The Confederation of British Industry weighed into the pre-election debate over the best use of existing funds in education with claims that cash could be saved through better use of teachers and resources and more efficient management.
Despite spending pounds 36bn annually on education, the United Kingdom was still far from achieving government targets for 2000 on education and training which had already been outstripped by some of its international competitors, the CBI said.
In a consultation paper, Does It Add Up?, the confederation sets out proposals for reform of education funding. It calls for a debate over how greater value for money could be achieved, and whether the savings, and any extra funding, should be pumped into education.
The paper suggests efficiency could be improved by introducing an element of payment by results in schools and universities.
In schools, the payment could be based on the educational "value added" rather than exam results, ensuring schools in poorer areas were not penalised compared with those in middle-class areas.
Further education and sixth-form colleges already receive some funding according to students' success in achieving qualifications, and the Department for Education and Employment plans to extend that to school sixth-forms.
Schools doing particularly poorly should be able to bid for extra cash, the paper suggests. To win the money, they would have to show how more resources would be used to increase attainment, and would have to undergo an inspection by the schools watchdog Ofsted.
In higher education, the CBI proposes that would-be students should be given a learning credit for tuition fees to bring with them to the university offering them a place.
Universities would be able to charge top-up fees above the value of the credit, but, according to the paper, the need to attract students would encourage them to keep charges down.
The paper, which is being sent to politicians, local authorities, teaching unions and other interest groups, also asks for views on the option of investing more on primary and nursery education in order to save money spent later on helping struggling learners.
Tony Webb, the CBI's director of education and training, denied the document amounted to a criticism of the Government's management of the education system. "In terms of performance, we are doing a lot better, but we have still got a long way to go," he said.
"As things stand we are not achieving the full value for money we could achieve. As a consequence, we are not going to be as close to hitting the targets as we could be."
t The Government went on the attack yesterday after a Labour education spokesman questioned the charitable status of "wealthy" public schools, such as Eton, Harrow and Rugby, writes Colin Brown.
The remarks, by Peter Kilfoyle, came as ministers announced Government support for an extra 1,200 assisted places, of which half will go to 118 preparatory schools from September this year.
Labour is committed to abolishing assisted places, which is costing the taxpayer about pounds 200m a year to send about 34,000 children to private schools. But Labour denied that it had any plan to abolish the schools' charitable status.
Armed with Mr Kilfoyle's article, the Secretary of State for Education, Gillian Shephard, accused Labour of threatening the existence of the independent schools by taking away their charitable status.
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