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determination of grants solely or mainly with reference to results or efficiency, provision for a variable factor, dependent on the general work of the school, may be defended on educational groun We would leave this question to be settled in accordance with local expert opinion, provided that expenditure on the staff, and not results or attendance, is definitely established as the main factor in the determination of a grant.
(12) In deciding what portion of the grant, if any, is to be variable and dependent on efficiency, it should be remembered that any steps that dislocate the finances of a school are likely to reduce its efficiency. The variable grant should be relatively small, should be regarded essentially as a bonus, and should be calculated with- out reference to any particular item of expenditure. Such a grant, if won by the industry of the staff, could usefully be devoted to the further development of the institution. The withholding of such a grant will not make the school less efficient than it was before. If the variable portion of a grant is large and based on actual expenditure, the withholding of it must mean a reduction of expenditure and a consequent loss of efficiency.*
Salary Grants.
(13) If, as has been suggested above, recurring grants should be based primarily on expenditure, the first and perhaps the only point to be considered is the expenditure on salaries. Calculation on these lines is simple. A salary grant system is conducive to efficiency, in so far as it concentrates attention on the teaching staff. In some areas it is customary to consider also expenditure on contingencies. This, however, introduces unnecessary com- plications, and it seems better to concentrate the help the Govern- ment is able to give on one item only of the school's expenditure. It is important to make clear that what is proposed is an educational grant based on salaries and not the payment by Government of the salaries of the staff in aided institutions.
(14) The salaries on which grants are based should be calculated on a scale approved by the Government. In accordance with the principles emphasized in paragraph 4 above, the number of teachers would be fixed with reference to the needs of the school, the scale should be calculated in such a way as to attract teachers with the qualifications assumed by Government to be necessary, and grants should be payable on this scale only in respect of full-time teachers who possess these qualifications. Proportionate reduction should of course be made in the salaries of other than full-time members
*If inefficiency is the result of mismanagement, withdrawal of the school from the aided list is justifiable and desirable. If, as is more usually the case, it is due to lack of funds, the situation will not be improved by further reduc- tion of these funds,
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of the staff. The managing bodies to whom the grants are paid should be free to fix the salary of each member of the staff with ference to the needs and circumstances of the holder of the post, or to make any such financial arrangements for their staff as may be consistent with their ordinary conditions of recruitment. If this involves a difference between the total amount of staff salaries assumed by Government for purposes of grant calculation and the actual expenditure on salaries by the managing body, this difference should not involve any consequent reduction of grant, so long as the Government is satisfied that all educational grants are devoted to educational purposes. But the Government should reserve power to reduce the grant, or that portion of it which is based on salaries, in respect of any post filled by a teacher with qualifications inferior to those prescribed for the post by an amount equivalent to that portion of the assumed salary which is covered by the grant.
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If a managing body is unable, within a reasonable period, to supply a teacher possessing the necessary qualifications from among its own members, the Government may require the managing body to endeavour to fill the post by offering a salary not less than the assumed salary. Alternatively the Government would have power to withdraw the grant in whole or part. It should also have power to withdraw the grant altogether if the qualifications of the staff as a whole are such that the school can no longer claim an equal status with Government institutions. For in this case it will no longer deserve inclusion in this system of grants-in-aid. Expenditure on the board, lodging, clothing, medical attendance, etc., of members of the staff, where this is provided free of charge, in addition to or in lieu of salaries, may be included in the staff expenditure on which the grant is calculated.
(15) If the staff of aided institutions are to be on the same footing as the staff of Government institutions, provision must obviously be made by the management for pension or superannuation funds and, in the case of European staff, for furlough allowance, passage money, and leave reserve. Expenditure on these items may be included in the staff expenditure on which the grant is calculated. The salary of an accountant for dealing with the accounts, statistics, and corre- spondence of a large institution or group of schools may similarly be included.
(16) The desirability of grants-in-aid on salary expenditure has been questioned by some Governments solely on the grounds that it would be likely to result in a claim for larger grants than available funds would permit. It is clear, however, that a Government, merely by alteration of its mode of assessment, does not commit itself to additional expenditure, and that principles of assessment can be considered without prejudice to the financial position of the Government.
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