A recent study from academics in The Bartlett School of Construction and Project Management provides valuations of the benefits of educational attainment resulting from capital investment. The analysis combines data from a range of sources to assess the returns from investment on facility cost, as well as the potential future tax revenues.
The overall finding of the analysis on potential tax returns, resulting from improvements in human capital (proxied by educational attainment), suggests that capital investment does provide a positive return to treasury over the portfolio of schools analysed. The datasets generated as part of the work will be useful for informing policy effectiveness concerning which schools present the highest propensity to improve outcomes from rebuilding works, a key goal of the former Building Schools for the Future programme.
The study, led by Graham Ive, Construction Economist, commented, “Economic returns to individuals reaching higher levels of education have been shown repeatedly to be high, and the quality of human capital stock to be a major determinant of a nation's rate of economic growth. Whilst we are confident long-term returns to the economy from the programme will most likely be positive, the size of that return is inevitably uncertain. The former BSF programme looks to be on course to achieve its economic goals overall. It is also clear, however, that more effective focusing of BSF spending could have greatly increased total returns. This is because the great majority of the total improvement came from a small minority of the rebuilt schools”.
Co-author Alex Murray, who led on the data collation and analysis, added “Much of the paper’s intention is to highlight how limited we are in terms of timely data to properly estimate the effectiveness large investment programmes have on the things that really matter, outcomes. We could understand these linkages much better if we adopted closer to real time analysis, as we’re seeing commercial organisations do so readily. We’re not even talking big data here, just some consistent and thought through analytics feeding evidence based policy. When we’re talking billions of pounds of expenditure, a 1% more efficient policy is a lot of money”.
The method developed along with the research will become more powerful as the years pass and as time series data amasses, allowing the team to trace the longer-term dynamics of educational attainment associated with rebuilding works.
The work is published in a special issue of the Building Research and Information Journal titled “Closing the Policy Gaps”. The work was referred to in a response to a recent request for evidence from the Education Select Committee hearing on the current Priority Schools Building Programme, using the work to support calls for a less myopic assessment of programme and policy effectiveness.
For further information about the study, please contact alex.m.murray@ucl.ac.uk.