Lowe’s Problem

So what was the question that the reformers of the 1860s were trying to answer? In order to understand this question, we need to understand both who the reformers were and the context in which their reforms took place. Britain in 1862 was governed by a parliamentary monarchy. The senior formal committee to advise the crown was called the Privy Council (informally the cabinet, a subcommittee of that council, had since the eighteenth century become much more important). Committees of Council were often used for ad hoc tasks. In 1833, when Parliament made the first grants for education, it authorized a committee of the council to administer the grants. A senior minister, the Lord President, chaired the education committee, but the vice president of the Committee of Council for Education was the effective leader on the topic for the government. In 1862, the vice president was the formidable Liberal politician and intellectual, Robert Lowe. Permanent civil servants, led by a permanent secretary, in the newly created department of education advised the vice president: they administered the grant, supervised the inspection regime, and advised on policy detail. This system endured through the period of payment by results. Occasionally the government with support in Parliament might request a detailed study of education by others, who would take evidence from experts and issue a report. In our period, there were two significant commissions that examined elementary education, the Newcastle Commission of 1861 and the Cross Commission of 1888.

Education policy was novel in 1862. The office of vice president and the department were only twenty-nine years old, having been created in 1833. Prior to 1833, education of young children had been funded in part by local churches and in part by parents, paying fees.^{Footnote 16} From 1833 on, elementary schools were funded additionally by direct parliamentary grants: Parliament voted money and officials distributed it.^{Footnote 17} The number of grants built up over time and they were hypothecated to various purposes: there were grants for books, maps, teacher’s pay and pensions, training for pupil teachers, and capital expenditure. This system moved a great deal of power into the department and to the vice president. Inspectors examined every school, on a county-by-county basis, testing their educational achievements and examining their religious and moral atmosphere. The amount spent on education via parliamentary grant increased constantly. Between 1854 and 1861, the grant effectively doubled from £424,000 to £861,000.^{Footnote 18} Contrary to the claims of West and Tooley that the amount of public funding was low in respect of most school budgets: Sir James Shuttleworth, permanent secretary at the department in the 1840s and 1850s, argued that most schools received at least a third of their income from the parliamentary grant.^{Footnote 19} By the 1850s, increasing discontent within Parliament and outside was leading to demands for change.

The Palmerston government in the 1860s wanted to reform the system. Lord Palmerston, an experienced Liberal politician, had been in power with brief interruptions since 1855. He led a coalition government of Liberals and defectors from the Conservative Party. He wanted to advance retrenchment and reform. This impulse was not new with Palmerston’s government, but went back into the 1830s at least. Reform, though, meant different things at different points in time. In a whole series of areas, government in the 1830s had moved to inaugurate inspections to establish minimum standards. After 1846, governments became more involved in setting out what public services should deliver, and regulating them by this aspiration.^{Footnote 20} We will find that educational policy followed this pattern.

In 1858, Palmerston appointed Robert Lowe as vice president. Lowe’s superior, Lord Granville, was a very senior politician but did not focus on education as much as other matters, so Lowe was free to innovate as he chose.^{Footnote 21} Lowe was supported by the chancellor (minister of finance), William Gladstone, who himself later served as prime minister and was a leading supporter of payment by results right up until the 1890s.^{Footnote 22} Gladstone and Lowe were interested in continuing reforming work from earlier in the century that sought to rationalize the British system of government and counter the influence of special interests in the name of economy: as we shall see, this sentiment underlay much of their analysis of the education system and its problems.

In 1862, ministers believed that there were three main problems with the system of education they had inherited. First, they argued that the costs of education kept rising and should be restrained.^{Footnote 23} Nineteenth-century British governments faced a huge burden of government debt, inherited from wars in the eighteenth and early nineteenth century; this meant that politics focused on debt reduction.^{Footnote 24} Specifically, in 1860 the new Liberal Chancellor Gladstone had found himself faced with a deficit of £5 million.^{Footnote 25} Gladstone and others thought that the budget should be balanced as a matter both of policy and morality.^{Footnote 26} He was backed by a coalition of taxpayers and bondholders, who since the 1820s had been pressing government to pay down debt and cut spending. Radicals argued that government expenditure and taxation, especially tariffs, supported special interests against the people. Lowe argued that savings were available: from reductions in the bureaucracy associated with grants and abolishing national pay rates for teachers.^{Footnote 27} Otherwise he and others feared that they would be left with an open-ended financial commitment to a system that did not work.^{Footnote 28}

Lowe and his colleagues were not purely concerned with reducing education spending. They also were concerned with educational attainment. The Newcastle Commission (1861) had exposed significant deficiencies in education. It found that even in the most successful schools, at least two-thirds of students (the commission suspected three-quarters) left without achieving basic standards in literacy and numeracy.^{Footnote 29} In particular, the commission identified that schools failed struggling children.^{Footnote 30} They argued that fewer than three-fifths of children attended school long enough to get a good education.^{Footnote 31} In the Commons, this was unsurprising: MPs had long argued that British education lagged behind most of its international rivals.^{Footnote 32} Lowe stated on the basis of the commission’s figures that only one-ninth of the children funded by the Privy Council actually received a well-grounded education.^{Footnote 33} He intended to provide these children with a basic literacy and numeracy education, which would permeate beyond the academic elite to their less-able peers.^{Footnote 34} Change was urgent as during the nineteenth century the franchise was progressively extended. By 1862, further reform was on the agenda and politicians wished to create a more educated electorate.^{Footnote 35}

Third, Lowe and his allies believed teachers were arrogant and, protected by an indulgent state, were the cause of the education system’s underperformance. “No occupation,” Lowe stated, “is more likely to degenerate into lifeless routine and meaningless repetition” than teaching.^{Footnote 36} He believed that those seeking instruction were better reading Adam Smith than consulting a teacher.^{Footnote 37} Lowe’s views were shared: the Sheffield Examiner wrote that teachers were arrogant.^{Footnote 38} Lowe thought that teachers had a protected position thanks to the state subsidy: he compared his opponents in the profession to the “anti corn law league.”^{Footnote 39} Liberals were fixated on protecting the public against privilege: whether through reforms to trade (1846 passed by a Conservative government, but only thanks to the votes of future liberals), the civil service (1854), or reforms to army commissions (1868–74).^{Footnote 40}

Lowe’s concern was that, unless the Commons got control, funding would continue to increase in the service of those who ran education, not those who consumed it. He portrayed education as another field in which liberal reform opposed privilege. As he said, “The great danger is that the grant for education may become instead of a grant for education, a grant to maintain the so called vested interests of those engaged in education. . . . If Parliament does not set a limit to the evil, such a state of things will arise that the control of the educational system will pass out of the hands of the Privy Council and of the House of Commons into the hands of the people working that education system and that no demand they choose to make on the public purse would any Ministry dare to refuse. Imperat aut servit.”^{Footnote 41} Lowe diagnosed two dangers. First, he believed that the schooling system was being run to suit the teachers and not the children. State protection for elementary education could end up protecting teachers rather than assisting children. Second, he thought that if left unrestrained education spending would increase forever, without promoting increased educational attainment.

Lowe’s Solution

In 1862, Lowe published a new code for educational funding. Every year the vice president published a code, which set out the conditions for funding schools from Parliament. Lowe’s code superseded all previous codes. Under the new code, schools received funding for pupils under two conditions. First, they received a limited amount of funding for every child who had attended more than two hundred mornings or afternoons at the school in the previous year. Second, they received funding for every child who passed one of the seven examinations, in each one of three key subjects—reading, writing and arithmetic. Succeeding vice presidents amended the code—as we shall see—when publishing their own codes. Until the 1880s, though, the principles of Lowe’s system were retained. This next section examines why Lowe chose this structure to reform the public funding of schools.

Lowe’s idea was conventional. Payment by results appealed to those schooled in political economy.^{Footnote 42} The Newcastle Commission suggested it as a solution for elementary education, as had inspectors, and the Department of Arts and Sciences used it in the 1850s.^{Footnote 43} While some intellectuals like Edwin Chadwick (a noted public reformer and economist) opposed it, thinking it focused teachers on purely mechanical results rather than on the true education of the child, others such as the economist Nassau Senior hoped it would cure some of the failures of the pre-1862 system.^{Footnote 44} Lowe used arguments from political economy to support his reform, deploying, for example, Bastiat’s contrast of seen and unseen effects (Bastiat had argued that often we overrate the significance of state intervention because we can see its effects, whereas we cannot see the effects of the activity it displaces)^{Footnote 45} to suggest that grants held back innovation: “What they [grants] actually do, we see and for that they get full credit. What they prevent others from doing we do not see, and consequently do not reflect upon; but the agency of endowment is just as real in preventing better teaching as in teaching badly itself.”^{Footnote 46} Endowment here threatens innovation, whereas payment by results offers a doorway to innovation.

Specifically, Lowe thought payment by results would lower costs and increase standards. Edward Leatham, the Liberal backbench MP for Huddersfield, in the debates on the code, told the Commons it offered a “modicum of retrenchment.”^{Footnote 47} Lowe offered reasons for this confidence in the mechanism’s ability to deliver savings: rather than a complex structure to inspect schools, Lowe told the Commons he was investing in “the only substitute; for this circumlocution and red tape—the only check on managers— . . . the examination of the pupils.”^{Footnote 48} Payment by results offered the prospect of reducing costs inside schools. Granville stated the case in the Lords, asking “whether this [elementary education] cannot be done, and done even more efficiently—for that is the whole gist of the matter—for a smaller outlay than the present, an outlay more under the control of Parliament, and producing more satisfactory results than those now realized.”^{Footnote 49} Scotland was exempted from payment by results because Lowe and Granville believed that there were alternative ways of reducing expenditure in that kingdom.^{Footnote 50} Payment by results was eventually introduced north of the border in 1872.

Granville’s reference to “more satisfactory results” reminds us, though, that the government was not purely after a reduction in cost but also an improvement in the service. In his view, the incentives would improve education and extend it to more pupils. As a supporter of the government said in debate, “The system of individual examination would, therefore, be a powerful inducement to the master not to neglect the school generally for the purpose of getting forward individual pupils.”^{Footnote 51} A. R. Grant, another supporter of the bill concurred. He went further—under the old system inspectors might recommend improvements, but Grant believed the stimulus would change the way teachers reacted to those recommendations: “His [the inspector’s] remonstrances were generally met with a number of good reasons why things should be no better, I do not mean false or evasive excuses. I have no doubt the Teacher generally believed all he said but I have a great idea that if he were put on his mettle by his pay depending on children being brought up to a certain standard, he would find ways and means of getting over many of his problems.”^{Footnote 52} Others agreed that the tools of political economy could stimulate teachers to change their behavior.^{Footnote 53} Even those who criticized the code believed that incentives could improve education: Lord Edward Fitzmaurice, a Liberal MP and junior minister, in 1872 attacked the code in the Commons but suggested replacing it with an alternative set of incentives.^{Footnote 54}

Lastly, Lowe wanted to address the problems raised by the Newcastle Commission. He wrote later of the argument that payment by results was designed for the children of the poor.^{Footnote 55} Lowe wanted “to do everything in our power to induce the children to come early to school, to promote their regular attendance, to spread education as wide as possible through the school, and to give as much of it as possible to the child.”^{Footnote 56} He acknowledged that attendance depended on other factors, such as the requirement for children to work; however, the capitation element of the grant was an incentive to schools to do what they could to raise attendance.^{Footnote 57} The second objective of widening the education system was just as important to Lowe as the first: he wanted children, no matter how long they were at school, to receive a basic education in literacy and numeracy and saw payment by results as a way to incentivize this.^{Footnote 58}

Lowe’s mechanism worked by reallocating power within the educational system, moving it from teachers and inspectors toward the managers of schools, through directing the payment straight to them.^{Footnote 59} In the previous system, the government had made some payments directly to teachers; however, now, as managers received payments, they, rather than the central department, would control teachers’ pay and conditions.^{Footnote 60} Lowe himself gave an example of how he thought payment by results would benefit schools: managers would be incentivized to divert money from teachers’ wages to school equipment.^{Footnote 61} Lowe’s system moved power away from the inspector to the department. Before the revised code, inspectors had been able to inspect virtually any element of a school they chose to—although they were limited by the time available to inspect.^{Footnote 62} The revised code shifted the basis of payment from the opinion of the inspector to a mark in an exam and it prescribed which students the inspector should test and which subjects he should examine. J. G. Fitch complained, for example, that “since the examination is to be an individual one and since it will be necessary to keep a record of the result of each child in each of the three subjects, the time of the inspector will be wholly absorbed.”^{Footnote 63} William Sims agreed. The inspectors were now “confined very much to [inspecting] the simple fact whether the children can read, write and spell.”^{Footnote 64} As John Kerr, an inspector, suggested in 1902, the revised code had changed an inspector’s task into a machine-like function.^{Footnote 65} Lowe’s inspectors were there principally to assess results, not come to opinions.

Did Lowe’s Scheme Achieve His Objectives?

In analyzing whether Lowe’s scheme achieved its objectives, we need to consider it in the terms Lowe was thinking about. Payment by results was introduced to raise results, encourage the average child, change teaching practices, and reduce the cost of education. It was also introduced to raise attendances. We will find that payment by results succeeded in raising educational attainment for precisely the children that Lowe had targeted and that it did so partly by changing teaching practices. It did not raise attendances—and in the 1870s further reforms were layered on top of the payment mechanism to create more capacity in the system. In the 1890s, the government decided that education should be made compulsory; only in that way could they override the incentives on parents to keep their children outside school. Broadly, though, apart from in the area of attendance, we can show that Lowe’s scheme achieved its aims.

First, payment by results can be linked to successes. Pass rates for the exams rose across the period that payment by results was used: in 1863, 79.8 percent of students passed the first reading exam; by 1888, the percentage passing had risen to 87.8 percent. In arithmetic, in 1863, 73.2 percent of children passed the same first exam, and in 1888, 87.95 percent passed.^{Footnote 66} Exams were not getting easier: in 1862, the highest standard would be asked to read and explain a newspaper article to the relevant inspector; by 1888, children at the same standard were being tested on their comprehension of a Shakespeare history play.^{Footnote 67} Contemporaries definitely believed that payment by results was making an impact: in 1867, one inspector reported that “the elementary instruction has become more thorough and methodical in every class of almost every school, more particularly in the lower classes. Teachers have been compelled to greater activity, scholars to greater orderliness and attention by the strict necessity of study entailed upon them in preparation for individual examination.”^{Footnote 68} This statement does not stand alone: J. D. Morrell, giving evidence to the House of Commons in 1865, argued that “reading, writing and arithmetic are considerably improved.”^{Footnote 69} Modern scholars acknowledge too that payment by results succeeded in raising standards in literacy and numeracy.^{Footnote 70}

Lowe’s code was designed to help average students as opposed to brighter ones. The inspectors pointed to the increased attention that schools paid to mediocre students rather than to high achievers.^{Footnote 71} Inspectors identified a number of consequent pedagogic changes within schools: for example, teachers were seen to be working more with children in the younger age groups, introducing their own examinations to identify gaps in each child’s education and then remedying them and focusing their attention in class on every child rather than just the precociously bright.^{Footnote 72} These changes in focus probably did have an effect on the standard of the education received by children. The inspectors believed they did: in 1865, Mr. Hernamen reported how the code had led to “greater accuracy, particularly in the lower classes.”^{Footnote 73} Others too reported improvements in the performance of weaker pupils.^{Footnote 74} The department told a later Royal Commission that far more children than before were making it to the higher classes in each school.^{Footnote 75} Furthermore, performance in schools converged over time, with weaker schools improving their performance against their peers.^{Footnote 76}

Retrenchment was also achieved. Overall expenditure on education fell from £813,044 in 1861 to £622,730 in 1866.^{Footnote 77} This figure, however, includes other policy changes; for example, reductions in school capital expenditure, which were not due to the introduction of payment by results. If we strip out all other changes and focus alone on like-for-like funding, we still see that the policy still reduced expenditure. Morris suggests that between 1862 and 1866, like-for-like expenditure fell from £537,000 to £456,000,^{Footnote 78} The school population was expanding at this point, so the reduction per pupil was much more severe, from 141p in 1862 to 104p in 1866. Most of this reduction flowed from the fact that children did not attend school in the volume required for the grant to stay stable.^{Footnote 79} In part, schools made up for this reduction in revenue through receiving increased contributions from the community, largely the clergy: voluntary contributions rose from 60p to 80p per pupil in the same period.^{Footnote 80} Overall funding per pupil between 1862 and 1866 from both voluntary and parliamentary sources fell by just under 10 percent and had not recovered its 1862 level by the end of the decade.

Attendance and the Education Act of 1870

The one area in which Lowe’s scheme failed to make much difference was attendance. Payment by results incentivized schools and teachers to secure better attendances, but we shall see that in spite of their efforts, attendances failed to rise. The efforts of schools and teachers failed for two reasons. First, children and their parents preferred the certainty of paid employment to the long-term gains coming from attending school. Second, the school system had a limited capacity. In 1870, the Liberal government layered on top of Lowe’s reforms its own reform program to redress this second issue: it created Board Schools and from 1881, the government compelled authorities to set up schools where provision was lacking. In 1891, the Conservative government of Lord Salisbury brought in compulsory elementary education for all children. Neither of these reforms were explicitly meant to reverse payment by results, but we shall also see later on in this article that the introduction of School Boards contributed to its demise.

The nineteenth century saw a population explosion in Britain, so school attendances should have risen over time. This is true both for the pre-payment by results era and the post-payment by results era. However, payment by results had little discernable impact on the rate of increase: it may have slightly slowed in the 1860s when compared to the 1850s.^{Footnote 81} This is also borne out by local evidence. Elkington found that after payment by results was introduced the proportion of children in school in every city in his study fell, in one case, Leeds, by 5 percent.^{Footnote 82} Inspectors agreed: Fussell in Middlesex in 1868 reported that attendances had fallen back to the 1858 figure (given the increase in population, a real decline in the proportion at school).^{Footnote 83} There is some evidence that payment by results did stimulate children to stay longer in school and to have a more consistent association with one school: between 1861 and 1871, we can see this happening in Henley on Arden in Warwickshire, but the sample size is small and even there attendance in the 1870s was still irregular.^{Footnote 84}

Attendances failed to rise for two reasons. First, the school system did not have enough capacity for all children to attend. In Leeds and Birmingham, there were school places for under half of the students who could have attended.^{Footnote 85} One inspector in 1869 noticed that in thirty-nine significant places in his region (Yorkshire), there were no appropriate schools.^{Footnote 86} Even in small rural communities like Henley-in-Arden, there was a capacity issue: the facilities at one of the schools in Henley were not big enough, and by the 1880s the government assessed that the town was missing about sixty school places (equivalent to 20 percent of its children).^{Footnote 87} In the reports of 1872, just after the introduction of Board Schools, just under half the inspectors in England and Wales (nine of the twenty-one) reported that schools in their district lacked appropriate accommodation for students.^{Footnote 88} Thus the education sector could not expand as much as Lowe hoped it might without new investment in capacity.

Second, in many families children were important economic contributors and could not be spared from work. Family earnings depended heavily upon the presence of child labor.^{Footnote 89} Children missed school frequently because they were needed either in work or to support their parents labor. From the perspective of a teacher, they looked unreasonable: as T. J. McNamara, a new headmaster in Bristol in the 1890s, put it, “No word of reprobation I can find [for these parents] is good enough.”^{Footnote 90} However, Humphries found that parental decisions about whether to send a child to school or keep them in employment were not irrational at all: the gains from schooling were unpredictable and many families needed short-term income.^{Footnote 91} Unsurprisingly, one modern study shows that the children of wealthier parents were more likely to attend school and more likely to continue past the age of ten.^{Footnote 92} Wealthier parents could afford to invest for the long term.

The 1870 education act created School Boards. Boards were elected locally and were supposed to remedy any deficiency in educational provision, dealing with the capacity problem described above. The succeeding decade saw the number of schools in England almost double.^{Footnote 93} Local school boards could from 1870 onward compel children to attend school, and in 1876 attendance officers could be appointed locally to assist with this. In the 1880s, A. J. Mundella, then Lowe’s successor, compelled boards to introduce bylaws to raise attendance.^{Footnote 94} The trend of legislation in this area continued, with schooling becoming free in 1893.^{Footnote 95} By the late 1870s, commentators argued that the attendance element of Lowe’s system had been rendered obsolete.^{Footnote 96} These measures on attendance sat alongside payment by results.^{Footnote 97}

Why Was Payment by Results Abandoned?

Payment by results was not abandoned at one point in time. A series of amendments to the code phased out the principle that schools were paid according to their results in examinations. Historians have thus given different dates for the end of the system. Armytage argued that in 1881 Mundella had already moved away from the principle of payment by results by creating merit grants.^{Footnote 98} Merit grants were awarded to schools and were made “in respect of the quality of instruction” as judged by the inspector.^{Footnote 99} Sutherland suggests Salisbury’s government ended the scheme between 1889 and 1892, when the Conservative government moved to create specific grants for schools that failed to get sufficient funding under Lowe’s scheme.^{Footnote 100} Evans argues that the scheme ended in 1893–94, when the Liberal vice president Acland added more grants for activities such as attending museums.^{Footnote 101} Daglish thinks 1900, when the variable element of the grants was abolished, was the key date.^{Footnote 102} These disagreements between historians suggest that there was no one date on which payment by results was abandoned: the judgment of Mahoney and Thelen, that “incremental shifts often add up to fundamental transformations,” seems apt in this case.^{Footnote 103}

Lowe’s concept of education was very narrow. As Sutherland argues, Lowe’s successors changed the code to assist voluntary schools and to admit new subjects to the scheme.^{Footnote 104} Lowe’s scheme did not award money for religious subjects and he clearly separated the secular role of education, administered by Parliament, from any religious role, administered by in the case of the Church of England, the ecclesiastical hierarchy.^{Footnote 105} This had an effect upon small voluntary schools. They asked for more money and were supported by the church and by conservative politicians, motivated by their view of church schools as a bulwark against atheism and immorality.^{Footnote 106} Changes to the grants in both 1867 and 1871 were made in part to protect these schools.^{Footnote 107}

Lowe’s scheme had originally been limited to three subjects: reading, writing, and arithmetic. We have evidence that this did contribute to narrowing the curriculum in elementary schools.^{Footnote 108} School inspectors and MPs such as Sir John Lubbock, the famous scientist, put pressure on Lowe’s successors to expand the curriculum.^{Footnote 109} Lowe’s successors complied. In 1868, the committee of council added new subjects in which children might be examined and for which schools might receive a grant (for example, history, grammar, or geography). These “specific subjects” were not popular enough with schools and did not really contribute to extending the curriculum. In 1873, only 15 of the 237 schools Smith examined offered history to students.^{Footnote 110} Similarly in Derbyshire, only five pupils took French in 1872.^{Footnote 111} In the later 1870s, schools could enter children in class subjects (for example, history or geography) where the school received a payment if the class average was above a certain level. Again, while some schools took this opportunity, others saw it as involving them in too much risk. W. H. Brewer found in the district he inspected that while he examined 15,121 children, only 837 took history,^{Footnote 112} and 10 percent of schools opted out of taking class subjects altogether.^{Footnote 113} In making these changes, the Government did not abandon the principle of payment by results because schools were still being paid by exam pass, but they did show that contemporaries did not necessarily share Lowe’s limited view of education. As we shall see, the demand for more resources for the voluntary schools and the demand for further subjects flow into the ideological currents of the 1890s, when Lowe’s policy was eventually abandoned.

I want to distinguish two sets of reasons, one ideological and the second political for the system’s eventual abolition. First, politicians began to want different things from the educational system. In the late nineteenth century, there was a generational change in the upper echelons of politics. Politicians with a greater focus on reducing public expenditure—such as Gladstone—became less influential as the 1890s progressed. A cross-party movement, embracing both the Liberal vice president, Arthur Acland, his Conservative successor, Sir John Gorst, and leading civil servants such as Sir Robert Morant and Sir George Kekewich, focused on holistic education rather than individual pass rates. Second, outside Westminster there were a number of developments that weakened payment by results. Its introduction had prompted teaching unions to organize and to begin to become politically active.

The questions asked by politicians of education had changed by the 1880s. A new generation of politicians with a different set of ideological commitments came to power. Policymakers such as Acland, Haldane, Morant, and Sadler were linked by an interest in idealism.^{Footnote 114} They believed education should focus on the entire child, rather than success in exams. Arthur Acland, speaking in the Commons, argued, for example, that “I think we are all now agreed that, whatever may have been the merits for the moment of the Revised Code of 1862, it was far too mechanical and inelastic to serve the purposes which are demanded by National education in this country. . . . We are now bearing in mind that the great object before us is not merely knowledge, but character; and we are remembering that, as a very wise man, Bishop Butler, said in the last century, ‘of education information is the least part.’”^{Footnote 115} In making this argument, Acland repeated conventional wisdom. Only through the spread of appropriate moral character through education could Britain compete in the modern world.^{Footnote 116} By the 1890s, demands to strengthen civic virtue and economic might were leading to a new focus in the curriculum toward both history and technical subjects.^{Footnote 117} After the inadequate reforms of the 1870s, politicians pushed forward the idea of a more inclusive curriculum, one that could not be sustained by payment by results. Idealism and the emphasis on holistic education went along with a concern for moral character, national renewal, and competitiveness.^{Footnote 118}

These politicians focused on national renewal. Victorians envied the sophisticated education system of Germany and connected its success with German economic and geopolitical strength.^{Footnote 119} Samuel Smith contrasted the disciplined Swiss with the English, who did not learn either moral character or political principle at school.^{Footnote 120} Lowe’s system was derided, on the other hand, for creating, as one headmaster put it, a “premium on mediocrity.”^{Footnote 121} Edmond Holmes, chief inspector of schools, echoed this judgment: “For a third of a century, from 1862 to 1895, self-expression on the part of the child may be said to have been formally prohibited.”^{Footnote 122} Critics of payment by results had always argued that teachers would teach to the test. Lowe and other defenders of the system disagreed with them when it came to basic literacy and arithmetic. As one commented, “A child can either perform these acts or he cannot; whether he can perform them is ascertainable by a simple test and if he can perform them well, he has acquired an accomplishment of permanent value.”^{Footnote 123} However, the same author argued that exams could not measure the effectiveness of more advanced forms of teaching, such as moral instruction.^{Footnote 124} Robert Lowe agreed: writing to his former colleague Ralph Lingen (permanent secretary during Lowe’s time at the department), he commented that only reading, writing, and arithmetic could be tested using payment by results.^{Footnote 125} When politicians moved to expand the curriculum to focus on character and national renewal, they naturally began to move beyond payment by results. Even before the 1890s, idealists were putting this kind of philosophy into practice. E. B. Sargent set up his own school in London in 1889 and deliberately did not take money from the government as he saw payment by results as a system that prevented the teacher from inspiring his charges and teaching them properly.^{Footnote 126}

In parallel with the emergence of new thinking about education, society’s attitude toward children changed over. In 1866, one inspector argued payment by results was a good thing as it incentivized children to achieve, reducing the drudgery of teaching.^{Footnote 127} By the 1880s, attitudes had changed. In 1889, the National Society for the Prevention of Cruelty to Children was founded and regulations over street trading, cruelty to children, against incest, and raising the age of consent followed.^{Footnote 128} This new social movement contributed to driving change in Lowe’s mechanism. During the 1880s, Sir James Crichton Browne reported on cases of overpressure (psychological harm) that he found in children faced with the horror of taking the exams.^{Footnote 129} Whereas modern scholars think that reports of deaths were exaggerated, children were suffering from headaches and anxiety at least.^{Footnote 130} A massive scandal in the press followed and the Salisbury government committed in the 1886 election to convening a Royal Commission to reflect on payment by results.^{Footnote 131} The Cross Commission complained that individual examination “has the tendency to frighten children.”^{Footnote 132} Although they accepted that reports of overpressure had been exaggerated, they argued that schools concentrated on reporting about rather than educating children. If there was any crisis, such as those discussed by Baumgardtner and Jones, then this was it: however, the Cross Commission’s report suggested amending payment by results and variable payments survived until 1902.

Theories of political change identify feedback loops as well as ideological change as a source for policy change. Lowe’s policies did prompt feedback from teachers that helped to undermine his system and its interactions with the 1870 act created political pressures that undermined payment by results. The National Union of Teachers was founded in 1870 following agitation against the revised code.^{Footnote 133} By 1885, the Union had eleven thousand members and within twenty years that figure had doubled.^{Footnote 134} This happened as the general trade-union movement in the UK was getting stronger.^{Footnote 135} Several members of the Union, such as T. J. McNamara and George Collins, became MPs and other teachers ran for election to school boards.^{Footnote 136} McNamara organized the successful journal The Schoolmaster, which allowed the union to spread its message across the country.^{Footnote 137} In the 1890s, the Union became more aggressive, publically agitating in the press against individual injustices, particularly focusing on abuses by managers against teachers.^{Footnote 138} Heller, the secretary of the Union, sat on the Cross Commission and numerous teachers gave evidence.^{Footnote 139} The Union successfully obtained its policy goals: both a national register of teachers and a central fund for pensions as well as the successful abolition of payment by results.^{Footnote 140}

The Union’s strength was fed by the increasing respectability of the teaching profession. In the early nineteenth century, many teachers had been underqualified: many were widows, discharged soldiers, or failed tradesmen and effectively engaged in child minding.^{Footnote 141} Things had changed by 1881, when J. G. Fitch told his audience at Cambridge that teaching should be taught by the universities.^{Footnote 142} By 1900, teachers, like other members of the professions, had become more socially respectable than ever before.^{Footnote 143} Sir George Kekewich as leading civil servant at the department dedicated his autobiography to the National Union of teachers because “they have fearlessly attacked all the absurdities of our educational system” and paid testament to the help he got from the teachers in undoing the revised code.^{Footnote 144} Kekewich was not alone.^{Footnote 145} Other policymakers agreed: they saw that teachers were the foundation of the reformation of character that they sought in children. Canon Morant, for example, argued that “character is the chief element in good teaching and character is the only product worth considering.”^{Footnote 146} Acland echoed Morant in a debate in the Commons in 1890: “We should all feel that the national teachers of England are a body who deserve our cordial sympathy and hearty admiration, and anything and everything which can help them in their kind feeling towards the children, and in their pity for the poorer ones, many of whom are insufficiently fed and clothed—anything that can brighten the work of the teachers is a thing which we should gladly do.”^{Footnote 147} By the 1900s, thanks in part to the higher respect for them and in part to their own political activities, the teachers were represented in cabinet by McNamara and were a major political force behind the abolition of the code.

In the 1890s, a second area of controversy relating to payment by results opened up. From 1870, Board schools run by boards that collected local rates opened up where there was no voluntary provision. As well as opening up opportunities for local officials to contribute to policy development, this reform created a distinction between two groups of schools.^{Footnote 148} The first group was dependent on the state’s direct funding through payment by results and from any money that could be raised charitably locally (school fees were eliminated in the early 1890s). The second group of schools received local funding from local taxation in addition to their central government payment by results funding. The two different sets of schools competed with each other, but contemporaries acknowledged that voluntary schools were at a permanent disadvantage.^{Footnote 149} The Anglicans and Roman Catholics who attended voluntary schools were irritated that they were forced to fund the board schools as well as their own schools.^{Footnote 150} As the Conservatives (in government between 1895 and 1906, their longest sustained period of office since the foundation of the party in 1834) were leading supporters of the voluntary school movement due to their links with the established church, this issue became very prominent.^{Footnote 151}

The varied forces that shaped the end of payment by results should not surprise us. The process took over twenty years to complete, with the final abolition of payment by results in the Education Act of 1902. A group of skilled politicians in London with agendas different from Lowe’s shaped the new policy and directed it away from what they saw as the reductive mechanism of payment by results. They simply had different objectives for education than Lowe. They were assisted by the changes in public sentiment that arose independently during the century about the condition of children. They were also assisted by two reactions to Lowe’s policy. The first reaction came from teachers. Lowe had targeted his measures explicitly at reducing the pay of teachers; twenty years later they had their revenge upon his system. Second, Lowe’s system reacted with the 1870 act in a way that he could never have anticipated and the sponsors of the voluntary schools called for greater and more certain funding from the center to balance the new rate-funded board schools. Lowe could not have anticipated this second feedback loop, from a reform that was never meant to have any impact on payment by results whatsoever.