour MPs are planning to ambush Tony Blair's forthcoming (and seemingly umpteenth) reform of Britain's education system. The dissident view of Blair's proposals is that they introduce selection by the back door.

This same group of politicians apparently believes that everyone should be educated in exactly the same way: fair enough in principle, I suppose, but like many high-minded ideals, utterly impossible to implement in practice.

Such sentiments motivated the dismantling of Britain's grammar school system in the late 1960s. This resulted in most children, at least those who stayed within the state system, experiencing the delights of a comprehensive school. Speaking as one who attended such an establishment I can vouch for the fact that this represented seven largely wasted years.

Labour's then education reforms essentially amounted to a mass dumbing down of the system: an under-resourced and overly-unionised education establishment succeeded in turning out a generation of young adults grossly unprepared for the real world and utterly committed to not allowing their own children to repeat the same experience.

I can only assume that the current generation of Labour politicians never went to a comprehensive school. If they did, they would certainly be cheering Blair's reforms to the rafters.

That they are not applauding probably signals that they went to some form of fee-paying school or one of the few institutions that managed to excel in spite of the constraints handed down from Westminster. No sentient human being would want to replicate the bog-standard British education system if they had ever had first hand experience of it.

George Osborne, (the shadow chancellor) recently returned from a trip to Ireland that aimed to learn the lessons of the Celtic Tiger. Like many before him, he came back lauding the Irish education system. I'm not sure what underlies the success of Irish schools but I have a sneaking suspicion that resources have had a large part to play and the issue of selection, to the extent that it exists, has played a very small role. Labour MPs are simply barking up the wrong tree.

Indeed, if Tony Blair thinks that more selection is key to success, he too is making an error. It's all about what the state puts into the system. Rocket science it ain't, but if more money is thrown at education it will get better.

Gordon Brown might argue, with some vindication, that he has indeed been pouring extra cash into the system. And there is some evidence to suggest that this has had the desired effect - but only up to a point. Thinking back to my own experiences of Soviet-era schooling, no amount of money would have altered the methods of some of the dead-beat, but unsackable (and never assessed) teachers that graced the classrooms of that era.

As any modern corporation can attest, productivity-enhancing restructuring involves spending some money, cutting out unnecessary costs and introducing incentive mechanisms that reward the best performers. Not exactly the British model of state education. Come to think of it, not exactly the model for much of the public sector.

Blair, to his credit, finally seems to have realised this. He has also worked out that the way to introduce market discipline into any public sector service is to give the customer some choices. You could try to reform the unions, apply pressure to management or force through other detailed reforms but this would be a pointless task: the roadblocks are as ubiquitous as they are obvious.

Giving the customer some choice over where his health or education pound is spent will cause all this to happen naturally. Market forces will be unleashed by the individual consumer of education services: good schools will flourish and bad ones will die (instead of being kept on semi-permanent but pointless life support). And as Blair has worked all this out, so have the backbench commissars.

Letting the market do the heavy lifting for you is a neat trick - if you can get away it. In order to achieve anything, Blair has had to water down his proposals. In the ultimate of ironies he is possibly going to have to rely on the support of George Osborne and other like-minded Tories. Blair's metamorphosis into a Tory prime minister - Thatcher-lite as it were - is almost complete.

Chris Johns is an investment strategist with Collins Stewart. All opinions are person