John Taylor,
President of the Virginia Institute for Public
Policy, publisher of Virginia Viewpoint.
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While the recent focus on education has centered on
vouchers, testing, and accountability, other issues
have important implications for the proper
management of public schools. Schools provide a host
of services that bear no relation to their
fundamental role of educating students. Functions such as transportation, food
services, and cleaning and maintenance, can be
delegated to private firms allowing school officials
to focus on their core mission — educating Virginia’s
youth.
Two statewide surveys of school districts in
Illinois
and Alabama
showed that schools that privatized support services
saved tax dollars and improved the quality of these
functions. The
districts were then able to reallocate the savings
into core services — teachers’ pay, new
textbooks and computers, and other instructional
activities.
The three most common areas of
privatization are in maintenance, transportation,
and food service delivery. Savings differ for each. However, savings typically range from 12 to
25 percent.
There are twelve different maintenance services school
districts identified as privatization opportunities.
Those include HVAC maintenance, grounds
keeping, and janitorial services.
On average, districts that fully outsourced
their grounds keeping saved 25 percent.
Transportation,
or busing, is another area where significant savings
are possible. A
study by economists at Ball
State
University
estimated that the costs for public ownership of
school bus services can be as much as 12 percent
more than if one contracted with a private vendor.
The
Illinois
and
Alabama
surveys found that food services are the least
commonly privatized. Yet,
nationally 17.5 percent of schools have outsourced
their food service functions. In Alabama
only two districts have privatized their food
service, and although they outsourced only a portion
of this function, they still enjoy the lowest cost
per student in the state for the provision of food
service by having saved nearly 28 percent.
However, both surveys confirmed that privatization is
becoming critical in the provision of non-core
services. In Illinois,
for example, virtually every school district has
outsourced at least one function with nearly a
quarter of them having privatized at least ten. Of these districts, 41 percent reported that
outsourcing was the only way they could provide a
particular service either due to a lack of technical
expertise, or because of budgetary constraints.
Additionally, the survey indicated that as budgets grew
tighter, privatization increasingly became the
alternative of choice, especially in the larger
districts. Roughly
one in four school districts expanded outsourcing
programs in the past five years, with one in four
planning to privatize more in the next five years
— the rate of increase being greater for school
districts with larger enrollments.
While saving money is important, delivering quality
services is essential when thinking about our
children. Despite
the fact that school officials usually turn to
privatization because of financial pressures and
rising personnel costs, improving quality is every
bit as critical. The Illinois
survey indicated that quality enhancements were as
important, if not more important, to outsourcing
being perceived a success.
Privatization is not new to
Virginia. School
districts around the state
have begun to outsource services not directly
related to education. However, much remains to be
done. It’s worth noting that the Alabama
and Illinois
surveys also found that once school officials
successfully privatized a function, they were more
likely to look for additional opportunities.
Furthermore,
officials also rely heavily on experiences in
neighboring school districts for guidance.
In fact, networking among school officials is
an important, if understated, part of the decision
making process, playing a role in information
gathering and contract monitoring.
It’s critical that districts that have
outsourced communicate their experience to their
colleagues.
Perhaps the most important data from the surveys is that
two-thirds of school officials rated privatization a
success. Only
four school districts in Alabama
reported that it had failed, with one in five
reporting it had mixed results. With roughly 20 percent of education budgets
being spent on non-education support services, the
opportunities for savings are just too great to
ignore. Outsourcing
can be used to address budget challenges while
directing more funds toward instructional programs. School officials across
Virginia
should carefully consider how non-core,
non-education related services are provided in their
own districts. Privatization,
though not a panacea, can help school districts
enhance the educational experience of Virginia’s
youth.
--
June 21, 2004
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