"The English education system performs well against a number of international benchmarks, particularly in terms of school attainment and the performance of the higher-education system. But there are major issues for policy to contend with, including a low staying-on rate in post-compulsory education, a significant gap in attainment between social classes, and poor work-force skills. Much recent policy change, and the very substantial increases in spending, can be seen to flow from these imperatives and from the continued high returns to education in this country. This paper concentrates on a few aspects of policy, including the central roles of funding systems and Public Service Agreement targets. We argue, inter alia, that there are important policy complementarities and informational and incentive problems that could benefit from further attention, and that the low staying-on rates after 16 remain one of the key concerns of policy, being both symptomatic of problems at earlier ages and a cause of later problems."

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