Inspiration in schools beyond the Great Grade Grab

A teacher outlines the practical difficulties of improving sport in schools.

As the euphoria of London 2012 dissipates, the country's focus has shifted to legacy and to the furtherance of that considered strapline: "inspire a generation". Despite the potential for the whole nation to have been inspired by the incredible scenes of achievement and public commitment, it is natural to hear this phrase and think of the impact of the Games on the next generation. Such thought instinctively leads to questions about provision and very quickly we find ourselves on that well-worn path, the one which begins with an issue and ends with disparaging looks at our state school system.

So it seems we are here again. The school system, and the teachers that build it, are being spurred by yet more emotive political diatribes from those who know; but what do they know? There is little I find more uncomfortable than a politician using individual experience to analyse education holistically, perhaps only more so a politician discussing sport. So you can imagine how I winced at Cameron’s assertion that teachers are not giving enough of their time to school sport or Boris’s suggestion that two hours of exercise a day should be mandatory. It is not that they are necessarily wrong, just inconsistent and ill-considered in their approach. It is easy for Cameron to criticise teachers verbally for not participating in extra-curricular activities – a typically vacuous, faux-man-of-the-people sound-bite – but actions are harder than words. In fact, the comment is blind to the harsh reality of our state school system, a blindness I shared before leaving the City and spending the past year training as a Mathematics teacher. 

Eager to embrace all aspects of school life and equip my pupils with skills outside of the classroom, I was keen to help coach sport during lunchtimes or after school during my PGCE placements. Yet what I envisaged did not match reality. Instead I found PE departments isolated from the rest of the school, hidden from the frenzy of the core-subject-get-me-a-grade-C rush. School senior management, much like politicians, were happy to use favourable sporting results to their advantage but a thousand other pressures meant that sport was pushed to the outermost recesses of their agenda. In fact, the majority of my teaching colleagues advised me not to offer any assistance, viewing it as an ineffective use of time and one particular head of department went so far as actively to discourage it.

Yet this is not to lambast the attitude of teachers; their advice was considered, and although depressing it was designed to make me succeed within the parameters of the current schooling system. State school priorities are so aggressively geared towards achieving benchmark results that it is unsurprising that sport is an after-thought. Far from teachers sharing in the panoply of school life, subject-specific departments act like distinct entities, working frantically and individually to keep their own house in order. Years of governmental scrutiny and review have led to schools being appraised through statistical expectation, altering the dynamic of our education system. Somewhat perversely, I found the school environment distinctly more corporate than the investment bank in which I had previously worked: irrelevant staff-training, convoluted layers of management and endless paper-trails, seemingly created solely to appease an inspector's eye. It is as though those in charge had been reading Management-101 straight from 80s corporate America, complete with the de rigueur motto and mission statement. 

While such a rigorous infrastructure surrounding the profession could arguably engender increased professionalism, I feel it moves schools further from the true essence of teaching. So much pressure is placed on departments to meet GCSE grade targets that any staff spare-time is given over to the endless pursuit of improving results, and in particular the movement of Grade D's to Grade C's. As a result, any teacher’s involvement in other activities can be seen as shirking responsibilities. As an outsider looking in, the status quo is clearly not right. The working balance of teachers has been skewed to such an extent that the job seems to be a Sisyphean task of pushing statistics up a summitless hill. Whilst a plethora of interests and additional skills exist within the profession, such a system straight-jackets teachers into uniform conformity.

So how can the balance be readdressed? How can teachers be encouraged to lead activities and initiatives away from the Great Grade Grab? This is where David Cameron can actually help. Trust needs to return to the schooling system at every level. Government needs to allow school management space to breathe, to trust that this freedom will lead more effective leadership, focused on pupil development instead of lurching to and fro trying to fulfil the latest DfE edict. School management needs to trust departments and teachers. Teaching children is exhausting and fraught with complications that cannot always be explained by statistics. Rather than create a culture of after-school revision classes, the allocated lesson time should be viewed as sufficient, giving greater freedom for teachers to give more of their true selves to schools. Parents need to trust in this more rounded vision of school that improves pupil autonomy, removing the notion that a teacher is an unlimited resource to exploit as exam-stress looms. 

In the final placement of my teacher training course I worked in the only school in a working class town. Despite strong and motivated staff, the absence of choice for pupils meant the school struggled against being viewed as a five-year prison sentence. Results had recently improved and money had been spent to improve facilities but this was irrelevant in the classrooms. The children were not proud of their school and felt unlucky to be on its register. Sport at the school was not a priority and consequently few competitive fixtures were played, let alone won. It struck me that the school was missing a trick. 

Irrespective of teaching, results would always struggle to rise above those of the more affluent local schools. Furthermore what child would care whether 52 per cent rather than 49 per cent of GCSE pupils gained at least five grade Cs? No, that does not change the mood of a population. We do not celebrate if GDP has risen 0.2 per cent quarter on quarter. Yet think what delight we take from a taekwondo gold or a pommel horse silver. We like being associated with winners even if we do not necessarily understand what we have won. The power of human achievement to transform is enormous. If instead this school focused more broadly on success and its sports teams started winning, then maybe motivation would turn and morale lift. Paradoxically, less effort on results could actually lead to their improvement. 

I believe schools should adopt a flatter, more flexible management structure that embraces achievement alongside core responsibilities. At all levels trust is required to build unquantifiable skills in pupils, skills that fuel passions, create dreams and act as inspiration for the future. Yet this vision requires a fundamental structural shift. The current stasis needs breaking and the balance of power readdressing. Maybe the legacy of these Games will allow schools to free themselves from the stranglehold of results as sport steals some of this focus. More probably, the next in a seemingly endless line of society's ills will be blamed on state school under-performance and teachers will retreat further behind the cover of statistics. So, Dave, the Olympians have inspired a generation, now it's your turn.

Local school children taking part in football coaching at Staines FC. Photograph: Getty Images
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We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?