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Sunday, April 16, 2006 

Education reform funding dilemma

More taxation, NHT money, privatisation among options


Sunday Observer Writer

Sunday, April 16, 2006

The government's Education Transformation Team, grappling with how the programme - projected to cost $520 billion over the next decade - will be financed, is looking at a raft of options ranging from more taxation to privatisation of the education system.

But the Education Transformation Team (ETT) could find itself on a collision course with the Opposition Jamaica Labour Party (JLP) over a proposal to pull money from the housing fund controlled by the National Housing Trust (NHT), a controversial formula that has already been used by the government.

for education annually, but needs to tap into new sources for another $20 billion per year to finance the reform plans crafted in 2004."The NHT has $49 billion that it won't be able to spend anytime soon. Why not use some of that for education?" ETT acting director Dr Disraeli Hutton asked at a forum earlier this month exploring the issue of funding for the ambitious programme.

Hutton also told the forum at the University of Technology (UTech) in Kingston that among the options being considered are:

; the establishment of a National Education Trust, similar to the National Housing Trust (NHT) but with responsibility for the building and maintenance of school plants;

. the floating of a tax-free government bond at a fixed interest rate over 20 to 30 years;. the introduction of a special education tax for a limited period of 15 years;

. the identification of low-cost financing from multilateral lending agencies such as the World Bank, the Inter-American Development Bank or the United Kingdom's DFID;

. the sale of government property specifically for funding education; . the establishment of new schools by the private sector and NGOs under a build, own, lease, transfer (BOLT) system, in which the operators would have the option to continue operating the schools after 20 years; and

. a review of the laws governing the NHT. The housing fund finances housing development, largely for down market purchasers and first time homeowners.

Hutton did not give specifics about the proposed review of the NHT laws. However, last year, then Prime Minister P J Patterson earned the ire of the JLP after he announced a plan to dip into the NHT for $5 billion to help fund the education programme.

At the time, the JLP had argued that the NHT's funds were not to be used for purposes other than the provision of housing solutions. Opposition Leader Bruce Golding told the House on July 20 that while the JLP was not opposed to spending more money on education, the party had a difficulty with how the money was being sourced."We feel that the way it is being done undermines the essential purpose for which the Trust was established," Golding said.

The government, however, used its majority in the House to approve the measure and in February this year, Education Minister Maxine Henry-Wilson reported to the Parliament that her ministry had already spent $406 million of the $5 billion.

Under the education reform plan first announced by Patterson on April 26 last year, 200 schools were to be rehabilitated and upgraded, an additional 2,400 high school places were to be created, and the ministry was to be transformed to improve its role in assessment and monitoring.

The plan also called for the freezing of all school fees at 2002/2003 levels, the provision of an across-the-board subsidy of $3,000 per year for each high school student, and the continuation of the underwriting by government of the CXC exam fees for students sitting Math, English, Information Technology and a Science subject.

At the funding forum, Hutton said that the other options being considered by the ETT were a surcharge on all remittances from abroad, the privatisation of the entire education system, and borrowing from multilateral agencies.

Hutton also told the forum, organised by the UTech Student/Teachers Association and the Jamaica Teachers' Association, that based on an audit carried out as part of the Report of the Task Force on Education, 400,000 new school spaces were needed under the transformation.
This figure was based on the assumption that the average class size was to be reduced from the current 45 students to 25; that two more years were to be added to the current school system; and that the shift system was to be eliminated.

"These 400,000 school places, when converted into schools, mean that 498 new schools would need to be built in the next 10 to 15 years, 177 secondary and 221 at the primary level," Dr Hutton said.

Regarding the privatisation of all or some public schools at the primary and secondary levels, Hutton said: "The trend is that education should be made private and that users should purchase the service." Under this system, he said, student loan facilities would have to be greatly expanded and more scholarships offered for persons unable to afford education.

That option was, however, flatly dismissed by another panelist, Opposition spokesman on education Andrew Holness, who said his party's view was that education should be funded by the state.Holness suggested that instead of attempting to reform the entire education system at the same time, the early childhood sector should be reformed first.

"I don't believe it is possible to roll out all the reforms in one go," said Holness. "We (the JLP) would focus on the most critical area, and that is early childhood education."

He called for a tripling of the Transformation Team's budget for the early childhood sector from $2 billion to $6 billion and suggested that a trained teacher be placed in every basic school and the curricula for the sector be standardised.


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