Education has emerged as an important election issue. As always, people are arguing about how much money should be spent on it. But should funding really be at the heart of the debate?

Australia already spends lots of money on education. National Assessment Program – Literacy and Numeracy (NAPLAN), the My School website, and the Programme for International Student Assessment (PISA) analysis are giving taxpayers more information (such as student gains in subject areas) of the quality of the output of the education system.

While the trends are mixed, the data reinforces the view that we may not be getting very good value for our money. Among other things, international comparisons are significantly less favourable now and the achievement gap continues to grow.

We cannot really make that judgement, however, because we do not have enough information on the inputs to the system such as school provision, school governance, nor if system design principles are adhered to.

Take the example of the right to a local school. It is virtually impossible to judge on the basis of public data whether we have enough schools, or whether they are in the right locations. This is one of the biggest areas of public expenditure but is a virtual black hole for data.

This comes down to how the state departments of education operate. These are huge bureaucracies spending hundreds of millions of dollars.

It is hard to see how citizens can get any insight into their decisions given the current structures.

Education departments make policy, allocate funds, build schools, operate the largest players in the field, public schools, and act as regulators as well.

This bundle involves multiple conflicts of interest because the departments operate the public education system but also regulate the public, the Catholic and the independent school systems.

One ironic consequence is that this strengthens the hand of the non-government operators.

They have spokespeople and lobbyists who can push their case to government while it is not clear the public education system gets a similar hearing.

Operation and regulation need to be separated

The recent Competition Policy Review argued that the structure was fundamentally inappropriate. It laid down some very clear principles. These included that “governments should retain a stewardship function, separating the interests of policy (including funding), regulation and service delivery”.

The implication is that education departments need to be broken up. Responsibility for the operation of public schools needs to be separated from the policy making and regulatory functions and put into a separate authority. This will have a wide range of benefits.

With the establishment of an authority for public schools at arm’s length from the department, each sector would finally be structured equivalently and able to compete more openly.

Increasing transparency and accountability

Each sector could also be assessed for the quality of the service it delivers in a much more open and transparent way and held to account if necessary.

Having a single entity responsible for the delivery of public school education would also open the way for other avenues of review.

The Auditor-General would be able to assess the value being delivered by benchmarking the state system against the others.

An office of the education ombudsman for all school systems, or education services more broadly, could also be established to consider concerns raised by people. Both would increase transparency and accountability.

In their role as stewards, policymakers could be assessed with PISA, NAPLAN and school-level data for the overall performance of the system without distractions from operational considerations.

As parents and taxpayers, we could ask whether the education system as a whole was performing well. Education already absorbs a large share of tax revenue; we have to make sure it is used well.

The government has commissioned a review of the delivery of human services by the Productivity Commission following the recommendation of the Competition Policy Review. It will focus on the two big areas – education and health.

We can expect the review to reinforce the messages from the Competition Policy Review. As a result Australia might have a sensible governance model for its education system.