Institute for Democracy and Economic Affairs 31 May 2011 Kuala Lumpur, Malaysia Norman LaRocque

Institute for Democracy and Economic Affairs31 May 2011Kuala Lumpur, Malaysia

Norman LaRocqueSenior Education SpecialistAsian Development Bank

The Role and Impact of PPPs in Education: Learning from International Experience

IntroductionIntroduction

Defining Partnerships• Definition of partnership differs in terms of scope, Definition of partnership differs in terms of scope,

nature and formality of arrangements: nature and formality of arrangements: - ““risk sharing relationship based upon an agreed aspiration risk sharing relationship based upon an agreed aspiration

between the public and private sectors to bring about a between the public and private sectors to bring about a desired public policy outcome.” desired public policy outcome.”

– – Commission on UK PPPsCommission on UK PPPs

- ““cooperative venture between the public and private sectors, cooperative venture between the public and private sectors, built on the expertise of each partner, that best meets clearly built on the expertise of each partner, that best meets clearly defined public needs through the appropriate allocation of defined public needs through the appropriate allocation of resources, risks and rewards.” resources, risks and rewards.”

– – Canadian Council for Canadian Council for PPPsPPPs

PPPs: Key Elements• Key Elements:Key Elements:

--

- Formal arrangement between public and private sectorsFormal arrangement between public and private sectors- Private financing and/or private delivery of public services Private financing and/or private delivery of public services - Ultimate responsibility remains with public sectorUltimate responsibility remains with public sector- Arrangement often based on explicit contractArrangement often based on explicit contract- Focus on service delivery and outputs/outcomes, not inputsFocus on service delivery and outputs/outcomes, not inputs- Sharing of risks/rewards between public and private sectors.Sharing of risks/rewards between public and private sectors.

• Range of objectives: iRange of objectives: improved efficiency, enhanced quality, increased accessmproved efficiency, enhanced quality, increased access. .

• Various forms of PPP: Various forms of PPP: – Service deliveryService delivery– InfrastructureInfrastructure– Finance. Finance.

Potential Benefits of PPPsPotential Benefits of PPPs

Increase efficiency – improved incentives and Increase efficiency – improved incentives and increased competitionincreased competition

Improve quality of service deliveryImprove quality of service delivery

Secure specialized skills not available in sectorSecure specialized skills not available in sector

Overcome public service operating restrictions – Overcome public service operating restrictions – salary scales, civil service work rulessalary scales, civil service work rules

Quicker response to changing demands and facilitate Quicker response to changing demands and facilitate adoption of service delivery innovationsadoption of service delivery innovations

Government focus on areas of comparative advantageGovernment focus on areas of comparative advantage

Increase access, especially among poorly served Increase access, especially among poorly served groupsgroups

Increase transparency of government spending. Increase transparency of government spending.

PPPs in Global PerspectivePPPs in Global Perspective

Classifying PPPs in Basic EducationClassifying PPPs in Basic Education

Education Service Delivery Initiatives

Infrastructure PPPs

Demand-side Financing Programs

Education Support Initiatives

• Scholarships, private voucher programs• School sponsorships, Adopt-a School programs• School construction

Philanthropic Initiatives

• Private management of public schools

• Contracting with private schools for delivery of education services

• Contracting with private providers for the delivery of specialist curricula

• Provision of before and after school care

• Provision of tutoring services

• Outsourcing of ancillary functions at schools

• Publicly and privately financed voucher programs

• Targeted scholarship programs

• Payment of subsidies to students at private schools

• Tax credits/tax assistance

• Private involve-ment in curriculum development

• Private sector involvement in quality assurance

• Private information/ testing services

• Private sector school review

• Private Finance Initiatives - finance, construction and maintenance of core and non-core educational assets

• Private leasing of public school facilities

• Equipment and maintenance of IT laboratories

• Private sector school construction

Examples of Partnerships in Education

Partnership TypePartnership Type ExamplesExamplesEducation Service Education Service

DeliveryDelivery

• Contracting for the Contracting for the Delivery of Education Delivery of Education ServicesServices

• Private Management Private Management

of Public Schoolsof Public Schools

• Government Sponsorship of Private School Government Sponsorship of Private School Students, Cote d’IvoireStudents, Cote d’Ivoire

• Educational Services Contracting, PhilippinesEducational Services Contracting, Philippines• Alternative Education, New ZealandAlternative Education, New Zealand• Foundation Assisted Schools, Punjab (Pakistan)Foundation Assisted Schools, Punjab (Pakistan)• Universal Secondary Education, UgandaUniversal Secondary Education, Uganda• Promoting Private Schooling in Rural Sindh, PakistanPromoting Private Schooling in Rural Sindh, Pakistan• Concession Schools (Bogota), ColombiaConcession Schools (Bogota), Colombia• Railways Schools/Management of Government Railways Schools/Management of Government

Schools Lahore/Developments in Learning, PakistanSchools Lahore/Developments in Learning, Pakistan• Fe y Alegria, South AmericaFe y Alegria, South America• Independent Schools, QatarIndependent Schools, Qatar• Contract schools and Charter Schools, USAContract schools and Charter Schools, USA• Khazanah Trust Schools, MalaysiaKhazanah Trust Schools, Malaysia

Infrastructure PPPsInfrastructure PPPs

• Private Finance Initiative, UKPrivate Finance Initiative, UK• Leasing of Public Schools to Private Operators, Leasing of Public Schools to Private Operators,

PakistanPakistan• School Private Finance Projects in Australia, Canada, School Private Finance Projects in Australia, Canada,

Germany, New ZealandGermany, New Zealand• Build Transfer Lease Scheme, South Korea Build Transfer Lease Scheme, South Korea

Examples of Partnerships in Education

Partnership TypePartnership Type ExamplesExamples Demand-side FinancingDemand-side Financing

• PACES voucher program, ColombiaPACES voucher program, Colombia• Voucher scheme, ChileVoucher scheme, Chile• Private school subsidies, Cote d’IvoirePrivate school subsidies, Cote d’Ivoire• School funding system, the Netherlands and School funding system, the Netherlands and

SwedenSweden• Milwaukee Parental Choice Program, USAMilwaukee Parental Choice Program, USA• Voucher scheme, QatarVoucher scheme, Qatar• Punjab Education Foundation programs, PakistanPunjab Education Foundation programs, Pakistan• State tax credit programs, USAState tax credit programs, USA

Philanthropic Initiatives Philanthropic Initiatives • WEF Global Education Initiative – Jordan, India,WEF Global Education Initiative – Jordan, India,Egypt, Palestinian National AuthorityEgypt, Palestinian National Authority

• Bill and Melinda Gates FoundationBill and Melinda Gates Foundation• Academies Program, UKAcademies Program, UK• League of Corporate Foundations, PhilippinesLeague of Corporate Foundations, Philippines• Philippines and Pakistan adopt-a-school programsPhilippines and Pakistan adopt-a-school programs

Education Support Education Support ServicesServices

• Private sector school review in UK, Dubai, Thailand,Private sector school review in UK, Dubai, Thailand,Abu DhabiAbu Dhabi

• Private sector accreditation services, PhilippinesPrivate sector accreditation services, Philippines• School testing services, USA and PhilippinesSchool testing services, USA and Philippines

Education Service Delivery Initiatives

• Government contracts with private schools to enrol Government contracts with private schools to enrol students at public expense or contract private sector to students at public expense or contract private sector to manage non-performing public schoolsmanage non-performing public schools

• Often used where there is insufficient public sector Often used where there is insufficient public sector capacity and/or quality of public education is lowcapacity and/or quality of public education is low

• Key features: Key features: – Formal contract Formal contract – School paid a fixed amount per student enrolledSchool paid a fixed amount per student enrolled– Education is delivered using provider’s Education is delivered using provider’s

infrastructure or public infrastructureinfrastructure or public infrastructure– Schools accountable for performanceSchools accountable for performance– For-profit or not-for-profit schoolsFor-profit or not-for-profit schools

Foundation Assisted Schools (FAS) Program, Pakistan

• Key features: Key features: – Schools paid Rs350/month for each student Schools paid Rs350/month for each student

they enroll (up to set maximum)they enroll (up to set maximum)– Schools located in poor urban and rural areas Schools located in poor urban and rural areas – No tuition or other feesNo tuition or other fees– Regular quality assurance tests Regular quality assurance tests – Continued program participation dependent on Continued program participation dependent on

school performance school performance

Rapid expansion – from 54 schools/20,000 Rapid expansion – from 54 schools/20,000 students in late 2005 to 1,157 schools/ students in late 2005 to 1,157 schools/ 500,000 students in early 2008 500,000 students in early 2008

Foundation Assisted Schools Program, Punjab (Pakistan)

0

100,000

200,000

300,000

400,000

500,000

600,000

0

200

400

600

800

1000

1200

1400

1600

2005 2006 2007 2008 2009

Nu

mb

er o

f Stu

de

nts

Nu

mb

er o

f Sch

oo

ls

Number of Schools Number of Students

Educational Service Contracting, Philippines

Government contracts with private secondary schools to enrol students in areas where there is a shortage of public places

Administered by the Fund for Assistance to Private Education, a private not-for-profit organization

Certification program for schools participating in ESC to address ‘ghost students/ghost schools’ issue

In 2008/09, 477,000 recipients, > 2,000 private schools In 2008/09, 477,000 recipients, > 2,000 private schools

½ of secondary schools had ESC grantees in 2008/09½ of secondary schools had ESC grantees in 2008/09

Per-student payment is PhP4,500Per-student payment is PhP4,500

ESC Recipients and Schools, 1986/87-2005/06

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

Nu

mb

er o

f Pa

rtic

ipa

ting

Sch

ool

s

Nu

mb

er o

f Gra

nte

es

ESC Grantees Participating Schools

Concession Schools, Colombia

• Key features: Key features: – Competitive selection processCompetitive selection process– Newly constructed schoolsNewly constructed schools– 15 year contract15 year contract– Schools paid $US500 per student per yearSchools paid $US500 per student per year– School autonomySchool autonomy– Operate in disadvantaged areasOperate in disadvantaged areas– Educational outcome targetsEducational outcome targets– Formal contract specifying delivery standards Formal contract specifying delivery standards

• 25 schools serving over 26,000 students and plans for 25 schools serving over 26,000 students and plans for further schoolsfurther schools

Vouchers and Voucher-type Programs

• Many countries are making use of vouchers and voucher-Many countries are making use of vouchers and voucher-type programs in education, including subsidies to private type programs in education, including subsidies to private schoolsschools

• More than 30 countries using demand-side financing More than 30 countries using demand-side financing mechanisms to finance education - vary from mechanisms to finance education - vary from small/targeted to full/national programs:small/targeted to full/national programs:

- Colombia – PACES programColombia – PACES program- Swedish school choice programSwedish school choice program- Denmark, Netherlands, Australia, New Zealand, Canada, Denmark, Netherlands, Australia, New Zealand, Canada,

Senegal and others – public funding of private schoolsSenegal and others – public funding of private schools- Chile – national voucher programChile – national voucher program- USA – Florida, Milwaukee and Cleveland voucher schemesUSA – Florida, Milwaukee and Cleveland voucher schemes- Pakistan – Punjab Education FoundationPakistan – Punjab Education Foundation

National Voucher Program, Chile

• Nationwide voucher program implemented in 1980• Applies to public and private schools – secular and

religious• Monthly payments are made to schools on a per-

student basis • Initially, subsidized private schools could not charge

top-up fees• Voucher schools must follow certain operational

guidelines (eg. basic facilities, certified teachers, class size, etc)

• Vouchers cover most or all of the tuition at eligible schools

School Infrastructure Initiatives

• Governments contract with private sector to design, Governments contract with private sector to design, finance, build and operate school infrastructurefinance, build and operate school infrastructure

• Key features: Key features: – Private sector builds schools and operates them Private sector builds schools and operates them

for a set periodfor a set period– Schools returned to government at end of contract Schools returned to government at end of contract – Long-term contracts – 15-30 yearsLong-term contracts – 15-30 years– Government employs teachers, while private sector Government employs teachers, while private sector

employs non-teaching staff employs non-teaching staff – Performance based payments – specified services Performance based payments – specified services

and agreed performance standardsand agreed performance standards• Examples include Canada, UK, Australia, Germany.Examples include Canada, UK, Australia, Germany.

PPP for New Schools, Egypt

• PPP to build 2,210 new PPP to build 2,210 new primary and secondary primary and secondary schools in Egyptschools in Egypt

• First stage involves First stage involves construction of 345 schools construction of 345 schools in 18 governorates in 18 governorates

• Government provides landGovernment provides land• Private sector designs, Private sector designs,

constructs, finances and constructs, finances and furnishes schools and furnishes schools and provides non-educational provides non-educational services services

• 15 year contracts15 year contracts

Education Support Services

• Various forms of educational support are delivered via Various forms of educational support are delivered via PPPs – teacher training, school review, performance PPPs – teacher training, school review, performance evaluationevaluation

• Examples include: Examples include: - CfBT undertakes teaching/learning support and CfBT undertakes teaching/learning support and

personnel/evaluation functions in Gulf Statespersonnel/evaluation functions in Gulf States- CfBT and Cambridge Education both undertake school CfBT and Cambridge Education both undertake school

reviews/inspections – China, Dubai, Thailand, UKreviews/inspections – China, Dubai, Thailand, UK− Public authorities in Colombia contract with the Escuela

Nueva Foundation to train rural school teachers, distribute textbooks and update curricula

− Punjab Education Foundation trains private school teachers

Philanthropy

• Wide range of philanthropic ventures in education in Wide range of philanthropic ventures in education in many countries – some centrally coordinated/ many countries – some centrally coordinated/ regulated and others notregulated and others not

• Examples include: Examples include: - Adopt-a-school programsAdopt-a-school programs- School improvement programsSchool improvement programs- School constructionSchool construction- Private sector venture fundsPrivate sector venture funds

• Some countries coordinate/regulate philanthropic Some countries coordinate/regulate philanthropic initiatives – eg. Philippines, Pakistaninitiatives – eg. Philippines, Pakistan

League of Corporate Foundations, Philippines

• Established 1993 and officially registered in 1996Established 1993 and officially registered in 1996• Governed by 7 member BoardGoverned by 7 member Board• More than 50 corporate foundations and business More than 50 corporate foundations and business

organizationsorganizations• Role:Role:

- Provide services to enhance institutional Provide services to enhance institutional capabilities to member firms capabilities to member firms

- External advocacy role – information, External advocacy role – information, coordination, networking, researchcoordination, networking, research

• Full time SecretariatFull time Secretariat

Amount of Education Investments, LCF, Amount of Education Investments, LCF, 2002-20072002-2007

189165

194

296

367

543

0

100

200

300

400

500

600

2002 2003 2004 2005 2006 2007

Mill

ion

s o

f Pe

sos

Adopt-a-School Program, PhilippinesAdopt-a-School Program, Philippines

• Private sector philanthropic venture that provides Private sector philanthropic venture that provides resources and support to public schools resources and support to public schools

• Key features: Key features: – Established 1997Established 1997– Public primary, secondary schools and tertiary institutionsPublic primary, secondary schools and tertiary institutions– Targeted on poorest provincesTargeted on poorest provinces– Assistance can involve staff development, construction/ Assistance can involve staff development, construction/

upgrading of facilities, books and learning materials and upgrading of facilities, books and learning materials and technologytechnology

– Tax incentives for participating individuals, organizations Tax incentives for participating individuals, organizations and firmsand firms

• $284 million invested from 2000-2008 $284 million invested from 2000-2008 • Sometimes combined with private management of Sometimes combined with private management of

public schools initiativespublic schools initiatives

Private Sector Support Through Adopt-a-Private Sector Support Through Adopt-a-School, PhilippinesSchool, Philippines

1,965

3,972

6,307

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2000-2006 2007 2008

Millio

ns o

f P

eso

s

Making Making

Public-private Partnerships Public-private Partnerships WorkWork

Regulating for PPPs

Provide legal recognition for private education Provide legal recognition for private education

Introduce realistic and objective criteria, and Introduce realistic and objective criteria, and streamlined processes for the establishment streamlined processes for the establishment and operation of private schoolsand operation of private schools

Allow for-profit schools to operateAllow for-profit schools to operate

Provide financial incentives to private schoolsProvide financial incentives to private schools

Provide families with information on school Provide families with information on school performanceperformance

Encourage philanthropy Encourage philanthropy

Regulating for PPPsRegulating for PPPs

Establish quality assurance processesEstablish quality assurance processes

Develop government regulatory capacityDevelop government regulatory capacity

Promote and facilitate FDI in the education Promote and facilitate FDI in the education sectorsector

Ensure flexible operating environment for Ensure flexible operating environment for private schools private schools

Provide support services to schoolsProvide support services to schools

2929

Other PPP Success Factors

• Split purchaser/provider roles within government

• Ensure capacity of contracting agency

• Transparent, competitive process for selection of PPP providers

• Establish appropriate performance measures, incentives incentives and sanctionsand sanctions

• Effective contract monitoring frameworkEffective contract monitoring framework

• Introduce longer-term contracts with providersIntroduce longer-term contracts with providers

• Independent evaluation of provider performanceIndependent evaluation of provider performance

Conclusions

• Wide range of PPP models availableWide range of PPP models available

• Increasing international experience with PPPs. Increasing international experience with PPPs. Countries have adapted general PPP model to a Countries have adapted general PPP model to a variety of country and developmental contexts variety of country and developmental contexts

• Considerable interest and growing expertise in PPP Considerable interest and growing expertise in PPP design among donor agencies such as ADBdesign among donor agencies such as ADB

• Context important – country governance, financial Context important – country governance, financial management/administrative capacity, size/nature of management/administrative capacity, size/nature of private sector, fiscal situation, demographicsprivate sector, fiscal situation, demographics

• Debate should be about role of government, not Debate should be about role of government, not whether government is involved or not in educationwhether government is involved or not in education

“It doesn’t matter if a cat is black or white, as long as it catches mice.”

- Deng Xiaoping

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www.adb.org/education

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