OECD Reviews of School Resources

# Responsive School Systems

CONNECTING FACILITIES, SECTORS
AND PROGRAMMES FOR STUDENT SUCCESS

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OECD
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# Responsive School Systems

CONNECTING FACILITIES, SECTORS AND PROGRAMMES FOR STUDENT SUCCESS

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OECD

BETTER POLICIES FOR BETTER LIVES
This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of OECD member countries.

This document, as well as any data and any map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

**Please cite this publication as:**

OECD (2018), *Responsive School Systems: Connecting Facilities, Sectors and Programmes for Student Success*, OECD Reviews of School Resources, OECD Publishing, Paris.

https://doi.org/10.1787/9789264306707-en

ISBN 978-92-64-30669-1 (print)

ISBN 978-92-64-30670-7 (pdf)

Series: OECD Reviews of School Resources

ISSN 2413-4333 (print)

ISSN 2413-3841 (online)

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© OECD 2018

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## Foreword

Evolving educational objectives, changing student needs and demographic developments require school systems to be highly responsive to new patterns of demand and adapt their provision accordingly. The organisation of school facilities, sectors and programmes plays a key role in doing so and in providing students with a high-quality education where they need it. This report aims to assist governments in efficiently and equitably organising school infrastructures and services to achieve their education policy objectives. It offers a systematic analysis of the governance of school networks, their adaptation to demographic changes and student needs in urban, rural and remote areas, as well as the vertical and horizontal co-ordination of education services across levels, sectors and programmes.

This report is the second in a series of thematic comparative reports, which brings together the findings of a major OECD project on the effective use of school resources, the *OECD Review of Policies to Improve the Effectiveness of Resource Use in Schools (School Resources Review)*. The first report of the series was published in 2017 and analysed funding policies (*The Funding of School Education: Connecting Resources and Learning*). The next report will focus on the management of human resources in school education. The School Resources Review was launched in 2013 to help countries learn from one another by exchanging best practices, and to gather and disseminate evidence on effective school resources policies. The project highlights issues and explores ideas for policy development that may be difficult to raise in national debates. It seeks to inform discussions among stakeholders with new and different perspectives that are based on research and evidence from different countries.

Like the other thematic comparative reports of the series, this publication draws extensively on the experience of the nineteen school systems that were actively engaged in the preparation of this report. They vary significantly in their economic and social contexts, and illustrate a wide range of approaches to governing and adapting their school networks, and co-ordinating educational levels and sectors. This approach allows this report to take a comparative perspective on key policy issues. Although the analysis also considers the broader research evidence, and evidence from other OECD and partner countries, it nevertheless is important to acknowledge that the report – to a certain extent – reflects the practices and priorities of the participating education systems. The country examples cited in the report should not be assumed to reflect international best practices, but rather serve to expose policy makers to a wide range of country experiences, good practices and lessons learned. In addition, readers should bear in mind that policy initiatives that work well in the context of one school system are not necessarily transferable to others. The review has attempted to be sensitive to this by analysing policies pertaining to the organisation of school facilities, sectors and programmes in relation to the values, vision and organisation of different countries’ school systems, as well as their broader economic, social and political contexts.
This report was co-authored by Luka Boeskens (co-ordinator), David Liebowitz, Gonçalo Lima and Thomas Radinger with analytical contributions from Alfonso Echazarra from the OECD Directorate for Education and Skills. The work on this report was led by project manager Deborah Nusche (January 2017 to March 2018) and interim project manager Cláudia Sarrico (since April 2018) under the responsibility of Paulo Santiago, Head of the Policy Advice and Implementation Division. Eléonore Morena provided key administrative and logistical support for the review and editorial support during the early stages of the report's production. Claire Berthelier was responsible for the copy-editing, layout and final formatting of the report. Henri Pearson co-ordinated the report's production and supported its communication.
Acknowledgements

This report would not have been possible without the support of the 19 education systems that are actively engaged in the School Resources Review. Participating countries committed substantial resources and opened their school resource policies to review and debate. National co-ordinators (listed in Annex B) played a key role in this exchange, enriching discussions with their insights from diverse contexts and co-ordinating their countries' participation in the project.

The OECD Education Policy Committee (EDPC), the Group of National Experts (GNE) on School Resources, and the delegates to both bodies provided essential support and analytical guidance since the inception of the project, and offered valuable feedback on drafts of this document. Leading up to the publication of the report, the GNE was chaired by Mr Jørn Skovsgaard, Senior Advisor of the Danish Ministry of Education; and had as vice-chairs Ms Marie-Anne Persoons, International Policy Advisor in the Strategic Policy Support Division of the Flemish Ministry of Education and Training and Mr Matej Šiškovič, Director of the Educational Policy Institute at the Slovak Ministry of Education, Science, Research and Sports. The dedication and leadership of the chair and vice-chairs is gratefully acknowledged.

The School Resources Review and this report also benefited from the active involvement of different stakeholders with an interest in education. The Business and Industry Advisory Committee to the OECD (BIAC) and the Trade Union Advisory Committee to the OECD (TUAC) participated as permanent observers in meetings of the GNE on School Resources and had the opportunity to comment on drafts of this report. During individual country reviews, students, parents, teachers, school leaders, researchers and employers made their time available to meet with review teams and to provide their perspective on school resource policy issues.

This report was prepared within a broader framework of collaboration and a partnership with the European Commission (EC), which was established for the OECD School Resources Review. The support of the EC has covered part of the participation costs for members of the European Union Erasmus+ programme and contributed significantly to the preparation of a series of thematic comparative reports, including this publication. The European Commission's support for the School Resources Review is gratefully acknowledged. The review team would like to thank in particular colleagues at the EC Directorate-General for Education and Culture, Mónika Képe-Holmberg (Unit A.2: Education and Training in Europe 2020 under the leadership of Denis Crowley), Marco Montanari (Unit B.2: Schools and Multilingualism under the leadership of Michael Teutsch) and many others whose contributions are acknowledged in Annex B.

In addition, the Review's collaboration with Eurocities, the European Agency for Special Needs and Inclusive Education, Eurydice, the Inter-American Development Bank (IDB), the United Nations Educational, Scientific and Cultural Organization (UNESCO), UNESCO's Global Education Monitoring Report, and the World Bank created synergies between the work undertaken by different organisations and we are grateful for the valuable input they provided into the project and this report.
The review is equally indebted to the many experts who contributed to the country review visits and the resulting country review reports that are part of the publication series *OECD Reviews of School Resources* (for the composition of the country review teams, see Annex B). Their expertise, analytical contributions to the country-specific reports and professional exchanges with OECD Secretariat members provided the foundation for the comparative perspective of this report. The background reports prepared by participating countries provided a further important source of information and thanks are due to all those who contributed to their production. In addition to this publication, by July 2018, the review had generated 16 reports by participating countries, 11 reports by external review teams and multiple research papers (all available on the OECD website at www.oecd.org/education/schoolresourcesreview.htm).

Within the OECD Directorate for Education and Skills, the work on this thematic report was carried out by the Policy Advice and Implementation Division under the leadership of Paulo Santiago. David Liebowitz, Deborah Nusche (project manager since December 2016), Thomas Radinger, Paulo Santiago (project manager between January 2013 and July 2016) and Claire Shewbridge assumed leadership for the individual country reviews on which this report is based. Important contributions to the country reviews were also made by Anna Pons (who led the review of Kazakhstan), Tracey Burns (who participated in the review of Uruguay), Alfonso Echazarra (who participated in the review of Colombia) and Gonçalo Lima (who participated in the review of Portugal). Cláudia Sarrico provided guidance for the completion of this report as the project's interim manager since April 2018. Claire Berthelier was responsible for the copy-editing, layout and final formatting of this report. Eleonore Morena provided editorial support during the early stages of the report's production and took responsibility for the administrative work within the review, the organisation of meetings and communication with the countries until May 2018. The team would also like to thank Andreas Schleicher and Yuri Belfali for their overall guidance and support for the project.

Gratitude is also extended to current and former team members who supported the work of the project at different stages. Macarena Ares Abalde, Francesc Masdeu Navarro and Alette Schreiner provided substantial input into the project's knowledge base and Samuel Kim supported the project's preparatory work on human resource policies. Luka Boeskens, Tala Fakharzadeh, Anna Gromada, Gaëlle Leduc, Gonçalo Lima, Antoine Papalia, Kerstin Schophol and Oliver Sieweke provided research assistance and summarised key areas of the literature on school resources during their internships with the review. Joris Ranchin led the initial preparation of the qualitative data collection on countries' approaches to school funding.

The OECD Review team is grateful to numerous colleagues within the OECD who provided valuable input and advice at different stages of the report's production. In particular, the report benefited from collaboration with the Programme for International Student Assessment (PISA), the Early Childhood Education and Care (ECEC) team within the Early Childhood and Schools Division, the Vocational Education and Training and adult learning team within the Skills Beyond School Division, the Strength Through Diversity project, the Learning Environments Evaluation Programme (LEEP), the INES Network for the Collection and the Adjudication of System-Level Descriptive Information on Educational Structures, Policies and Practices (NESLI), the Centre for Educational Research and Innovation's (CERI) work on Governing Complex Education Systems and Strategic Education Governance, and the Economic Analysis, Statistics and Multi-Level Governance Section within the Centre for Entrepreneurship, SMEs, Regions and Cities.
Table of contents

Abbreviations and acronyms.................................................................................................................. 11

Executive summary ................................................................................................................................. 13

Responsive school systems: Main findings and policy pointers ................................................................. 15

The need for responsive school systems........................................................................................................ 15

Governing the school network.................................................................................................................. 16

Adapting the school network in urban, rural and remote areas................................................................ 19

Co-ordinating educational levels, sectors and programmes................................................................ 22

Chapter 1. Introduction ................................................................................................................................. 27

1.1. Why physical resources in education matter.................................................................................. 30

1.2. Why the organisation of educational levels, sectors and programmes matters................................. 30

1.3. Trends affecting the organisation of school facilities, sectors and programmes ................................. 31

1.4. The context for this report.................................................................................................................. 37

1.5. Country participation and sources of information ........................................................................ 39

1.6. The structure of this report.................................................................................................................. 40

References........................................................................................................................................................................ 41

Chapter 2. Governing the school network........................................................................................................ 43

2.1. Distribution of responsibilities for the governance of school networks ............................................ 44

2.2. Central-level steering and co-ordination for effective network planning ........................................ 50

2.3. Network planning at the regional and local levels................................................................................ 77

2.4. Financing the development of the school network ................................................................................ 86

2.5. Policy options .................................................................................................................................................. 97

References........................................................................................................................................................................ 103

Annex 2.A. Mechanisms for capital funding ................................................................................................ 111

Country notes.................................................................................................................................................................... 117

Chapter 3. Adapting the school network to changing needs in urban, rural and remote areas 121

3.1. Contextual factors affecting the organisation of school networks in rural and urban areas ..... 122

3.2. Challenges and opportunities for the efficient and equitable provision of education in rural areas .................................................................................................................................................................................. 129

3.3. Strategies to adapt rural school networks with excess capacity........................................................ 136

3.4. Addressing efficiency, quality and equity challenges in remote rural schools .................................... 161

3.5. Challenges and opportunities for the efficient and equitable provision of education in urban areas .................................................................................................................................................................................. 167

3.6. Strategies to adapt urban school networks................................................................................................ 177

3.7. Policy options .................................................................................................................................................. 189

References........................................................................................................................................................................ 197

Annex 3.A. Supplementary material................................................................................................................ 213

Country notes.................................................................................................................................................................... 214
Chapter 4. Co-ordinating educational levels and sectors to improve student trajectories........ 219

4.1. Characteristics of vertical and horizontal educational pathways in OECD review countries... 220

4.2. Vertical co-ordination and students' transitions across levels of education ................................. 223

4.3. Horizontal co-ordination and students' transitions across parallel pathways ................................. 239

4.4. Policy options .................................................................................................................................................. 265

References.................................................................................................................................................. 277

Annex A. Glossary.................................................................................................................. 289

Levels of education according to UNESCO's International Standard Classification of Education (ISCED 2011) .................................................................................................................................................. 289

Levels of governance and administration .................................................................................................... 290

Public and private schools .................................................................................................................................... 291

Current and capital expenditure................................................................................................................................ 291

Allocation mechanisms for capital expenditure.................................................................................... 292

Bases for the allocation of funding for capital expenditure .................................................................... 292

Annex B. How the School Resources Review was conducted .................................................... 293

Governance of the review ................................................................................................................................ 293

National co-ordinators ................................................................................................................................ 293

Collaboration with the European Commission .................................................................................... 294

Country Background Report ................................................................................................................................ 295

Qualitative data collection ................................................................................................................................ 295

Country review reports ................................................................................................................................ 296

Analytical background papers................................................................................................................................ 299

Dissemination .................................................................................................................................................. 299

Tables

Table 2.1. Responsibility for the opening and closure of public lower secondary schools, 2011........ 46

Table 4.1. School pathways in OECD School Resources Review countries........................................ 222

Annex Table 2.A.1. Mechanisms for the distribution of capital expenditure........................................ 111

Annex Table 3.A.1. Public support for school transport, ISCED 1-3, 2016 ........................................ 213

Annex Table 3.A.2. Material resources in rural and urban schools ................................................................. 217

Annex Table 3.A.3. Teaching in rural and urban schools ........................................................................ 218

Table B.1. National co-ordinators in participating countries .................................................................... 294

Table B.2. European Commission contribution to country reviews................................................................. 295

Table B.3. Country contacts for the qualitative data collection ................................................................. 296

Table B.4. Country reviews and team members.................................................................................... 298

Figures

Figure 1.1. Framework to analyse the organisation of educational facilities and services.................. 29

Figure 1.2. Historical development and projection of the school-age population across OECD countries, in Belgium and Lithuania (1990-2020)................................................................................ 32

Figure 1.3. Change in the absolute youth population (0-14) living in predominantly rural and intermediate areas between 2001 and 2015.................................................................................. 33
<table><tr><td>Figure 2.1. Percentage of decisions on planning and structures taken at each level of government in public lower secondary education, 2017</td><td>48</td></tr><tr><td>Figure 2.2. Mean school size at the upper and lower secondary levels, 2015</td><td>56</td></tr><tr><td>Figure 2.3. Size of schools attended by 15-year-old students, 2015</td><td>57</td></tr><tr><td>Figure 2.4. Class size and teacher-class ratio in primary and lower secondary education, 2015</td><td>59</td></tr><tr><td>Figure 2.5. Average proportions of capital expenditure, staff compensation and other current expenditure from public and private sources in primary education, 2011-2014</td><td>87</td></tr><tr><td>Figure 3.1. The rural-urban gap and average science performance, 2015</td><td>124</td></tr><tr><td>Figure 3.2. Trends in the rural population share</td><td>125</td></tr><tr><td>Figure 3.3. Urban-rural differences in science performance, 2015</td><td>126</td></tr><tr><td>Figure 3.4. School size in rural and urban areas, 2015</td><td>128</td></tr><tr><td>Figure 3.5. Differences in rural and urban schools' student-teacher ratio and class size, 2015</td><td>131</td></tr><tr><td>Figure 3.6. Share of students with an immigration background by school location, 2015</td><td>169</td></tr><tr><td>Figure 3.7. Professional development needs of urban and rural teachers, 2013</td><td>170</td></tr><tr><td>Figure 3.8. Degree of school competition by location, 2015</td><td>172</td></tr><tr><td>Figure 3.9. Academic inclusion across schools in science performance by location, 2015</td><td>173</td></tr><tr><td>Figure 3.10. Social inclusion across schools by location, 2015</td><td>173</td></tr><tr><td>Figure 4.1. Employment rates of 25-34 year-olds, by educational attainment and programme orientation, 2016</td><td>224</td></tr><tr><td>Figure 4.2. Percentage of 15-year-old students who reported having accessed different types of career guidance, 2012</td><td>229</td></tr><tr><td>Figure 4.3. Students' socio-economic profile and year repetition, 2015</td><td>231</td></tr><tr><td>Figure 4.4. Cost of grade repetition, 2009/10</td><td>232</td></tr><tr><td>Figure 4.5. Change in the year repetition rate between 2009 and 2015</td><td>233</td></tr><tr><td>Figure 4.6. Share of students enrolled in upper secondary VET, 2015</td><td>240</td></tr><tr><td>Figure 4.7. Annual expenditure per student by educational institutions in general and vocational secondary education, 2014</td><td>241</td></tr><tr><td>Figure 4.8. Completion rates and track-switching of upper secondary students, 2015</td><td>255</td></tr></table>

## Boxes

<table><tr><td>Box 1.1. The OECD School Resources Review</td><td>37</td></tr><tr><td>Box 2.1. Central-level strategic steering of local school network reform in Lithuania</td><td>51</td></tr><tr><td>Box 2.2. Central guidelines for efficient school construction in England</td><td>52</td></tr><tr><td>Box 2.3. Reconciling incentives for network efficiency with funding for small schools in Estonia</td><td>54</td></tr><tr><td>Box 2.4. Trade-offs in decisions concerning the use of teacher resources</td><td>60</td></tr><tr><td>Box 2.5. Contracting private providers to address acute capacity shortages in Colombia</td><td>66</td></tr><tr><td>Box 2.6. Controlled choice reforms in the Belgian Communities</td><td>71</td></tr><tr><td>Box 2.7. Monitoring the school network in the Czech Republic</td><td>74</td></tr><tr><td>Box 2.8. Examples of automatic network review processes in the United Kingdom</td><td>76</td></tr><tr><td>Box 2.9. Addressing a lack of administrative capacity through collaboration and consolidation</td><td>81</td></tr><tr><td>Box 2.10. Recentralisation of upper secondary education in Estonia</td><td>84</td></tr><tr><td>Box 2.11. Initiatives to increase the efficiency of non-staff spending in English schools</td><td>88</td></tr><tr><td>Box 2.12. Examples of targeted infrastructure investment programmes</td><td>90</td></tr><tr><td>Box 2.13. Capital funding for private providers in the Flemish and French Communities of Belgium</td><td>94</td></tr><tr><td>Box 3.1. Definitions of "urban" and "rural" schools used in this report</td><td>123</td></tr><tr><td>Box 3.2. School associations in Belgium (Flemish Community)</td><td>139</td></tr><tr><td>Box 3.3. Centralised provision of specialist services through regional counselling centres in Estonia</td><td>141</td></tr><tr><td>Box 3.4. Rural micro centres as platforms for teacher collaboration in Chile</td><td>142</td></tr></table>
<table><tr><td>Box 3.5. Clustering as part of school network consolidation in Portugal</td><td>146</td></tr><tr><td>Box 3.6. Consultation procedure for school closures in Scotland</td><td>154</td></tr><tr><td>Box 3.7. Technical and financial support for rural and remote schools in Chile</td><td>162</td></tr><tr><td>Box 3.8. Using ICT to enhance students' access to learning resources in rural school networks</td><td>164</td></tr><tr><td>Box 3.9. Enabling parental school governance in Poland</td><td>166</td></tr><tr><td>Box 3.10. Optimisation of surface area use in the French Community of Belgium</td><td>179</td></tr><tr><td>Box 3.11. Public-Private Partnerships (PPP) for school infrastructure investments in the Flemish Community of Belgium</td><td>183</td></tr><tr><td>Box 3.12. Reducing segregation through student transfers and transport in Copenhagen</td><td>185</td></tr><tr><td>Box 3.13. The London Challenge and City Challenge</td><td>187</td></tr><tr><td>Box 4.1. Reducing year repetition and early school leaving using data and people</td><td>238</td></tr><tr><td>Box 4.2. The establishment of regional multi-function and vocational training centres in Lithuania</td><td>245</td></tr><tr><td>Box 4.3. Towards a more comprehensive system - New Secondary Schools in Austria</td><td>247</td></tr><tr><td>Box 4.4. Vocational programmes in Northern European countries</td><td>251</td></tr><tr><td>Box 4.5. Reforming special education provision in the Flemish Community of Belgium</td><td>256</td></tr><tr><td>Box 4.6. Cultural barriers to the inclusion of SEN students</td><td>260</td></tr></table>
Abbreviations and acronyms

<table><tr><td>CBR</td><td>Country Background Report</td></tr><tr><td>DBFM</td><td>Design-Build-Finance-Maintain</td></tr><tr><td>EC</td><td>European Commission</td></tr><tr><td>ECEC</td><td>Early Childhood Education and Care</td></tr><tr><td>ERDF</td><td>European Regional Development Fund</td></tr><tr><td>ESCS</td><td>Economic, Social and Cultural Status</td></tr><tr><td>ESF</td><td>European Social Fund</td></tr><tr><td>EU</td><td>European Union</td></tr><tr><td>GDP</td><td>Gross Domestic Product</td></tr><tr><td>GIS</td><td>Geographic Information System</td></tr><tr><td>GNE</td><td>Group of National Experts</td></tr><tr><td>ICT</td><td>Information and Communication Technology</td></tr><tr><td>IDB</td><td>Inter-American Development Bank</td></tr><tr><td>IIEP-UNESCO</td><td>UNESCO International Institute for Educational Planning ISCED</td></tr><tr><td>ILO</td><td>International Labour Organisation</td></tr><tr><td>ISCED</td><td>International Standard Classification of Education</td></tr><tr><td>OECD</td><td>Organisation for Economic Co-operation and Development</td></tr><tr><td>PIACC</td><td>OECD Programme for the International Assessment of Adult Competencies</td></tr><tr><td>PISA</td><td>OECD Programme for International Student Assessment</td></tr><tr><td>PPP</td><td>Public-Private Partnership</td></tr><tr><td>SEN</td><td>Special Educational Needs</td></tr><tr><td>TALIS</td><td>OECD Teaching and Learning International Survey</td></tr><tr><td>TRC</td><td>Teacher Resource Centre</td></tr><tr><td>UNESCO</td><td>United Nations Educational, Scientific and Cultural Organization</td></tr><tr><td>VET</td><td>Vocational Education and Training</td></tr></table>
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Executive summary

This report is the second in a series of thematic comparative reports bringing together the findings of the OECD Review of Policies to Improve the Effectiveness of Resource Use in Schools (School Resources Review). It provides analyses and policy options to assist governments in promoting educational quality, equity and efficiency through the organisation of school facilities and education services in a context of changing demand for school places and evolving student needs. Following the introduction, the report's three main chapters focus on the thematic areas below:

* Chapter 2: How the distribution of responsibilities for the school network and different steering tools can contribute to the effective organisation, distribution and size of educational facilities.

* Chapter 3: How the school network can be adapted to demographic changes and student needs to support policy objectives in urban, rural and remote areas.

* Chapter 4: How education services can be co-ordinated across levels, sectors and programmes to support students' vertical and horizontal transitions.

Chapter 1 introduces the trends that motivate the report and provides the context for the subsequent analyses. Countries are confronted with demographic trends, economic and social changes, as well as new and evolving educational objectives. Adjusting educational infrastructures and the services they deliver in response to these trends is crucial to ensure that students can continue to benefit from a high-quality education where they need it. Although physical resources account for a relatively small share of total educational expenditure in most school systems, they are critical to enable all actors in the system to work as effectively as possible towards students' success.

The governance of responsive school networks requires effective steering and co-ordination

Chapter 2, *Governing the school network*, analyses the roles and responsibilities different actors assume in governing a system's school facilities and how the relationships between them affect the system's capacity to respond to changing educational demand and student needs. As OECD school systems have grown in administrative complexity, they are increasingly characterised by multi-actor and multi-level governance arrangements. These developments generate both opportunities and challenges for the governance of school networks and depend on an adequate allocation of responsibilities and strong co-ordination between national, regional and local authorities. Education authorities have a range of steering and co-ordination mechanisms at their disposal that they should use to facilitate the strategic planning of school networks at the central, regional and local levels. To ensure that the school network is responsive to the needs of today's and tomorrow's learners, the chapter recommends that reforms should seek to: invest planning authority at the appropriate level of government and strengthen horizontal co-ordination mechanisms; build capacity for school network planning supported by the collection and maintenance of high-quality data; balance incentives for network efficiency with the need
to maintain high-quality provision in small schools and remote areas; and ensure
equitable access to capital funding.

*Efficient regional responses to changing educational demand are guided by equity and students' needs*

Demographic shifts, regional economic developments and changing student needs have generated costly mismatches between educational demand and the supply of school places in many OECD countries. Chapter 3, *Adapting the school network to changing needs in urban, rural and remote areas*, analyses efficient responses to this challenge and assumes a territorial perspective to acknowledge the significant heterogeneity that many countries face across different parts of their school network. In this context, responding to changing demand and student needs requires strategies that are sensitive to local contexts and take educational quality, equity and student well-being as their guiding principles. To do so, authorities need to identify and address equity concerns early on, engage relevant stakeholders and carefully evaluate ongoing network reforms. School network consolidation may be unavoidable to guarantee adequate learning environments for all students. Nevertheless, systems need to carefully weigh its costs and benefits and consider the potential efficiency gains afforded by sharing resources across providers, school clustering or the strategic redistribution of education services across sites. To adapt school networks to changing demand and student needs, the chapter recommends that reforms should aim to: consider a range of strategies to enhance the efficiency of school networks with overcapacities; compensate for efficiency, quality and equity challenges experienced by remote schools; and strategically respond to capacity shortages in urban school networks.

*Educational levels, sectors and programmes must be aligned to support students' vertical and horizontal transitions*

Chapter 4, *Co-ordinating educational levels and sectors to improve student trajectories*, examines the distribution of the educational offer across levels and pathways in schools and the co-ordination between its different components. A failure to effectively co-ordinate the educational offer risks the duplication or fragmentation of services. It also creates barriers to students' smooth progression across levels and their transition into post-secondary education or the labour market. To improve student trajectories, systems need to consider both the vertical co-ordination of levels and grades as well as the horizontal co-ordination of parallel sectors and programmes. Providing a variety of educational pathways has the potential to more closely match each student's interests and needs but also risks increasing segregation and a fragmentation of the educational offer. Tackling duplications between programmes, enhancing their alignment with post-secondary opportunities and guiding students to programmes that correspond to their interests and needs thus plays an important role in reaping the benefits of a diversified offer. To improve the co-ordination of educational levels, sectors and programmes, the chapter also recommends that reforms should seek to: enable students' smooth vertical progression by improving collaboration across levels and addressing grade repetition and drop out; ensure greater permeability between educational pathways; and strengthen the identification and supportive placement of students with special educational needs.
# Responsive school systems: Main findings and policy pointers

## The need for responsive school systems

A number of demographic trends, economic and social changes, as well as new and evolving educational objectives have required countries to respond and adjust the way they organise their school infrastructure and the education services it delivers to meet their students' needs. Demographic shifts, regional and international migration have caused a drastic decline in some countries' school-age population, reinforced regional variations in the demand for school places and led to greater student diversity. Changing family patterns and increased female labour market participation have raised the demand for early childhood education and care, while changing labour market needs have created pressures for vocational education and training (VET) and other sectors to adapt their educational offer. Finally, evolving educational objectives, including a strong commitment to inclusion as part of the UN's Sustainable Development Goals, require the adaptation of school services and new forms of collaboration across sectorial lines. These trends make the organisation of school facilities and their educational offer a central issue for the effective use of school resources.

Beyond these developments, multiple considerations have motivated this report:

* Providing adequate facilities where they are needed is a critical condition for teachers to create effective learning environments and enable their students to succeed. Although physical resources account for a relatively small share of total educational expenditure, efficiently organised school networks can enable all actors in the system to work more effectively towards students' success.

* The size and distribution of school facilities is intricately connected to their educational goals and the services they provide. The report's holistic perspective seeks to do this justice by analysing the organisation of school infrastructure alongside that of educational levels, sectors and programmes. It can thereby highlight the synergies that may arise from fostering or re-thinking the connections between schools and the various elements of their educational offer.

* Efficiency alone is not the main concern of school systems but needs to be achieved alongside the quality and equity objectives that are at the heart of education. The report therefore focuses on how school facilities, sectors and programmes can be organised so that available resources best support high-quality teaching and provide equitable learning opportunities for all students.

This report was prepared as part of a major OECD study on the effective use of school resources resulting in the publication series OECD Reviews of School Resources. Nineteen school systems (referred to as the “OECD review countries”) were actively involved in the preparation of this report by participating in a qualitative data collection, preparing detailed country background reports and/or participating in OECD-led country reviews. In addition, the analyses in this report draw on the broader research and policy
literature, bringing together findings from as many OECD and partner countries as
possible.

## Governing the school network

Over the last decades, OECD school systems have grown in administrative complexity and are increasingly characterised by governance arrangements involving multi-level decision-making processes. The governance of the school network (henceforth defined as the entirety of a system's educational facilities) is therefore frequently subject to complex relationships between multiple actors across different levels of government. Although the degree of local autonomy varies significantly across countries, in most of them, the central level remains a significant actor in steering the distribution and size of schools and shaping the relationships between them.

### Strengthening horizontal co-ordination mechanisms and clarifying responsibilities for the school network

Decentralisation processes have led to the emergence of increasingly autonomous and powerful local actors sharing responsibilities with national and regional authorities in many OECD education systems. In this context of multi-level and multi-actor governance, many inefficiencies in the planning and organisation of school networks are rooted in weak co-ordination mechanisms across disconnected subsystems and communities. A key political and administrative challenge is therefore to reflect on the allocation of planning responsibilities between different authorities and their effective co-ordination. While motivations vary across countries, giving local actors significant planning responsibilities (e.g. for the opening or closure of schools) is typically expected to improve the school network's adaptation to local conditions and the needs of local communities. This relies on adequate capacity at relevant levels of government and strong horizontal co-ordination. Particularly in systems with a high degree of municipal fragmentation, where local authorities oversee a small number of schools, ensuring students' access to all relevant parts of the educational offer while avoiding duplication across municipal boundaries requires strong co-ordination mechanisms.

**Pointers for policy:** Mechanisms to support the planning of school networks need to reflect a system's governance structure, the roles it assigns to local, regional and system-level entities as well as their respective capacity to carry out these responsibilities effectively. Particularly in systems where small, local authorities with little capacity are responsible for the governance of the school network, regional platforms can allow them to co-ordinate their provision more effectively across administrative boundaries. To improve the regional planning of the school network, authorities should seek to build on existing regional structures and co-ordination mechanisms, where possible, or institutionalise previously informal modes of co-operation. Where planning is hindered by fragmented responsibilities for different parts of the school network, a clearer division of labour can be another way to facilitate its efficient planning and oversight, reduce undesired competition between different public providers and increase the potential for co-operation among schools operating at the same level of education.
## Monitoring demand and supply of school places and building planning capacity at relevant levels of government

High-quality data on the current capacity of school facilities and reliable forecasts of future demand are essential for the strategic planning and organisation of school networks. Effective monitoring and forecasting mechanisms can help countries develop strong administrative tools that enable them to recognise and respond to capacity challenges early on. The requisite data may be collected locally or centrally, on an ad hoc or regular basis and may include both quantitative and qualitative information on the capacity and condition of buildings and learning spaces. Particularly in decentralised systems, training local authorities to interpret and use capacity data or providing them with access to centrally administrated databases and infrastructural indicators can enhance their ability to plan their school networks effectively.

**Pointers for policy:** Combining robust models to forecast enrolment with high-quality data on the current state of educational provision can help authorities to identify and respond to discrepancies between the supply and demand for school places. Data collections and inventories are most effective if they are subject to regular updates and cover facilities across all relevant providers and sectors. Crucially, this data can also serve as a basis to assess the viability and expected effects of competing strategies to enhance the efficiency of the school network, such as sharing, clustering or closing facilities. If supplemented with information on the quality and condition of learning spaces, infrastructural inventories can also help to identify investment priorities and forecast renovation or maintenance needs. Capacity building should ensure that authorities at relevant levels can leverage the potential of these planning tools strategically.

## Designing regulations and incentives for network efficiency that are sensitive to student needs and local contexts

The structure of a school network, including the size and distribution of its constituent units, has a significant impact on the resources required to operate and maintain its facilities. The average school size and proportion of very small providers varies considerably across OECD countries. Given the cost associated with excess capacity and instruction in very small schools or classes, this has prompted concerns about the efficient use of public funds in some systems. Steering tools such as minimum school and class size regulations can promote the provision of education services at an efficient scale and the parameters of funding formulas can create incentives for greater network efficiency. Strict per capita funding, for example, places larger providers with lower fixed costs at an advantage and encourages school consolidation. So can one-off payments in support of rationalisation projects. However, given the heterogeneity in regional and local contexts, it is important to bear in mind that there is no “one size fits all” solution to the size and distribution of schools. Many systems therefore face the challenge to reconcile incentives for a rational organisation of the school network with the recognition that high-quality instruction in small schools is more resource intensive and should be supported accordingly, particularly where consolidation is not an option.

**Pointers for policy:** Regulations and incentives for network efficiency need to be sensitive to student needs and local contexts. While incentives for the increase of schools' size may improve educational quality and efficiency in some contexts, enforcing a lower bound may be neither feasible nor desirable in geographically isolated areas. To address this tension, authorities can exempt schools from size requirements if they are identified as meriting protected status to avoid placing student in remote areas at a disadvantage.
Thresholds should also reflect the pedagogical requirements and needs of students in different age groups and take into account the special attention required, for example, by disadvantaged students and those with special educational needs (SEN). Supporting network restructuring projects with direct grants provided outside the main funding formula can be another flexible solution that allows giving adequate consideration to schools' role within their local educational context.

**Supporting educational quality and network efficiency with adequate licensing procedures**

Licensing procedures that regulate the creation of new schools play an important role in supporting equity, educational quality and efficiency in dynamic school networks. Low barriers to entry and incentives for the establishment of new (public or private) schools can be a way to increase the supply of school places and broaden parental choice. At the same time, it can lower educational standards, contribute to the fragmentation of the school networks and thwart efforts to consolidate excess capacity. To support quality, equity and efficiency, licensing criteria thus need to be well-aligned with policy priorities. Divided responsibilities for licensing new schools and funding can diminish incentives for network efficiency and reduce the scope for strategic planning, just as decentralised licensing procedures can raise concerns about transparency and the consistent application of quality assessment procedures.

**Pointers for policy:** Particularly in systems seeking to adapt their school networks, licensing procedures should be aligned with policy priorities. In regions without evidence of capacity shortages, authorities should ensure that the licensing of new providers and the allocation of public funds is conditional on the positive assessment of both quality and needs, for example by demonstrating demand for a sufficient number of classes above a minimum threshold. Needs-based assessments can also support the efficiency and relevance of the vocational offer by taking into account the views of and demand from relevant stakeholders and social partners in the licensing of schools or the accreditation of new programmes. The implementation of such needs-based licensing procedures relies on the formulation of clear, adequate and transparent criteria, their reliable measurement as well as sufficient capacity among school authorisers to carry out the corresponding assessments.

**Ensuring equitable access to capital funds and the efficient management of infrastructural investment**

Although – compared to staff salaries – a relatively small share of educational expenditure is devoted to physical resources, funding for educational materials and the construction and maintenance of school buildings is one of the most significant investments in public infrastructure. The mechanisms by which these capital and maintenance funds are distributed play an important role in ensuring that they are used effectively and reach the areas and facilities most in need of investment. While funding for current expenditure is usually allocated using earmarked grants or restricted block grants, the distribution of capital funding tends to rely on ad hoc grants and investment programmes. While these distribution mechanisms provide the requisite flexibility to redress the greatest infrastructural needs as they arise, they often require technical capacity and experience on the part of schools or local authorities, which can exacerbate inequities. Even if they succeed in accessing capital funding, some authorities may lack
the means to effectively manage large infrastructural developments, procurement processes and the purchase of materials and services.

**Pointers for policy:** To ensure a fair distribution of capital funding to the schools and locations that need it the most, distribution mechanisms should minimise barriers for recipients with less technical expertise and experience. Capacity building for schools and local authorities should ensure that they can successfully bid for infrastructure funding where necessary. Professional development programmes should equip them with the skills needed to provide effective oversight over capital development projects to ensure they are getting value for money. Central guidelines for the construction of school facilities can further reduce the costs of planning procedures and ensure the fulfilment of quality standards and policy objectives related to issues such as environmental performance or accessibility. Likewise, sharing best practices among schools and facilitating their co-ordination of procurement processes can improve the cost and time of constructions.

## Adapting the school network in urban, rural and remote areas

To develop and maintain infrastructures that provide all students with adequate spaces to learn is a critical condition for an accessible and high-performing education system. Schools that are overcrowded or inadequately maintained, that lack facilities conducive to students' learning, health and comfort or that are too distant from their homes are a significant barrier to achieving this goal. At the same time, demographic shifts, regional economic developments and changing student needs have exposed many school systems to costly mismatches between educational demand and supply in both rural and urban areas. Adapting the school network in response to these challenges has therefore become a central aim for systems seeking to enhance their efficiency to free up resources for the improvement of student outcomes. Place-based challenges and territorial heterogeneity in the structure of school networks call for strategies that are highly sensitive to local contexts.

### Selecting appropriate strategies to enhance efficiency in school networks with excess capacity

Operating fragmented school networks with a large number of small schools or facilities with significant overcapacities can place a significant financial burden on education systems. Many OECD review countries have responded to this challenge by closing selected schools and transferring their students to proximate sites. Larger schools with lower per-student fixed costs may offer their students greater curricular diversity, specialised teachers, better equipment and facilities as well as the ability to organise all instruction in single-grade settings. Nevertheless, the disruptive experience of relocation and increased travel distances can negatively impact students' well-being and learning outcomes in the short term. In addition, the process of consolidation can generate substantial public and private transition costs that need to be weighed against any economic benefits. In this context, many education systems are struggling to respond to an enduring decline of student enrolment in parts of their school networks while preserving students' access to high-quality education and accounting for the needs of local communities. Yet, OECD review countries have used different strategies to successfully adapt and enhance the efficiency of their school networks, ranging from the shared use of facilities to the clustering of schools under a shared administration.
**Pointers for policy:** When adjusting school networks to enhance their efficiency and free up resources to improve student outcomes, policy makers should consider a range of different strategies to select the approach most suited to a given context. In many cases, fostering co-operation and resource sharing between providers can allow smaller institutions to benefit from economies of scale and enhance efficiency while leaving the number, size and distribution of school facilities intact. Where possible, authorities should encourage this practice and reduce barriers or disincentives for small schools to engage in voluntary collaboration. This may include jointly providing specialised services or curricula; sharing human resources, facilities and back-end infrastructure; jointly purchasing materials or services; co-ordinating student transportation; and jointly offering professional development opportunities for teachers.

If properly administered, the creation of school clusters under joint administration can also generate significant improvements in efficiency and educational quality without diminishing the geographic coverage of the school network. In light of its complexity, the successful introduction of a centralised leadership team and budget for multi-site schools may require active support from regional or central authorities and an effort to build the requisite capacity for pedagogical and administrative leadership. Finally, authorities should take a modular approach to the educational offer and consider more targeted, selective forms of consolidation by rethinking how grade levels and different types of provision are combined and distributed across school sites.

When engaging in consolidation, authorities need to carefully weigh the benefits of school closures against their social and economic impact on surrounding communities, the transition costs generated in the process and the public and private expenditure on longer commuting distances. They need to ensure that the transition process is as smooth as possible, consult relevant stakeholders, identify and take precautions against any negative impacts on equity or local development and ensure that adequate transportation arrangements are in place by the time students are reallocated. A combination of policy levers including financial incentives and direct support can facilitate the closure process and assist the remaining schools in integrating transferred students.

***Compensating for efficiency, quality and equity challenges experienced by***
***remote rural schools***

Very small rural schools often have difficulty recruiting and retaining teachers in certain subject areas and preparing them to teach effectively, for example in multi-grade settings. They may also lack the student numbers and personnel to offer specialised courses and after-school activities, and they can struggle to provide a supportive learning environment for specific student groups, such as special needs or academically gifted students. While the performance differential between rural and urban schools is largely explained by their students' socio-economic background, rural students' educational aspirations are significantly lower on average. Factors related to schools' resources and regional economic conditions likely contribute to this gap. Particularly in remote rural areas, these problems are frequently compounded by geographic isolation, which limits the scope for inter-school co-operation, clustering or consolidation. A range of compensatory policies, including targeted funding and the use of ICT, can ameliorate the limitations imposed by the course offering and personnel of small rural schools and put them in a better position to provide their students with the high-quality education they deserve. Given that these schools are often embedded in tight-knit communities and serve an important role in their social life, many of them have sought to leverage the support of parents, small businesses and other local actors to ameliorate their condition. A lack of transparency and overly
rigid regulations of volunteer involvement, however, can create uncertainties and barriers that reduce the ability of rural schools to draw on local support.

**Pointers for policy:** Where consolidation, inter-school co-operation and other means to improve the efficient provision of quality education are not an option, authorities should consider providing struggling schools with targeted financial support. In light of the higher per-student cost faced by small remote schools and their difficulty in attracting specialist teachers, dedicated compensatory funding or targeted programmes can support their teachers' professional development or collaboration and vital services such as school transport arrangements. In addition, support for initial teacher preparation and effective "grow your own" programmes can help to alleviate concerns about teacher shortages in rural settings. While distance education and other forms of ICT-supported learning can offer remote schools a way to expand educational access and broaden their course offering, it is critical to build capacity among teachers and principals to use these tools effectively. Finally, to ensure remote schools can leverage the support of their local communities, a constructive regulatory environment should be combined with monitoring to ensure that health and safety regulations are adhered to and public resources are spent effectively.

***Responding strategically and sustainably to capacity shortages***

Particularly urban areas in many OECD review countries are faced with rising demand for school places, caused by residential development, increased birth rates and regional or international migration dynamics. These trends can be long-lasting or short-lived and appear with varying degrees of predictability, which makes it difficult to respond to them effectively under significant space constraints. Initiating new construction in response to temporary spikes in enrolment can render school buildings obsolete before the investment has paid off. Conversely, short-term solutions such as the intensified use of existing buildings or temporary facilities are unlikely to be efficient and beneficial for student learning if the level of enrolment remains high in the long run. While a high density of schools and students can enable cities to provide a rich educational offer and extensive choice, urban school networks are also more vulnerable to socio-economic segregation. To ensure that all students benefit from the rich educational opportunities afforded by dense school networks, policy responses should address the multi-faceted causes of segregation, bridging multiple domains from education to transport and housing.

**Pointers for policy:** Authorities in high-density areas need to cultivate strategic foresight and the capacity to distinguish long-term enrolment trends from short-term fluctuations to ensure that the school network's capacity grows in line with increased long-term demand. This may include providing the responsible authorities with the analytical tools and capacity to identify areas of heightened demographic pressure and the sites where new school constructions can most effectively pre-empt or alleviate overcrowding. Contingency plans and guidance materials should be used to help schools and local authorities find adequate solutions where increases in student enrolment are expected to be temporary or occur too rapidly for new constructions to offer sufficient relief. These can include optimising schools' use of their available spaces, re-directing students to undersubscribed providers, temporarily relaxing maximum class size rules, or deploying mobile classrooms. These prefabricated classrooms can add flexibility to the school network and attenuate the negative impact of acute overcrowding. Nevertheless, high standards should ensure that they not only guarantee the students' health and safety but also provide them with a high-quality learning environment. To ensure that school networks expand in line with long-term educational demand, developer contributions can
be an effective way to share the burden for infrastructural investments and local authorities should be enabled to negotiate satisfactory agreements if they are subject to site-by-site negotiations.

## Making educational quality, equity and student well-being the guiding principles for network reforms

Education policy has an important role to play in ensuring that school networks are sufficiently adaptable to ensure their long-term efficiency and sustainability. Regardless of whether this goal is pursued through greater school collaboration, consolidation or the expansion of capacity, advancing educational quality, equity and student well-being should be the guiding principle for any network reforms. While school consolidation, for example, can provide students and teachers with access to better learning and professional development opportunities in some cases, it may result in prohibitively long travel distances in others. Making students' educational benefit central to network reforms thus requires policy makers to acknowledge the limits of consolidation and to ensure that access to schools at a reasonable distance remains a priority, particularly for younger children. For school network reforms to benefit students of all backgrounds and needs, it is also essential for authorities to identify their potential impact on equity and the well-being of specific student groups in advance to take the necessary steps to address them.

**Pointers for policy:** As with any major reform project, the reorganisation of school networks should be preceded by the systematic consultation and engagement of all major stakeholders. This can help to resolve conflicts before they arise, hold authorities to account, yield solutions that are suitable to the local community's needs and ensure that stakeholders are willing to effect change and possess the tools to implement a reform as planned. Authorities should contribute to this process by maintaining a high level of transparency, articulating a clear educational vision for the reforms and demonstrating that it will bring about tangible improvements in educational quality. Central guidance on when and how to conduct consultation procedures can be an effective means to support local authorities and align expectations among all actors involved. For school network reforms to benefit students of all backgrounds and needs, careful projections based on research evidence and the continuous monitoring of equity developments should be integrated into their planning and design from the outset. At the same time, representatives of vulnerable groups can be consulted and involved at key stages of the proposed reforms' design and implementation. While authorities should draw on best practices and international experiences with network reforms, generating and sharing evaluation results at the sub-system level can also be effective in fostering system-wide learning and can generate reliable insights into the effects of networks adjustments on students.

## Co-ordinating educational levels, sectors and programmes

Providing all students with a high-quality education where they need it depends not only on the construction and maintenance of school facilities, but also on the rational distribution of education services across school sites and the co-ordination of its various components. The failure to effectively organise educational levels, sectors and programmes risks causing the duplication and fragmentation of school services, barriers to students' smooth progression through the system and their inadequate preparation to transition into post-secondary education or the labour market. Authorities therefore need
to engage in both the vertical co-ordination of school years and levels as well as the
horizontal co-ordination of parallel sectors and programmes.

Easing students' vertical transitions across school years and levels through
effective co-ordination and targeted support

Ensuring that students' transition smoothly across school years and levels is a critical condition for their successful vertical progression throughout compulsory and upper secondary education. Misaligned course contents, a lack of guidance or support, and weakly connected remote schools are just some of the many barriers that students can face along the way. Consequences such as year repetition, early school leaving, and unsuccessful transitions beyond secondary education remain a challenge in many OECD review countries. School systems are keenly aware of the significant individual and social costs that this problem imposes and have sought to address it by easing transitions and providing targeted support to those who stand to benefit from early intervention. Many school systems, however, struggle to anticipate students' failure, which prevents them from providing intensive, individualised support to struggling students and identifying systemic or organisational difficulties in supporting student with specific profiles. Likewise, while career and guidance counselling can be effective in enhancing students' transitions between levels of education and into the labour market, they are severely under-resourced in many OECD review countries.

**Pointers for policy:** Strengthening connections between levels of education through administrative co-operation or even their integration can ease students' transitions while also rationalising resources and reinforcing equity, professional collaboration and supervisory capacity. Designing explicit transition programmes or combining different levels of schooling into a single organisation in areas with high rates of early school leaving can help to ease vertical transitions for all students. These structural approaches should be complemented with targeted strategies to support students early on and address learning gaps before they widen. Early warning indicators that identify students who are at risk of grade repetition and dropout can provide a strong basis to prevent unsuccessful transitions and school failure, if combined with effective support and interventions. Strategic investments in data-supported counselling is resource intensive but can have a meaningful impact on students' transitions and long-term trajectories. Lower-cost strategies involving insights from behavioural science, such as nudges to promote enrolment in tertiary education programmes, can be effective complements to remedy specific challenges.

Ensuring the VET offer's continued relevance and facilitating its
students' horizontal transitions

The desire to improve the quality of educational provision and ensure that it matches each student's interests and potential, has led many school systems to offer a variety of educational pathways and parallel programmes. The risks associated with this approach include increased segregation, mismatches in students' pathway choices and a fragmentation of the educational offer. The horizontal co-ordination of education services across sectors and programmes and the ability to guide students to programmes that correspond to their interests and needs is therefore critical to reap the benefits of a diversified offer. Part of this challenge is to improve the fluidity between vocational and general education programmes and the evidence suggests that such transitions remain
rare, even in systems that aspire to strengthen horizontal transitions and provide the requisite pathways.

Vocational education plays a central role in training highly-skilled young adults for the jobs of the future and the significant amount of resources devoted to VET students makes its efficient organisation and alignment with labour market needs a priority. Nevertheless, a lack of structured consultation procedures with industry representatives and limited use of labour-market forecasts has frequently resulted in VET programmes offering training that no longer reflects the structure of regional labour markets. In addition, despite the proven benefits of work-based learning, many VET programmes remain insufficiently connected to the world of work and overlook the potential for a broader involvement of employers in upper secondary VET. Complex governance arrangements in vocational education, fragmented school networks and a lack of co-ordination or oversight can add to these challenges. Poor planning and weak incentives for co-operation between local authorities are also prone to generate inefficient duplications in the educational offer, such as schools offering similar vocational programmes in close proximity to one another.

**Pointers for policy:** Regular consultations with labour market actors and rigorous forecasting of projected labour market needs can strengthen the system's capacity to provide students with a VET offer that is aligned with industry needs. Including a substantial work-based component in VET programmes has not only been shown to improve the labour-market outcomes of graduates, but also provides opportunities for mutually beneficial cost-sharing arrangements between public and private actors. The design of funding mechanisms can also play an important role in setting incentives for the efficient provision of the vocational offer, just as fostering collaboration between regional providers can reduce duplication and make VET programmes more coherent. Facilitating students' transitions between vocational and general education pathways has the potential to give more students access to tracks that match their interests and potential and to reduce the impact of socio-economic background on track choice or student outcomes.

***Addressing infrastructural, administrative and pedagogical barriers between SEN and mainstream education to support inclusion***

Over the past 40 years, at varying rates, OECD countries have recognised the imperative to provide equal educational opportunities to students with special educational needs (SEN). Recent evidence has added weight to the moral argument, demonstrating improved academic and life outcomes from educating students with SEN in the least restrictive environments while providing additional supports. Nevertheless, many systems still have a long way to go to create more welcoming and productive classrooms for students with special needs. Difficulties in the valid and reliable identification of special needs students have emerged as a significant obstacle to successful inclusion practices in some systems. While the paucity of international standards and comparable data limits the knowledge base on identification and inclusion practices, there is evidence of systematic over- or misidentification in some systems, which can have serious negative consequences for the students concerned and create negative externalities for the education system as a whole. The cost of educating students with SEN is high and the failure to accurately target these resources may come at the expense of those who need them the most.

As systems move towards integration and greater numbers of SEN students are educated in mainstream settings, co-ordination and collaboration across sectors plays an increasingly important critical role. Education systems may need to make significant
investments and build capacity to reduce infrastructural, administrative and pedagogical barriers between special education and general schools. In some countries, for example, special education schools are governed by different authorities than mainstream schools. In addition to the difficulties this creates in monitoring school quality, licensing teachers, co-ordinating resources, and the creation of staff development plans, divided responsibilities can make the partial integration of students difficult.

**Pointers for policy:** The valid and reliable identification of students' needs is a cornerstone of the effective co-ordination between mainstream and special needs education. Developing clear, standardised protocols for teams of educators and health professionals to recognise students' special needs is an important step in this direction. They can also ensure that all relevant actors (students, families, teachers, school leaders, social workers, guidance counsellors, psychologists, health professionals and others) can have a voice in the decision-making process. Linking these protocols to data collections can help agencies to recognise irregularities and monitor whether all steps of the identification process have been taken. To support these efforts, governments should ensure that funding formulas do not create perverse incentives to over-identify SEN students or retain them in separate schools. This could mean equalising weighted per-student allocations across placements and differentiating them based on students' objectively identified category of SEN. Likewise, appropriate monitoring procedures should ensure that these funds are used at the school level to serve SEN students or early intervention practices. Depending on the existing degree of integration, a range of measures can help systems improve the collaboration across sectors by reducing infrastructural, administrative or pedagogical barriers between them. Permitting staff working in special education schools to support instruction in mainstream settings and offering transferable licenses can, for example, facilitate the conversion of special needs schools into service providers offering multiple mainstream schools specialised assistance for the integration of SEN students.
<figure><img src="image_6.png" /></figure>
# Chapter 1. Introduction

This report analyses policies that can help countries improve the organisation of school facilities, sectors and programmes to advance educational quality, equity and efficiency. This chapter introduces and provides the context for the subsequent analyses. First, it explains why the organisation of educational infrastructure matters and how the distribution and size of schools can affect a system's educational performance and efficiency. Second, it highlights the importance of coordinating educational levels, sectors and programmes to support these goals. Third, it explores major developments and trends in educational demand and students' needs that school systems need to respond to. The chapter then explains the report's methodology and the evidence on which it draws.

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
This report provides analyses and advice on policies concerning the organisation of school facilities, sectors and programmes, considering both the physical school network (i.e. the entirety of a system's educational facilities), and the organisation of education services within this network. It is intended to help school systems meet their quality, equity and efficiency objectives and ensure that all students can benefit from a high-quality educational provision where they need it. The first part of the report (Chapter 2 and Chapter 3) is primarily concerned with policies affecting the size and distribution of school facilities as well as the relationships between them. The second part of the report (Chapter 4) focuses on education sectors, levels and programmes, the way they are co-ordinated and distributed across school sites and how this affects students' horizontal and vertical transitions through the system (see Figure 1.1 for an analytical framework and the themes explored in this report). A wide range of endogenous and exogenous developments, including demographic trends and policy changes, mean that educational demand and students' needs are constantly evolving. The central challenge addressed by this report is how the organisation of school facilities, sectors and programmes can enable school systems to respond to these changes and promote student success in an efficient and equitable way. The report examines how the distribution and size of schools impact expenditure, how the responsibility for their construction and maintenance is distributed, and which governance arrangements can facilitate the school network's ability to adjust in the face of changing demand and students' needs. It also analyses how assignment policies, parental choice and transport provisions shape the distribution of students across schools and takes stock of promising strategies to reduce student segregation and inequities in access. Finally – assuming the students' perspective – the report considers how the distribution of education services across school sites, the articulation of pathways and the relationships between sectors (including general and vocational, mainstream and special needs education) can support students' successful progression through the school system. The modalities of students' horizontal and vertical transitions, including tracking, selection and grade repetition policies, are evaluated both in terms of equity and their effectiveness in matching students to programmes that correspond to their interests and needs.

It should be noted that the subject of this report is in many ways linked to those of other thematic comparative reports prepared by the OECD School Resources Review, namely the funding of school education (OECD, 2017[1]) and the management of human resources (forthcoming in 2019): Efforts to improve the organisation of the school network and education services must be complemented by supportive funding mechanisms that are aligned with policy priorities and educational objectives. Likewise, adjustments to the school network affect both teachers and principals and the provision of high-quality education relies on qualified personnel to deliver it. While these issues are touched upon in the report at hand, more in-depth analyses of school funding and human resource policies can be found in the OECD review's first and third thematic reports.
<figure><img src="image_7.png" /><figcaption>Figure 1.1. Framework to analyse the organisation of educational facilities and services</figcaption></figure>
## 1.1. Why physical resources in education matter

Although – compared to staff salaries – a relatively small share of educational expenditure is devoted to physical resources, funding for educational materials and the construction and maintenance of school buildings is one of the most significant investments in public infrastructure. Non-staff related spending accounts for 28% of the average OECD education budget and varies considerably across countries, ranging from 20% or less in Belgium, Ireland, Mexico and Portugal to more than 40% in the Czech Republic, Finland, Hungary and Latvia (see Chapter 2, Figure 2.5). There is no doubt that attracting, developing and retaining effective teachers is central to building a high-performing education system¹. Yet, providing adequate facilities and materials where they are needed is a necessary condition for teachers to realise their full pedagogical potential and create effective learning environments with their students. The efficiency with which school systems employ physical resources and organise their educational offer and to achieve this end is thus critical to enhance their performance and their ability to focus on what matters the most for students’ success.

Spending on physical resources in education is, in part, a function of the size and location of schools, their age and condition, as well as the educational programmes they provide, which may account for some of the observed variation across school systems. Yet, the level of spending on infrastructure and school materials also depends on the efficiency of their use, the timing of investments and negotiations at the point of purchase, as well as schools’ capacity to enter mutually beneficial resource-sharing arrangements and to rationally distribute education services across school units.

Developing and maintaining infrastructures that provide all students with adequate spaces to learn is a fundamental condition for an accessible and high-quality education system. Meta-analyses have found particularly young students to be affected by the condition of their school buildings (Gunter and Shao, 2016[2]) and evidence suggests that some infrastructural improvements can exert a positive impact on teachers, students and the wider community (Cellini, Ferreira and Rothstein, 2010[3]; Conlin and Thompson, 2017[4]; Neilson and Zimmerman, 2014[5]). A central aspect of this is to ensure the geographic coverage of school networks and the proximity of education services to students’ homes. Excessive distances and inadequate school transport arrangements can be detrimental to both attendance and students’ outcomes. In and it itself, enhancing existing infrastructures beyond the point of adequacy is rarely the most effective way to improve students’ learning experience. Yet, schools that are overcrowded or inadequately maintained, that lack facilities conducive to students’ learning, health and comfort or that are too distant from their homes can thwart an education systems’ pursuit of excellence.

## 1.2. Why the organisation of educational levels, sectors and programmes matters

Providing all students with a high-quality education where they need it depends not only on the construction and maintenance of school facilities, but also on the rational distribution of education services across school sites and the co-ordination of its various components. The failure to effectively organise educational levels, sectors and programmes risks causing the duplication and fragmentation of school services, barriers to students’ smooth progression through the system and their inadequate preparation to transition into post-secondary education or the labour market. Authorities therefore need to engage in both the vertical co-ordination of school years and levels as well as the horizontal co-ordination of parallel sectors and programmes.
The vertical co-ordination of students' pathways across school years and levels of education is critical to ensure their smooth progression throughout compulsory and upper secondary education. Misaligned course contents, a lack of guidance or support, and weakly connected remote schools are just some of the many barriers that students can face along the way. Consequences such as year repetition, early school leaving, and unsuccessful transitions beyond secondary education remain a challenge in many OECD review countries. The failure to design pathways conducive to a smooth vertical progression of students throughout the system leads to both an inefficient and inequitable use of school resources, imposing significant individual and social costs (see Chapter 4, Figures 4.3 and 4.4).

The horizontal co-ordination of education services across sectors and programmes is equally critical for the efficient use of school resources. Offering students and families a variety of educational pathways and parallel programmes promises a diverse educational provision that matches each student's interests and potential. At the same time, it may lead to increased segregation, mismatches in students' pathway choices and a fragmentation of the educational offer. The horizontal co-ordination of education services across sectors and programmes and the ability to guide students to programmes that correspond to their interests and needs is therefore critical to reap the benefits of a diversified offer. Complex governance arrangements, fragmented school networks and a lack of co-ordination and oversight can contribute to misalignments or duplications in the educational offer and make it difficult to students to access programmes that match their interests and needs. In vocational education, for example, poor planning and weak incentives for co-operation between local authorities or between public authorities and private providers is prone to result in schools offering similar vocational programmes in close proximity to one another and, by extension, duplicating costs. Likewise, supporting students with special educational needs (SEN) relies on the effective co-ordination of resources and expertise between special needs providers and mainstream schools.

## 1.3. Trends affecting the organisation of school facilities, sectors and programmes

A number of demographic trends, economic and social changes, as well as new and evolving educational objectives have required countries to respond and adjust the way they organise their school infrastructure and the education services it delivers. They have caused changes in educational demand (that is, the number of school places required in a given area across educational levels and sectors), students' needs (encompassing both the need for specific pedagogical provisions and students' overall well-being), and education policy goals. There is no doubt that the impact of the developments elaborate below extends well beyond the organisation of school facilities and their educational offer, but their effect on tertiary and adult education as well as other areas of public spending is beyond the scope of this report.

### Demographic developments have placed different pressures on rural and urban school networks

Demographic developments, including regional and international migration and fluctuating birth rates, are an important factor in the change of educational needs and demand and affect how school systems can efficiently organise their educational offer. Some trends, such as declining fertility rates are widespread among advanced and emerging economies and, on average, OECD countries are projected to experience a continued population decline over the coming years, at least in their upper secondary
school-age population. Despite this general trend of shrinking student populations, there is considerable variation both between countries and their constituent regions.

While countries like Belgium have experienced a sharp rise in their primary and lower secondary student populations over the past decade (mainly due to international migration), declining birth rates and emigration have caused a drastic drop in the school-age population of some Central and Eastern European countries. In Estonia, for example, the number of students in general education dropped by 22% between 2005/06 and 2013/14 (see Figure 1.2). This trend is expected to continue in the longer term and has, despite a small rebound in recent years, left the country with a school network whose capacity greatly exceeds the number of students it serves (Santiago et al., 2016[6]).

<figure><img src="image_8.png" /><figcaption>Figure 1.2. Historical development and projection of the school-age population across OECD countries, in Belgium and Lithuania (1990-2020)</figcaption></figure>

Source: OECD (2016), Historical Population Data and Projections (1950-2050), https://stats.oecd.org/index.aspx?DataSetCode=POP_PROJ.

StatLink https://doi.org/10.1787/888933831089

The demand for school places is subject to significant regional heterogeneity, which has forced many OECD countries to respond to opposite developments across different parts of their school networks. In the Czech Republic, for example, internal migration and decreasing birth rates have caused considerable growth in the school-age population of Prague and the Central Bohemian region (3% and 14% between 2001 and 2012 respectively), while other parts of the country have grappled with a decline of up to 18% (Shewbridge et al., 2016, p. 61[7]). The rapid expansion of urban centres has often called for the construction or extension of educational infrastructure to provide sufficient school places and accommodate services like all-day schooling. By contrast, declining enrolment and the associated increase in the number of small schools has made the efficient provision of education increasingly difficult in many rural areas.

Rural-to-urban migration has been a universal trend among OECD countries and the rest of the world for over 50 years and cities continue to attract people hoping for better economic prospects, easier access to public services and a richer cultural offer. Between
1960 and 2013, the proportion of the population living in cities has increased across the world, reaching rates of up to 90% in OECD countries like Belgium (OECD, 2016, p. 64[8]). At the same time, rural areas in many OECD countries have been losing attractiveness, particularly among the young, resulting in a reduced population density and declining school-age population (OECD, 2016, p. 46[9]). Between 2001 and 2015, the absolute youth population below the age of 14 living in predominantly rural regions declined in almost all OECD countries, with the exceptions of Belgium, France, Ireland and the United States. By contrast, intermediate regions with mixed urban and rural populations have more frequently avoided this fate and even grown in some OECD countries over the past decades (see Figure 1.3).

<figure><img src="image_9.png" /><figcaption>**Figure 1.3.** Change in the absolute youth population (0-14) living in predominantly rural and intermediate areas between 2001 and 2015</figcaption></figure>

Note 1: For Chile, change refers to the period 2002-15; For Netherlands: 2003-15; For Spain: 2002-15.

Note 2: Predominantly rural areas are those in which more than 50% of the population live in rural units; Intermediate areas are those in which 15% to 50% of the population live in rural local units.

Source: OECD (2017), Regional Demography, https://stats.oecd.org/index.aspx?DataSetCode=REGION_DE MOGR

StatLink https://doi.org/10.1787/888933831108

*Increasing awareness of their educational benefits has led to rising demand for ECEC and all-day schooling*

In a majority of OECD countries, the steady increase in women's labour market participation over the past decades has been paralleled by the expansion of early childhood education and care (ECEC) (OECD, 2016[8]). Increased parental demand and evolving family values have prompted many European governments, in particular, to expand ECEC services to allow parents to better reconcile work and family responsibilities (OECD, 2016[10]). High-quality ECEC is also increasingly recognised as effective in fostering the development of cognitive and non-cognitive skills that persist throughout a student's educational trajectory, particularly for children from less privileged socio-economic backgrounds (OECD, 2018[11]).
The importance of high-quality ECEC has been underlined by the United Nations' adoption of the Sustainable Development Goals in 2015 and the OECD's commitment to supporting Members and the international community in their achievement (OECD, 2016[12]). As part of Goal 4 (to "ensure inclusive and equitable quality education and promote lifelong learning opportunities for all"), countries have set themselves the target to ensure "that all girls and boys have access to quality early childhood development, care and pre-primary education so that they are ready for primary education" by 2030 (United Nations, 2015[13]).

For similar reasons, many OECD systems in which it is not yet the norm, including Germany and Austria, have made the expansion of the school day in primary or secondary education a policy priority (OECD, 2018[14]). Like the expansion of ECEC, it is likely to support the labour market participation of parents, and mothers in particular. Providing students with a high-quality, integrated educational offer in the afternoon is also seen as a strategy to increase academic achievement, particularly among disadvantaged students. While all students would benefit from more learning time, extracurricular activities and guidance with their homework, advocates of all-day schooling argue that its benefits are particularly pronounced for children of families that are less capable of supporting them in this regard (Nusche et al., 2016[15]). Although few rigorous evaluations are available, some research has indicated a positive impact of extended days in kindergarten (Gibbs, 2014[16]) and sustained participation in high-quality afternoon activities at the primary and secondary level (Fischer and Klieme, 2013[17]). Yet, providing the infrastructure for all-day schooling and extracurricular activities can constitute a significant challenge and may require considerable adjustments to the organisation of instruction and the adaptation or expansion of educational facilities.

*A greater recognition of special educational needs and increased emphasis on inclusion requires the adaptation of education services*

School systems are increasingly emphasising the importance of recognising and providing inclusive learning environments for students with diverse educational needs. This commitment has been underlined by the goal to "ensure equal access to all levels of education and vocational training for the vulnerable, including persons with disabilities, indigenous peoples and children in vulnerable situations" by 2030, which was adopted as part of the United Nations' Sustainable Development Goals (United Nations, 2015[13]). Empirical evidence has added to the ethical arguments, demonstrating that educating students with disabilities in the least restrictive environments while providing additional supports improves their academic and life outcomes (Hanushek, Kain and Rivkin, 2002[18]). Due to the improved diagnosis of SEN and an increasing attention to students' right to participate in mainstream education, both the percentage of students identified with SEN and the proportion of them that are taught in inclusive settings has risen.

In light of these developments, education systems face the challenge to consistently and accurately identify students' educational needs and enable schools to meet them effectively. The misidentification of students' needs can have serious negative consequences for the students concerned and prevent systems from accurately targeting their resources to those who need them the most. At the same time, regulations increasingly aim to improve the accessibility of public facilities, which can require schools to make significant infrastructural adjustments (Leemans and von Ahlefeld, 2013, p. 15[19]). To ensure that these investments improve the opportunities of SEN students not only in terms of access but also educational quality, school systems also need to ensure the provision of adequate learning materials and well-prepared teachers and support staff.
Some school systems have recognised the potential of fostering the collaboration and moving towards a greater integration of mainstream and special needs providers. In some cases, this has taken structural forms, such as physically locating special needs provision in the same building as mainstream schools to provide opportunities for SEN students to take more classes in mainstream education settings. It can also involve efforts to build professional connections between mainstream and special education providers, and to encourage teachers with special education expertise to coach their colleagues.

*Schools are expected to respond to new and evolving needs, in part due to international migration and increasing student heterogeneity*

The academic and socio-emotional needs of students across the OECD have increased substantially over the past decade. Between the 2006 and 2015 PISA cycles, the percentage of students with an immigrant background in OECD countries increased from 9.4% to 12.6%, in line with the share of students who speak a foreign language at home (OECD, 2016, p. 421 ff.[20]). Increasingly diverse student populations, especially in urban areas, require many schools to provide specialised services and individualised support to meet their students' needs, reduce dropouts, year repetition, and poor labour market outcomes.

At the same time, the proportion of students who felt socially isolated in their school grew by nearly 10 percentage points between 2003 and 2015 – one of several OECD indicators pointing to students’ growing socio-emotional needs (OECD, 2017, p. 345 ff.[21]). As the level of students’ needs has increased, so too have ambitions to hold schools accountable for the measurable performance of all students. Thus, more than ever, schools must be enabled to continue their progress in helping a diverse range of students overcome the obstacles imposed by socio-economic and cultural disadvantage and to prepare them for responsible citizenship and success in the labour market.

*Complex and highly differentiated school systems require efforts to ease students' vertical and horizontal transitions*

As education systems grow increasingly complex (Burns and Köster, 2016[22]), their success relies on the capacity to ensure students’ smooth progression through the system and access to appropriate support along the way. The failure to guide students along pathways that correspond to their educational interests and needs imposes significant individual and social costs as it increases inequities, the likelihood of school failure and skills mismatches in later life. Educational transitions are of particular significance in this regard as they constitute critical junctures in students’ trajectories. Frictions and inefficiencies can arise from students’ vertical transitions across years and levels of education (e.g. from pre-primary to primary school and from lower to upper secondary school), as well as their horizontal transitions between different school sectors (e.g. general and vocational education or mainstream and special needs education).

Chapter 4 addresses in detail how school systems can articulate the relationship between levels of education and different sectors within the school network to ease these transitions. Common barriers to students’ vertical transitions include learning gaps and grade repetition, early school leaving and poor transitions into post-secondary education or the labour market. Common concerns in the horizontal co-ordination of the educational offer include early tracking into academically weak pathways, especially for disadvantaged students; an insufficient permeability between different educational
pathways; and inadequate arrangements for SEN students that provide them with limited
learning opportunities.

*Changing labour market needs create pressures for the vocational education and training sector to adapt its provision*

Upper secondary vocational education and training (VET) programmes play a significant role in OECD education systems, educating nearly half of all upper secondary students across the OECD and over two thirds in some countries. As many jobs of the future are expected to require technical and interpersonal skills, but not necessarily at the tertiary level, policy makers have come to regard vocational education as central to their countries' economic and social success (Hoffman and Schwartz, 2017[23]; CEDEFOP and European Center for the Development of Vocational Training, 2017[24]; Richards, 2015[25]). The efficient provision of high-quality VET programmes requires the sector's careful co-ordination with both general education pathways and the world of work. Likewise, a lack of horizontal co-ordination is prone to lead to costly duplications in the VET offer.

For vocational programmes to be successful for both students and employers, it is increasingly recognised that VET must be a high-status pathway that develops flexible skill sets. Continuous changes in the skills profile sought by companies means that a wider and more flexible range of abilities is required from workers (Autor, Levy and Murnane, 2003[26]; Goldin and Katz, 2008[27]). Since firms rarely have a short-term incentive to unilaterally invest in the development of long-term human capital, education systems must design adequate funding mechanisms and support vocational programmes that meet these complex and changing demands (OECD, 2016[28]).

*Educational facilities need to meet greater expectations and accommodate evolving pedagogical techniques*

Evolving and increasingly ambitious goals arising both from within and outside the sphere of education place complex new demands on school infrastructures and learning environments. Growing concerns surrounding the consequences of climate change, for example, have led many countries adopt new standards for the construction of sustainable buildings and energy-saving infrastructures that schools are expected to comply with (Leemans and von Ahlefeld, 2013, p. 14[19]).

School facilities also need to be flexible to adapt to new pedagogical techniques and evidence on the effective use of learning environments. For example, the desire to equip students for the information age and prepare them for a world that is increasingly shaped by computers has prompted education systems to advance the integration of information and communication technology (ICT) in school buildings. Some systems require significant investments in their digital infrastructure in order to permit schools to fulfil ICT-related objectives. Accommodating new pedagogical approaches such as competency-based education and delivering on pledges to focus on student well-being may also require adjustments to learning environments and to the configuration of facilities within the school network (Leemans and von Ahlefeld, 2013, p. 15[19]).
## 1.4. The context for this report

This report was prepared as part of a major OECD study on the effective use of school resources resulting in the publication series *OECD Reviews of School Resources*. This publication series encompasses thematic comparative reports that synthesise the review's major findings on school resources policies, drawing on evidence from research and the project's country-specific analyses. The first three thematic reports cover the following topics: i) the funding of school education (OECD, 2017[1]); ii) responsive school systems (the present report); and iii) the management of human resources (to be published in 2019). Box 1.1 provides more information on the main features of the OECD review.

### Box 1.1. The OECD School Resources Review

The *OECD Review of Policies to Improve the Effectiveness of Resource Use in Schools* (also known as the *School Resources Review*) was launched in 2013. This review is conducted in collaboration with countries and under the guidance of the OECD Group of National Experts (GNE) on School Resources, comprising representatives from all participating countries and other OECD Members. The review is designed to respond to the strong interest in the effective use of school resources evident at national and international levels. It provides analyses and policy advice on the use of school resources to help governments achieve quality, efficiency and equity objectives in education. It focuses on primary and secondary school education, although links to other levels of education are also established where relevant.

#### Key issues for analysis

School systems use a broad range of resources. This review primarily considers three types of closely interlinked resources:

* **Financial resources** (e.g. monetary transfers, school funding mechanisms).

* **Human resources** (e.g. teachers, school leaders, education administrators).

* **Physical resources** (e.g. buildings and school places, networks and clusters).

The overarching policy question guiding the review is “What policies best ensure that school resources are effectively used to improve student outcomes?” In considering policies to ensure that these resources are effectively used to improve student outcomes, the review focuses on four key issues for analysis: the governance of resource use (how to govern, plan and implement resource use); resource distribution (how to distribute resources across levels, sectors and student groups); resource management (how to manage, evaluate and follow up on resource use); and resource utilisation (how to utilise resources for different programmes and priorities).

#### Review objectives and methodology

The School Resources Review's analyses are designed to support governments in developing effective national education policies. In particular, the project proposes policy options to ensure that school resources are effectively and equitably used to improve student outcomes. The project provides opportunities for countries to learn from one another by exchanging best practices, and to gather and disseminate evidence on effective school resource policies. Through the public dissemination of its results, the project also seeks to inform policy debates on school resources among relevant stakeholders.
The project involves a reflection about the policy implications of the currently available evidence on the use of school resources in a wide range of national settings. The evidence is drawn on includes relevant academic and policy papers published in peer-reviewed journals, detailed information provided by countries on their school resource policies, as well as the experience and perspectives of a wide range of stakeholders in participating countries. The work is undertaken through a combination of desk-based analysis, country reviews and periodic meetings of the GNE on School Resources, which provides feedback on substantive documents and determines priorities for further analytical work.

The work involves three major strands:

*   **An analytical strand** draws together evidence-based policy lessons from international data, research and analysis. The analytical strand uses literature reviews, country background reports (CBRs) analyses data to investigate the factors that shape resource use in school systems. The CBRs use a common framework to facilitate comparative analysis and maximise the opportunities for countries to learn from each other.

*   **A country review strand** provides individual countries with policy advice on resource issues tailored to their priorities, drawing on international evidence and the insights obtained by a team of experts visiting the country. For each country review, a team of up to five reviewers (including at least two OECD Secretariat members) analyses the CBR and subsequently undertakes an intensive case study visit of about eight days in length. Each study visit aims to provide the review team with a variety of perspectives on school resource policies and includes meetings with a wide variety of stakeholders. Country review reports are published in the series *OECD Reviews of School Resources*.

*   **A synthesis strand** with the preparation of a series of thematic comparative reports. These blend analytical and review evidence and provide overall policy conclusions on specific themes.

## Collaborations

This report was prepared within a broader framework of collaboration and a partnership with the European Commission (EC), which was established for the OECD School Resources Review. The support of the EC has covered part of the participation costs for members of the European Union Erasmus+ programme and contributed significantly to the preparation of a series of thematic comparative reports, including this publication. The review of Kazakhstan was undertaken in co-operation with the World Bank. Other international agencies collaborating with the project include Eurydice, the Inter-American Development Bank (IDB), the Organising Bureau of European School Student Unions (OBESSU), the Standing International Conference of Inspectorates (SICI), the United Nations Educational, Scientific and Cultural Organization (UNESCO) and UNESCO's Global Education Monitoring Report. Social partners are also involved through the contribution of the Trade Union Advisory Committee to the OECD (TUAC) and the Business and Industry Advisory Committee to the OECD (BIAC), which participate in the GNE as Permanent Observers.
1.5. Country participation and sources of information

The analysis in this report is based on multiple sources of evidence, including first and foremost the analysis of countries actively participating in the review. At the time of writing this report, 19 school systems were actively engaged in the review and will be referred to as the “OECD review countries” throughout. These 19 school systems represent a wide range of economic and social contexts, and illustrate diverse approaches to the organisation of school facilities, sectors and programmes, which enables this report to take a comparative perspective on key policy issues. In addition, this report seeks to go beyond information collected from OECD review countries by drawing on data collections and case studies from across the OECD and beyond, as well as the relevant international research literature.

Most of the OECD review countries also took part in a collection of qualitative data on the main features of their school funding approaches and prepared a detailed background report, following a standard set of guidelines. By July 2018, 12 of these school systems had also conducted a country review, undertaken by a review team consisting of members of the OECD Secretariat and external experts. Country reviews provide an independent analysis by the review team of identified strengths and challenges in the use of resources in these countries. In their analyses, the review teams have drawn on information gathered through interviews with a broad range of stakeholders, including social partners, during a main country review visit.

This report draws on four main sources of information:

* Eleven country review reports completed by OECD-led review teams for Austria, Belgium (Flemish Community), Chile, Colombia the Czech Republic, Denmark, Estonia, Kazakhstan, Lithuania, the Slovak Republic and Uruguay, as well as an ongoing country review of Portugal.

* Sixteen country background reports completed by the following school systems: Austria, Belgium (Flemish Community), Belgium (French Community), Chile, the Czech Republic, Denmark, Estonia, Iceland, Kazakhstan, Lithuania, Luxembourg, the Slovak Republic, Slovenia, Spain, Sweden and Uruguay.

* Seventeen responses to a qualitative data collection on national approaches to school funding provided by the following school systems: Austria, Belgium (Flemish Community), Belgium (French Community), Chile, the Czech Republic, Denmark, Estonia, Iceland, Israel, Kazakhstan, Lithuania, Portugal, the Slovak Republic, Slovenia, Spain, Sweden and Uruguay. The responses to selected questionnaire items were drawn on for part of the analysis in Chapter 2 and Chapter 3 and are summarised in comparative tables included in the respective chapters.

* A range of literature reviews bringing together research findings on relevant issues from as many school systems as possible beyond the OECD review countries. These literature reviews include, among others, OECD working papers on school size policies; the regulation of publicly funded private schools and student learning time.
## 1.6. The structure of this report

The report has four chapters. Following Chapter 1, which provides the context for the subsequent analysis and explains the importance of physical resources in education and the organisation of school sectors and programmes, Chapters 2-4 are concerned with the key substantive issues involved in the organisation of school facilities, sectors and programmes: *Governing the school network* (Chapter 2); *Adapting the school network to changing needs in urban, rural and remote areas* (Chapter 3); and *Co-ordinating educational levels and sectors to improve student trajectories* (Chapter 4). The chapters provide a description of different countries' approaches to organising school networks and education services; analyse strengths and weaknesses of different strategies; and provide recommendations for improving the organisation of school facilities, sectors and programmes.

### Notes

<footnote n="1">¹ The management of human resources will be the subject of the School Resources Review's forthcoming third thematic report.</footnote>
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Chapter 2. Governing the school network

This chapter describes the different actors involved in governing the school network, the roles and responsibilities they assume in different OECD and partner countries, and how their relationships affect the school network's capacity to meet demand for high-quality education. The chapter maps out steering and co-ordination mechanisms that can facilitate the strategic planning of school networks at the central as well as the regional and local levels. It also analyses challenges in aligning the development of the school network with infrastructural funding mechanisms. The chapter concludes by exploring a range of policy options to enhance the effective governance of school networks across levels of government.

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
While the notion of the “school network” has in some contexts been used to denote specific school sectors and informal or formal associations of schools, this report uses the term to describe the entirety of school facilities through which education is provided in a given system (unless otherwise noted). In this context, governance therefore primarily concerns who makes, implements and monitors the decisions that affect the organisation of the school network and the basis upon which these decisions are made. This chapter describes the different actors involved in governing the school network, the roles and responsibilities they assume in different OECD and partner countries, and how their relationships affect the school network’s capacity to meet demand for a high-quality education. In particular, the chapter considers i) the distribution of responsibilities in the governance of the school network, ii) how the strategic planning of school networks can be facilitated through central-level steering, iii) strategies to improve it through regional and local co-ordination and iv) how the strategic governance of the school network can be aligned with infrastructural funding mechanisms. Annex Table 2.A.1 includes relevant data on the distribution of capital expenditure from the OECD review’s qualitative survey.

## 2.1. Distribution of responsibilities for the governance of school networks

Over the last decades, OECD school systems have grown in administrative complexity and are increasingly characterised by governance arrangements involving multi-level decision-making processes in which the links between actors operating at different levels are fluid and open to negotiation (Burns and Köster, 2016[1]). In addition, many OECD countries have undergone a process of decentralisation, increased school autonomy, and placed greater emphasis on market mechanisms and incentive schemes. These trends provide the context in which modern education systems have sought to distribute decision-making responsibilities and define relationships between different actors in the school system so as to render the governance of the school network more efficient and effective.

The developments mentioned above have taken place to varying extent across OECD countries. This is partly due to their different points of departure since some of them have a long-standing culture of devolution while others have historically been characterised by a high degree of centralisation. Federal countries such as Australia, Austria, Canada, Germany and the United States, have a long history of decision-making powers being shared between central and state levels. In others, such as Belgium and the Netherlands, the organisation of the school network is shaped by a strong tradition of school choice and the public funding of private education. A historically high degree of devolution in Finland and the United Kingdom also means that the local level has played an important role in schooling decisions for a long time (Burns and Köster, 2016[1]; OECD, 2017[2]). It is important to bear in mind these different institutional traditions to understand both the present organisation of school networks and the context in which the future development of their governance arrangements are likely to take place (OECD, 2017[2]).

Even where measures to adapt the school network are widely supported among stakeholders, complex governance arrangements can make it difficult to enhance its resource efficiency. Two of the key political and administrative challenges in addressing this issue are to reflect on the adequate distribution of network governance responsibilities between central, regional and local authorities as well as the division of responsibilities for different parts of the school network. The appropriate distribution of
these responsibilities depends on the wider governance context and, as will be further discussed below, there are many ways in which responsibilities can be effectively shared between actors at different administrative levels. Improving the arrangements for school network governance promises a more efficient use of school infrastructure. It also plays a role in reinforcing trust and promoting functioning relationships across levels and actors, in aligning curriculum and pedagogical approaches and in setting clear goals that guide students through their educational pathways, which is particularly important where student mobility is an issue.

### Central, regional and local responsibilities for the governance of the school network and distribution of programmes

While there has been a general trend towards greater decentralisation in school systems over the past decades, the degree of local autonomy varies considerably across countries and domains of decision making. Compared with the organisation of instruction, for example, responsibilities for the governance of the school network and distribution of programmes across school sites tend to rest with more centralised tiers of government. Between 2003 and 2011, the proportion of decisions related to these matters that were taken at the central and state level has actually slightly increased while the proportion taken at the local and school level has dropped (OECD, 2012, p. 510; Table D6.6c[3]).

Some of the most consequential decisions affecting the organisation of the school network concern the creation of new schools and the closure of existing ones. As can be seen in Table 2.1, in 2011, the authority over the creation and closure of public lower secondary schools lay with central or state authorities in 14 OECD school systems. In half of these, the decisions were taken in full autonomy while the others let central authorities take their decisions after consulting with school, local or regional actors. Of the remaining countries, 16 assigned responsibility for the opening and closure of schools to local authorities. However, in only six systems did local authorities take these decisions autonomously, while the majority of them operated within frameworks set by higher level authorities (usually the state or central level) (OECD, 2012, pp. 505, Table D6.9.[3]).
<table><caption>Table 2.1. Responsibility for the opening and closure of public lower secondary schools, 2011</caption><thead><tr><td>Country</td><td>Level taking the decision</td><td>Decision mode</td></tr></thead><tbody><tr><td>Greece</td><td>Central</td><td>After consultation with regional level</td></tr><tr><td>Ireland</td><td>Central</td><td>After consultation with school level</td></tr><tr><td>Israel</td><td>Central</td><td>After consultation with local level</td></tr><tr><td>Luxembourg</td><td>Central</td><td>In full autonomy</td></tr><tr><td>Netherlands</td><td>Central</td><td>In full autonomy</td></tr><tr><td>Portugal (1)</td><td>Central</td><td>After consultation with local level</td></tr><tr><td>Slovak Republic</td><td>Central</td><td>After consultation with local level</td></tr><tr><td>Australia</td><td>State</td><td>After consultation with state and local level</td></tr><tr><td>Austria</td><td>State</td><td>After consultation with state and local level</td></tr><tr><td>Belgium (Fr.)</td><td>State</td><td>In full autonomy</td></tr><tr><td>Canada</td><td>State</td><td>In full autonomy</td></tr><tr><td>Mexico</td><td>State</td><td>In full autonomy</td></tr><tr><td>Spain</td><td>State</td><td>In full autonomy</td></tr><tr><td>Switzerland</td><td>State</td><td>After consultation with local level</td></tr><tr><td>Italy</td><td>Regional</td><td>Within framework set by central level</td></tr><tr><td>Korea</td><td>Regional</td><td>In full autonomy</td></tr><tr><td>Turkey</td><td>Regional</td><td>Within framework set by central level</td></tr><tr><td>France</td><td>Sub-regional</td><td>Other</td></tr><tr><td>Chile</td><td>Local</td><td>Within framework set by central level</td></tr><tr><td>Czech Republic</td><td>Local</td><td>Within framework set by regional level</td></tr><tr><td>Denmark</td><td>Local</td><td>Within framework set by central level</td></tr><tr><td>England</td><td>Local</td><td>In full autonomy</td></tr><tr><td>Estonia</td><td>Local</td><td>Within framework set by central level</td></tr><tr><td>Finland</td><td>Local</td><td>In full autonomy</td></tr><tr><td>Germany</td><td>Local</td><td>After consultation with state level</td></tr><tr><td>Hungary</td><td>Local</td><td>After consultation with sub-regional level</td></tr><tr><td>Iceland</td><td>Local</td><td>In full autonomy</td></tr><tr><td>Japan</td><td>Local</td><td>In full autonomy</td></tr><tr><td>Norway</td><td>Local</td><td>In full autonomy</td></tr><tr><td>Poland</td><td>Local</td><td>Within framework set by central level</td></tr><tr><td>Scotland</td><td>Local</td><td>Within framework set by central level</td></tr><tr><td>Slovenia</td><td>Local</td><td>Within framework set by central level</td></tr><tr><td>Sweden</td><td>Local</td><td>In full autonomy</td></tr><tr><td>United States</td><td>Local</td><td>Within framework set by state level</td></tr><tr><td>Belgium (Fl.)</td><td>School</td><td>Within framework set by state level</td></tr></tbody></table>

1: Information updated, 2018.

Source: OECD (2012), Education at a Glance 2012: OECD Indicators, OECD Publishing, Paris, http://dx.doi.org/10.1787/eag-2012-en, Table D6.9.

As the authorities responsible for the organisation of the school network vary, so do the ownership models that govern educational infrastructure. While some OECD review countries rely on the local ownership and management of school buildings, others have sought to increase administrative efficiency by centralising the ownership, administration and maintenance of their educational infrastructure. In Austria, for example, ownership of the majority of federal school buildings has been transferred to a federal agency – the Federal Real Estate Company (Bundesimmobiliengesellschaft, BIG). With only few federal schools remaining in the ownership of other proprietors such as municipalities, the ministry rents most of its schools from the BIG, which reinvests this revenue into the buildings' centrally co-ordinated maintenance, improvement and the network's expansion. Occasionally, the BIG receives additional investments in the form of increased
rental payments to implement major infrastructural projects adjustments such as the transformation of schools into all-day schools (Bruneforth et al., 2016[4]).

In countries where schools, school boards or local authorities are endowed with the responsibility to initiate and lead school construction projects, central governments often assume a facilitating role in relation to local actors. One example of this arrangement can be seen in the Flemish Community of Belgium where school boards have far reaching autonomy in school construction. To support school boards in the creation of effective learning spaces, the Flemish Ministry of Education has tasked the Flemish Agency for Infrastructure in Education (AGIOn) with subsidising the purchase, construction and renovation of public and private school buildings; advising schools on the planning and design of buildings through a knowledge centre, publications and websites; and providing guidance and monitoring for construction projects operated under public-private partnerships as part of the DBFM-project (Design-Built-Finance-Maintain), which established a company with a private partner (Fortis Bank-Fortis Real Estate) to head a large-scale investment to reduce the backlog in school construction works (Leemans and von Ahlefeld, 2013[5]).

It should be noted that the opening and closure of schools may occur for a variety of reasons and that different actors may be responsible for authorising and implementing the opening or closure of schools under these different scenarios. For example, systems may distribute responsibilities differently depending on whether schools are closed due to poor performance or under-enrolment and whether new schools are constructed in response to local initiatives or based on central-level enrolment projections. Likewise, some countries have devised specific arrangements that differ from the ordinary school network governance to advance specific network restructuring projects. Some urgent or large-scale infrastructural developments have thus been carried out by specialised government agencies endowed with a high degree of independence that allowed them to bypass traditional ministries and avoid certain regulations and bureaucratic procedures. As specialist centres with a highly focused mandate and consolidated expertise, these independent agencies can be more proactive, innovative and agile in their response to unanticipated situations (Blyth et al., 2012, p. 46[6]). One of the challenges governments face when delegating responsibilities to independent agencies is to ensure that their activities are effectively evaluated and coherent with those of other government bodies and programmes.

Systems differ not only in the way they assign responsibilities for the development of the school networks' physical infrastructure, but also for the distribution of educational programmes and subjects to be taught at these sites. Figure 2.1 presents the share of such decisions concerning planning and structures taken at each level of government across OECD countries in 2017. This comprises decisions on the design of programmes of study and their content as well as the selection of programmes and subjects taught in a particular school (OECD, 2018[7]). Other than decisions concerning the organisation of instruction, which mostly are taken at the school level (50%), those concerned with planning and structures are most likely to be made at the central or state level (48%). On average across OECD countries, local authorities take 4% of key decisions concerning the design and distribution of programmes and courses in lower secondary schools, while schools themselves take another 33% of these decisions and 15% of them involve multiple levels of government (OECD, 2018, p. Table D6.2[7]).
<figure><img src="image_10.png" /><figcaption>Figure 2.1. Percentage of decisions on planning and structures taken at each level of government in public lower secondary education, 2017</figcaption></figure>

Note: Countries are ranked in descending order of the percentage of decisions taken at the central or state level. Decisions at a specific level of government may be made in full autonomy, or after consulting with other bodies, or within a framework set by a higher level of authority.

1: Year of reference 2011.

Source: OECD (2018), Education at a Glance 2018: OECD Indicators, OECD Publishing, https://doi.org/10.1787/19991487, Table D6.2.

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https://doi.org/10.1787/888933831127

In 2017, in 14 of the 35 OECD countries and economies with available data, decisions on the selection of programmes to be taught in each school were taken at the state or central level, although this process may involve the consultation of lower-level authorities or schools, for example in Portugal. While 10 of the 35 systems allowed schools to decide on their selection of study programmes, all of them operated within frameworks set by a central or state authority (OECD, 2018, p. Table D6.7[7]). Even in countries with a greater overall degree of decentralisation and school autonomy, such as the Flemish Community of Belgium and the Netherlands, the central and state levels can therefore play an important role in shaping the distribution of study programmes across school sites.

## Division of responsibilities for different parts of the school network

The facilities comprising a school network are often governed by multiple authorities. In OECD countries, primary education facilities, for example, are more frequently owned and governed by local administrations (Beynon, 1997, p. 7[8]), while upper secondary and special needs infrastructures are often governed by regional or central authorities. Similar divisions of sectorial responsibilities may occur between the ministries governing early childhood education and care (ECEC), compulsory and post-secondary education facilities. Where parts of the school network are subject to different administrative authorities, a low degree of integration can be aggravated by a lack of institutional co-ordination mechanisms and communication channels between providers. This can impede strategic infrastructure planning and lead to duplications in the educational offer or administrative services. Similar inefficiencies can arise where multiple public providers engage in undesired competition within a given region and level of education or
where funding models discourage municipalities from integrating different services and sharing resources between them.

Fragmented governance arrangements in the school network can result in administrative duplications, a misalignment of infrastructural investment strategies and other inefficient spending patterns. In the Flemish Community of Belgium, for example, the decentralised school system with three independent network providers has been identified as an obstacle for the efficient distribution of resources and the pursuit of central objectives concerning the quantity and quality of educational facilities. Likewise, each of the three educational networks has a central organisation employing administrative staff and operates its own pedagogical advisory services (PBDs) and student guidance centres (CLBs) funded by the Flemish government. This duplication of administrative positions and services risks generating inefficiencies and fragmented responsibility (Nusche et al., 2015, p. 115[9]; Rouw et al., 2016[10]).

In some cases, the decision for parts of the school network to be governed by different authorities is driven by instrumental considerations. The responsibility for specialised schools, for example, might be situated at the central level to pool the required resources and expertise at a scale that enables their efficient management. Special needs education and specific forms of Vocational Education and Training (VET) are therefore sometimes administered at more central levels than mainstream and general education respectively. It is important, however, to recognise that this arrangement can weaken the connections between sectors and that the advancement of inclusion or a greater integration of vocational and general education may require additional co-ordination efforts under these circumstances.

In the absence of strong co-ordination mechanisms, divided responsibilities within the school network can also negatively affect the pedagogical integration across levels of education, the alignment of their goals and implementation strategies. Particularly in education systems with high dropout and repetition rates, the failure to ensure successful student transitions from one level of schooling to the next comes at a high individual and social cost (see Chapter 4). There are some concerns linked to the integrated provision of ECEC services and its impact on children and the ECEC teacher profession, notably the risk of “schoolification” (i.e. introducing school pedagogical practices to ECEC settings, including longer days, more teacher-directed pedagogies, greater attention to academic content or less playtime) (OECD, 2017[11]; OECD, 2015[12]). Yet, particularly in contexts where transitions from ECEC to primary education are subject to frictions, integrating both services in the same administrative structures and facilities can ease students’ entry into primary school. Demographic shifts and changing student enrolment patterns can provide an opportunity to efficiently repurpose school structures and advance this integration. In the Slovak Republic, for example, declining upper secondary enrolment has freed up capacities in compulsory education facilities that could be used to integrate ECEC services in the same structures as primary education (Santiago et al., 2016, p. 95[13]).

The case of Estonia is a good example of a country seeking to clarify the division of responsibilities for different levels of education to facilitate the efficient governance of the school network. In a system characterised by many small providers, Estonia's complex division of responsibilities across education levels and between providers had given rise to co-ordination problems. Municipal and state-owned schools competed with each other in general education, in special needs education and – to a lesser extent – in VET. This generated unnecessary duplication in the educational provision, reduced the
capacity for co-ordination and made planning the school network more difficult. In light of this complicated governance context and the risk of fragmentation, the efficiency of the school network – particularly at the lower secondary level – hinges on strong mechanisms for inter-municipal co-operation and resource sharing between institutions (Santiago et al., 2016, p. 83[14]).

Recent reforms in Estonia aim to improve the division of labour between its municipalities and the state, leaving the provision of pre-primary, primary and lower secondary education to the former and the responsibility for upper secondary education (both general and VET) and special education schools to the latter. The reform is expected to reduce unnecessary duplication and ambiguous responsibilities, provide the conditions for better co-ordination within education levels and assist with school network planning. For example, the new governance structure is expected to facilitate bringing VET and general upper secondary education closer together and allow all of upper secondary education to be effectively managed as a unified sub-system (Santiago et al., 2016, p. 94[14]).

The Czech Republic has grappled with similar challenges. The Czech system divides responsibilities for the school network between municipalities, which take care of primary education and the majority of lower secondary level, and regions, which provide upper secondary education. Despite this relatively clear division of responsibilities, some specialised regional schools (gymnasia with eight-year and six-year programmes) also compete with municipal schools for enrolment at the lower secondary level, generating some duplication of services that has been argued to exacerbate inefficiencies in the school network caused by demographic pressures (Shewbridge et al., 2016, p. 74[15]).

## 2.2. Central-level steering and co-ordination for effective network planning

Despite the trend towards decentralisation in the governance of OECD education systems, central authorities remain a critical actor in the planning and co-ordination of the school network. Depending on the precise distribution of responsibilities, central-level authorities have different tools at their disposal to steer the development of the school network in line with policy priorities and improve the efficiency of its organisation. These range from direct interventions into the organisation of the school network to efforts to ensure that local network reforms maintain traction by monitoring progress and, where appropriate, challenging local or regional authorities. Furthermore, central authorities in many OECD countries dispose of more indirect means to advance efficiency in the school network, including the provision of central information systems to support the regional planning of school infrastructure; facilitating local co-ordination; setting financial incentives and providing guidelines for infrastructural development projects; regulating school and class sizes; and regulating the creation of new schools, school choice or catchment areas. The full extent of central-level steering capacity in decentralised systems where the design and planning of school networks lies at the local level was illustrated during Lithuania's network restructuring process (Box 2.1). The following sections will explore some of these tools in more detail, providing the context for Chapter 3 and the analysis of concrete strategies to adapt the school network in response to changing levels of demand.
Box 2.1. Central-level strategic steering of local school network reform in Lithuania

Over the past decades, the Lithuanian school network has been subject to a significant reorganisation, with the number of general education schools dropping from 1499 in 2004/05 to 1022 in 2015/16. Although municipalities are responsible for planning their school network, the central government has actively steered the restructuring process in order to maintain its momentum and ensure that the provision of high-quality education remains the central goal of the reform. In particular, the Ministry of Education and Science has played a key role in initiating the reorganisation process, providing its strategic direction and devising rules to guide it. In 2011, the ministry determined that the structure of general education should be reformed by replacing previous “secondary schools” and transforming them into either gymnasia (offering the second part of lower secondary and upper secondary education), basic schools (offering the first and second part of lower secondary education and in some cases primary education) or into the newly-introduced pre-gymnasia (offering the first part of lower secondary and in some cases primary education). Since 2004/05, 451 secondary schools were transformed into gymnasia, basic schools or pre-gymnasia (of which 112 were operating by 2015/16). At the same time there has been a significant reorganisation of primary and basic schools: 219 basic schools were re-organised into pre-gymnasia, gymnasia or a basic or primary education unit within a secondary school; 179 primary schools were closed or transformed into gymnasia, basic schools or a primary units within pre-gymnasia.

The reorganisation process at the local level was guided by central rules and parameters, based on which municipalities were expected to advance the reform of their school networks. To deal with the particular challenges experienced in rural areas, the government set out priority measures to address the preservation of small primary schools in rural areas and concerns about safe transportation to school. These priorities aimed to ensure that the provision of high-quality services would be the central objective in advancing the school network reform and would not be compromised by purely economic considerations. As part of the phasing out of “secondary schools”, an accreditation process has been put in place to determine whether existing secondary schools that wish to convert into gymnasia can meet the more rigorous requirements of the curriculum at Years 11 and 12. Conditions for their transformation include a sufficient number of students studying in secondary education programmes and a given number of classes at Years 11 and 12. Thresholds vary, however, depending on the population that a school serves (for example rural or urban; border area; language of instruction).

In order to support school consolidation initiatives the central administration provided a rich array of data, analyses, models and the ministry's "Recommendations for Establishing a Network of Schools", which includes national guidelines for municipalities. Another important document supporting the school network reform was the "Workbook for Municipalities", which the ministry piloted with six municipalities. The ministry also prepared sample plans for school network reform that municipalities could use as a basis for their planning and collected data on student achievement at the municipal and school level. These data-rich publications were a key resource in negotiations with different municipalities, to inform public consultations and to communicate the key principles of the school network reform.

Source: Shewbridge et al. (2016). *OECD Reviews of School Resources: Lithuania 2016*, OECD Publishing, Paris, http://doi.org/http://dx.doi.org/10.1787/9789264252547-en (pp. 55 ff., 61).
Guidelines for infrastructural development and school construction projects

Some countries have issued central guidelines for the construction of school facilities in order to reduce the cost of planning procedures for infrastructural development and ensure the fulfilment of quality standards and policy objectives related to issues such as environmental performance or inclusive educational settings (see Box 2.2 for an example of such guidelines in England). Centrally set and monitored norms for educational facilities can be particularly useful where the planning of school networks and individual facilities is the responsibility of local authorities with insufficient capacity to effectively engage in the planning of infrastructural developments. This tends to be more frequently the case at the level of primary education (Beynon, 1997, p. 7[8]).

School networks can make significant long-term efficiency gains by sharing and employing best practices for the construction of high-quality and flexible school facilities. Providing architects with guidelines and objectives for the creation of learning spaces that support a variety of pedagogical practices and offer enough flexibility to respond to changing student needs can reduce the initial cost of construction, but also expenditures on maintenance and remodelling works in the long term (Beynon, 1997, p. 60 f.[8]). Several large-scale infrastructural development projects have taken this approach, including Portugal's Secondary School Building Modernisation Programme (SMP), which comprised the rebuilding, extension, adaptation and re-equipment of 173 schools. As part of the modernisation project, *Parque Escolar* (a special-purpose state-owned company charged with overseeing its planning and delivery) assembled a design manual providing architects a range of guidelines ranging from requirements for classroom layouts to technical guidance on acoustics and lighting, drawing on the findings of consultations with various experts and stakeholders (Blyth et al., 2012[6]).

Box 2.2. Central guidelines for efficient school construction in England

In England (United Kingdom), there were three major allocations of public funding for capital expenditures (delivered as a capital grant) in 2013/15: basic needs funding allocated to local authorities to provide additional school places where needed in their area (based on projections of need and enabling authorities to plan provision over the coming two years); maintenance funding (allocated to local authorities or direct to schools, depending on the management of the school); and devolved formula funding allocated direct to schools. Additional targeted funding (targeted basic need programme) was announced to provide additional support to local authorities with the greatest demographic pressures to expand the provision of school places.

A “Priority School Building Programme” was also established to target the renovations or rebuilding of schools in the worst condition across the country (a total of 537 schools). The Education Funding Agency (which was merged with the Skills Funding Agency in April 2017 to form the Education and Skills Funding Agency) designed the programme to make more efficient use of public funding. First, schools are grouped into “batches” to improve efficiency in procurement time and costs. Second, the programme promotes a more standardised design to support construction efficiency and principles for future sustainability. It specifies standard designs, services and performance requirements for each school.

The facilities' output specification comprises: a generic design brief with requirements for all schools; a school-specific design brief (e.g. reflecting special needs provisions); schedules of accommodation comprising a list of rooms and spaces required in each school; and area data sheets which identify the requirements for each room and space listed in the schedule of
accommodation (comprising services, environmental performance requirements, fittings, furniture and equipment and Information and Communication Technology [ICT] provision). Key design principles guiding the project relate to functionality, health and safety, a standardised approach, sustainability and future-proofing (i.e. the flexibility to adapt school facilities to changing enrolment patterns, curricular provision and teaching methods). These principles are illustrated in a set of baseline designs for schools which can be consulted at www.gov.uk/government/collections/school-building-design-and-maintenance.

Source: OECD (2017), *The Funding of School Education: Connecting Resources and Learning*, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264276147-en.

## Central funding mechanisms and incentives for local network efficiency

In school systems that use central formulas to distribute financial resources to lower-level authorities or schools, the choice of the formula's parameters can set incentives for greater network efficiency and steer the development of the school network in line with policy objectives. Increasing the weights for students attending specific types of schools, for example, can encourage their expansion where they are in short supply or encourage specific forms of educational provision, such as teaching in integrated classrooms for special educational needs (SEN) students. Given that per-student fixed costs are higher in small schools, strict per-capita funding places larger providers at an advantage and thereby indirectly encourages school consolidation. Alongside direct interventions into the school network, such as one-off payments to support municipal school consolidation projects, the design of funding allocation mechanisms therefore provides a particularly important instrument for systems with significant excess capacity to encourage the rationalisation of their networks. Reducing the funding for schools that remain below a given class sizes threshold for multiple years or the amount of additional allocations to small schools are common ways to exert indirect pressure towards school consolidation in these contexts.

Reconciling incentives for a rational organisation of the school network with the recognition that small schools face an additional burden and should be compensated accordingly – particularly where consolidation is not an option – poses a challenge for many school systems. Some of the strategies governments have explored to resolve this tension include i) limiting incentives for school network consolidation to higher levels of education for which the proximity of provision to students’ homes is considered less of a priority, ii) granting protected status and guaranteed additional funding to remote schools whose maintenance is critical to the school network, iii) offering financial incentives for network consolidation in the form of direct grants provided outside the main funding formula (see more in Chapter 3). The funding system in Estonia provides examples of some of these techniques (see Box 2.3).

Countries that place a premium on school choice and curricular diversity, rather than economies of scale and the efficiency of the school network, often design funding mechanisms with a view to safeguarding the provision of a wide range of courses and maintaining small classes. In the Flemish Community of Belgium, for example, the funding formula for secondary education assigns a greater weight to students enrolled in small courses, thus encouraging teaching in smaller classes and maintaining access to course options which could not otherwise be offered. In addition, funding is based on regressive scales, calibrating student coefficients to rise in value as course enrolments fall. While this approach ensures a wide range of diversified course options, it risks to
exacerbate inefficiencies arising from the operation of a fragmented school network, particularly in conjunction with a relatively fragmented curriculum and a large number of small schools. Authorities should be aware that this funding model penalises schools that seek to achieve economies of scale by consolidating their programme offer or establishing co-operations between schools (Nusche et al., 2015, p. 113 f.[9]).

### Box 2.3. Reconciling incentives for network efficiency with funding for small schools in Estonia

In recognition of the higher resource needs of small schools, Estonia's school funding formula contains coefficients that are designed to give additional resources to municipalities that operate small schools while at the same time providing them with incentives to engage in school consolidation. Since the Estonian government is committed to providing primary education close to the place where students live, the formula used to allocate education salary grants to local governments is primarily designed to encourage consolidation at the lower secondary level (Years 7-9).

Municipalities that close lower secondary schools continue to receive funding for these students for multiple years, while the municipality that takes them on immediately also receives whichever level of funding was assigned to them prior to the consolidation. This was particularly relevant prior to 2017, when an Administrative Reform Act reduced the number of Estonian municipalities from 213 to 79. Until then, half of them had only operated a single school.

At the upper secondary level, support for consolidation is further supported through direct investment grants. Local governments that reduce their number of upper secondary schools are eligible for special investment grants and the national government fully covers the cost of transportation for students who decide to commute to one of the newly constructed state-run gymnasiums. In addition, to provide local governments with greater long-term financial security when planning the reorganisation of their school networks, the coefficients used to allocate both salary and equalisation grants were fixed in 2015 and are no longer subject to annual changes.

Source: Santiago, P. et al. (2016), *OECD Reviews of School Resources: Estonia 2016*, OECD Publishing, Paris, http://doi.org/10.1787/9789264251731-en.

For any such funding formula-based incentives to enhance the school network's efficiency, its objectives and the factors that drive the distribution of funding need to be transparent to schools and local authorities (OECD, 2017[2]). A clear public communication strategy and coherent messaging can help to dispel ambiguities and provide school leaders or local authorities with a good understanding of the trade-offs they face and their financial implications. For example, as has been suggested in the case of Estonia, authorities could adjust the funding formula such that it covers teacher salaries only for classes exceeding a given minimum threshold and ensure that municipalities understand that maintaining smaller classes would require them to contribute additional resources (Santiago et al., 2016, p. 98 f.[14]). However, it should be born in mind that some small municipalities and schools have limited capacity and manoeuvring space to adequately adjust their resource use in response to financial incentives (Blanchenay, Burns and Köster, 2014[16]).
The distribution of spending responsibilities and the mechanisms used to distribute funding across levels of government also plays a critical role in shaping the incentive structure for the efficient organisation of the school network. Complex governance arrangements in Austria, for example, provide municipalities with little incentives to engage in the strategic planning of their school networks since they bear few of the financial consequences generated by its inefficiencies. Under a system sometimes described as “distributional federalism”, the federal government provides provinces with annual funding for teacher salaries based on previously agreed staff plans. However, provinces are free to hire more teachers than foreseen in these annual plans and the federal level covers part of the additional expenditure generated as a result. This arrangement has encouraged overspending and caused the number of excess teaching positions at general compulsory schools to almost double from 1 039 to 2 063, between 2006 and 2010. In addition, Austrian municipalities face financial incentives to resist school closures, since consolidating municipalities are required to compensate the constituency which absorbs their students to cover part of its increased infrastructure and non-teaching staff expenditures (Nusche et al., 2016, p. 26[17]).

By contrast, aligning financial responsibilities with the degree of local autonomy for the planning of the school network can generate strong incentives in the opposite direction, prompting strategic reflections at the local level on ways to increase the efficiency of the school network. For example, both Norway (1986) and Sweden (1993) decentralised their school funding systems by providing local authorities with block grants from the central level. Although the amount of per-pupil funding remained unchanged, reforming the mechanism through which it was distributed and decentralising spending responsibilities incentivised local authorities to generate savings by reorganising their rural school networks (Sigsworth and Solstad, 2005[18]). Likewise, in Denmark, municipalities can devise their own school funding formulas and adapt them to local conditions and the concerns of the local community (Nusche et al., 2016, p. 82[19]).

## Regulations concerning school and class sizes

The regulation of school and class sizes is an important steering tool in the governance of the school network. It can serve as a means to improve the efficient use of public funds, steer rationalisation processes and provide incentives for co-operation among schools. As can be seen in Figure 2.2, the average size of secondary schools varies considerably across OECD countries around an average of 668 students at the lower secondary level and 921 at the upper secondary level. In systems at the extreme ends of the spectrum, more than 1 400 students attend average upper secondary schools and more than 1 200 attend average lower secondary schools, while upper and lower secondary schools in Greece are the smallest with an average enrolment of 269 and 233 students respectively. In general, primary schools tend to be significantly smaller than those at the secondary level and lower secondary schools are on average smaller than upper secondary schools in all OECD countries with available data, apart from Luxembourg, Turkey and Israel.
<figure><img src="image_12.png" /><figcaption>Figure 2.2. Mean school size at the upper and lower secondary levels, 2015</figcaption></figure>

Note: Countries and economies are ranked in descending order of students per school at the upper secondary level (based on school principals' reports). Missing bars due to insufficient number of observations to ensure comparability (i.e. there are fewer than 30 students or fewer than 5 schools with valid data).

1: Number of students refers to school clusters (see PISA 2015 Technical Report, Table 4.3).

Source: OECD (2016), PISA 2015 Results (Volume II): Policies and Practices for Successful Schools, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264267510-en, Table II.6.7.

StatLink https://doi.org/10.1787/888933831146

One of the biggest challenges for the efficient organisation of the school network, particularly in rural areas, is a low population density. In multiple OECD review countries, this has been aggravated by declining birth rates and rural-urban migration (see Chapter 3). As a result, many of the affected countries have seen a significant reduction in the average school size for parts of their network. As can be seen in Figure 2.3, the proportion of 15-year-olds attending small secondary schools with fewer than 300 students is lower than 15% in the majority of OECD countries. Nevertheless, they account for at least one third of students in six countries and more than half in Greece and Poland. The structural variation in school networks is even more apparent for the prevalence of very small secondary schools with fewer than 100 or 50 students. While their proportion is negligible in the majority of OECD member states and review countries, more than 5% of 15-year-olds in the PISA sample attend such schools in Austria, Estonia, Greece, Hungary, Iceland, Latvia, Mexico and Poland.
<figure><img src="image_13.png" /><figcaption>Figure 2.3. Size of schools attended by 15-year-old students, 2015</figcaption></figure>

Note: Countries and economies are ranked in descending order of the proportion of students in schools with fewer than 300 students (based on school principals' reports). School size categories with fewer than 30 students or fewer than 5 schools are displayed as 0.

1: PISA 2012 data

2: PISA 2009 data

3. Number of students refers to school clusters (see PISA 2015 Technical Report, Table 4.3).

Source: Authors’ analysis based on PISA 2015 data.

StatLink

https://doi.org/10.1787/888933831165

Subject to school network reforms and demographic shifts, the size of schools has
undergone significant changes in some OECD school systems. Between the 2009 and
2015 waves of the OECD Programme for International Student Assessment (PISA)
survey, the proportion of 15-year-olds in schools with fewer than 300 students has
increased by more than 10 percentage points in Sweden and the Slovak Republic, while
dropping by close to the same magnitude in Italy and Slovenia. In Greece, Romania and
Poland, enrolment in very small secondary schools with fewer than 100 students has risen
by more than 3 percentage points over the same period of time while it has dropped
significantly in Latvia, Sweden and Turkey. At the other end of the spectrum, multiple
OECD countries have significantly raised the proportion of 15-year-olds enrolled in large
schools with more than 1200 students between 2009 and 2015, increasing it by more than
10 percentage points in Belgium, Denmark, Germany, Italy, the Netherlands and the
United Kingdom (based on the authors' analysis of PISA 2009 and 2015 data).

The proliferation of very small schools has important fiscal implications, given that expenditure per student tends to be highest in small schools (Falch, Rønning and Strøm, 2008[20]; Østergaard Larsen, Houlberg and Schindler Rangvid, 2013[21]). At the same time, research from multiple countries suggests that providers can generate economies of scale by increasing school size up to a certain enrolment level (although marginal returns to scale tend to diminish and diseconomies of scale may emerge in very large schools) (Ares Abalde, 2014[22]). One of the main reasons why larger schools are able to reduce per-student costs is their ability to fill classes up to the maximum number of students (Knoth Humlum and Smith, 2015[23]). Conversely, very small schools are more prone to suffer from underutilisation (i.e. large spaces and high staff numbers for few students), which can put considerable pressure on public resources.
Even though, within a given school system, schools with small classes tend to face higher per-student staff costs, the link between average class size and student-teacher ratios is surprisingly weak across countries. As illustrated in Figure 2.4, countries with similar class sizes can have very different teacher-class ratios depending on the number of classes for which a teacher is responsible, the amount of instruction time compared to the length of teachers’ working days, how students are grouped within classes and the use of team teaching. For example, while the average class size in Luxemburg primary schools is the lowest of any OECD country, the number of primary teachers per class is only slightly above the OECD average (1.46 in Luxembourg, compared to 1.39 in the OECD on average), which results in a student-teacher ratio comparable to that of some countries with above average class sizes. The number of teachers per class also tends to increase with the level of education, reflecting increased annual instruction time for students and fewer instruction hours per teachers as their specialisation and the number of different courses on offer increases. Correspondingly, the number of students per class is higher in lower secondary than in primary education in most OECD countries (Figure 2.4).
<figure><img src="image_14.png" /><figcaption>Figure 2.4. Class size and teacher-class ratio in primary and lower secondary education, 2015</figcaption></figure>

1. Primary includes pre-primary education.

2. Public and government-dependent private institutions only.

3. Lower secondary education comprises secondary schools for age 11-16.

4. Public institutions only.

Source: OECD (2017), Education at a Glance 2017: OECD Indicators, OECD Publishing, Paris, http://dx.doi.org/10.1787/eag-2017-en, Tables D2.1 and D2.2; Lithuania: Eurostat.

StatLink https://doi.org/10.1787/888933831184
Given that, all else being equal, smaller classes are associated with higher staff costs and may require greater administrative and organisational effort (Hanushek, 2011[24]; Rivkin, Hanushek and Kain, 2005[25]), the regulation of class sizes has featured prominently in discussions surrounding the efficient organisation of the school network. The strongest objections to the increase of class sizes are based on the perception that smaller classes are conducive to educational quality since they permit teachers to devote more attention to individual students and employ a wider range of pedagogical approaches (see Box 2.4). The empirical evidence on the effects of class size on student outcomes are contested (Krueger, 2003[26]; Hanushek, 1997[27]). The best-identified studies from large-scale experiments such as the Tennessee's Student Teacher Achievement Ratio (STAR) study suggest that reducing class sizes from kindergarten through third grade to around 15 students had a positive effect on achievement and some longer-term outcomes, particularly for students from disadvantaged backgrounds (Chetty et al., 2011[28]; Dynarski, Hyman and Schanzenbach, 2013[29]).

The effect of class size appears to be smaller for older students and varies considerably across countries (Wößmann and West, 2006[30]). Relatively small or absent effects in many schools systems have been taken to suggest that student learning can be more effectively supported through other means than class size reductions (Hattie, 2009[31]). Proposals for such alternative investments include the increase of teacher salaries, investments in their professional development or the hiring of extra assistant teachers and other para-professionals. Although long-term effects of class size reductions on students' future earnings have not been conclusively demonstrated in the United States (Chetty et al., 2011[28]), evidence from Sweden points to long-term wage increases that could offset some of the cost associated with smaller classes (Fredriksson, Öckert and Oosterbeek, 2013[32]). Nevertheless, few studies have directly compared the cost and benefit of class size reductions with those of alternative interventions (Chingos, 2013[33]).

**Box 2.4. Trade-offs in decisions concerning the use of teacher resources**

Holding other factors constant, organising students in smaller classes is more expensive since it requires more staff resources per student. While smaller classes are often assumed to improve educational quality by allowing teachers to focus more on the needs of individual students, the effectiveness of class size reductions needs to be considered in comparison with competing strategies to improve student outcomes.

Some studies indicate that smaller classes can improve non-cognitive skills (Dee and West, 2011[34]) and others have found these effects to be more pronounced among students from disadvantaged socio-economic backgrounds (Piketty, 2004[35]; Dynarski, Hyman and Schanzenbach, 2013[29]). Most studies that rigorously identify effects of class size reduction, however, have focused on the earlier years of education (Chetty et al., 2011[28]) and cross-national evidence from OECD countries has generally found a weak association between smaller classes and the performance on standardised tests, attainment or degree completion (OECD, 2013[36]). Some of these inconsistencies may arise from the assignment of less qualified or experienced teachers to smaller classes. Another reason may be that marginal reductions in class size only translate into better outcomes once they enable teachers to employ different pedagogical practices (Santiago et al., 2016, p. 27[13]).
Given the trade-off between investments in lower class-size and other priorities, some high-performing systems, such as Shanghai and Singapore, have chosen to reduce teacher workloads instead to enable them to spend more time on professional development (Jensen et al., 2012[37]). Others have proposed increasing class sizes to invest in higher salaries for teachers, teaching technology, or more widespread use of assistant teachers (OECD, 2014). Recent findings from the 2013 OECD Teaching and Learning International Survey (TALIS) show that the proportion of a teacher's students with behavioural problems remains a strong predictor of low job satisfaction, while the size of their classes is insignificant in most participating countries (OECD, 2014, pp. 445, Box D2.1[38]). This underlines the importance of ensuring that teachers are well-equipped to teach diverse and challenging classrooms regardless of their size.

*Sources:* OECD (2014), *Education at a Glance 2014: OECD Indicators*, http://dx.doi.org/10.1787/eag-2012-18-en; Jensen et al. (2012), *Catching Up: Learning from the Best School Systems in East Asia*, Grattan Institute, Melbourne, Victoria.

## Maximum class size regulations

Based on concerns for educational quality and the well-being of students and teachers, many OECD countries specify an upper bound or recommend a maximum size for school classes. This threshold may vary across different types of provision, educational levels or according to the size of schools. In Estonia, for example, new state-run upper secondary general schools are expected to proscribe a maximum class size of 28 students for small schools (planned for 252 students), 30 students for medium-sized schools (planned for 360 students), and 36 students for schools located in larger towns (planned for 540 or 750 students). In addition, the maximum class size for students with SEN is considerably smaller, depending on the severity of their learning difficulties (Santiago et al., 2016, pp. 166, Table 4.5[14]).

Hard upper bounds to maximum class sizes may pose challenges for a number of reasons. Since both educators and parents tend to have a preference for smaller classes, school leaders might seek to artificially increase enrolment by flexibly applying age-at-entry rules or moving students between grades if they are close to the cut-off. For example, data from Israeli primary schools, which need to split classes once they exceed 40 students, provides clear evidence of this practice (Angrist et al., 2017[39]). At the same time, particularly in constituencies with limited funding capacity, maximum class size rules can put schools under financial pressure and cause teacher shortages in case they have to unexpectedly split classes. Evidence from California's class-size-reduction programme indicates that the need to split classes has compelled many disadvantaged schools to hire inexperienced and less qualified teachers, which offset some of the benefits associated with smaller classes (Jepsen and Rivkin, 2009[40]). In order to ease the financial burden resulting from an unexpected increase in the number of required classes, small schools are sometimes provided with additional financial support or permitted to exceed the maximum number of students. Such exceptions may be granted after obtaining permission from a relevant authority (Santiago et al., 2016, p. 27[13]) or for a limited period of time (e.g. one academic year in a specific class) and may be conditional on certain provisions (e.g. ensuring that all health and safety requirements are met), as is the case in Estonia (Ministry of Education and Research, 2015, p. 45[41]).
## Minimum class size regulations

While the specification of maximum class sizes is common practice, there are many cases in which schools remain well below this threshold, to the extent that their operation raises concerns for the efficiency of the school network. Particularly in systems where the responsibility for the operation of schools is relatively decentralised, the authority to set minimum class and school sizes has therefore come to constitute a powerful steering tool with which central authorities influence the organisation of the school network (Shewbridge et al., 2016, p. 66[15]). The potential effects of minimum class size rules need to be carefully considered as they are likely to vary across contexts and the level of education to which they are applied. Particularly in sparsely populated areas, they may exert pressure leading to the closure of schools or reduction of their course offer. All else being equal, minimum class sizes are also likely to have a greater effect on schools with a more diversified course offer, as is commonly the case at higher levels of education.

Once defined, minimum class size rules may be used for different purposes. Some countries use them as thresholds for recommending or requiring schools to initiate the merger of multiple small classes or provide them with additional support if the size of their classes requires specific pedagogical arrangements such as multi-grade teaching. Minimum class sizes may also be used to impose sanctions such as a reduction in funding if a school remains below the threshold for multiple years, or to define the maximum number of teachers required for a given number of students. To the same effect, some Danish municipalities use national guidelines on *maximum* class sizes to fund schools according to the minimum number of theoretically required classes (Nusche et al., 2016, p. 71[19]).

## School and class size regulations that are not attuned to student needs and regional context can undermine quality and efficiency objectives

While the regulation of school and class sizes can play an important role in the governance of school networks, it is important to bear in mind that there is no “one size fits all” solution. Regulations concerning minimum class or school sizes should allow for variation across levels of education and locations. Even though providing incentives for municipalities to create larger schools and classes may improve school quality and efficiency in some contexts, enforcing a lower bound to school sizes may be unfeasible in geographically isolated areas (Andrews, Duncombe and Yinger, 2002[42]), just as increasing the size of classes may not be an option for small schools admitting only a single class per year.

Under per capita funding regimes, small classes tend to place a financial burden on schools anyway and further sanctioning their operation may be counterproductive and detrimental to their ability to provide high-quality education (Santiago et al., 2016, p. 183[14]). To account for this challenge, authorities may specify a threshold or average school class size below which students would not be funded, while offering schools an option to be exempted from this rule subject to their identification as meriting a protected status. This serves to ensure that students in remote areas are not placed at a further disadvantage and that school owners and local authorities can deliberate whether to engage in consolidation processes or contribute funding out of their own budgets to keep schools open at their current level of enrolment.

In the absence of a clear consensus on optimal school or class sizes, local authorities with sufficient authority and capacity play an important role in developing context-specific strategies to improve the efficiency of their school networks. As discussed in more detail
in Chapter 3, a range of different strategies have proven effective in offsetting the disadvantages of small remote schools without further tightening their budgets or removing them from their communities. Especially in systems with a tradition of local autonomy, involving local communities in the restructuring of the school network can be more effective than driving the process through national-level regulations as it allows for contextual characteristics to be taken into account. Nevertheless, central-level actors should ensure that the adjustment of school network structures remains high on local political agendas and that it is guided by school quality at least as much as it is by concerns for economic efficiency (Nusche et al., 2016, p. 91[19]).

## School licensing and the role of private providers

A central issue for the governance of the school network are the rules and procedures for setting up new schools. The criteria employed in the licensing and funding of new schools are not only critical to ensure a high quality of educational provision, they can also serve as steering tools supporting the rational organisation of the school network. Low barriers to entry and incentives for the establishment of new (public and private) providers can be a way to expand the capacity of the school network and broaden parental choice. Inducing greater dynamism in the school network is often expected to yield innovation and facilitate the replacement of ineffective providers by competitors of higher quality or productivity. Yet, the unplanned school closures characterising many high-turnover systems are disruptive events for students that can negatively impact their social and educational outcomes (Grau, Hojman and Mizala, 2018[43]). To compensate for these adverse effects, newly opened schools would need to be of significantly higher quality than those leaving the network, which need not be the case in practice. Licensing procedures that regulate the entry into of new providers therefore play an important role in supporting equity, educational quality and efficiency in dynamic school networks.

The licensing process often requires prospective school owners to submit a range of information to the license-granting authority and any standing or ad hoc expert committees involved in the process. These dossiers may include the school statutes, its proposed curriculum, the qualifications of school management and teachers, information about facilities, development plans etc. In some cases, the licensing process involves binding agreements between school founders (e.g. self-governing regions, municipalities, regional state authorities), which may impose additional criteria for the provision of school services and define quality standards, minimum class and school sizes or maximum commuting distances for students.

The ultimate responsibility for the creation of public schools may be shared between multiple authorities and vary by school type. The process of registering new schools, revoking their license or recommending their consolidation may also draw on the assessment or recommendation of other public bodies, for example the school inspectorate in the Slovak Republic (Santiago et al., 2016, p. 41[13]). For specific school types, such as vocational schools in Estonia, employers other social partners can play a role in the process too (Santiago et al., 2016, p. 73[14]). Given that decisions to open a school are frequently made by local authorities, many systems face challenges when trying to ensure that the process is transparent and that decisions are based on an assessment of quality and need, as the review team observed, for example, in the Slovak Republic (Santiago et al., 2016, p. 22[13]).
### Differential standards for admission and tuition practices can generate an uneven playing field between public and private providers

School systems vary in their approach to licensing independent private schools and government-dependent private schools (i.e. those receiving a majority of their funding from public agencies). Encouraging the entry of private providers, for example through public subsidies, is usually intended to stimulate competition between schools and provide parents with a greater diversity of educational approaches to choose from. Distinct licensing criteria for private schools may therefore give them greater freedom to teach innovative curricula or a flexible programme to encourage this pedagogical diversity. However, when it comes to factors like the ability to select students, applying different standards to public and private schools can raise significant equity concerns related to the segregation of students and the allocation of public resources (Boeskens, 2016[44]; Waslander, Pater and van der Weide, 2010[45]).

Chile provides a good example of a country that has experienced and recently addressed this challenge. Until the 2015 Inclusion Law (*Ley de Inclusion*) put an end to the practice, government-dependent private schools were eligible for the same amount of funding as public schools while retaining the right to charge parental fees and engage in selective admission practices (Santiago et al., 2017[46]). This has contributed to the country's high level of socio-economic segregation as middle class students increasingly left the public school system to enter subsidised private schools whose tuition and admission policies had put them at a financial advantage while effectively excluding many disadvantaged students (OECD, 2017, p. 85 f.[2]). Most countries acknowledge this risk of "cream skimming" or competition based on selectivity rather than educational quality and therefore apply the same admissions regulations for public and government-dependent private providers and ensure that tuition fees do not exclude disadvantaged students from attending publicly funded schools.

### The process of licensing new schools can facilitate or undermine the rational organisation of the school network

Independent of concerns related to equity and segregation, licensing and funding arrangements that strongly encourage the entry of private providers can come at the expense of efficiency in the school network. Even though, on average across the OECD, private schools are larger than public schools and there is no significant difference in their class size, an influx of private providers encouraged by low barriers to entry or preferential funding conditions can contribute to the fragmentation of the school network and lead to smaller average school and class sizes, thus thwarting efforts to provide education services at a greater scale. Systems in which funding follows students across sectors therefore need to carefully define the conditions under which different services and providers should be eligible for public funding, in order to guarantee a high quality of provision and to protect students' interests while avoiding a fragmentation of the school network.

Estonia, for example, has seen a significant increase in the number of government-dependent private schools, which are entitled to the same amount of funding as public schools, provided that they do not charge tuition fees exceeding 25% of the monthly minimum wage. These schools have significantly smaller classes than public schools, counting 15 and 12 students in primary and lower secondary education respectively, compared to the system-wide averages of 17 and 16 students per class (Santiago et al., 2016, p. 76[14]). While the opening and closure of municipal schools is
the responsibility of local governments acting within a central regulatory framework, private schools in Estonia are not subject to the same control. As in many OECD countries, the expansion of the private sector therefore not only comes with the prospect of greater competition, but also that of diminished public control over the planning of the school network. Given the country's ongoing challenge to adapt the school network to shrinking cohort sizes, the funding and regulation of private schools has raised significant efficiency concerns (Santiago et al., 2016, p. 94[14]).

The misalignment between a system's policy priorities for the school network and its process for the creation of new schools can also significantly diminish the scope for strategic network planning and thwart efforts to reorganise the school offer. Between 2007 and 2013, for example, Danish municipalities have responded to shrinking cohort sizes by closing down smaller schools and reorganising the management of schools by joining several schools under the same leadership. As a result, they reduced the total number of municipal schools by more than a fifth and increased the average size of a *Folkeskole* (public primary and lower secondary schools) from 362 to 442 students. However, the potential for private schools to emerge and replace the recently closed public schools has raised concerns that the low barriers to entry for private providers might undermine their efforts to rationalise the school offer. Even though it is difficult to establish the extent of this phenomenon, municipal leaders repeatedly reported to the OECD review team that the closure of public schools has led parents to set up a private school in the same location, particularly in rural areas with strong parental engagement (Nusche et al., 2016, pp. 55, 90[19]). The fact that private schools are funded by the state rather than the municipalities has aggravated this problem, since it gave local authorities little incentives to apply stricter standards for the creation of new schools. A similar phenomenon has been reported in Norway, where parents in multiple rural communities decided to shift to Montessori pedagogy when faced with the prospect of municipal school consolidation, which made them eligible for state-funding under the country's Private Schools Act (Lauglo, 2010[47]).

The Flemish Community of Belgium – another system that places great emphasis on school choice and autonomy – has responded to similar efficiency concerns by financing school associations to encourage collaboration between schools with management and administrative support. Such initiatives can offset some of the cost associated with diseconomies in fragmented school networks and foster co-operation in a competitive choice-based system that provides few incentives for collaboration. However, the cost of supporting school associations and similar platforms to remediate diseconomies in fragmented school networks needs to be weighed against the potential efficiency gains afforded by a broader public ownership of school facilities or increased control at the point their creation (Nusche et al., 2015, p. 115 f.[9]).

In order to align procedures for the creation of new schools with the pursuit of greater efficiency in the school network, some systems have tied the licensing and funding of education services to an assessment of both quality and needs. In regions without a clear case for unmet demand, schools might for example be required to serve a sufficient number of classes above a given threshold before qualifying for inclusion into the network of publicly funded providers. Historical examples of the introduction of such need-based licensing procedures include the Czech Republic, where a reform of the Education Act in 1995 aimed to tighten up access to public funding and the entry into the School Registry of Schools and School Facilities (see Box 2.7). The revision imposed a stricter set of criteria to be fulfilled for the public funding of school providers as well as specifying under which conditions a school would be removed from the school registry.
This significantly reduced the number of private schools (MŠMT, 2016[48]). As described in Box 2.5, Colombia provides another example for the needs-based licensing and funding of private schools, which ensures that they complement the public offer and are strategically drawn on to address capacity shortages in the school network (Sánchez, 2018[49]; Radinger et al., 2018[50]).

Box 2.5. Contracting private providers to address acute capacity shortages in Colombia

When faced with capacity shortages or other limitations, Colombia's Secretaries of Education (sub-national authorities at the departmental or municipal level that have been certified to provide education and are referred to as certified territorial entities) can provide education through different forms of partnerships with private providers (matrícula oficial contratada). Regulated by Decree 1851 of 2015, these partnerships most commonly take the form of publicly funding privately operated schools under the supervision of the Secretaries of Education. Overall, around 6% of students from pre-primary to upper secondary education were enrolled in publicly funded private schools and 19% in independent private schools in 2017 (Sánchez, 2018). Based on PISA 2015 data, the share of 15-year-old students attending government-dependent or independent private schools in Colombia stood at 24.1% compared to the OECD average of 19.1% (OECD, 2016[51]).

The contracting of private providers can take different forms and is conditional on the local authorities' proven inability to supply sufficient school places to meet educational demand. Most commonly, local authorities hire the owners of private schools from a regulated database of recognised suppliers on the basis of single-year contracts that encompass both personnel and facilities. Private school providers can also be contracted through a selective process via tender to take over the management of existing public school facilities for a period of 2-12 years. Furthermore, churches and other religious entities can be engaged to provide educational services on single-year contracts and certified municipalities with more than 300 000 inhabitants can provide vouchers for low-income students to attend independent private schools.

The limited-term contracts on which most publicly funded private provision is based has allowed authorities to quickly scale back their reliance on private schools when enrolment started to drop or to assume the responsibility themselves where demand for facilities and staff was expected to remain high. A drawback of the flexibility afforded by these short-term contracts is the insecurity it entails for private partners, which makes it difficult for them to establish high-quality educational projects over a longer period of time (Radinger et al., 2018).

These public-private partnerships were important for Colombia's ability to respond to rising enrolment in urban areas driven by rural-urban migration and students displaced from conflict zones. They also helped to guarantee the provision of specialised education to indigenous students and mandatory services for students with SEN where local authorities did not have the capacity to adequately provide them on their own. At the same time, the quality of education provided by private entities is highly variable and not all local authorities have adequate capacity to monitor their quality. In recent years, the government has promoted the reduction of the use of private providers (Radinger et al., 2018).

Sources: Sánchez, J. L., (2018), *OECD Review of Policies to Improve the Effectiveness of Resource Use in Schools: Country Background Report for Colombia*, Ministerio de Educación Nacional [National Ministry of Education], Bogotá, D.C; Radinger, T., A. Echazarra, A., G. Guerrero & J. P. Valenzuela (2018), *OECD Reviews of School Resources: Colombia 2018*, OECD Publishing, Paris.