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Context and main features

Governance and financing

in Latvia the ministry of Education and science (MoEs) is the leading government institution in the field of education and science. The main responsibility of MoEs is to define national regulations, policy documents and goals on behalf of the government; supervise their implementation; and evaluate the results of the system. MoEs is supported in these functions by several specialised agencies (see Chapter 1). These include the national Centre for Education, which develops proposals for the regulation of basic school curricula and subject standards, administers national exams, and co-ordinates teachers’ professional development, and the state Education Quality service which accredits and evaluates education programmes and schools and reports on the quality of basic education.

Municipalities are responsible for providing children living in their area with a place at the nearest basic education institution to their home. Municipal Boards of Education are responsible for the provision of education in their territory from early childhood education and care (ECEC) to upper secondary education. Municipalities are also responsible for organising non-formal education for children and adults.

The vast majority of schools in Latvia are public municipal schools. They are relatively independent in developing and implementing education programmes, hiring staff, and school management. PisA 2012 found the level of autonomy of Latvian schools, as reported by school principals, was similar to the OECD average overall, but much higher in certain areas. For example, Latvian schools enjoy considerable freedom in the area of teacher recruitment: 92% of school principals reported that they (and/or teachers) had the authority to hire teachers, which is similar to countries like the Czech Republic and the Netherlands, but considerably above the OECD average of 49% (OECD, 2013a). Moreover, schools define their own goals, the organisation of the education process, internal regulations, and programmes to be implemented within the framework of the General Education Law. Within the National standards for Basic Education, teachers have discretion in developing or selecting the subjects of study or course programmes in agreement with the school principal.

schools should also establish a school board that includes staff, parents, students and representatives from the municipality or the school founder in the case of a private school. The board is consulted over the drafting of the school development plan, organises school social activities, manages donations and decides on the use of these funds.

Latvia’s expenditure on basic education as a share of GDP is relatively low compared with many OECD countries. In 2011, Latvia spent 2.1% of its GDP on basic education, a similar share to its neighbour Estonia (2.0%), but lower than Poland (2.4%), the Netherlands (2.7%) and the OECD average (2.5%). Annual expenditure per student on basic education is also considerably below the OECD average. For example, in 2011 the expenditure per primary student was USD 4 982 in purchasing power parity (PPP) terms, compared with an OECD average of USD 8 296 (OECD, 2014a). These differences in expenditure partly result from the low salaries Latvian teachers and school leaders receive by national and international standards. A recent report by the OECD (2014b) noted the importance of raising teacher salaries to nationally and - in time - internationally comparable levels. The same report also highlighted the need for further efficiency gains for school education in Latvia with clear challenges ahead over the size of the school network and its relatively large teacher workforce in the context of a shrinking student population.

Compulsory basic education is free in Latvia. School funding is shared between the national government and municipalities. Central funds are transferred to municipalities and private schools through a grant to pay for the salaries of teachers and other education staff. The national government also provides free school meals to all students in Grades 1 to 4 in all schools including special education schools and private schools (Table 3.1).

Municipalities finance the salaries of non-teaching staff and capital investments, maintenance and utility costs from their own revenue. They may also opt to increase teacher salaries and provide students with greater financial support, for example school meals, subsidised transport and additional allowances for education materials.1 Municipalities and schools are also able to apply for EU structural funds. Many of Latvia’s schools have been refurbished in recent years using this funding option. The majority of schools also participate in the School Fruit Scheme and School Milk Scheme co-financed by EU structural funds and schools. These schemes provide children with fruit, vegetables and dairy products to encourage good eating habits and promote healthy lifestyles.

The current funding system for primary, lower secondary and upper secondary education in Latvia was implemented in 2009/10. It is based on a per-student school funding model, often referred to as “money follows the student” (see Box 1.3 in Chapter 1). The aim of the funding model was to bring about greater efficiency while enhancing student achievement (Cabinet of Ministers, 2009). Implementation of the model was managed by the 119 newly created municipalities as a result of the Territorial Reform in 2009 (World Bank, 2010). Municipalities can decide how to distribute resources among schools and can also supplement them with other funds.

Table 3.1. Overview funding of costs items, basic education, by source of funding

Provision of basic education in municipal schools

Provision of basic education in private schools

Provision of special education programmes

State grant

  • • Salaries of teachers
  • • Lunch for Grade 1-4 students
  • • Study materials
  • • Salaries of teachers
  • • Lunch for Grade 1-3 students
  • • Study materials (scope stated by Education Law)
  • • Salaries of teachers
  • • Lunch for Grade 1-3 students
  • • Maintenance of buildings and utilities
  • • Study materials

Municipal budget

  • • Supplement for teachers’ salaries
  • • Maintenance and utilities cost
  • • Study materials (scope stated by Education Law)

• Study materials (scope stated by Education Law)

EU structural funds

  • • Infrastructure, study aids
  • • Teacher training, and individual support measures for student talent development
  • • Career education and individual support measures for students with special education needs (2014-20)
  • • Infrastructure
  • • Teacher training

Source: MoEs (2015), “Country background report Latvia”, unpublished, Ministry of Education and science, Riga.

While Latvia’s intergovernmental fiscal arrangements are outside the scope of this review, it is important to note that the financial autonomy of municipalities has been questioned due to their limited capacity for revenue-raising and the limited impact of financial equalisation arrangements (OECD, 2015a). The public administration reform meant that those responsible for implementing the new school funding model at the local level were often inexperienced. Some have questioned whether some municipalities, in particular the smaller ones, have the capacity to effectively manage their local education systems (OECD, 2014b).

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