| Abstract: | ABSTRACT The 1988 Education Reform Act introduced a schools’ quasi‐market intended to reward schools financially for recruiting pupils and to give them a financial incentive for ‘good’ educational performance. The paper examines this linkage by analysing data on financial performance for over 300 English Local Education Authority (LEA) and Grant Maintained (GM) secondary schools from 1990/91 to 1995/96, correcting for inflation and changes in LEA delegation ratios. On average over 6 LEA areas, real school budgets per pupil declined by 0.6% a year while examination performance at GCSE improved. Statistical analysis shows that while change in pupil numbers is the most important variable explaining school budget change, half as much is explained by variations in LEA and government financial policy, thus weakening market incentives. It was also found that the proportion of socially disadvantaged pupils, as measured by free school meals, is associated with a loss of pupils over time and hence a decline in budget. GM status had no discernible effect on pupil recruitment, once social disadvantage and other explanatory variables were taken into account. It is suggested that both ecological and open systems theories of how organisations change in response to external environmental pressures explain the differential success of schools in attracting resources. |
