Presentation by Ramya Venkataraman at the School Choice National Conference 2013

1. Relevant policies for
school education reform
Slides used at School Choice National Conference
Dec 20, 2013
CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of McKinsey & Company is strictly prohibited

2. Immense need for public-private partnerships (PPPs) in school education
All the possible options for
under-privileged children…
…can benefit significantly from PPP
▪ Well-structured private expertise could help
Government schools
improve the quality
▪ No robust selection or performance evaluation
Government aided schools (an existing form
▪ Well-defined PPP needed for quality
of public-private partnership or PPP)
enhancement
Non-RTE compliant: say,
Rs. 300-700/ month fee
Affordable
private
schools
“RTE-superimposed” likely
to be Rs. 1200-1500++/
month in fee
Donor-funded schools (sometimes with
government infrastructure)
25% reservation in elite schools as per RTE
(an existing form of PPP)
▪ Quality challenges
▪ May not sustain without RTE compliance
▪ PPP critical to make them affordable and
therefore scalable
▪ Very small in number/volume
▪ PPP critical to reduce donor funding and
therefore make them scalable
▪ The model may need refinements to address
implementation challenges
McKinsey & Company
| 1

3. Kinds of public-private partnerships in school education
Five kinds of public-private
partnership possible
Government
interest
Private player
interest
1▪ Running schools with government
infrastructure and private teachers
2▪ Fully private schools with some
government support (e.g. subsidy)
– Greenfield (new investment)
?
– Brownfield (existing)
3▪ “Turnaround” of aided schools by
enhancing the PPP model
?
4▪ Running government schools with
government teachers
(“management and quality
support”)
5▪ Holistic system level partnership
with the government
?
Different
implications
for scale,
quality and
effort (set-up
effort,
sustaining
effort) in
each case
?
McKinsey & Company
| 2

4. A few common success factors to make any of the PPPs work…
Key success factors
▪ Adequate funding for the PPP to scale up
▪ Financially sustainable in the long term
▪ Not attracting the “wrong” kind of players
Funding
Current situation in India
▪ Most PPPs with existing infra
through “excess funding”
▪ High quality selection process with sufficient
focus on qualitative aspects
▪ Mitigate risk of subjectivity with strong rubric
Selection
and steering committee
likely to have 30-40% viability
gap (e.g. Mumbai)
▪ Greenfield PPPs may be fully
financially sustainable
▪ Government’s preference for a
largely quantitative process;
however, some early exceptions
(e.g. Mumbai)
▪ Sufficient autonomy to the private player (e.g. ▪ Teacher salaries likely to be
Autonomy
teacher hiring, teacher salaries, pedagogy,
etc.); still relevant support from government
leadership
▪ Regular evaluation with sufficient to student
learning outcomes
Outcome
evaluation and
consequences
regulated in most PPPs
▪ Concerns about excessive
information gathering
▪ Focus more on inputs for
evaluation
▪ Balanced by select input metrics
▪ Consequences being thought
about in a binary manner
▪ Leeway in the first 3 years; then well-defined
escalating consequences (e.g. warning and
support, funding reduction, termination)
SOURCE: McKinsey’s experiences internationally and in India
McKinsey & Company
| 3

5. …consistent with international experiences
International observations
Examples
▪ Partial operating funding from the government
▪ Charter schools, UK Academies,
and gap filled through donor funds
▪ Partial operating funding from the government;
Funding
gap filled through both fees and donor funds
Pakistan PEF funded schools
▪ Education Voucher scheme
Pakistan, South African PPP
schools, Malaysian trust Schools.
▪ One or two State entities as authorizers with high ▪ Central State Board of Education
political accountability
▪ Stringent selection criteria
and Central Education
Department for NY Charter
Schools, DOE UK
Selection
▪ Private player has complete autonomy over
pedagogy, teachers, budget
Autonomy
Education Voucher Scheme
Pakistan
▪ Private player has autonomy over pedagogy and ▪ Forced Academies UK, many inhours but needs to adhere to some Govt. teacher
norms
▪ State level exams for comparison of charter
students’ performance vs. Government schools
▪ Third party independent evaluation including
Outcome
evaluation and
consequences
▪ New Orleans Charter schools,
learning outcome exams and field visits
SOURCE: McKinsey’s experiences internationally and in India
district charter schools – payrolls
are managed by Govt
▪ State wide exams are used in all
US States
▪ Monitoring & Evaluation unit and
Academic Development Unit in
Pakistan, Ofsted and Ofqual in
UK,
McKinsey & Company
| 4

6. Kinds of public-private partnerships in school education
Five kinds of public-private
partnership possible
Government
interest
Private player
interest
1▪ Running schools with government
infrastructure and private teachers
2▪ Fully private schools with some
government support (e.g. subsidy)
– Greenfield (new investment)
?
– Brownfield (existing)
3▪ “Turnaround” of aided schools by
enhancing the PPP model
?
4▪ Running government schools with
government teachers
(“management and quality
support”)
5▪ Holistic system level partnership
with the government
?
Different
implications
for scale,
quality and
effort (set-up
effort,
sustaining
effort) in
each case
?
McKinsey & Company
| 5

7. Mumbai School Excellence Program (SEP) example – unique partnership
Municipal Corporation of
Greater Mumbai
Related
government
bodies
4 implementation partners
selected out of 62 entities
MC
AMC
for Urdu medium
SSA
DMC
EO
Maharashtra
SCERT
for Marathi medium
Zonal DEO’s
Text book
bureau
DEO, SEP
In-charge
DEO central
SI
AO
BO
BO SEP
In-charge
HM
Teachers
Overall program design and program management
Funding and governance
McKinsey & Company
| 6

8. The Planning Commission has cited SEP in the country's 12th 5-year plan
draft as an "innovative example" recommended for other urban bodies
McKinsey & Company
| 7

9. Asian countries dominate the top scores in all the three subjects in PISA
2012
1 Reading
Rank
Country
1
Shanghai-China
2
2 Mathematics
Mean
score
Rank
Country
570
1
Shanghai-China
Hong Kong-China
545
2
3
Singapore
542
4
Japan
5
6
3 Science
Mean
score
Mean
score
Rank
Country
613
1
Shanghai-China
580
Singapore
573
2
Hong Kong-China
555
3
Hong Kong-China
561
3
Singapore
551
538
4
Chinese Taipei
560
4
Japan
547
Korea
536
5
Korea
554
5
Finland
545
Finland
524
6
Macao-China
538
6
Estonia
541
7
Chinese Taipei
523
7
Japan
536
7
Korea
538
8
Canada
523
8
Liechtenstein
535
8
Viet Nam
528
9
Ireland
523
9
Switzerland
531
9
Poland
526
10
Poland
518
10
Netherlands
523
10
Canada
525
11
Liechtenstein
516
11
Estonia
521
11
Liechtenstein
525
12
Estonia
516
12
Finland
519
12
Germany
524
13
Australia
512
13
Poland
518
13
Chinese Taipei
523
14
New Zealand
512
14
Canada
518
14
Ireland
522
15
Netherlands
511
15
Belgium
515
15
Netherlands
522
16
Macao-China
509
16
Germany
514
16
Australia
521
17
Switzerland
509
17
Viet Nam
511
17
Macao-China
521
18
Belgium
509
18
Austria
506
18
New Zealand
516
19
Germany
508
19
Australia
504
19
Switzerland
515
20
Viet Nam
508
20
Ireland
501
20
United Kingdom
514
21
France
505
21
Slovenia
501
21
Slovenia
514
22
Norway
504
22
New Zealand
500
22
Czech Republic
508
23
United Kingdom
499
23
Denmark
500
23
Austria
506
24
United States
498
24
Czech Republic
499
24
Belgium
505
25
Denmark
496
25
France
495
25
Latvia
502
Source: PISA 2012 Results
McKinsey & Company
| 8

10. Qatar has shown the biggest improvement in scores in all the three subjects
followed by Kazakhstan that showed improvement in Maths and Science
Mathematics
Reading
Mean score
in PISA 2012
Annualised
change
in score points
OECD average
494
-0.3
Qatar
376
9.2
Kazakhstan
432
9
Malaysia
421
Albania
Romania
Science
Mean score
in PISA 2012
OECD average
496
Qatar
Serbia
8.1
394
445
Shanghai-China
Israel
Annualised
change
in score points
Mean score
in PISA 2012
Annualised
change
in score points
0.3
OECD average
501
0.5
388
12
Kazakhstan
425
8.1
446
7.6
Turkey
463
6.4
Singapore
542
5.4
Qatar
384
5.4
5.6
Peru
384
5.2
Poland
526
4.6
4.9
Montenegro
422
5
Thailand
444
3.9
613
4.2
Shanghai-China
570
4.6
Romania
439
3.4
466
4.2
Chinese Taipei
523
4.5
Singapore
551
3.3
Bulgaria
439
4.2
Turkey
475
4.1
Italy
494
3
Brazil
391
4.1
Albania
394
4.1
Israel
470
2.8
Singapore
573
3.8
Tunisia
404
3.8
Korea
538
2.6
Turkey
448
3.2
Israel
486
3.7
Japan
547
2.6
Mexico
413
3.1
Chile
441
3.1
Portugal
489
2.5
Tunisia
388
3.1
Colombia
403
3
Argentina
406
2.4
Portugal
487
2.8
Poland
518
2.8
Ireland
522
2.3
Italy
485
2.7
Estonia
516
2.4
Brazil
405
2.3
Poland
518
2.6
Hong Kong-China
545
2.3
Albania
397
2.2
Serbia
449
2.2
Indonesia
396
2.3
Tunisia
398
2.2
Chile
423
1.9
Latvia
489
1.9
Hong Kong-China
555
2.1
Chinese Taipei
560
1.7
Germany
508
1.8
Latvia
502
2
Montenegro
410
1.7
Portugal
488
1.6
Bulgaria
446
2
Germany
514
1.4
Japan
538
1.5
Indonesia
382
1.9
Hong Kong-China
561
1.3
Liechtenstein
516
1.3
Shanghai-China
580
1.8
Argentina
388
1.2
Croatia
485
1.2
Colombia
399
1.8
Korea
554
1.1
Brazil
410
1.2
Macao-China
521
1.6
Russian Federation
482
1.1
Russian Federation
475
1.1
Hungary
494
1.6
Source: PISA 2012 Results
McKinsey & Company
| 9

11. Sweden, Finland, New Zealand and Australia are among the biggest drops
in all the three subjects
Mathematics
Reading
Mean score
in PISA 2012
Annualised
change
in score points
Science
Mean score
in PISA 2012
Annualised
change
in score points
OECD average
494
-0.3
OECD average
496
0.3
Sweden
478
-3.3
Malaysia
398
Finland
519
-2.8
Sweden
483
New Zealand
500
-2.5
Slovenia
Czech Republic
499
-2.5
Australia
504
-2.2
Iceland
493
Denmark
500
Netherlands
Mean score
in PISA 2012
Annualised
change
in score points
OECD average
501
0.5
-7.8
Sweden
485
-3.1
-2.8
Finland
545
-3
481
-2.2
Slovak Republic
471
-2.7
Uruguay
411
-1.8
New Zealand
516
-2.5
Finland
524
-1.7
Uruguay
416
-2.1
-2.2
Australia
512
-1.4
Jordan
409
-2.1
-1.8
Iceland
483
-1.3
Iceland
478
-2
523
-1.6
New Zealand
512
-1.1
Indonesia
382
-1.9
Belgium
515
-1.6
Canada
523
-0.9
Hungary
494
-1.6
France
495
-1.5
Ireland
523
-0.9
Chinese Taipei
523
-1.5
Canada
518
-1.4
France
505
0
Canada
525
-1.5
Slovak Republic
482
-1.4
Netherlands
511
0.1
Malaysia
420
-1.4
Lithuania
479
-1.4
Belgium
509
0.1
Greece
467
-1.1
Uruguay
409
-1.4
Denmark
496
0.1
Czech Republic
508
-1
Hungary
477
-1.3
Norway
504
0.1
Australia
521
-0.9
Costa Rica
407
-1.2
Slovak Republic
463
0.1
Belgium
505
-0.8
Ireland
501
-0.6
Austria
490
0.2
Austria
506
-0.8
Slovenia
501
-0.6
Spain
488
0.3
Slovenia
514
-0.8
United Kingdom
494
-0.3
United States
498
0.3
Costa Rica
429
-0.6
Luxembourg
490
-0.3
Jordan
399
0.3
Netherlands
522
-0.5
Norway
489
-0.3
Bulgaria
436
0.4
Croatia
491
-0.3
Austria
506
0
Czech Republic
493
0.5
Montenegro
410
-0.3
Spain
484
0.1
Italy
490
0.5
United Kingdom
514
-0.1
Jordan
386
0.2
Greece
477
0.5
Liechtenstein
525
0.4
Liechtenstein
535
0.3
United Kingdom
499
0.7
Denmark
498
0.4
Source: PISA 2012 Results
McKinsey & Company
| 10

12. Conversations around the world in the last two weeks
“Shanghai
solidified its
lead since its
entry last
cycle”
“Massive drop for
Finland (which
previously led PISA for
multiple cycles)”
“Big surge for
Poland (story there
getting better with
every cycle)”
“Meaningful gain for
Brazil, but local media
concerned with increases
flattening (though recent
efforts' children still to see
PISA)”
“Vietnam enters
at the level of
Germany (very
impressive)”
“Lithuania
(previous
high-flyer)
now falls
to the level
of the US”
“Singapore
regains
ground it lost
last cycle”
“Big drop in
Sweden, lot of
local media
reaction”
McKinsey & Company
| 11

13. Example of tracking school processes – sample of 150 government schools
McKinsey & Company
| 12

14. A few recommendations
Recommendations
1  Launch annual national assessment of student learning – standardized,
third party based, low stakes.
For the
Central
Government
2  Develop 2-3 possible templates for a financially sustainable brownfield (i.e.
with current infra) PPP policy, that includes high quality selection and
evaluation of players. States can then use this template as a guiding post
and customize to their needs.
1  Create and start implementation of high quality public-private-partnership
For State
Governments
policies – financially sustainable, high quality selection, outcome
evaluation
2  Get headmasters to do self-assessment of schools on a set of well-defined
processes and start at-scale dialogues with the administration on this
basis. Use the national standardized assessments or launch state level
versions to get a view of student learning.
3  Launch city by city, and district by district holistic school system
transformation efforts with many of the above elements and selective welldefined use of private expertise
1  Players: develop capabilities to participate in PPPs, if you really want to
For private
players and
donors
serve under-privileged children at scale.
2  Donors: move a lot more to "catalytic funding"; e.g. funding learning
assessments, making PPPs viable, helping launch system transformation,
rather than direct support
McKinsey & Company
| 13

15. End
McKinsey & Company
| 14

16. The Mumbai PPP policy has been established through a long journey
2008-09 – Emphasis of
the need
▪ School adoption with
MCGM teachers by
Naandi
▪
2010-12 – Integration
with school excellence
program
▪ Policy set in the
broader context of
SEP and refined to
ensure full integration
2012-13 – Formal
approvals
▪ MC signing
▪
▪
▪
Education committee
Standing committee
Corporation (legislation)
Active interaction with
AMC/DMC on need for a
PPP policy
July/Aug 2013
onwards –
Implementation
starting
April
2013
onwards
2012-13
2010-12
2011-12
2010,
Jan,
June
2008-09
2002-03 – Early initiation
▪ School adoption by Akanksha
and Muktangan
▪
2002-03
Early attempts to get
“standard norms” with MCGM
2010, Jan, June –
Development of the policy
▪ Committee set up by AMC
▪ Active inputs from global
2011-12 – Stakeholder
syndication; e.g.
▪ New AMC, MC and others
▪ Education and Standing
Committee Chairs
▪ Several NGO leaders
experts
McKinsey & Company
| 15

17. There is a gradual PPP schools movement starting around the country
Several state and city governments
considering PPP (not exhaustive)
However, there are several challenges to
be resolved
▪
Existing
policies
Policies
taking shape Early interest
▪
▪
▪
▪
▪
▪
▪
▪
▪
Mumbai
Punjab
Rajasthan
MHRD
…others
Policies likely to require continued partial
donor funding
– Infrastructure Rs. 12–15,000/child/
South Delhi Several other
interested
Gujarat
governments
Punjab
including
…others
Thane, Bihar,
etc.
annum, with teacher salary same as
government
– No fee-paying students
– No alternative uses of infrastructure
▪
Very few private players with the
combination of “keenness to serve underprivileged children”, “ability to operate at
scale” and “financial wherewithal”
▪
Several challenges in implementation
Two significant forms of PPP already exist
▪
▪
Private-aided schools
25% reservation for under-privileged
children under RTE
SOURCE: Source
McKinsey & Company
| 16