A Devastating Crisis of Confidence Is Holding State School Leavers Back

I would love to believe that we now live in a meritocratic nation in which success depends on talent and hard work rather than connections and class. But it is evidently not so.

I would love to believe that we now live in a meritocratic nation in which success depends on talent and hard work rather than connections and class. But it is evidently not so.

Last week, the Institute of Fiscal Studies published a devastating study into the "old school tie" pay gap - looking at the earnings in January 2011 of graduates from the summer of 2007. The study found that privately educated graduates earned about £1,500 more than their state school equivalents in the same job.

The IFS researcher commented: "our research shows that, even among those who succeed in obtaining a degree, family background, and in particular the type of school they went to, continues to influence their success in the workplace". Perhaps in ten years time the results will have evened out, as state sector alumni pick up confidence with experience, but you'd have thought that four years out of university this kind of disparity would already have disappeared.

As the Nuffield funded study shows, this is not by any means simply a matter of this group being harder working or cleverer. Indeed, other studies have for example shown that state school students with straight A's at A Level attain higher grades at university anyway. But even then, when they are in the same jobs from the same universities, those privately educated individuals are still paid more.

There is a good reason for this, and it's about confidence and expectations. Although of course there are exceptions, Britain's remarkable private schools teach one skill above all others - self-belief: a sense that anything is possible and there are no limits on one's potential achievement. A sense of entitlement, if you will.

They also teach how to deal with failure. Setbacks are a part of life and a springboard to future success - competition and goals, whether in the classroom, on the sports pitch, or in the music department are and should be part of learning for the game of life.

State school leavers, if they do then go on to a good university, all too often do not translate that into the best jobs, partly because they don't have the connections through their parents to get the interviews or work experience in the first place, and partly because they simply don't think that the top slots are achievable.

Even if they do get those jobs, they don't push and demand for higher status, better pay, more promotion (because again they don't believe they merit it), whereas the graduates of many private schools are in no doubt at all about their deserving status.

Changing this fundamental problem in our society is not going to be straightforward. It's not an issue simply for schools, or parents or employers, but for everyone. There's a lot of talk today about the need to teach creativity, but just as significant is giving pupils the confidence to act on their ideas.

Clearly employers value the qualities that a private education bestows upon an individual, even when they come from the same university as a state educated one. Whilst it would be fascinating to know whether the pay premium truly stands the test of time - and whether the apparent attributes are good long term ones in reality - it should be observed that the economics of a private education are strikingly questionable from a purely financial standpoint.

It has been estimated that the "all in" cost of private education runs to £250,000-£300,000. Adjust for tax and that is £400,000-£600,000 of pre-tax income. That privately educated annual income premium cited by the IFS will take a long time to pay off.

Therefore, parents choosing private education must be looking far more holistically than better earnings prospects alone. And herein lies a lesson. Society beyond employers highly values attributes that can be taught and learned in private schools. It is therefore a tragedy for the other 92% of children that they do not have the opportunity of such.

But this won't happen unless there is a wider change of heart. We need to appreciate and teach in schools the importance of confidence as well as opportunity. We need to value the significance of hunger, We need to stop as a country putting down success, and to learn both at school and afterwards how to deal with failure.

The raw talent pool of young people today is at least 10 times the size of the cohort who get on the private education ladder. Unleash their talent, hunger and drive and Britain will be an even more successful nation - more broadly happy in a societal sense and with more participating in success rather than having to be supported by it.

You may wonder why a hedge fund principal would care so much about this issue? I came to London shortly after the Big Bang reforms of the Thatcher government, without membership of the "old boys" network. I was armed with a degree from the University of Sheffield and a secondary education from a decent, but wholly unknown, comprehensive in Manchester. I succeeded not despite my education, but by using the hunger created because of it. Inspiring others to do the same is key.

I took on the chairmanship of Speakers for Schools, the charity that sends the most exceptional people in the country to speak at state schools to broaden the horizons and ambitions of the youth of today. Many of our speakers come from backgrounds like mine, and they are making a demonstrable difference to the perspectives of that important age cohort looking for more opportunity. It speaks to the shared passions for these ideas that over 1,000 eminent individuals from all disciplines are participating in the programme.

When I return to my old schools and talk with students, I point out that, when I was their age, I used to have a weekend job washing cars a few streets away. Somebody's background does not define their future success, and it is absolutely fundamental that we do everything we can to convince the next generation that anything is possible for them - as it had been for me. Only once we instil this sense of belief will we have built the meritocratic nation we have all aspired to for so long.

A shorter version of this article first appeared in City AM on 5th November 2014

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