By IOE Editor, on 2 February 2020
The CEPEO Blog
Welcome to the Centre for Education Policy and Equalising Opportunities (CEPEO) blog. This blog is a forum for staff, students, alumni and guests to write about and around CEPEO’s four thematic areas of research and engagement.
Our focus areas
The Centre concentrates around four thematic areas, each underpinned by the aim to improve the education system and equalise opportunities for all. These include:
Exams 2021: So what now? Part 2: CEPEO’s response to the DfE/Ofqual consultation on summer assessment 2020/21
By IOE Editor, on 21 January 2021
By Jake Anders, Lindsey Macmillan and Gill Wyness
Given the widespread disruption to learning this academic year and the substantial risk of continued disruption to schooling into the summer term, the government were right to take the decision to cancel exams in England in their usual form – indeed having done so earlier as many were calling for would have made the implementation of a wider range of alternatives feasible. But now that the government, working with Ofqual, have turned to decide how GCSE and A level grades should be awarded this year, what should they do? In our recent blog we made the case that assessment should be flexible in terms of timing and content, but that it should continue to be externally set and marked, to ensure fairness and rigour.
Unfortunately, the government’s new proposals do not take that message on board and instead take teacher assessment as a given. As a result, their current consultation is framed without allowing for the opportunity to consider this fundamental aspect of the government’s approach. In setting out these plans, Gavin Williamson said that they put their trust in teachers, not algorithms. But this is a false dichotomy, as our proposed approach shows. In addition, as we argued last year, asking teachers to assign grades accurately and fairly is asking them to do a near impossible task – and one that will add considerably to their hugely expanded workloads: fundamentally, trusting teachers can only go so far when it comes to achieving fair and rigorous assessment.
Nevertheless, since the framing gives no alternative, in our response to the consultation, we make suggestions that will minimise the unfairness that this approach will cause. In particular, we highlight that, if teacher assessment must be used, it must take unequal learning loss into account, and it must be subject to a system of external quality assurance.
Dealing with Learning Loss
Assessment is important, not just so that students can continue to the next stage of their education, training or employment, but also to ensure that they continue to engage with schooling for the remainder of the academic year and, hence, minimise the learning loss that will be experienced. We therefore agree that students should be assessed in some manner, and that this should be through papers set by the exam boards and provided to the schools (as is proposed). Both for this reason and wider aims of fairness, it should be compulsory for these to be used by schools as the primary basis of the teacher assessed grades for both GCSEs and A levels. Flexibility in the timing of these assessments will allow this possibility despite the ongoing risks to disruption of schooling.
However, as is widely documented, pupils have had very different experiences of learning this year, so they will be at very different stages when they come to be assessed. For this reason, it is deeply unfair to award pupils grades based solely on the standard they are performing when they are assessed(which is proposed to be at some point between May-June 2021). While it is important to push the assessment date to the latest time period possible (to allow students maximum time to catch up), it is unlikely that students will be able to recover from lost learning, and it is inevitable that students will be at different levels when they are assessed through no fault of their own.
This is fundamentally different from the philosophy that DfE and Ofqual have taken according to the consultation document, which states that students should be assessed at the standard at which they are currently performing. While we agree that it is important that these grades proxy pupils’ potential for that next stage, given the important role they play in the transition to further education and employment, it cannot be fair for pupils whose education has been disrupted the most to be systematically disadvantaged by an approach that ignores this. As such, it is vital that this year’s assessment system take this unequal opportunity to learn into account.
An important aspect of that would be for the papers set by exams boards to have several flexible components. There should be flexibility in the timing, to ensure that all pupils are able to sit them in their educational setting despite the risks of further disruption. The papers themselves should also be flexible, with teachers able to account for differentially disrupted curricula by deciding which topics are covered in the questions that students are asked to answer.
Given the exam boards will be required to set these exams, the best approach would be also to use their expertise in marking them. As well as being far more rigorous, using the exam boards’ available, paid workforce to do the marking would avoid placing a huge additional burden on teachers’ workloads, as well as avoiding the risks of exposing them to unfair pressure from pupils and parents.
But in the absence of this option, we agree with Ofqual that exam boards should still play an important role in providing assessment guidance and monitoring. We agree with the proposals to involve exam boards in providing support and information to schools and colleges to help them meet the assessment requirements, and to ensure internal quality assurance. Exam boards should also be involved in external quality assurance. At the very least this should include extensive sampling, at subject level, the evidence on which the submitted grades were based. Judging by last year’s experiences, there is good reason to suggest that independent schools should be a particular focus of external quality assurance activity.
We also argue that the exam boards should be responsible for the appeals processes, rather than schools and teachers being involved in reconsidering the marks they have provided. Again, this distance between candidate and assessor is vital to ensure a rigour and fairness in the process that is not susceptible to inappropriate pressure, while also protecting individual teachers and schools from unfair criticism from parents and the media.
Finally, it is crucial that the appeals process take place before universities receive students’ grades. This is critical to avoid the deeply unfair situation of last year, with students apparently missing offers and losing their university place, only to have their grades later overturned.
Making these decisions quickly will provide much needed clarity for schools, pupils and their parents. However, the serious problem of learning loss will remain. Students transitioning to further education or into the labour market will be doing so having received less education than in a normal year. Adjusting grades to take account of this is a necessary short-term solution to avoid embedding unfairness in the transition process, but even more important is a plan to support catch up for all those who have fallen behind, which will be most acute for students from disadvantaged backgrounds. This will require significant commitment and investment. This needs to be recognised immediately to prevent further delay.
By IOE Editor, on 4 January 2021
By Jake Anders, Lindsey Macmillan, and Gill Wyness
While the uncertainties of a global pandemic make this one of the most volatile periods of education policy in history, if there is one lesson we should all have learned since last March, it is that indecision is costly. This has proven true repeatedly for public health and looks just as relevant for education. As we saw with the exam fiasco of summer 2020, the failure to act decisively led to there being little alternative but to assign students grades based on teachers’ predictions of what they would have achieved. This sub-optimal situation removed any final contribution on the part of the student, and, more importantly, resulted in significant biases across school type and family background. Of course, back in summer 2020, the government had little time for the advance planning that any alternatives (such as ongoing assessment) would have required. But this year, they have no such excuse, and inaction now poses the substantial risk of being left without alternatives again. That is why the government must act now to ensure that we don’t have a repeat performance in summer 2021.
For exams to give all pupils the same chance to succeed, one of the pre-requisites is that they have had the same amount of time to prepare. However, we know that is not the case from looking at patterns in disruption to their studies. While both exam cohorts (year 11 and year 13) missed up to 5 months schooling in the academic year 2019-20, the disruption has continued during this crucial exam year and in much less uniform a manner. Unfortunately, England does not publish data on attendance rates by year group, but we can look more broadly at attendance rates in all state-funded schools by region over the autumn term. The figure below illustrates that while attendance rates started the academic year between 85% and 95%, by mid-November we were seeing rates substantially below this (falling from 88% to 83% on average) driven by widespread – but regionally varying – self-isolation by both individual pupils and education ‘bubbles’. In mid-November, attendance rates were lowest in the North West and Yorkshire. By mid-December, with what we now understand to be the prevalence of the new variant increasing, London, the East, and the South East had all seen stark declines in their attendance rates. In contrast, the South West has remained near the top of attendance rates throughout.
Figure: Weekly attendance in state-funded schools by region, 10th September 2020 – 10th December 2020.
This disruption seems likely to get worse still. The Christmas holidays were anything but a break for schools and teachers, with an announcement on setting up in-school testing released shortly before the end of term (here) and the long-awaited announcement on returning to school made by DfE on December 30th. Secondary schools across the country have now moved to remote learning this week. While the majority of primary schools remain open, an increasing proportion (upwards of 15%) will not open their doors to pupils for the foreseeable future, either under direct DfE instruction through the schools contingency framework, or acting unilaterally over fears for teachers’ and students’ health. The DfE currently state that the majority of schools will re-open on January 18th, but with spiralling infection rates and stretched hospital capacities in every region, this position looks increasingly untenable. We await the Prime Minister’s announcement this evening, but many suspect that all schools will be closed for the foreseeable future.
In a blog post from November (here), we laid out the evidence that points to exams being the best route forward for school pupils in 2021, but advocating important changes (particularly focused on allowing greater flexibility), given the uncertainty that was already evident at that point. It is becoming increasingly clear that exams, at least in their usual form, cannot go ahead – this makes the changes that we continue to call for vital and urgent. The current exam plans cannot provide the level playing field that it is claimed they will deliver, given the extent of differential learning experiences of those from different regions and backgrounds in this school year alone. So what now?
A levels and GCSEs
The evidence clearly points to avoiding centre or teacher assessed grades where possible. We, therefore, argue that externally set and marked exams remain the fairest option to all pupils taking terminal exams.
But these do not have to take place in the current format proposed, during a three-week period in June 2021. Instead, there is a strong case for more flexible timing for testing pupils, allowing exams to be spread across the summer term and, crucially, allowing pupils to sit these exams at different times to deal with any continuing need for closures during this period. While this will involve more work for exam boards given the need to provide multiple versions of each exam, this is the fairest way to ensure that pupils do not miss out on external assessments. The fact that it requires more work only underlines the need for swift action.
Further, we must ensure that this year’s exams include flexible content. This would help to reduce the unfairness caused by the fact that different schools will have been able to cover different content through interruptions to in-person schooling. These reformed exams would be more like university finals: pupils could be given a wider set of options and be asked to answer a smaller proportion of these, for example, 2 questions from 6 alternatives covering a wide sweep of the curriculum.
This approach would have substantial similarities with that already announced in Wales – also supporting fairness for university applications between applicants from the two countries – and would ensure that pupils can still be awarded grades that they have earned while providing robust information on achievement for universities and future employers. Scotland, on the other hand, has cancelled their exams altogether – with National 5s (the GCSE equivalent) cancelled several months ago, and Highers (the A level equivalent) cancelled just before Christmas. Scotland will instead base awards on teacher judgement, and while this is not an optimal situation, announcing this well in advance gives schools and teachers ample time for ongoing assessment and observation.
Primary school testing
While Key Stage 1 tests have been suspended for 2021, current plans are for Key Stage 2 tests to go ahead, although the school-level results will not be published. Given that these tests are primarily used as indicators of school performance, which is going to be measured with substantial error this year, there are serious questions about their value to bodies such as Ofsted with whom they are still proposed to be shared for accountability purposes. As such, there is a strong case for abandoning these tests altogether given the current circumstances. This would significantly reduce the burden on primary school teachers, who are working under very difficult conditions, and would remove the stress on pupils and parents associated with preparing for these tests under such difficult circumstances.
Action this day
The longer it takes for these steps to be taken, the harder it will be for them to be implemented, until the point where they are no longer feasible. At that point, there is a major risk of a repeat of last year’s fiasco – but without the excuse of not having had time to prepare a better alternative. We’ve seen yet another example today of the decision making process in Whitehall lagging behind that of Holyrood. In the words of the Scottish national anthem, it’s time for the Prime Minister “tae think again.”
By IOE Editor, on 14 December 2020
By Katherine Rychliski, CEPEO Centre Manager
This year was a big one for the CEPEO team. In the year that we launched we have published a vast number of new research papers, have been awarded multiple research bids, been interviewed by various media channels, and watched our research make direct policy impact. For such a small team, we are very proud of how we’ve grown. People tend to overestimate what can be achieved in a short time but greatly underestimate what can be achieved in a year or two. I’d say this was the case for CEPEO in 2020.
However, in this piece, I’m not going to wow you with our achievements or findings – instead, I want to share our lived reality of this year and provide some insight into how our team rode the storm.
As I’ve watched our team, I’ve discovered that when we all care about our cause and try to add value to other people’s lives, a lot starts to fall into place. I can honestly say, no one tells our team members to work hard or make a difference. We all care about our cause in our unique way and seriously “go for it”.
While we’ve kept you up to date with our newsletters throughout the year, our successes haven’t happened overnight: our team has put in the effort over time. They kept at it. They cared. As Centre Manager, I wasn’t surprised about what our team was able to accomplish in a year, but I want to highlight the unique stories of the year from each team members – how they experienced 2020 at CEPEO. I hope you enjoy their stories as much as I do.
Lindsey Macmillan, Director
Setting up a research centre just as a global pandemic hit has led to an interesting, at times exasperating, and totally exhausting first year. But this year has also created numerous opportunities to contribute to evidence-led policy making, through the variety of different outputs that we’ve created together as a team.
My work on the Social Mobility Commission report ‘The long shadow of deprivation: differences in opportunities across England’ really stands out to me this year, as this report has been with me at every stage of the pandemic.
It’s hard to believe it was just February when I was presenting our initial findings at a workshop in a window-less basement at IFS. There must have been around 20 of us in the room, and it’s one of the last times I was surrounded by that many people. By mid-March, in the first of the new-normal online meetings, I spent most of the call on mute due to a suspiciously terrible cough. Yet the first draft of the report was due that Friday and I hadn’t yet processed the enormity of the pandemic.
I recall April phone calls with the Commission where I was locked away in whichever space I could find, typically hiding under my stairs. The re-drafting of the report often took place late into the evening, due to having to work around homeschooling my 5- and 3-year-old. Despite all of this, the report has been the start of some important conversations with local leaders about how best to equalise opportunities across places, feeding directly into the levelling up agenda.
This year’s successes have been undoubtedly down to this incredible group of people that come together to create CEPEO. From the boundless energy to the constant positivity (and hilarious chat) in our weekly team meetings, I couldn’t ask for a better group of people to work through a pandemic with.
Gillian Wyness, Deputy Director
My unforgettable moment of 2020 was around the time exams were cancelled because of the pandemic, and it was decided that teachers would predict the grades of students instead. I’ve co-authored two studies into the accuracy of teacher predictions, both published as CEPEO working papers earlier in the year, so my phone started ringing pretty quickly after the announcement.
But things really went crazy when the predicted grades were finally released. It was the middle of August and one of the hottest days of the year, and I was away visiting in-laws in Exeter. Myself and my partner had found some handy, centrally located accommodation in a new student halls of residence building in the town centre. And it was from there that I found myself talking to Branwen Jeffries on the BBC News at 6 about inaccuracies in predicted grades. The room was pretty basic, with no lamps, just strip lighting on the roof, and I had foolishly worn a white shirt because of the heat. The result was my face was lit up like the moon while the rest of the room was in the darkness around me. Thankfully, the clip was well received by my colleagues, friends, and the various people (including someone I hadn’t seen for 20 years) who got in touch with me after it showed on News at 10. I am really pleased to have been able to promote the centre and our work on such an important topic this year.
Jake Anders – Deputy Director
Jake is on paternity leave with his precious new daughter (who we admit we have seen dressed in her own a CEPEO branded babygrow) and so rightly was focusing on the new one at the time this was written.
Samuel Sims – Lecturer
This year has been unique in many ways. One particular novelty has been working from home at the same time as my wife. She is a GP and was forced to conduct her work remotely for a period early in the pandemic. During Lockdown 1, I remember my wife calling round her most elderly and vulnerable patients to check if they were OK. My initial response to his was pride and awe – this was the NHS in action, reaching out to protect those who needed it. Inevitably, however, some of her elderly patients are hard of hearing (I will be the same one day) and required a higher volume phone call. Those of you who were on Zoom calls with me back in April might therefore also have heard the NHS in action, despite my wife and I working in separate rooms!
Asma Benhenda – Research Fellow
One of the things I was the most excited about this year was publishing a book about teacher policies and educational inequalities (in French, Tous des bons profs, Fayard, September 2020). It was my dream as a kid to be a writer. I didn’t dream about writing books about education policy as an 8-year-old (my role model was Joe March from Little Women, slightly different style) but still, I kind of feel I accomplished one of my life goals! It’s really amazing to be able to write for a wider public and to contribute to the policy debate, which I feel is at the core of CEPEO’s mission. I wrote the book during the spring: an extremely challenging period as the lockdown was very tough, but the silver lining was that I had very little distractions and no choice but to get my writing done !”
Laura Outhwaite – Research Fellow
Who would have thought my brother would have been my new colleague in 2020! I escaped the city back to my family home during the lockdown, the longest period I’d been back since I was 18 and left to go to university. While I faced many of the challenges in the transition to working from home, I came to value my time with family immensely. Many of my ideas and new research plans came from talking them through with my brother (who is anything but an academic), typically on our government approved walks. Looking back, I feel incredibly lucky to have the support of my family and incredibly proud that many of those research plans conceived in the midst of COVID panic and lockdowns will come to fruition just after Christmas. I am proud to be part of such a supportive centre that values and encourages my creativity and work, and more importantly, cares about equalising opportunities for all as much as I do.
David Stoker – Communications Officer
My highlight was developing our centre’s animation. This kind of strategic storytelling, facilitating the team’s discussion about whether inequality is more like a running race or train tracks, was very rewarding to me. Even though I am yet to meet most of my team in person (!) I feel very connected with CEPEO, the cause and the talented researchers I have the privilege to work with. They are very productive and give me lots of juicy content to publicise and repurpose. As a supply teacher in primary schools one day a week, I have the added benefit of seeing the importance of our work from the front line. For 2021 I’m excited to continue our mission of explaining how inequality works and how to equalise opportunities. I’m grateful to be supported to develop my skills with infographics training and curious what insights we discover next.
By IOE Editor, on 1 December 2020
By Professor Paul Gregg, University of Bath
The last two weeks have revealed that the government has woken up to the reality of the nature of pandemic and its economic effects. The most immediate shift has been to recognise that in the absence of substantial downward pressure on socialising the virus spreads exponentially. The massive error behind Lockdown 2 was the Summer return to almost normality, just no festivals. Indeed, the government actively encouraged people to return to restaurants and pubs helping to drive infection rates back up, which again they were way too slow to respond too. As soon as Lockdown 1 ended, the return was inevitable as insufficient downward force was being applied, given the track and trace system never really got off the ground. After Lockdown 2, we will not be all Christmas parties and New Year celebrations with almost none of the country in tier 1. Many areas, like my home city, went into Lockdown 2 in tier 1 and will emerge in tier 3. It will have to be a cool quiet mid-Winter this time to stop Lockdown 3 being the result. The government is now looking to suppress the virus till vaccines are available in sufficient quantity, which plans announced suggest will be around March.
What are the economic costs?
Furlough has been extended to cover this period as the only current alternatives are very unpalatable – letting the virus rip uncontrolled or business restrictions without government support and thus mass job losses. The Bank of England has allowed this extension to March to be possible through further Quantitative Easing (QE) buying up government debt. The government’s attempts to reduce spending by reducing financial support in plans announced in the late summer and early autumn are the can that has been kicked down the road again. So the government is now trapped in the current spending scenario until there’s an endgame from vaccines.
The state of the economy in September, before local lockdowns, became widespread and Lockdown 2, was 8.5% below its pre-Covid peak. This was the peak of re-opening the economy. Obviously, this high point of openness in the economy will not be reached again now until April at the earliest. In March 2021, one year on from the start of the pandemic, the economy will still be 10% down. Only the Great Depression compares with this. Without the government Furlough scheme, with its massive costs, 10% lower GDP would mean 10% lower employment, as firms cannot hold staff when under such extreme pressure. Unemployment would be heading to 14% and could have been worse if fear of these job losses drives down consumer spending.
Somewhat less obvious is the realisation that the recovery will be protracted. It will be late Summer 2022 before the economy is back to peak levels and more importantly, the prognosis now is we never get back the two and half years of lost growth. This economic cost will translate into lost wages from the downward pressure of unemployment and low productivity growth as businesses are not investing (see the useful Resolution Foundation report on the Autumn Statement). What has not been highlighted enough is that we are not all in this together. This pain will only fall on those below retirement age. The triple lock on the state pension and more importantly DB occupational pensions being linked to inflation (in most cases the generous RPI measure) means little change in current pensioner incomes from the virus. Only those reliant on earnings now will suffer, but of course, when those aged 50 or less reach retirement their pension pots will have been reduced from less being put in. The under 50s will lose out twice over.
The job preservation strategy behind the furlough scheme has massive value but also limitations which will be increasingly obvious and unjust on those not in work. We are putting huge amounts of resources into holding jobs open but next to nothing to help those who fall out of work.
This is being made clear by the last labour market data and will be even more so by the next instalment. Mass job losses are being stemmed by furlough but there is a moderate but steady decline in employment. Jobs are seeping rather than flooding out of the economy. Over ½ million fewer working-age people were in work in September than in February – that’s one and a half percent of all employment or 70,000 a month. Redundancy levels suggest things are accelerating. January to March 2020 saw 30,000 redundancies a month, April to June 44,000, July to September 100,000. The rapid increases for 3-month averages that have occurred every month suggest that September alone saw around 150,000 redundancies as the generosity of furlough was reduced.
But the rise in unemployment is being driven as much by the inability of those losing work to get back into employment. Vacancies fell to 40% of pre-Covid levels in Lockdown 1 but recovered to a bit under 70% before we closed much of the economy again. Lockdown 2 and tight restrictions that follow will mean low vacancy levels through till April. This combination of job loss and especially restricted re-entry always hurts the young most. Of the ½ million falls in employment more than half (270,000) comes from 16-24-year-olds. But large numbers have elected to stay in education as a result of fewer job opportunities, pegging the increase in the unemployment rate to 3% (for 35-64 it is up 0.4%). 270k fewer in work but only an extra 100k unemployed. The youth are doing the sensible thing and have been supported in this by the government and universities, but this trend won’t continue as most courses have started now.
But the deeper point is that the vast bulk of government efforts are on job preservation in struggling industries not new jobs in the rest of the economy- saving jobs for those in work but the little drive for new ones for those without. Kickstart, even after the proposed expansion, cannot start fully start with Lockdown 2 or restrictions after December the 2nd. This programme is essentially a hiring subsidy but in a labour market that isn’t hiring. The government has so far rejected the Intermediate Labour Market (ILM) of charities and the public sector that was used under the successful Future Jobs Fund in 2009/10. The new recognition of the protracted downturn means that this needs to be re-examined.
The Autumn Statement had two very small positive announcements around green and northern investment, which with earlier infrastructure announcements brings up the government support for new job creation to around 10% of the total economic supports for the economy (mostly furlough). The imbalance though still remains massive and the result of such little focus on job creation in a protracted recession will rise in long-term unemployment (6+ moths) through until at least April 2021.
Time for the Bank to step up?
The Bank of England is drip-feeding support to the Treasury for managing debt. What we are not having is the conversation about the total envelope that will eventually be made available and what a coherent strategy for its use would look like. What is needed is for them to be asked to fund a serious plan for the investment in green industries and housing etc, not just saving the pubs. And the government needs to have a plan on how to do it. We are still in crisis mode rather than recovery planning. The Bank of England needs to adjust its thinking and urgently – it is them, not the Treasury that is the problem here.
The crunch has been delayed and the government hopes it can keep furlough going till there is a Covid endgame. Meanwhile, we are likely to be shedding 100,000 jobs a month with few ways back in for those without work and no plan for an economic recovery, beyond re-opening pubs.
By IOE Editor, on 18 November 2020
Last week was a big week for university admissions with UCAS leading new calls for reforms to the process on Monday, followed on Friday by support from Universities UK, and the much-welcomed announcement from the Department for Education that plans are underway to move to a Post-Qualification Admissions (PQA) system. Based on our research, in this post, we explain why it is clear that the A in PQA must mean Applications, rather than Admissions.
The central reason for this is that all other options rely on the use of predicted grades, which are both inaccurate and unfair, and so should not be used at any point in this process. Here we put forward a plan for how a Post-Qualification Applications system could be achieved, central to which is reducing the time taken to mark exams. This is a once-in-a-generation chance to re-design a flawed system. We must not waste this chance by recreating a system that continues to embed systematic inequalities by using predicted grades.
An outdated applications calendar
While at first glance the UK’s centralised applications system (University and College Admissions Service – UCAS) might appear modern, we have actually had a centralised applications system since 1961 (then known as UCCA – the University Central Council on Admissions). Since then there have been major advancements in technology, including the move from paper forms with traditional mail and hand processing, to online applications, and the computerisation of exam marking. Yet despite these changes, the calendar of the applications and admissions process has remained stubbornly fixed for the past 60 years. The inertia of this system has been widely accepted, but we believe there are clear opportunities for efficiency gains.
The acceptance of this inertia can be seen in discussions of what a new post-qualifications system might look like. There has been a plethora of ideas, debating the pros and cons of post-qualification decisions, offers, and applications (PQD, PQO, PQA) all of which appear to take the current grading duration as given. In a lot of the discussion that has followed, there is a frequent assumption that in order to move to post-qualification applications, A levels will need to happen much earlier, or universities start much later. This acceptance of the status-quo in terms of timing creates the very real possibility that this opportunity for change will be squandered.
What is the problem with PQO or PQD?
The crucial problem with the alternatives to post-qualification applications is that they still rely on predicted grades. As is very clear from the DfE press release, the significant inaccuracies in predicated grades, and the systematic differences across students, is the key reason for this reform in the first place.
Our recent study showed that only 16% of students receive accurate predictions. While the majority of students are overpredicted, high achieving students from disadvantaged backgrounds are typically underpredicted.
In another recent study, we highlight the difficulty of predicting grades, showing that when relying on machine learning and advanced statistical techniques only 1 in 4 students were accurately predicted. This also showed that it was harder to accurately predict grades for high-achieving state school students, relative to their selective grammar school or private school counterparts.
The implications for relying on predicted grades is also clearly explained in the DfE press release:
“Disadvantaged students are more likely to ‘under-match’ and enter courses below their ability than their advantaged peers. Under-matched students are then more likely to drop out of university, get a lower-class degree and earn less in employment.”
The phenomenon of undermatch had not been formally documented until recently in the UK. Our paper highlighted for the first time that students from more disadvantaged families systematically attend lower tariff universities than they could do given their A level achievement, relative to their more advantaged counterparts. Predicted grades are a driver of this phenomenon – we found that those disadvantaged students who were underpredicted ended up being overqualified, or unmatched, in terms of both their applications to university and where they ended up going.
Reforms in which students are still making their applications on the basis of predicted grades (as is the case with many of the options being discussed), will not solve this undermatch problem, since students will still be making their applications on the basis of inaccurate predictions. It is therefore crucial that students are allowed to make their applications on the basis of actual, rather than predicted grades.
So how do we deliver PQA (Applications)?
Our proposed approach to PQA is based on utilising the efficiency gains that should be made from our archaic applications system. We argue that given the technological advancements made over the past 60 years, there is no obvious reason why we need to stick to the current timeline. These gains can be made both in terms of how quickly exams are marked, and in terms of how long it takes to process university applications.
Stage 1: Exams and student applications
We suggest virtually no change is needed to the timing of A levels, allowing teachers the time to teach the full curricula. Examinations would still occur in early May. Once these exams are over, A level students could return to school for a range of ‘forward-looking’ activities, including university and careers guidance, work experience, financial literacy training and, in the final week, an ‘applications week’. Keeping students in school for the full school year addresses concerns regarding disadvantaged students not receiving guidance.
In this ‘applications week’, students would receive their grades and apply to their chosen courses, with the support of their school teachers. This would have a neutral impact on teacher workload as they would no longer have to predict grades during the year – their support for applications would shift from earlier the year, and perhaps would no longer have to help with personal statements (see below). Or schools could take on specialists to conduct this advisement.
For this to be achieved, results day would only need to be brought forward by 2-3 weeks. The condensing of the marking period would be achieved through a combination of the previously discussed technological improvements, and increased investment to employ more markers during this intense period to ensure quality is unaffected.
Stage 2: University processes
Universities would receive all applications by the end of July and would have a finite period (a month) to process these and make offers. Given that they will be receiving applications based on final grades, it is possible that the entire application process could be simplified, relying less on ‘soft metrics’ such as personal statements or teacher references which can be affected by bias. Where applicants have identical grades, universities could look at the students’ final grades relative to their schools’ performance, baking in some Widening Participation targets to the process. Those students with most ‘potential’, outperforming their school’s results, would be prioritised among ties. Students would receive their offers at the end of August, only a few weeks after they do in the current system, and accept their favoured choice.
Creating a more agile system
When setting out his rationale for considering post-qualification admissions, the Education Secretary Gavin Williamson said he wanted to “remove the unfairness” that some groups currently face due to inaccurate predicted grades.
The only way to remove this unfairness is to remove predicted grades from the application process altogether and create a post-qualification applications system.
Rather than shifting the timing of examinations and university start dates, we argue that this can be achieved by harnessing technological efficiencies which have emerged over the 60 years that the current system has been in place. This is a once-in-a-generation chance to re-design our system to make it fairer for all young people. Allowing them to make critical decisions based on their own merits, rather than inaccurate predictions, is a critical step.
By IOE Editor, on 10 November 2020
By Professor Lindsey Macmillan, Dr. Jake Anders, and Dr. Gill Wyness
In summer 2020, to much controversy, the UK government cancelled both GCSE and A level exams and replaced them with “Centre Assessed Grades” based on teacher predictions. While Scotland has cancelled some exams in 2021, and Wales appear to have arranged for something akin to exams to take place in a classroom setting, the English Government remains adamant that their exams will go ahead as planned. This strategy is not without its problems, but with some important adjustments, it’s still the best and fairest way to assess pupils.
Primary and secondary schools closed their doors in late March 2020 and only fully re-opened 6 months later in September. Schooling has continued to be disrupted for many, when classes or other ‘bubbles’ have to self-isolate due to suspected COVID outbreaks, meaning that learning has to move online. This situation is likely to result in further unequal “learning loss” as a result of inequalities in-home learning environments, including technology to reliably access lessons online.
Recent work by Ofsted reported widespread learning loss as a result of these closures, with younger pupils returning to school having forgotten basic skills, and older children losing reading ability. But the loss is not evenly distributed; Ofsted reported that children with good support structures were doing better than those whose parents were unable to work flexibly. Several analyses (e.g. Andrew et al, 2020; Anders et al, 2020) back this up, reporting that pupils from better-off families spent more time on home learning, and were much more likely to have benefitted from online classes than those from poorer backgrounds. Work by the Sutton Trust found that children in households’ earnings more than £60,000 per year were twice as likely to be receiving tutoring during school closures compared to those earnings less than £30,000. While steps have been put in place to help pupils catch up, such as the pupil catch-up premium and the National Tutoring Programme, pupils this year will almost certainly be at a disadvantage compared to previous cohorts when they face this year’s exams, and the severity of disadvantage is likely to vary by family background.
While this might be evidence enough that exams should be cancelled this year, it is worth first considering that the alternatives:
- Continuous teacher assessment
Perhaps the most obvious alternative to exams is continuous teacher assessment, through the use of coursework, in-class testing and so on. This would negate the need for exams and would mean all students would receive a grade in the event that exams have to be cancelled due to a resurgence in the pandemic. Scotland has already committed to using teacher assessment instead of exams for their National 5s (equivalent to GCSEs) this year. While this does seem like a safe choice to replace exams, research has shown that teacher assessment can contain biases. For example, Burgess and Greaves (2013) compared teacher assessment versus exam performance at Key Stage 2, finding evidence of black and minority students being under-assessed by teachers, versus white students. Campbell (2015) similarly shows that teacher’s ratings of pupils’ reading and maths attainment at age 7 varies according to income, gender, Special Education Need, and ethnicity.
Using coursework to assess pupils (whether internally or externally marked and/or moderated) also risks interference from parents and schoolteachers, so that a pupil’s eventual grade could be more a reflection of the support they’ve received rather than their own achievements. And levels of support are likely to vary by SES, again putting those from poorer backgrounds at a disadvantage.
2. Teachers’ predictions
But sticking with exams is not without its risks. It is, after all, a pandemic, and the government could be forced to cancel exams at the last minute. If they leave it too late to implement continuous teacher assessment or an alternative form of external assessment then they will have to turn to more reactive measures – such as asking teachers to predict pupils’ grades (the method finally adopted for the 2020 GCSE and A level cohorts). This would at least have the advantage of being consistent with last year, but, again would likely result in biased measures of achievement. Predicted grades have been shown to be inaccurate, with the vast majority overpredicted (causing headaches for university admissions). However, work by Anders et al. (2020) and Murphy and Wyness (2020) showed that among high achieving pupils, those from low SES backgrounds and state schools are harder to predict and end up with lower predictions than their more advantaged counterparts.
3. A school leaving certificate?
There are more radical possibilities to consider. One is for schools to abandon assessment this year altogether, and to simply issue students with school leaving certificates, similar to that received in America for graduating high school. This would certainly level the playing field among school leavers. But it could lead to some big problems for what comes next. For example, without A level grades, how would universities decide which applicants to accept? Under this scenario, admissions tutors would become increasingly reliant on ‘soft metrics’ such as personal statements, teacher references and interviews. This may also lead to the more widespread use of university entry tests, which are already in place at some institutions. All of this is likely to be bad news for social mobility since the use of “soft metrics” has been shown to induce bias (Wyness, 2017; Jones, 2016) while there is very little evidence about the equity implications of using aptitude tests, except in highly specific settings (Anders, 2014) so the potential for unintended consequences is substantial.
But in theory, universities shouldn’t need to use entry tests – these pupils already have grades in national tests – their GCSEs. For this university entry cohort, they were sat before the pandemic, and are high-stakes, externally marked assessments. Indeed, Kirkup et al. (2010) find no evidence that the SAT (the most widely used aptitude test in the US) provides any additional evidence on performance once at university than using GCSE results on their own. Many universities already use GCSE grades as part of their admissions decision along with predicted A level grades. Yet these grades were measured two years ago now – and so will obviously miss any changes in performance since then. Indeed, recent work by Anders et al. (2020) suggests that GCSE performance is a poor predictor of where students are at, in terms of achievement, at the end of their A levels. Using administrative data and machine learning techniques, they predict A level performance using GCSEs, finding that only 1 in 3 pupils could be accurately predicted, and that certain groups of students (those from state schools and low SES backgrounds) appeared to be “underpredicted” by their GCSEs, going on to outperform at A level.
An alternative approach to exams?
The alternatives to exams raise many concerns, particularly for those from poor backgrounds. A better solution may be to design A level exams to take account of the learning loss and missed curricula experienced by pupils, and the fact that some pupils will have experienced this to different degrees. Ofqual was dismissive of this suggestion in their report on examinations for 2020/21, pointing to burden on exam boards among other factors, but while we take seriously the considerations they highlight, we think this underestimates the challenges of the status quo.
For all the headlines about Wales “cancelling” exams, from a first look, it appears that this is rather a simplistic summary. They are still planning to hold some kind of examination, which will be both externally set and externally marked, but when these will take place is now more flexible, and they will happen in class rather than in exam halls – ironically, removing the in-built social distancing normally associated with examinations. This kind of flexibility is needed in these difficult circumstances.
An alternative that has also been discussed in England is that exams could be redesigned so that the majority of questions are optional. In this way, they would look more like university finals, in which students are typically given a set of questions, and need only answer a subset of their choice – e.g. answer 2/7 questions. This would take account of the fact that pupils may have covered different aspects of the curricula but not all of it, since they need only answer the questions they are prepared for. While appreciating there are challenges with this approach, a carefully designed exam would at least provide pupils with a grade they have earned and would provide universities and employers with the information needed to assess applicants.
Universities should also be aware that students from different backgrounds will have experienced lockdown in very different ways, and those lacking school and parental support may still struggle to do well, even in well-modified exams. This could and should be tackled with the increased use of contextual admissions. Universities often cite fears that students from contextual backgrounds are more likely to arrive underprepared for university and risk failing their courses. But this year, lack of preparation for university may well be the norm, forcing universities to provide extra tuition and other assistance to help students get “up to speed”. There has never been more need, and more opportunity, for widespread contextual admissions.
By IOE Editor, on 23 October 2020
By Dr. Jake Anders
The negative effects of the covid-19 pandemic and its associated restrictions on people’s wellbeing, especially young people’s wellbeing, have been widely highlighted since the onset of lockdowns in March. Unfortunately, there are reasons to believe that even when the direct effects of the pandemic come to an end, there is a continuing risk to young people’s wellbeing from the more long-lived effects of the associated economic downturn that is only just starting.
In a recent research study that John Jerrim, Phil Parker and I carried out, we explored the impact of the last recession (the 2008-09 global financial crisis) on the wellbeing of young people in the Australian context. Our research used data from four different cohorts of their Longitudinal Surveys of Australian Youth (LSAY), for young people born in 1981, 1984, 1987 and 1990.
Because young people’s wellbeing varies as they age, it’s not as simple as comparing the same cohort of young people’s wellbeing before and after the onset of an economic downturn. The difference that we observe might just be caused by those changes as young people get older. To address this issue, we attempted to isolate the effect of this event by comparing trends in reported wellbeing among overlapping cohorts of young people before, during and after this period. Since young people in these different cohorts experienced this event at different ages, we are able to verify that their wellbeing initially evolved in a similar manner, before comparing what happened as the economic challenge hit.
The basic idea of our results is evident from the following graph – although we also applied further statistical modelling to check the robustness of our findings in the paper.
You can follow the average reported level of each cohort’s wellbeing as separate lines reporting annually from when members of the cohort are 17, up to when they are 26. All the lines start out as solid lines – which indicates measures collected before the onset of the economic downturn – before becoming dashed lines after this event.
Because the cohorts were born in different years, the onset of the global financial crisis (and, hence, the change from solid to dashed line in our graph) happens at different ages. Only the cohorts born in 1987 and 1990 experience the onset of the global financial crisis between ages 17 and 26, so only these two lines change to being dashed. The cohorts born in 1981 and 1984 retain a solid line throughout.
The graph suggests that the cohorts born in 1987 and 1990 had similar (or slightly higher) levels of wellbeing as the older cohorts at younger ages. However, a substantial gap emerges between the wellbeing of the earlier and later cohorts, starting at age 19 for the 1990 cohort and age 22 for the 1987 cohort. This indicates that a negative impact on wellbeing was caused by the onset of the global financial crisis.
What are the lessons of this for the current situation? Unfortunately, it suggests that even if negative effects on young people’s wellbeing dissipate when restrictions are eased, the longer-term effects on well-being of the onset of the economic downturn are likely either to prolong these or add to them further. This further increases the importance of policymakers doing all they can to alleviate the negative effects of the pandemic on the economy, and in particular on the challenges that young people now seem likely to face in taking their first steps into the labour market.
The full article on which this blog post is based is freely available online: Parker, P., Jerrim, J., & Anders, J. (2016) What effect did the Global Financial Crisis have upon youth wellbeing? Evidence from four Australian cohorts. Developmental Psychology, 52 (4), 640-651.
By IOE Editor, on 16 October 2020
By Dr. Samuel Sims
*This article originally appeared in Schools Week*
This week sees the climax of two elite competitive events: the French Open and the 11 Plus.
On Sunday, Nadal confirmed his status as the ‘King of Clay’ by winning a record thirteenth French Open. There was no aspect of the game in which he did not excel. His topspin made the ball bounce up rapidly off the clay. His nimble footwork allowed him to cover the long courts at Roland Garros. And his persistence paid dividends during the longer rallies. Nadal is the complete clay court player.
In the 11 Plus, which thousands of pupils sit today, primary school children compete for entry to selective grammar schools. They will slug it out over three sets of questions: English; maths; and ‘reasoning’. The test is designed to objectively determine those with the highest academic potential.
As with the tennis, the prizes on offer in the 11 Plus have changed over the years. Between the wars, examinations at age 11 were used to ration access to free secondary school places. When secondary education was extended to all in 1944, the test was used instead to allocate pupils to more academic (grammar) or less academic (‘modern’) secondary schools.
Likewise, the rules of the 11 Plus game have changed over time. Prior to 1944, headmasters would often decide who to admit based on wide-ranging interviews with pupils, which might cover history, science, or any other range of subjects.
Unsurprisingly, concerns emerged that pupils whose parents couldn’t answer such questions would themselves be disadvantaged. Others worried that the test incentivised “cramming.” In 1938 the Spens report, which laid the foundations for the post-war grammar school system, concluded that modern intelligence testing would be fairer, and should be used instead. Some local education authorities followed their recommendations.
In the decades following the war, the extent of middle class dominance in grammar schools became all too clear. To make matters worse, private tutors began offering preparation for the tests. Repeated attempts were made to ‘class proof’ the 11 Plus by removing any assessment of knowledge. Hence the emphasis on maths, comprehension, and abstract ‘verbal and non-verbal reasoning’ in today’s exam.
No sooner than the shift to intelligence testing began, however, its limitation started to become apparent. As early as 1947, the educationalist Brian Simon noticed the weak correlation between IQ and academic achievement among his own pupils. In the same way that Nadal’s dominance results from a combination of skills and temperament, intelligence seemed to only be one part of what makes for the complete student.
Recently, the psychologist Sophie Von Stumm has identified the other elements. Synthesising data from eleven different studies, she found that the recipe for the ideal student is approximately two parts intelligence (IQ), to one part intellectual curiosity, and one part scholarly diligence. In short, intelligence is only half the story.
This insight was not lost on pre-war Heads. John Paton, High Master of Manchester Grammar School in 1920, defended his admission interviews against accusations of social bias on the grounds that the conversations told him about a pupil’s hunger for knowledge, and ability to apply themselves academically. Paton was also looking for Von Stumm’s other two ingredients of academic potential.
So where does this leave the 11 Plus? At one extreme, we could design it to be a pure intelligence test. This would prevent pupils from highly-educated families gaining an advantage from the knowledge they pick up by osmosis at the dinner table, or the coaching they receive from private tutors.
But this would be a highly incomplete measure of academic potential. It would be like running a version of the French Open in which the players were only allowed to play forehand shots. The tournament would obviously fail to establish the best tennis player. Nadal might struggle to make the quarter finals.
Alternatively, we could include tests of students’ knowledge in a wider range of areas. This would no doubt better reflect their wider reading and studiousness up to that point. But history tells us that this would be socially unfair – like running the French Open with the less wealthy player forced to tie one hand behind their back.
The 11 Plus can either be an accurate measure of academic potential that is unfair. Or a socially fair test that is inaccurate. But it cannot be both. After a century of failed attempts to perfect the formula, perhaps it is time the 11 Plus retired from the game.
 Thom, D. (2004). Politics and the people: Brian Simon and the campaign against intelligence tests in British schools. History of Education, 33(5), 515-529.
 Von Stumm, S., Hell, B., & Chamorro-Premuzic, T. (2011). The hungry mind: Intellectual curiosity is the third pillar of academic performance. Perspectives on Psychological Science, 6(6), 574-588.
 Sutherland, G. (1840). Measuring Intelligence: English Local Education Authorities and Mental Testing, 1919–1939. Biology, Medicine and Society, 1940, 315.
By IOE Editor, on 13 October 2020
By Professor Paul Gregg, University of Bath
Cold Turkey – or Chicken Licken?
Before the Chancellor’s recent winter package of measures, Andy Haldane, the prominent member of the Bank of England Monetary Policy Committee (MPC), called that it was time for the UK economy to go ‘cold turkey’. That is to stop the financial support (or fiscal stimulus) from central government to business. In another poultry analogy, he argued that recently the economics and business community is acting like ‘Chicken Licken’, always believing that the sky is about to fall in since the pandemic started, whilst there were far more positive signs out there than appreciated. Andy Haldane is a decent economist and a decent bloke and his views should be considered thoughtfully and not dismissed. But in the rapidly shifting world of the pandemic things already look far worse than three weeks ago.
The Chancellor did not take Andy’s line wholesale but his Winter Economic Plan was far smaller than the previous summer stimulus to preserve jobs and in a different league to that back in March. The package essentially offered more of the same through to next April but at a lower cost to the Treasury while for firms it was the opposite.
Levels of Support
To give a broad sense of the level of support, in March a worker on £24,000 a year (£2,000 a month), a little below the typical (median) wage, cost the firm nothing to keep on the books. Now (October) the firm is paying 20% of the wage, so £400, for a furloughed worker to do no work. But part-time furlough is allowed and so a half-time worker costs the firm £200 a month in pay for hours not worked. This is the last instalment under the original scheme.
The Job Retention Bonus (JRB) added in the summer to protect jobs into next year offers a one-off £1,000 payment in January, irrespective of hours worked. To this has been added, from November, a new Job Support Scheme where the firm only pays 1/3 of the cost of hours not worked through to April but at least one-third of normal hours must be worked.
Thus between November and January, this combination of supports means a representative worker working half-time (or above) costs the firm very little since they qualify for the new scheme and the JRB. But for a worker not working at all in a firm that is not legally required to shut, the cost to the firm is £5,400 in total for them to do nothing, as they are not eligible for the new scheme and firms pay all the wage costs. Where firms are legally required to shut, the Chancellor has just added a new measure where the worker will get 66% of normal wage at no cost to the firm (though this is down from 80% in March-Oct period).
So up until January, part-time work-sharing is strongly encouraged. But after the generosity of the package declines to cover just 1/3 of the wage costs of hours not worked, before ending entirely in April.
For Chancellor to take the Haldane view and make no new Economic Plans then:
• He would be expecting firms will be able to have workers on or above half normal hours from November, to be working almost full-time from February and back to full working by April as all job preservation support ends. In addition, in April the extra support in Universal Credit ends cutting £20 a week (£1000 a year) from the budgets of those not working or working but with low family income.
• This would mean that pretty much the entire economic stimulus to the economy and efforts to preserve jobs end pointedly at the same moment. So the economy will have to be back to near normal before April, with the heart of the economy healthy and the hard-hit sectors in recovery. Although they will have shed some workers. The economy is thus weened off support from February and goes Haldan-style cold turkey in April. This would also be implicitly saying that the government can no longer offer more support than this.
Here then the interpretation of the Treasury’s position is ‘that’s your lot, guv’. The alternative view is that the Chancellor is kicking the can down the road and awaiting events before announcing the next measures.
Should we expect a Spring Economic Plan?
Whilst the government has made a complete hash of the health response to Covid-19, the Chancellor was doing well on the economic side. His responses were timely and proportional, with first the furlough scheme, then part-time furlough. The VAT cut and Eat out to Help Out looked sensible to get hospitality and related sectors trading again as we emerged from Lockdown (although it now seems certain that it helped start the second wave of Covid-19 cases). The Job Retention Bonus offered ongoing financial support to stretched firms whilst incentivising work-sharing. It did so in a very flexible way too, not requiring reduced hours of work just encouraging to use short-time working over redundancies, especially for lower-paid jobs. After October, firms were being paid to not sack workers, not for specified cuts in hours. To this has been added a smaller package which works well to support job retention until February.
But from February, support rapidly ends unless Rishi announces a Spring Economic Plan in December or January. And if this happens what should it look like?
There are two obvious points to make first:
1. The new Job Support Scheme (JSS) is less generous than previous support packages but the country is entering a phase with rapidly increasing Covid-19 cases and fresh local Lockdowns of increasing severity by the week. Across most of Northern England and much of Scotland and Wales, the winding down of support is at profound odds with the worsening health situation. The economic support and health-based restrictions are no longer in sync. There is massive dissonance here.
2. The Chancellor has designed the Job Support Scheme (JSS) to work with the Job Retention Bonus (JRB) for at or above half-time working from November and close to full-time from February. Then in April, the ending of all job protection and cuts to Universal Credit will create a substantial economic hit in the Spring. In normal recessions, the ending of fiscal stimulus measures comes a good year after the recession has ended and as recovery is underway. Austerity (there is always a degree of austerity) starts two to three years after the recession has ended and builds up. Lockdown saw economic activity drop 25%, but the improvement since should not be viewed as recovery, just re-opening. In August, the economy was still 9% down on pre-crisis levels. This is the starting point from which we judge recovery when lockdown pretty much ended. Given the second wave of the virus and related restrictions it seems likely now that the recovery will not start before Christmas, the ending of support between February and April will then prevent any recovery. Ending support before the recovery has started is very bad economics.
The Spring Economic Package: Beyond Job Preservation
There is great value in preserving jobs as, beyond those with very low levels of productivity, they have productive value that is hard to quickly recreate. Plus as people become fearful of job loss, they cut spending to reduce debt or increase savings. Maintaining consumer confidence and hence a recovery next year, hangs on employment. However, as many people will lose their jobs and some sectors will not return fully to pre-crisis working levels any time soon, there needs to be a broadening in the focus to cover both job creation and preservation. The government has done next to nothing around job creation so far. Any Spring Economic Package has to move beyond preserving existing jobs.
Job creation requires a further fiscal stimulus tightly focused on employment, especially on jobs suited for groups at high risk of unemployment such as the young and less well educated.
The government has announced the bringing forward of £8 billion pounds of infrastructure spending. This is sensible policy-making as it boosts activity and infrastructure spending has low import content and substantial multiplier effects on the rest of the economy. £8 billion is not very much, however. Spending on repairing roads etc. has the advantage of getting started quickly but more green action, alongside loft insulation, would be desirable. Infrastructure takes time to boost the economy: Much larger investments (offshore wind farms / tidal power) in green energy take far longer to get moving but have similar multiplier effects into the wider economy and meeting long-term needs. The Prime Minister made suggestions along these lines in his conference speech but the action has to start now for any benefits to be felt by 2022.
Lowering Employers Wage Costs:
More targeted support for employment could come by raising the earnings threshold at which employer NI payments start by £5,000 (from around £10k to 15k). This is then more valuable for lower paying jobs, which means young workers and part-time jobs which are half-time or more (employers pay no or very little NI on short hour part-time working). It also supports entry jobs and thus most of the sectors hardest hit through the Lockdown. In sum, it offers a fiscal stimulus focused on employment in general and for target groups and sectors. At the margin it provides incentives to recruit workers as labour costs are reduced and again in the sectors/groups where it represents a larger share of labour costs. It is however, not targeted beyond that. It would be worth £650 a year per worker or £20 billion to the Treasury.
There are two ways of gaining greater focus and reducing the cost. First, would be to apply the raising of the NI threshold only to young workers (18-24) but this reduces the potential power for job creation in the wider economy. It may also be possible to target on areas affected by area Lockdowns for periods of say 6 months, for firms that can make clear location of their workers, which is easy for small firms, and such local NI cuts may well be best focused on small businesses (500 workers or less).
The other way to improve targeting is to raise employer NI rates at the same time. Raising the NI by 2% from the current 13.8 would cut the cost of the initiative in half. This higher rate might be capped at £50,000 annual salary (the Upper Earnings Limit for employee contributions) to stop NI costs rising for higher paid jobs. Having less earnings covered by employers but at a slightly higher rate thereafter focuses the benefits very strongly on lower earning jobs but obviously reduces the wider economic stimulus.
For the Haldane (cold-turkey) view to be right, the economy in the Spring will need to be in strong recovery and existing supports can be withdrawn safely. However, the virus is very much not going away right now and the health crisis in the run up to Christmas looks severe.
The reasonable prognosis for policy planning is that in January economic activity will still be at least 5 to 6% below last February’s peak. Then if government supports are wound down rapidly, a Spring recovery is implausible.
A further fiscal stimulus will, therefore, be desperately needed and should go beyond job preservation to job creation. Working through employers’ NI offers a route for an employment targeted fiscal stimulus, honed on the types of employment most needed at this stage of the economic cycle.
The connection with Andy Haldane here is that the Chancellor may only be willing to borrow more if the Bank of England is willing to undertake fresh Quantitative Easing, buying up the government debt. Andy Haldane’s statements suggest that he at least would not support such a move. The arguments against further QE are either it is not needed (which seems extremely unlikely now) or that it is storing up inflation for the future when too much money will be chasing too few goods. Right now expecting QE to create inflation at some unknown future date feels a lot more Chicken Licken than a Spring of rising unemployment.
My money is on a Spring Economic Plan package and one with a wider job creation focus. The Soviets used to have 5-year economic plans. In this crisis, ours are just 3 months apart. A little more medium-term policy thinking would be nice but the initiative lies with the Bank of England as much as the Treasury.
By IOE Editor, on 18 August 2020
By Professor Paul Gregg, University of Bath
August produced two vital sets of data on the state of the economy. Assessments of output (GDP) and jobs. Britain officially entered a recession, though it has been since April when output was 26% below that seen in February. The latest data showed a sharp bounce back as businesses started to re-open in June. But output remained 15% below February’s peak. This is unsurprisingly the worst economic decline, by a big margin, since the second world war.
How can unemployment stay so static?
At the same time it was announced that since the virus hit and economic production tanked, unemployment has not moved at all by June. Also, that total employment has fallen by ¼ of million, the number of employees on payrolls for PAYE tax registration fell by ¾ million and the number of claims for out of work benefits (the claimant count) is up by 1 million. Looking at these makes anyone think that something has gone wrong at the Office for National Statistics. There are massive contradictions here. The reasons how these statistics can all be true get a little arcane but here goes.
How can the data look so good?
In short, from the start of the pandemic and up till June,
- Around 200,000 older workers decided to retire a bit earlier than planned and around
- 600,000 People with either jobs (mainly zero-hours contracts) or self-employed stopped earning anything.
- Around 5 million on furlough pay at any point in time.
None of these count as unemployed and only the 200,000 count as not in employment as they have retired. The others still have employment but no earnings.
Below I explain this in more detail.
- Early retirees don’t count as unemployed. The unemployment and employment data comes from the Labour Force Survey and covers the 3 months April to June but there is no sign that things changed much over these months. The story here is that the employment fall was almost entirely among those aged 65+ and again almost entirely among the self-employed. Older people faced with a lengthy shut down of their businesses and other self-employment activities (what are called own account workers), have simply retired. These number around 200,000. In most cases, they were probably planning to retire soon and have just brought it forward. To be unemployed you need to be looking for a new job – if you retire you are not unemployed. Hence the difference between employment and unemployment numbers.
- People on zero-hours contracts don’t, either. The PAYE register of employees covers an extra month, going through to July and perhaps 100,000 of the large ½ million discrepancy with LFS employment data. The bigger story is about those who are away from work. Some 7.5 million people are away from work now. Normally this is about 2.5 million which mainly reflects sickness. The 7.5 million figure reflects both higher sickness and those on furlough, where people are still being paid and count as employees in the PAYE system. However, there are a number of people away from work and not on a payroll for tax purposes. ONS estimates that there are 300,000 away from work, and not furloughed, with no earnings. Most are likely to be on zero-hours contracts and with zero hours. These people are employed – they have a contract – just they have no paid work but the will have dropped off the PAYE radar of people earning on firms payrolls.
- About 600,000 employed with no earnings The increase in the claimant count is higher still as many self-employed people are claiming Universal Credit to tide them over lockdown. Normally UC requires people to be searching for work – which would make them unemployed – but this has been waived for the pandemic. This means we have a lot of people with zero earnings and claiming benefits but have employment contracts or normally work as self-employed and are not looking for a new job. These are considered employed in official statistics. So by June, we had about 600,000 people who count as employed but without any earnings.
- Plus the 5 million or so on furlough by this time.
July: “the first wave of major job-shedding”
In July though the job shedding started, with at least 100,000 losing work (and more if some of those with jobs but no earnings re-started working). Up until the end of July, the economy was partially closed but jobs and incomes were largely protected by the government. This ends in August and September and the real recession begins.
Recommendation: We need to monitor the zero hours/self-employed more.
The anomaly all this highlights is people with a zero hours or self-employment contract who have no earnings are considered employed and hence don’t count as unemployed – the size of this group needs to be monitored. The question is whether these people will restart employment now lockdown is eased.
Recession “in the ballpark of the 1980s”
The main story will be how deep the recession is after lockdown has mostly ended in July. The signs are that this will be in ballpark of the 1980s and the last 2008/09 recessions.
The Bank of England suggest that there will be around 1 million workers losing their jobs, as the economy is still 5% below peak after Lockdown ends. As I have posted before I feel if this forecast of economic activity is right the jobs shakeout will be higher, around 1.5 million, as so many firms are in critical financial condition. The unemployment storm has only just started.