John Patten, the Secretary of State for Education, seized the opportunity to order a review of the examination's standards, despite ministerial statements only a week ago that this year's record-breaking results were due to teachers' and pupils' hard work.
His decision suggested that the Government may concede traditionalists' demands to bring back O-level and that it wants to replace the existing examination boards with one national agency.
Full details of the inspectors' criticisms will not be available until later this week, when their report is published, but Mr Patten said the inspectors had 'limited confidence' in this summer's record grades. The report said: 'The evidence could point to a gradual erosion of standards since the introduction of the GCSE in 1988.'
Fifty-one per cent of this summer's candidates gained the top three grades, the equivalent of all the pass grades at O-level, a rise of 2.3 percentage points and the fourth consecutive improvement since the exam began. The proportion passing O-levels in 1987 was 39.8 per cent, but the figures are not strictly comparable because the GCSE exam is so different.
Previous HMI reports have said overall standards at GCSE have been maintained. One published in January on last year's exam said: 'Marking and awarding procedures remained unchanged and examiners made every effort to ensure that standards were maintained from year to year.'
Some criticisms of marking have been made but the Government has never before used them to attack the exam as a whole. Ministers have steadfastly defended the GCSE, which was introduced by Lord Joseph, when he was Secretary of State, in the expectation that it would raise standards.
Mr Patten gave exam boards until the end of the month to respond to the inspectors' concerns. He said the report complained that the quality of exam papers was uneven and there was not enough to challenge the brightest pupils. Criteria for the award of different grades needed to be more objective and the boards' procedures should be more consistent. The marking of spelling, punctuation and grammar had been inconsistent.
The minister said: 'It is vital that students, their parents and employers have confidence in the GCSE. It would be irresponsible not to act swiftly in the face of such serious reservations expressed by the inspectorate.'
The report, sent to Mr Patten last week, followed visits to the four examining groups for the GCSE in England and an assessment of exams in 10 subjects.
Kathleen Tattersall, chief executive of the Northern Examinations and Assessment Board, said the inspectors had also attended GCSE awarding meetings last year and had made a similar report. 'Their comments are not substantially different from those which were made then but the conclusions drawn this year are different.
'Examining is not an exact art. It is not surprising given the number of people involved that there are variations. I don't think the variations warrant the conclusions which are being drawn.'
Professor Desmond Nuttall, consultant director of the London School of Economics centre for educational research, said it was easy to let standards drift and almost impossible to discover through research whether they had. 'You are relying on the judgements of thousands of examiners. I don't think HMI are any better qualified than the examiners to say what is happening.'
Ann Taylor, Labour's education spokeswoman, said Mr Patten was under pressure from Tory right-wingers and should have made his comments after the report was published. 'For all we know the information that is being given us is highly selective.'
Dr John Marks, a government adviser on exams and longstanding critic of the GCSE, urged the Government to order an independent inquiry going back before the GCSE and including some international comparisons.
David Hart, general secretary of the National Association of Head Teachers, described the report as a 'slap in the face' for young people who had just received their results. 'The view of the overwhelming majority of our members is that GCSE has been responsible for raising standards, improving pupil motivations and has contributed to a better staying-on rate.'
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