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The provision of high-quality education and health care to all of the population is considered a core element of public policy in most countries. In India, the government is active in both education and health but the private sector also plays an important role, notably for heath, and to a lesser extent in education. At present, the quality and quantity of the outputs from education, and also from public health care, are holding back the process of economic development. Steps are being taken to draw more children into primary education and the paper considers ways to keep children in school. It also considers institutional changes that may help to improve the performance of the educational system and so boost human capital formation.

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Globalisation, together with skill-biased technical change, is changing the composition of jobs in advanced economies and raising the level of skills required to do them. This has increased the importance of educating a large proportion of the population to much higher standards than in the past. The government in the United Kingdom has responded to this challenge by raising education spending and expanding the capacity of the education system in key areas such as pre-primary education and increasing participation in education beyond the age of 16. Nevertheless, performance on international tests of cognitive ability remains significantly below the standards of the best performing OECD countries and the education system seems to be particularly poor at ensuring good performance of pupils in the middle to bottom half of the education performance distribution. A renewed sense of urgency, together with some new approaches, is required to address the United Kingdom’s relative underperformance in literacy and numeracy. This paper proposes a number of avenues for encouraging a higher level of educational attainment, without significant further increases in expenditure.

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