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Contracting Out Instructional Services: Education's New Frontier

IP-18-1993 (November 1993)
Author: Douglas B. May

PDF of full Issue Paper
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The idea of contracting out instructional services is gaining momentum in Colorado and throughout the United States.

In the 1993 legislative session, Colorado took the lead on the issue; first by enacting a charter schools law, since charter schools may become heavy consumers of privatize educational services. Secondly, the legislature passed House Bill 93-1118, which makes it clear that school districts have full authority to hire private contractors for any service, including educational services.

This paper will show that the trend toward privatization in education is already well underway, to the benefits of education consumers.

The paper then outlines further steps that could be taken by Colorado and other states’ to encourage this new wave of edupreneurship.

Bureaucracy is failing us

Colorado’s heavily centralized and overly bureaucratic public school system is failing. In Liberating Schools, Cato Institute scholar David Boaz notes that a recent survey of 200 major corporations found that 22% of them teach employees reading, 41% teach writing, and 31% teach mathematical skills.

Many of these skills should have been taught to students prior to graduation, but even the graduates often need remedial help. A large number of students, of course, never even make it to graduation. Denver’s dropout rate is about 25%, but even the wealthiest school districts have little to brag about. Students are bored with low standards, lower expectations, disruptive classrooms and a plain vanilla (mediocre at best) curriculum. The system exists not to teach students, but to perpetuate the status quo. Rules and bureaucracy have sucked the lifeblood out of the system.

As a result, teachers are not provided with the materials or environment necessary for teaching, and students are not provided with an opportunity to learn.

Taxpayers are pouring money into the education meat grinder, but increasingly it is being scooped off at the top by rising administrative budgets, and wasted through inefficient work rules and practices. Between 1988 and 1991, for instance, Denver Public Schools instruction expenditures increased modestly (up only 6.1%). The student population changed little during this period. But support staff expenses shot up over 26%, and the cost of business support services rose nearly 21%.

We need to junk the overly centralized system for administering schools which we now have, and replace it with an increasing reliance on contracting out instructional services. This system would give teachers the autonomy to design their own curriculum, parents the opportunity to select from significantly differentiated education alternatives, and taxpayers the efficiency and cost effectiveness of a free market system.