Republic of Montenegro: Public Expenditure and ... - Vlada Crne Gore

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30 Chapter 2: Composition of Public Expenditure and Key Sources of Fiscal Pressure Opportunities for Cost Savings 2.43 The rise in staff salaries is such that without significant reductions in employment levels, salary expenditures will eat up a substantial portion of spending for school reform. In this section, it is assumed that these staffing reductions are made so that wage spending does not increase beyond the budgeted amount. Given this assumption, what avenues are there for Montenegro to make additional savings to pay for the school reform and, more broadly, the priorities identified in the Strategic Plan? Rationalizing the School Network 2.44 Montenegro can take advantage of the opportunity offered by the fall in pupil numbers over the next several years. Keeping the ratio of pupils to teachers and enrollment rates at the same level as currently, teacher numbers would need to be reduced by approximately 370 in primary education and 200 in secondary education by 2012 (Annex 2). This could yield total savings over the period of €4.0m or an annual average of €0.6m (plus, of course, parallel savings from non-teaching Table 2.10. Number of Schools and Classes with 10 or less Pupils, 2004/2005 and 2005/2006 Number of 2004/2005 2005/2006 pupils Schools Classes Schools Classes 1 16 16 18 18 2 27 27 21 21 3 11 12 20 20 4 19 19 15 15 5 16 17 22 22 6 19 19 12 13 7 15 18 13 16 8 13 16 12 19 9 11 11 10 18 10 9 9 12 23 staff). 38 The ratio of pupils to teachers in Montenegro is around international averages (Table 2.6). However, even some increases in these ratios would be compatible with good quality education. International evidence does Total 156 164 155 185 not display a significant correlation Sources: Ministry of Education and Science; Bank estimate. between class size and learning achievement. For example, in the 2003 OECD PISA international student assessment, Korea (with an average class size of those taking the test of 37) achieved a far higher mathematics and science scores than Germany (class size of 22) and Greece (17). 2.45 There are a large number of small and very small schools in Montenegro (Table 2.10). There are 167 elementary schools, but 457 active elementary school units. Of these, 74 units have fewer than 5 pupils, and more than one-third of them (155) have 10 or fewer students. The student/teacher ratio is very low in many cases – there are 18 schools with only one pupil! While having satellite schools reduces administrative costs (since the management and administration is done by the central schools), there does seem to be scope for consolidation. It is undoubtedly true that some of these schools could not be combined without making access for some students too onerous. At the same time, it is equally true that some could be consolidated without compromising quality or access. The challenge is to distinguish between schools in the 38 Even if enrollment rates were to rise to those of the EU, the project fall in the number of pupils would still mean an overall reduction in teacher numbers, perhaps of around 300, in Montenegro.
Chapter 2: Composition of Public Expenditure and Key Sources of Fiscal Pressure 31 first category and schools in the second, and to provide the means and the incentive to carry out consolidation where it makes sense to do so. Table 2.11. Characteristics of the Highest Unit Cost Primary Schools Pupil teacher ratio Mean unit cost per pupil Number of Number of Number of Number of Mean cost schools pupils teachers other staff per school Sparse rural € € Central school 7 177 71 37 2.5 75711 2778 Satellite school 18 35 18 9 1.9 7338 4385 Total 25 212 89 46 2.1 26483 4029 Rural Central school - Satellite school 4 12 6 2 2.1 11053 3794 Total 4 12 6 2 2.1 11053 3794 Rural/urban Central school 8 144 40 42 2.3 62817 3932 Satellite school 29 82 39 19 2.2 10516 4771 Total 37 226 79 61 2.2 21825 4589 Urban Central school 10 247 112 45 2.4 72886 3095 Satellite school 14 33 16 8 2 8304 4674 Total 24 280 128 53 2.1 35213 4016 Total Central school 25 568 248 124 2.4 70455 3368 Satellite school 65 162 79 38 2.1 9193 4583 Total 90 730 327 162 2.1 26210 4245 Source: Bannock Consulting, Education Finance Decentralization: Cost-Benefit Report, manuscript, 2006. 2.46 The MOES has recently produced new Norms and Standards, linked to the number of students rather than the number of classes, but this does not seem to have had a discernible effect, with in fact an increase in the number of very small classes (Table 2.10 above). This may be because the number of children in rural areas has decreased. 2.47 Consolidating the school network would go some considerable way towards meeting the projected additional costs of reform schools. If all of the most inefficient central and satellite schools were closed, then savings would be at least €2.4 m each year (Table 2.11). In a few cases it might be possible to sell or rent the school building, resulting in some additional income. Moreover, of course, additional savings could be found if slightly larger schools were closed or slightly larger classes merged. These savings would be slightly offset because there are some costs associated with closing schools, such as for redundancy payments for staff and some additional transportation costs to ensure schools remain accessible. 2.48 Fortunately, the evidence is that school consolidation is likely to improve rather than reduce student achievement. There is not much good data on the achievement of students in Montenegro. However, two clear findings emerge from a recent assessment. 39 First, students 39 In 2005, a national assessment was conducted for third grade students in mathematics and in mother tongue. In that assessment, overall 56.4 percent of questions were answered correctly in mother tongue and 57.5 percent in mathematics. However, it is hard to interpret this overall result, since the assessment was not designed with a minimum standard in mind nor were the expectations of students benchmarked against international standards.
Page 1 and 2: Report No. 36533 Republic of Monten
Page 3 and 4: CONTENTS ACKNOWLEDGMENTS ..........
Page 5 and 6: TABLES Table 1.1. Montenegro’s Gr
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Page 10 and 11: ii Executive Summary and procuremen
Page 12 and 13: iv Executive Summary 2006-2010 is p
Page 14 and 15: vi Executive Summary bill in the ke
Page 16 and 17: viii Executive Summary 23. Going fo
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Page 57 and 58: 3. PUBLIC ADMINISTRATION REFORM 3.1
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6. BEYOND THE NATIONAL BUDGET: FISC
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Chapter 6: Beyond the National Budg
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94 References Langseth, Peter Jerem
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96 Annex 1 Indicator 2001 2002 2003
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98 Annex 3 ANNEX 3. COSTS OF ALTERN
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100 Annex 4 Local roads planning, f
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102 Annex 4 with EU standards and d
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104 Annex 4 Most of the railway’s
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106 Annex 4 C. Public Expenditure o
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108 Annex 4 Table A4.6. Transport i
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