Wednesday 5 April 2017

Free School Powered Rent Seeking

Building on MW's previous posts.

Spotted at Guido Here

It's a gift that just keeps on giving.

Update

It has occurred to me that there may be another lesson to learn from this. That when people are able to make their own settlements for the education of their children then they are getting what they want rather than what a bureaucrat wants them to have.  This is clearly valued.  So the lesson here is not just that subsidies returns to rents but also that rents are higher when people perceive that better services are available, and in this case it means that they think more of education they have more control over than that provided centrally. 

13 comments:

James James said...

They're also a way of transferring the school property to private hands.

Mark Wadsworth said...

Good, so kids get better education and the government can part-fund it out of higher local land taxes, oh I see...

James Higham said...

'That when people are able to make their own settlements for the education of their children then they are getting what they want rather than what a bureaucrat wants them to have.'

A certain logic there.

Lola said...

JJ. I have no problem with 'school property being transferred into private hands' as part of a general de-nationalisation. As long as it is 'paid for'. And then as MW says we can fund any transfer payments/merit goods argument that might be necessary by way of LVT funded vouchers.

Mark Wadsworth said...

JJ, L, as long as the land remains in public ownership and the school pays rent...

mombers said...

The irony is that free schools are not under local democratic control like local authority schools. My kids are at an excellent free school which was founded by a self selecting group of aspirational families so it's no surprise that it is brilliant. It will however be interesting to see what it's like after a few decades once the intake is more typical of other schools. If it starts to go downhill, the community will have to rely on Westminster to step in instead of local government

Lola said...

MW Or the land and school are sold and pay LVT.

Mark Wadsworth said...

L, or that.

Lola said...

MW...because what we do not want is to add to land speculation around schools.

Rich Tee said...

Taking Guido's POV, this seems like an example of something that achieves the right outcome (increase in education standards) but for the wrong reason (increase in house prices caused by better schools).

mombers said...

Think of it this way though. An area with no special school admissions privileges gets a free school plonked in it. Free schools are generally set up by highly motivated groups and are quite desirable. So all of a sudden an area has a school place premium. I've seen this at my kids' school - people clamouring to buy a school place and pushing up rents and prices in a small area that had no premium until a few years ago

Lola said...

Mombers. Or put it the other way about. Crap schooling in 'bog standard comprehensives' depresses land location values?

DBC Reed said...

As was said a long time ago by Labour Land Campaign, transfer LVT income from areas with "good" schools (and hence land value inflation) to struggling schools in poorer areas.