The restrictions set by state on the use of education support work against the objective of streamlining the school network

Toomas Mattson | 9/6/2016 | 11:00 AM

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TALLINN, 6 September 2016 – The National Audit Office can confirm on the basis of audit results that the money allocated from the state budget for paying the salaries of teachers generally gets to the teachers, but the system requires a fundamental reform, as the present one works against the streamlining of the school network. The focus should be on the abolishment of the intended purpose of education support to make it a so-say ‘unlabelled’ part of the revenue base of local governments.

The intended purpose of the education support is too narrow. Although operating general education schools is one of the most important functions of local governments, they do not have the freedom to decide how to most reasonably use the money allocated to them for this purpose. The rules of using the education support, which in 2016 amounted to ca 237 million euros and comprises 14% of the revenue of local governments, have been strictly set for the local governments. The money goes to the local governments that have schools, and there is no possibility for them to consider alternative ways of using the money. For example, it may be more reasonable to close a school the is operating half-empty and to offer the education service in cooperation with neighbouring local governments instead, and to use part of the support to finance the transport of students, but this is not permitted at present. The state’s desire in recent years has been to raise the average salaries of teachers at a heightened pace, which has increased over-regulation even more. This salary exceeded the average salary in the state by as much as 7% last year, and it keeps moving towards the goal of amounting to 120% of average salary by 2020. There is no doubt that raising the salaries of teachers is necessary, but local governments should have the freedom to decide for themselves how to best use the money in the interests of the community.

The problem of contradicting effects between education support and the school network programme. The student-based education support paid to local governments depends on the coefficient approved for it. Consequently, some receive twice as much support per student than others. The idea is to promote operating schools also in places where it is more expensive for some reason. At the same time, the state wants the number of schools to decrease and the organisation of schools as a whole to become more cost-effective, and the school network programme has been launched for this purpose.

The National Audit Office noticed in the course of the audit that local governments with high support coefficients are the ones that have several schools which could obviously be merged, but this is not favoured by the bigger amount of support per student. The claim of the Ministry of Education and Research that this favours the preservation of basic schools close to home, is not true, as the nature of a basic school close to home has not been defined, and all existing schools can basically be regarded as one. The National Audit Office is of the opinion that the measures applied in an area should not be in contradiction of each other. This means that the streamlining of the school network is nothing but a waste of time and taxpayers’ money.

The state plans to analyse possible changes in the local government financing model in the course of the administrative reform. This should certainly include the education support as well. The National Audit Office is of the opinion that the focus should be on the abolishment of the intended purpose of education support to make it a part of the revenue base of local governments that has no intended purpose. Differentiating the support between local governments should also be more clearly connected to the need to support the basic school close to home. The goal of a higher support rate should be known and justified in terms of education policy in each specific case. This does not mean giving up the pay rise of teachers, as the salary level of teachers could also be influenced via the minimum salary rate to a larger extent than now.

Auditor General Alar Karis said the following when commenting on the audit results: “It is clear that the labelled support money does not meet this goal. For example, there is no point in making an agreement with the neighbouring municipality and operating a stronger school together, as a local government that closes its school no longer receives the education support.

In the audit report, the National Audit Office advises putting the focus on the abolishment of the intended purpose of education support to make it a so-say ‘unlabelled’ part of the revenue base of local governments. This would motivate local governments to try and find flexible solutions for people. There would be no need to fear that the salaries of teachers will stop rising, because the established mandatory minimum salary of teachers is the same throughout Estonia. At first, the mandatory minimum salary should be the support that helps to move towards the desired level of salary.

The larger local governments that emerge in the course of the administrative reform are motivated to streamline the school network more and they are also able to make these decisions themselves. The direction taken by the Government of the Republic in the course of the administrative reform is to integrate the support paid from the state budget in the revenue base in order to strengthen the capacity of local governments to make their own decisions by being less strict about the intended purpose of the support. The Ministry of Education and Research has been left alone with its position, which is to have the state intervene more in making decisions about local government issues.”


Education support is the biggest targeted support paid by the state to local governments. The amount allocated for this in the 2016 state budget is ca 237 million euros (i.e. 14% of local government revenue in total). The salary support of teachers comprises the majority of this. The audit focused on the salary support of teachers and school principals and its used was analysed and assessed in ten local governments (Albu, Ambla, Kullamaa, Paikuse, Suure-Jaani, Tähtvere municipalities, Keila, Sindi, Mustvee and Mõisaküla towns) and their general education schools. The money has generally gone where it was supposed to go, i.e. it has been used or is intended to be used for paying the salaries of teachers and school principals. However, the National Audit Office still found some deviations from the rules.


Toomas Mattson
Communication Service of the National Audit Office
+372 640 0777
+372 513 4900
[email protected]
[email protected]

  • Posted: 9/6/2016 11:00 AM
  • Last Update: 9/7/2016 3:30 PM
  • Last Review: 9/7/2016 3:30 PM

The present financing system does not favour the optimisation of the school network – if the school is closed, the municipality will no longer receive education support.

Teet Malsroos / Õhtuleht /Scanpix Baltics

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