"To give away money is an easy matter and in any man's power. But to decide to whom to give it, and how large and when, for what purpose and how, is neither in every man's power nor an easy matter". – Aristotle

Aristotle's musings on "giving away money" can surely be related to public funding. Public purse strings are becoming ever tighter and questions are constantly being asked about the amount of public spending, as well as its purposes. Education must compete for its fair share with a host of other important public services – such as health, transport, defence and the environment etc. When it comes to school funding, most teachers and parents would probably tend to agree that the short answer to the question "how much funding do you receive?" is "not enough". But how much would be enough? Although we often think that the amount of funding is the most important issue to address, perhaps it is equally important in today's society to think about who decides where resources go. After all, we tend to be happier when we know who makes decisions, and how they are made.

A recent Eurydice report found that there are almost as many models, methods and criteria for financing schools as there are education systems, with all countries having their own idiosyncratic features. Nevertheless, there are countries, such as Ireland, where funding systems are relatively direct – the money going from government to schools with little external interference. In many other countries, however, various levels of education authorities – central, regional and local level – and a variety of agencies and intermediary bodies may be involved in allocating resources. But which kind of system is better?

To answer that question, it would be important to define what we consider to be "good". Part of the equation, particularly at a time of financial stringency, must surely involve efficiency and the avoidance of unnecessary bureaucracy. On these criteria, the more direct systems surely win hands down. However, we should not exclude the issue of politics – in the original Greek meaning of being "for and related to citizens". Because in this sense, education, including education funding, is a supremely political issue: all citizens are affected, for better or for worse (and for richer or for poorer) by the education they receive. Therefore, education is a matter in which all citizens are stakeholders. So how do they influence funding decisions?

In some countries, such as Denmark, Poland, the United Kingdom (Scotland), Sweden and others, regional and local authorities provide part of the funding that goes to education from local tax revenue. And in these countries, it is often intermediary authorities that decide where the money is to be spent. As local authorities are also run by publically elected officials, the public has an additional opportunity to ensure that the importance of education is acknowledged and that decisions are taken in schools' interests. The hope of such systems is that, through the direct involvement of citizens in the decision-making process, they may gain political legitimacy and be more responsive to local needs. The question is whether the cost of involving citizens to bring about these potential benefits of democratic legitimacy outweighs additional bureaucratic burdens? Moreover, some intermediary bodies will rightfully claim that their hands are tied by decisions made above them, so that their role is merely to share out insufficient funding as best they can.

Another way of considering this issue is from the perspective of schools, as they are at the heart of the system and arguably best aware of their needs. So how much of a say do schools – including governing bodies, teachers and parents – have (or try to have) on the funds they receive? In some countries, such as Estonia, schools are left to make their own decisions on how to spend at least a part of the funding that they receive. In many other countries, however, decisions on how funding is spent are taken higher up the food chain, and money is earmarked by the time it trickles down to schools.

In the end, as Aristotle said, it is indeed not an easy matter to decide to whom to give funds, how much, or for what purpose. Nevertheless, asking how we design and fund our education systems is an integral element of building our societies. So countries that try to make their systems understandable, and that involve citizens in decision-making, may find that the effort is worthwhile in the long term. And having discovered that current systems are often complex and difficult to understand, it will be interesting to observe whether there will be a trend to provide more and better information on education funding in the future.

Authors: David Crosier and Orla Colclough