Microeconomics of

Education and the Effect of

Government Intervention:
The Role of Classroom 2.0 in Facilitating
the UK Government’s Schools Policies

Jonathan Bishop
Centre for Research into Online Communities and E-Learning Systems, Belgium

ABSTRACT
While the concept of Classroom 2.0 has been around for over a decade, the concept of electronic and
distance learning as a mode to improve education outcomes has existed ever since the first broadcast of
television programs carrying educational content. The governments in the United Kingdom have always
sought to intervene in education, whether this has been allowing schools to opt-out of local authority
control with grant-maintained schools under Margaret Thatcher, co-operative trusts under Tony Blair,
or free schools under David Cameron. Not all government interventions are as successful. Homogenized
one-size-fits-all education based on catchment areas such as Comprehensive Schools and state-run
projects like the UK e-University have been shown to lack the return on investment of Specialist and
Independent Schools and the Open University. This chapter reviews some of the microeconomic models
used by governments to intervene in the market for instructional services, including e-participation in
education, namely Classroom 2.0. It also looks at some of the possibilities of Classroom 2.0 in education
systems that have been affected by UK and respective devolved government’s education policy.

INTRODUCTION The self-interest of parents, as consumers is in

choosing schools that will provide maximum
The education market, particularly with regards advantage to their children and the self-interest of
to schools has been intended to be driven by self- schools or their senior managers, as producers is in
interest, by both parents and education providers. making policy decisions that are based upon ensur-

DOI: 10.4018/978-1-4666-6038-0.ch004
 
Microeconomics of Education and the Effect of Government Intervention

ing that their institutions thrive, or at least survive
in the market (Gewirtz, Ball, & Bowe, 1995). The
educational e-participation market as a whole has
similarly been driven by self-interest, from that of
the shareholders who want a high return on their
investment to that of the senior workers who see
an increase in profits as a way of furthering their
own objectives. Schools could be considered to
be part of the educational e-participation market
where they use any form of electronic equipment
to enhance participation in the learning process
(Bishop, 2007). This could include a primary
classroom that teaches word-processing using
computers, to a high school where lecture-like
lessons are delivered using Microsoft Powerpoint
presentations (ibid).
BACKGROUND
A number of economic models for regulating
education activities are at the disposal of govern-
ments. UK Government policies on education have
in recent decades been about removing control
over education provision from central govern-
ment. Whether this was the New Labour Gov-
ernment devolving authority to Scotland, Wales
and Northern Ireland legislators, or the Coalition
Government encouraging the opt-out from local
authority control in England, this has been an
aspect of education policy in the UK since 1997.
Legal Issues in Market-
Based Education
It has been argued that education should go be-
yond the bricks and mortar of school buildings,
including into the home and community venues
(Bishop, 2012b). The types of business models to
do this are extensive. Some of the more effective
models in relation to education, such as those with
limited liability are discussed in Table 1.
Other than the charitable incorporated or-
ganisations, there are no references to charities
in Table 1, but for a very good reason. Charities,
including charitable trust can exist alongside or
as part of these organisations. Other organisation
types, such as companies limited by shares and

Table 1. Types of organisational structure suited to education

Company Type Description

Company Limited by Guarantee
Community Interest Company
Charitable Incorporated Organisation
Co-operative Trusts
Academies
Source: UK Government
A company limited by guarantee is a type of private limited typically used for not-for-
profit organisations that want to fulfill charitable objects but with greater freedoms.
A Community Interest Company (CIC) is a limited company, with special additional
features, created for the use of people who want to conduct a business or other activity for
community benefit, and not purely for private advantage.
A charitable incorporated organisation, or CIO, is a new legal form for a charity that is
an incorporated form of charity which is not a company as it only has to register with
the Charity Commission and not Companies House. A CIO is only created once it is
registered by the Commission can enter into contracts in its own right and its trustees will
normally have limited or no liability for the debts of the CIO.
Co-operative Trusts are free-standing education co-operatives with a social mission,
owned by their local school communities. The rationale behind this initiative was to use
the framework of ‘Co-operative values’ to encourage autonomy for schools, but based on
a much closer relationship between schools and their local communities.
Academies are publicly funded independent schools that are not managed by a local
authority. They can set pay and conditions for their staff and also change the length of
their terms. Academies do not have to follow the national curriculum.

Microeconomics of Education and the Effect of Government Intervention
other for-profit companies, such as those created
through Private Finance Initiatives (PFI), Public
Private Partnerships (PPP) and through outsourc-
ing will be considered alongside these in this
chapter, but the focus will be on those capable of
being charities and/or trusts.
A common theme among all charitable and
other trusts is that there must be a public benefit
to its operations (Atiyah, 1958). Any of the or-
ganisational structures in Table 1 cannot be used
to benefit a group of individuals connected in
some way to the organisation, such as children
of its employees, as proven in Gilmour v Coats
[1949] A.C. 426. This was cemented into law
by the New Labour Government with the Chari-
ties Act 2006 (Geessink, 2013). The “personal
nexus test,” introduced by Oppenheim v Tobacco
Securities Trust Co Ltd [1951] A.C. 297 [1951]
1 All E.R. 31 HL, established that there should
be little connection between those who fund a
charitable trust and those who benefit from it.
Whilst on the one hand this might deal with tax
avoidance opportunities, it makes it difficult to
develop educational cooperatives, or commune
like organisations where those whom benefit from
it also work for it. Such a problem was in part ad-
dressed by New Labour with the establishment of
Co-operative Trusts in the [Education Act 2005],
and extended by the Coalition Government with
Free Schools and Academies with the [Act].
One of the first schools to be awarded Co-
operative Trust status was Reddish Vale Tech-
nology College in Stockport (Humphreys, 2011;
Thorpe, 2011). As part of its public benefit outlook
it established a further organisation outside of its
compulsory education remit to bring local stake-
holders, including schools, churches, businesses,
community groups and charities together in order
to establish a co-operative named “re:dish.” The
complex legal structures, including the need to
navigate rules like the “personal nexus test” when
it comes to charitable trusts, and the restrictions
on certain type of organisations not being able to
service all markets, makes achieving the charitable
purpose of ‘advancement of education,’ for people
from all backgrounds that much more difficult
(Iwobi, 2009). The remainder of this chapter will
focus on the issues arising out of the restrictions
and otherwise put on the formation of schools
and other establishments by the UK Government,
particularly focusing on the developments made
by the Coalition Government in improving on the
work of the New Labour Government. The next
section importantly discusses the impacts of the
devolved administrations on the education market,
who face the same challenges as in England, which
might need the same solutions.
A BRIEF HISTORY OF UK AND
DEVOLVED GOVERNMENT
INTERVENTION IN
EDUCATION MARKETS
In the UK, the role of providing education has been
provided by Local Education Authorities (LEAs)
since the enactment of the Education Act 1902.
The 1988 Education Act removed the manage-
ment responsibilities for schools from LEAs and
imposed a role of being responsible for strategic
planning. Local authorities were required to devise
a formula to determine how it would distribute
funds to local schools, which had to be approved
by central government.
The Conservative Government further re-
stricted LEAs by making it possible for parents
to call a referendum to opt-out of local authority
control, which may have been extended to remov-
ing education from the remit of local authority
responsibility had there not been a change of Gov-
ernment in 1997 (Chandler, 2001). This may be
the case as there has been a push by the Coalition
Government in this direction since taking power
in 2010. Maynard (1975) argued that in a system
of allocating places to schools based on a catch-
ment area, parents have the right to move house,
and some can opt-out of the LEA-funded school
and send their child to a fee-paying school. Each

Microeconomics of Education and the Effect of Government Intervention
of these choice strategies requires finance, and
so the catchment system provides choice only to
those who can afford it. Despite this depiction of
choice and competition, it is difficult to describe
school markets as free markets (Gewirtz et al.,
1995). Through its attempts to control the informa-
tion system of the education market via national
testing, local league tables and other performance
indicators, central government asserts a planning
function while pursuing the rhetoric of autonomy
and choice.
The introduction of the National Curriculum
by the Conservative Government in 1988 saw a
homogenising of the education being provided
across the United Kingdom. This meant that a
parent living in the North East of England could
move their family to Wales, knowing that their
children could resume their education from the
same point they were at in their previous school.
The Labour Government that came to power in
1997 decided to continue with the LEA structure
and brought many of the schools that opted-out
back into the control of local authorities. This
had the effect of removing the market created by
the previous administration with a move towards
providing education based solely on catchment
areas and not the ability to pay or other selection
mechanisms. New Labour’s abolition of the As-
sisted Places scheme in 1997 which previously
allowed low-income parents to send their children
to private school further limited choice of par-
ents in the marketplace, meaning state-provision
of education became a norm for most parents,
even if it was not in the interests of their child.
The regional governments that came out of the
devolution settlements for Scotland and Wales in
1998 continued the drive towards state-controlled
education by recognising the LEAs as responsible
for the funding and direction of individual schools.
Through maintaining the LEA structure, the
abolition of league tables and the continuation
of the National Curriculum, the regional govern-
ments originally adopted a quasi-market approach
to perfect competition in which both parents and

schools have limited influence in the market and
where all consumers have perfect information
about a homogeneous product determined by a
directly elected government. This was broadened
to some extent in Wales with the introduction of the
‘skills-based curriculum’, where the objectives of
schools was no longer to provide state-sanctioned
knowledge, but to provide a broad and localised
curriculum that provided the skills to enable effec-
tive learning and community participation beyond
compulsory education. Since the resignation of
the unpopular education minister for Wales, Jane
Davidson, the Welsh Government has taken a more
choice-based approach to schools more typical of
the New Labour Governments. This has included
the introduction of a Website to aid parents in
choosing schools by comparing school statistics
(My Local School: http://mylocalschool.wales.
gov.uk), as well as introducing ‘banding,’ which
like league tables allows parents to compare the
outcomes of a particular school. Its introduction of
a similar Website for healthcare (My Local Health
Service: mylocalhealthservice.wales.gov.uk) and
making food outlets display their hygiene ratings
suggests the Welsh Government is starting to move
unpopular decisions in public service cuts to the
people (i.e. the market), who though people power
will reject underperforming services in favour of
ones more suited to their needs.
The Coalition Government of Conservative
and Liberal Democrats that came to power in
2010 took steps to reverse the forced opt-in of
LEA control of schools in England by bringing
forward plans to allow greater financial freedom
so they become ‘Academies’ if they were to
opt-out. This was distinctly different from the
devolved administrations’ approaches, which
were committed to state controlled education,
and laid the foundation for more market-led ap-
proaches to education. Perhaps unfortunately,
in 2012 the Coalition Government proposed the
re-introduction of ‘grammar schools,’ which
educate children of different abilities in different
schools based on their ability. The problem with

Microeconomics of Education and the Effect of Government Intervention
this is that programmes such as Classroom 2.0,
which tailor information for each child, would not
have the benefits it would have in a mixed ability
setting where it adjusts the challenge of learning
materials based on the ability of the child using it.
A REVIEW OF THE
MICROECONOMIC MODELS
IN EDUCATION MARKETS
There are a number of clearly identifiable models
in terms of school legal and economic structures,
even though the schools may not actually con-
sider themselves in this way, which can be quite
academic. The types of school in the UK can be
thought of in terms of there being a perfect com-
petition model, a monopolist competition model,
monopolies, and oligopolies.
Perfect Competition Model
The perfect competition model assumes the
existence of numerous consumers unable to
significantly influence market price as well as
numerous small firms unable to significantly
influence market supply and who all produce a
homogeneous product. Consequently, each firm
is a price taker regarding the demand curve for
its product as being perfectly elastic at the going
market price, perfect information is available in
the form of the price of the homogeneous product
and there is freedom to enter to leave the market
at any time (Griffiths & Wall, 2000). To some
degree this may in theory match the system in
England where there is a subject based national
curriculum, even if the schools have different
legal structures. Indeed, governments can more
generally intervene in perfect competition markets
to control the specifications of the homogeneous
products being offered to ensure they comply with
government objectives or to increase the influence
of the consumers or firms in the market. The na-
tional curriculum is one aspect of this, and school
management is another. For instance in the case of
management structure it is the Coalition Govern-
ment’s policy to force weak schools to become
academies, run by sponsors and head-teachers
of strong schools (Dimmock, 2011). In terms of
the national curriculum the coalition can be seen
to have moved it back towards the subject-based
curriculum it originally was (Young, 2011).
Governments may also want to influence
product price either directly or indirectly through
introducing tax or incentive schemes, such as
vouchers or allowing firms to charge tuition fees.
The Conservative Government tried to introduce
such quasi-market approaches with the introduc-
tion of City Technology Colleges and sponsored
grant-maintained schools (Walford, 2000). Con-
cepts such as ‘pupil led formulas’ that can mean
schools get more money for accepting children
with disabilities or from low income backgrounds,
something that was envisaged in the creation of
grant maintained schools (Conway & Lawrence,
2013). Not only were City Technology Colleges
a significant part of resolving the problems as-
sociated with the perfect-competition failures of
earlier education models, but the introduction of
the ‘assisted places scheme’ also challenged its
furtherance (Selwyn, 2013). This policy was re-
versed by the subsequent New Labour Government
when it first came to power, which attempted to
return to the perfect competition model by focusing
funds on ensuring homogeneity of class sizes (i.e.
no more than 30) to provide the same provision to
all (Heath, Sullivan, Boliver, & Zimdars, 2013).
The perfect competition model would perhaps
fit best with a state-sponsored home education
programme. Home education is the education of
children in and around the house by their parents
or by those appointed by the parents and can be
seen as a temporary or permanent alternative to
the education provided by the state or by private
schooling (Taylor, 2000). Central Government
policy in the UK has since the 1980s been ac-
cepting of the right of parents to ‘home-ed’ their
children with Education Acts requiring local

Microeconomics of Education and the Effect of Government Intervention
education authority to facilitate parents in using
such a right while maintaining statutory obliga-
tions. New Labour’s drive to provide childcare
entitlement to parents so they can ‘go back to
work’ somewhat limited the extent to which public
perception warmed to home education and the
Coalition Government’s focus on large Academies
in England further diminished any drive towards
home education.
Monopolistic Competition Model
The monopolistic competition model assumes
the existence of a large number of firms in the
market who each act independently of each other,
freedom to enter and leave the market at any time,
and where each firm produces non-homogeneous
products (Griffiths & Wall, 2000). An example of
monopolistic competition in education is a local-
ity where several schools are trying to attract the
same student population, and where some schools
may want to attract some parents in preference to
others. The Co-operative Trusts model introduced
by the New Labour Government provided the
freedoms associated with the monopolistic com-
petition model, allowing schools to make more
decisions and provide education not restricted
by a homogenised national curriculum. In these
markets, schools can identify these parent niches
in the market by specifics or by descriptors. Indeed
the Coalition Government’s free school initiative
has been conceptualized as ‘start-up schools’
because of the ease with which groups of people
can enter the market (Hatcher, 2011). Specifics
include such items as the rate at which clients
purchase services, the range of products avail-
able (e.g. the range of courses or extracurricular
activities) and media exposure. Descriptors cover
variables such as age, gender, geo-demographics
(e.g. social structure of a school’s catchment
area) and people’s preferred lifestyle (Harvey
& Busher, 1996). This model of competition is
perfectly suited to privately run schools, such as
by parents. Indeed, it has been argued since the

dawn of New Labour that if parents were put
in control of schools then school curricula and
programs would be designed to accommodate
their concerns, and government intervention
would only need to be limited to allow families
the greatest possible freedom in educating their
children (Ebeling, 1994).
Online participation in education has the po-
tential to give parents, who may not be educators,
access to the latest knowledge on any subject.
This means that with the help of firms providing
e-participation in education technology they can
give their children access to authentic information
that has potentially been through strict quality
tests within an environment in which they feel
comfortable and in which their parents can trust.
The ‘Free Schools’ plan presented by the Coalition
Government in 2010 means that the potential for
parent run schools is a reality, and e-participation
in education could play and important part in the
process. Free schools can provide education in
most parts of the community, whereas under the
Comprehensive system they were constrained
to buildings that had planning permission. This
model has the potential to lead to a marketplace
of multiple firms offering distinctly different
products to each other, meaning the self-interest
of parents will be harnessed to provide a tailored
education based on a whole community approach.
In a market based on monopolist competition,
central government may want to intervene to limit
the number of firms, impose regulations relat-
ing to the standards and range of products, the
customer base and set conditions for entering or
leaving the market. Governments face continued
pressure from the electorate and lobby groups
to ensure certain, such as individuals from low
socio-economic backgrounds or minority groups,
have access to essential services. This could lead
to the imposition of quota systems, where firms are
required to accept certain consumers in place of
their desired customers to meet government policy.
In markets where firms can enter and exit easily,
governments may want to impose restrictions to

Microeconomics of Education and the Effect of Government Intervention
ensure that consumers continue to receive edu-
cational services, even at times when the market
would normally require cutbacks or the cessation
of certain products. This could materialize in the
form of a policy where a school is required to
register all students for a particular examination
when it is likely the school will drop in the league
table as a result.
Monopolies and Oligopolies
A monopoly is a market that is served only by one
supplier, known as a monopolist. A monopolist can
typically increase its profits by charging a price
higher than the competitive equilibrium price and
selling less of its product than would be supplied
in a competitive market. Where a monopoly ex-
ists in the case of schools, it is most likely to be
controlled by the government itself or a firm that
the government approves to provide education in a
particular locality. Governments may also wish to
restrict the freedoms of monopolists in these mar-
kets through imposing price restrictions, imposing
catchment areas, or through making it possible for
more firms to enter the market. Indeed, it has been
argued that post-1988 markets in education, as a
result of the introduction of catchment areas, can
be compared with the status ante, which has been
variously referred to as state monopoly schooling
or selection by mortgage (Gorard & Fitz, 1998).
In terms of charitable trusts, one might question
whether a trust school that serves a market that
has been partitioned in such a way that it covers
only those from privileged backgrounds would
meet the definition of charitable. The law relat-
ing to charitable trusts has been formed in such a
way that the wealthy should not benefit from such
education set-ups at the expense of the taxpayer.
Free schools are perhaps less likely to produce
monopolies as they can be set up regardless of
catchment areas. However their ability to become
charitable trusts might be challengeable. In the
cases of IRC v Educational Grants Association
[1967] 2 All E.R. 893 and Re Koettgen’s Will
Trust [1954] 2 W.L.R. 166 it was determined that
where the vast majority of spending is targeted at
those with a direct interest in the organisation it
is not charitable. This may be problematic for the
free schools policy, as if it is owned and/run by
the parents of the children in the school it might
fall foul of the “personal nexus test.” Indeed the
case of Re Compton [1945] 1 All E.R. 198 says
that where there is not a sufficient benefit to
the community a charitable trust does not exist.
However a school based on a Cooperative Trust
model, where parents and their children can join
voluntarily regardless of geography, if the judge-
ment in Re Koettgen was applied, it might mean
that if the trust is directed at those without the
means to pay then this may override the personal
nexus test prohibiting persons connecting with
those running an organisation to benefit from it.
The provision of education on the basis of
franchises, where a private firm has a monopoly
on a specific area, has no more benefits that what
a public sector monopoly without competitors
can offer.
An oligopoly is a market structure in which a
few firms dominate the industry. Crucially these
few firms recognize their rivalry and interde-
pendence, fully aware that any action on their
part is likely to induce counter-actions by their
rivals (Griffiths & Wall, 2000). In these markets,
governments may believe that firms are not doing
enough to improve standards or attract a greater
number of consumers to the market. Governments
may wish to intervene through imposing growth
targets or imposing penalties if certain standards
are not met. This would be done on the premise
that it would stimulate competition between firms
in the belief that this would increase growth in the
sector and improve standards. In fact, the Welsh
Government has created ‘virtual’ oligopolies of
schools in order to improve standards – called
‘family schools.’ The term family refers to a
group of schools put together to encourage them
to improve their standards through an artificial
form of competition. The schools that fit within

Microeconomics of Education and the Effect of Government Intervention
a family are selected according to the proportion
of pupils entitled to free school meals, the number
of pupils living in the 20% most deprived areas
of Wales. Also included is the number of pupils
with special education and those with English as
an additional language. If Wales were to move
away from its more homogenised policy on school
ownership and management then schools may
be more likely to gain a charitable status on the
basis of the funding framework put in place by
the Welsh Government, which not only focuses on
education, but relief of poverty also. Whilst it is
often thought that there is not ‘public benefit’ test
in the case of relief of poverty, Re Scarisbrick’s
Will Trusts [1951] 1 All E.R. 822 found that
where those who are to benefit from a trust, such
as those from the same family, then they cannot
be considered charitable.
BRIDGING THE GAP: THE
ROLE OF CLASSROOM 2.0 FOR
MARKET-DRIVEN EDUCATION
The complexity of policy formation with respect
to e-participation in education funding in schools
is further compounded by the requirement to
address the needs of a range of stakeholders in
the state and commercial sectors (Mee, 2006).
E-participation in education has a role to play in
the modernization process of economies, societies
and education systems. The Digital Classroom of
Tomorrow Figure 1 is envisaged as not simply
consisting of educators and learners or indeed
only hard-wired personal computers, but also
accessible at a distance through many forms of
new media, including mobile phones, personal
digital assistants (PDAs), tablet computing, and
interactive television (iTV) as demonstrated by
(Bishop, 2004). Indeed, the classroom of tomorrow
may consist mainly of these ubiquitous systems,
not tied to any geographical location or bound-
ary. Portable technology could enable people to

learn anywhere; on the bus or on the train, while
at home or while on the plane.
Indeed, Kanamori and Kobayashi (2004) has
described an e-participation in education system
with a mobile videophone for home education of
learners with severe physical impairments and
Bishop (2009) investigated a mobile system in
which both home and school-based learners could
interact with an educator-set learning program
through a persuasive mobile agent.
The Role of eTwinning
The concept of eTwinning is one that is essential
to the realization of Classroom 2.0. It involved
schools and other community venues, including
home-educated children, linking up through the
Cloud or other Internet system so that the learn-
ers can interact regardless of frontiers. There has
been an eTwinning project as part of the Digital
Classroom of Tomorrow Project, linking a Welsh
Medium High School and an English Medium
(Bishop, 2004, 2012a). Rolled out across Europe
as part of the Classroom 2.0 initiative, it has be-
come clear than linking schools, even after the
novelty factor has worn off, can have wide ranging
benefits in terms of choice and satisfaction with
learning programs.
The Role of Learning Objects
Learning objects are reusable pieces of educational
material intended to be strung together to form
larger educational units such as activities, lessons,
or whole courses (Brooks, Cooke, & Vassileva,
2003). Learning objects are typically relatively
small content components that are meant to be
reusable in different contexts, associated with
‘metadata’, so that they can be managed, searched
(Neven & Duval, 2002). The availability of Open
Source learning management systems such as
Moodle means that it is now possible for even the
smallest of schools to make use of e-participation
in education facilities and achieve the same high

Microeconomics of Education and the Effect of Government Intervention
Figure 1. The digital classroom of tomorrow
standards as even the biggest of educational es-
tablishments. The Faculty of Health at Birming-
ham City University uses Moodle and because
of its policy towards re-using learning materials
through learning objects, use of their managed
learning environment has increased dramatically
(MacKenzie & Walsh, 2009). Learning objects, if
their depositaries are accessible, could mean that
a parent educating their child from home could
give that learner the same breadth and depth of
knowledge as someone with an individual learn-
ing plan at an elite private school. Open learning
objects could do for compulsory education what
the Open University has done for Higher Educa-
tion – provide high quality learning materials
accessible to all whatever their level of attainment.
The Role of Computer
Assisted Marking
As early as the 1970s computers were being
spoken of as having the potential to speed up the
marking of student assignments to assist educa-
tors and allow them to get on with the job of
teaching (Rushby, 1979), something referred to
as Computer Assisted Marking (CAM). A more
egalitarian cause may also benefit from such an
approach, which is greater social mobility through
fairer assessment based on standardized questions
and criteria. Like learning objects computerized
tests could be developed by leading education
providers and made available to those whose
reputations are still being developed. Standard-
ized marking of this kind across schools, colleges
and universities could bring some legitimacy to
league tables, whether published widely as is the
case in England, or only available to officials, as

Microeconomics of Education and the Effect of Government Intervention
has been the case in Wales in terms of schools
since education policy in this area was devolved.
Standardized assessment would mean the ‘best’
students would get the ‘best’ grades, irrespective
of the individual marking schemes of educational
establishment they attended. Universities with
high entry criteria and a lot of formative assess-
ment and individual tuition such as the Oxford
and Cambridge colleges may still produce the
best results, but the average grades would be a
truer reflection of individual student performance
based on the objective criteria fed into the CAM
software, rather than inflated grades which cur-
rently mean a degree from one university is not
perceived to be as good as a degree from another.
IMPLICATIONS AND FUTURE
RESEARCH DIRECTIONS
In 2009 the Emotivate Project proved the ‘Excel-
lence in Transforming Understanding through
Distributed Independent Education Resources’
(ETUDIER) approach to education. By giving
11 young people in Treforest the opportunity to
learn new skills in Photoshop using Moodle and
classroom support, Emotivate gave these young
people the chance, through designing collages of
ideas on what they knew about Treforest’s past
and what hopes they had for its future, the chance
to make a difference. These were then designed
as a mural by an artist and the young people then
painted it before it was installed. This ETUDIER
approach to education involved using existing and
sometimes under-used buildings in the community
for the project. By using existing these buildings in
the community, it showed a community education
provider needs a maximum of three core staff. The
remainder staffing and support can be ‘contingent
workers’, as happened with sub-contractors in the
construction industry before the Labour Govern-
ment acted on the demands of the trade unions.

DISCUSSION
The education market, particularly compulsory
education is driven by self-interest. Parents will
always want the best for their child whatever the
market conditions imposed by the government
of the day and often regardless of the needs of
other parents. Government policies in the UK,
especially in relation to schools in England have
tried to harness parent power more effectively
through various models of school that are not
dictated to by government. Many of these school
constitutions have been driven by making use of
charitable principles such as the advancement of
education and the relief of poverty. The extent
to which schools are charitable by this means
often affects those parents who will participate
in them. It has been found for instance that it is
not possible for an employer to have a charitable
trust to provide education to their employees,
unless it is directed at staff in poverty, or another
related group that can benefit from charitable as-
sistance. The choice of model for a school usually
places it into a particular market theory, such as
a monopoly, a form of monopolistic competition
or a perfect competition model. Conceptualising
school models on this basis can assist the govern-
ment in determining what policies to use so that
those schools can provide maximum advantage to
their pupils. Regardless of a school’s constitution
it is clearly that they can benefit from information
and communications technologies to allow pupils
to connect with those at other schools who might
be from a different background to them, and who
they might otherwise never meet.
E-participation in education has the potential
to give each learning access to the best quality
knowledge tailored to their individual needs. Gov-
ernment policy in the UK has fluctuated between
schools being controlled by local authorities, as
under Labour, to being independent of the State
as has been the drive under successive Conserva-
tive governments. Under both governments there
have been providers outside the general market,

Microeconomics of Education and the Effect of Government Intervention
which have mainly provided specialist education
to either disadvantaged groups or elite education
for the children of wealthy parents, in both cases
providing individual education plans to learners.
E-participation in education has the potential to
bridge the gap so that all pupils regardless of
advantage or disadvantage can have access to
education programs tailored to them. Legislation
currently allows parents to opt-out of the traditional
education system and educate their children from
home. Further drives in the use of open ‘learning
objects’ and standardized assessment could mean
that home education could become a realistic
option. The development of ‘free schools’ run
independently of State education could lead to
greater demands for ubiquitous e-participation
in education that can be accessed anywhere in
the community. This would lead to a marketplace
with many ‘firms’ providing ‘non-homogeneous’
products, with many others seeking support from
other parents to increase revenues from State funds.
The need for collaboration between parents and
schools to ensure their children have effective
social interaction may mean the Digital Classroom
of Tomorrow will not simply consist of a single
building housing many pupils, but a network of
computers and mobile devices operating across
the community in people’s homes and premises
in the community.
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KEY TERMS AND DEFINITIONS
Classroom 2.0: Classroom 2.0 refers to a form
of learning instruction that involves using the
personal computers of pupils – either remotely or
in class – to allow them to enjoy education that is
personalised to them and their needs.
Education Policy: Education policy is in-
fluenced by a number of factors, including the
government of the day, academics and school staff.
eTwinning: The concept of eTwinning refers
to a situation where one school is partnered with
another so that pupils can use information and
communications technologies to work with pupils
at a different school to them.
Home Education: Home education is edu-
cation that is not provided at a school but in the
home of a pupil of compulsory education age. It
might rely on distance learning approaches and
Classroom 2.0 environments with eTwinning can
also pupils to collaborate with other learners who
are in schools.
Microeconomics: Microeconomics is a
discipline within economics which studies the
actions of individual members of the public and
the impact of their actions on institutions and
other organisations.
Monopolist Competition: The monopolistic
competition model assumes the existence of a
large number of firms in the market who each act
independently of each other, freedom to enter and
leave the market at any time, and where each firm
produces non-homogeneous products.
Monopoly: A monopoly is a market that is
served only by one supplier, known as a monopo-
list. A monopolist can typically increase its profits
by charging a price higher than the competitive
equilibrium price and selling less of its product
than would be supplied in a competitive market.
Oligopoly: An oligopoly is a market struc-
ture in which a few firms dominate the industry.
Crucially these few firms recognize their rivalry
and interdependence, fully aware that any action
on their part is likely to induce counter-actions
by their rivals.
Perfect Competition: The perfect competition
model assumes the existence of numerous con-
sumers unable to significantly influence market
price as well as numerous small firms unable to
significantly influence market supply and who all
produce a homogeneous product.
UK Government: Those elected or appointed
to the UK Parliament whom form part of the ex-
ecutive either through the cabinet or as ministers
accountable to that cabinet, whom have a degree
of control over instruments of government, such
as the civil service.