The Study

The study described in this chapter was conducted from 2010 to 2012 in two communities that were known to be hit hard by the crisis but that are economically dissimilar. The purpose of the study was to ascertain what difference, if any, the crisis had on each. One is in the middle of a farming community and the other bases its income on services, fishing, and transport. The researchers went into the communities and collected data and conducted interviews and focus groups with administrators of preschools and primary and secondary schools, teachers, parents, and pupils and gained access to school expenses from the local authorities. The research group included seven academics from the School of Education, University of Iceland, including the authors.

The number of pupils in both communities dropped by 12–13 percent from 2007 to 2010 (Table 13.1). In the farming community both the number of administrators and teachers went down. In the service community the pattern is different: the number of administrators went up from three in 2007 to four in 2010–2011, while the number of teaching posts remained the same, at thirty-eight, in 2007 and 2010, despite fewer pupils.

The pupil-to-staff ratio in the rural school went from 1:7.8 in 2005 to 1:5.9 in 2007 and 1:6 in 2010. In the service school the pupil-to-staff ratio was 1:7.4 in 2005, 1:7.3 in 2008, and 1:6.5 in 2010, suggesting an earlier change in the farming community.

The cost of running the schools is presented here in Icelandic kronur (ISK), which saw a devaluation of 83 percent from October 2007 to October 2010, and over 100 percent from 2007 to 2012 (Central Bank of Iceland 2012). This devaluation affects both the cost of the schools and the cost of living for teachers and others in the country.

Our interviews and focus groups yielded the following information on how the economic crisis affected the two target communities: we learned what the antecedents were in each community; what was cut from the schools and how; the effects of the cuts on schooling; and new opportunities created by the crisis.

Antecedents to the Meltdown

Prior to 2005, the farming community consisted of a number of smaller communities. Due to economic difficulties in 2006, the communities were merged that year. Throughout the process, residents discussed what to do with the educational system, including merging the schools. Although the communities did not physically merge the schools at the time, some of the rural schools did merge their administration. Educators found this process challenging, more value-laden and difficult to negotiate than the meltdown itself. One of the respondents stated: “They began immediately calculating what could be cut; the atmosphere in the community became quite stressed. One of the school sites was supposed to shut down; nobody knew what would happen. Many meetings were held; people were very upset here.” The economy of this community had been sliding for some years before the meltdown, resulting in a lower number of students because lack of job opportunities had caused families to move away. In 2007 an upper-secondary school established itself in the community as an independent association, but when its savings bank crashed relatively early in 2008, that school became a burden for the community.

For the service community, the crash seemed to come as a complete surprise, at least to the parents. One of them said simply: “No, there was no preparation or any antecedents. All of a sudden, the economy here had crashed completely.” Teachers and administrators were not of the same opinion as the parents; they thought the recession in the community started before 2008. So it seems the farming community had inadvertently prepared for cuts in the school system and had even completed many of the necessary cuts before the meltdown happened, where few actions were taken in the service community, leaving it less prepared for the shock. The latter community had already suffered a severe drop in employment in 2006 due to a major employer moving out of the area, making it more susceptible to the lure of the economic boom. The local savings bank made loans that allowed the unemployed to find jobs building new houses and factories, and those newly employed workers took out loans themselves that later they were unable to repay in a story that played itself out across Iceland.

What Was Cut and How?

In the farming community, there were discussions between the local authorities and the schools about what should be cut and how, but no school was ready to commit to cutting its own funding. In the end, community leaders decided what should be cut. Mostly, these cuts could include what was not decided beforehand or protected by law, as much of schoolwork is. Choices included providing less expensive food, less specialized assistance such as psychologists and speech therapists, less continuing education of staff, and less extra help for students as well as reducing administrative costs, all of which translated into administrators taking on more work with less pay, including substitute teaching. Support staff was hired on a part-time basis and extracurricular activities and after-school services were cut, as well as equipment and building maintenance. Monitoring of school financing also became much stricter than before, with no tolerance for slack.

The meltdown hit the service community harder than the rural community. The service community thrived during the economic hype around 2007, but after the meltdown it had trouble paying off loans. However, in spite of the grave situation it found itself in, the general consensus was that the schools should be protected. Their funding was cut, but less than expected, given the severity of the situation. “The first and greatest cut was in 2009, and the last three years we are getting less and less money to run the school,” said the headmaster of the grade school. The schools adopted measures that would affect the students the least and asked parents to participate more than before in bearing the costs of activities such as crafting, student trips, and monitoring during breaks. One of the parent committees negotiated with the oldest grade school students to help pay some of the cost of their yearly graduation trip if they would help with break monitoring. Parents understood that costs had to be cut, and they seemed to feel that the schools were doing what they could to prevent negative consequences for the children.

There is much more joblessness in this community than before, so the parent committee is reaching out to those parents who need help. However, they feel that the situation has changed. One parent said, “This is the first Christmas when we are asked to have the students bring materials from home to use for Christmas crafting and decorations.” In the upper-secondary school, class size increased when the school participated in a governmental plan to provide schooling for the unemployed. Students in the lower grades did not notice many changes, except for less specialized help. They are still able to come up with money to have expensive dances and trips, but they need to work harder to finance them than before, they said.

Both communities have had to cut costly extras from the schools. In the farming community, there was a popular center attached to the school with lots of recreational opportunities for the students. This had to be changed to more of a child-care facility, with fewer recreational options. Both communities cut down on trips. In the farming community, the students told us they understood this decision and agreed with it. “What we were doing before was simply much too expensive. We can still have fun if we take our graduation trips inland rather than going abroad,” they said. In both communities the preschool teachers had fewer possibilities for meetings, cooperating and offering specialized help, and in both communities the parents rose to the occasion.

In general, it seems that both of the communities went the extra mile to protect their schools, even if they had to cut costs. This was especially noteworthy in the harder-hit service community. The schools there seemed to be thriving, optimistic, and productive, in spite of the economic situation.

Effects of the Meltdown on Schooling

In the farming community the number of administrative posts decreased both in the grade school and in the preschools. The service community saw an increase in grade school administration from three to four in 2010, at the time of the most serious cuts. There was an increase in the number of children with special needs, so one administrator was dedicated to that area. The school administrators refused to take a 10 percent salary cut but agreed to give up their transportation expense benefit. The preschool administrators, however, took a 10 percent salary cut, as did most administrators in the community. Generally, administrative cuts are seen as the first place to tighten the budget, even if the need for administration does not diminish during these times.

In both communities, the pupil-to-staff ratio has risen slightly. Administrators take on more work than before without getting raises. The preschool teachers are fewer and complain about doing less professional work, particularly in the afternoon when just the basic needs of the children are attended to. The special education services have been cut in all the schools in both communities. In the service community, class sizes are larger in the upper-secondary school because of more students. Children in the upper grades are sent home if their teacher gets sick, but the lower grades have substitute teachers. Parents participate as best they can. Thus it seems there is a concerted effort to prevent negative cost-cutting effects on teaching or learning.

The grade school in the harder-hit service community had been ambitious in increasing reading and math proficiency for the last five years and have kept the full-time special teaching director for that. The school’s ranking on a national test for grade 4 has improved considerably in reading and even more in mathematics. The teachers are now happier about their secure jobs and salary than before, and now all the teachers have full teaching qualifications, compared with only 48 percent in 2006.

With fewer teachers, each teacher does more work and has fewer hours for collaboration than before, particularly in the preschools in both communities. There are also fewer possibilities for continuing education. In the harder-hit service community, cooperation between teachers and with parents has, however, become more school-oriented and improved, according to the principal. “We see ourselves as a community, the school and the parents.” Educational evaluation was thriving in at least some of the schools, and now evaluations are minimal, only enough to satisfy the letter of the law. It is clear that in order for cooperation and collaboration to take place, there must be time for meetings. This has become more difficult.

Opportunities in the Wake of the Meltdown

In both communities parents seem to have more time to spend with their families. When it is because of joblessness, it may have some negative as well as positive consequences, but, in general, people seem to see increased family time as a positive development. The school and the welfare services cooperate in the harder-hit service community to make sure all children have proper clothes and school equipment and are able to buy school lunch. Parents are more cooperative with the schools than before, spending more time and effort. They also help with entertaining their children during festivals rather than hiring entertainers for that. They go on field trips instead of paying teachers for those trips. The schools do not print more than absolutely necessary and monitor their spending diligently. The children seem to be just as happy now as before, even happier with more time and attention from their parents. Some of the respondents in this study saw these developments as opportunities to reevaluate the setup of our communities, with values other than grasping for material goods.

The future looked different in the two communities. In the farming community people believed that they had already cut as much as they needed for seven years and the only way now was up. The harder-hit service community had only been cutting for three years when the interviews took place, and the respondents were not as optimistic, particularly for the community as a whole. Some were of the opinion that the cuts were there to stay, at least for some years, but others thought they had already hit bottom in terms of cuts. The parents worried mostly that teachers they appreciated might tire of the situation and morale might deteriorate.

Another opportunity created by the meltdown was reorganization of specialist teaching in the grade school, which now focuses on small groups more than individuals. In the farming community’s upper-secondary schools, an interest in cooperating with neighborhood schools has increased. In the service community, new curriculum tracks and courses were created in cooperation with the unemployment services. In both communities, parent committees were ready to chip in with smaller issues, but people were worried about the bigger picture, especially in the harder-hit community.

Conclusions

As expected, there have been cuts in the Icelandic school system, and the devaluation of the Icelandic currency without comparable salary increases has been dramatic (Central Bank of Iceland 2012). This agrees with findings such as those from Education International (2010). Both the Icelandic government and local governing bodies have, however, prioritized to protect the preschools and primary schools as much as possible. So far, teachers have not been laid off in the communities discussed here. So far, extra costs have been “cut to the bone,” as some participants phrased it, but the basic functions of the schools have been protected as much as possible. This was possible because, before the crisis, Iceland was spending so much on preschool and primary education and ranked very high among the OECD countries in 2007 (OECD 2010) and in 2008 as well (OECD 2011a).

Different school levels

Disruptions to the general running and basic values of the schools have been minor. The grade school investigated in the service community had already taken on an extra goal to increase achievement in reading, math, and student health. This has continued after the crash and probably counteracted the adverse effects of the crash. Morale in the school community is high, with more parental participation than before. They have managed to create a community of practice with the parents.

In the preschools there is more disruption of the daily work, more so in the farming community. The fees have gone up, and the length of the school day has been shortened. Meetings and preparation time of teachers are difficult during normal working hours. Parents complain about shorter hours and lower-quality food for the children, but nevertheless they cooperate well with the preschools.

The upper-secondary schools are run by the state, and in these two communities the situation is very different. In the farming community a new school was founded and built during the economic boom in 2007. It was backed by private investors and the local service bank, which ran into difficulties and collapsed early in 2008. At the same time, the area is losing pupils as unemployment sets in, so running the school is difficult with fewer students. In the service community, there was an established upper-secondary school before the hype and the crash. After the meltdown this school cooperated with the government and the Directorate of Labor on the education of unemployed young people in an attempt to reduce unemployment. This has put the school in demand and made it more economically efficient, but at the same time there is more demand for counseling services, and new short tracks have been created. In this sense, the situation is similar to the findings of Shafiq (2010), where more secondary school students remain in school because of fewer work opportunities.

Professional work

In both communities the grade school leaders showed active leadership skills and are considered by their teachers to be fair. The headmaster of the rural grade school was seen as good at negotiating with the local authorities and in charge of choosing where to cut costs. In the service community the principal saw the amount of money the school got each year from the town as fixed, and his role was to communicate well with the teachers about how to make the most of that money and create a learning community that included the parents. He was seen as a fair and trustworthy leader. The leaders of the upper-secondary school in the service community were active in participating with the government unemployment office. Their program admitted more pupils and thereby strengthened the school, benefited unemployed individuals, and reduced national unemployment. This cooperation is a win-win situation and a sign of good leadership. The rural upper-secondary school was waiting for a new leadership team.

The political leadership in the farming community was more alert to the early warning signs of the crisis and started to cut the cost of education well before the meltdown. In the service community there were signs of overconfidence in the economic boom, and cuts were directed to other areas, such as administration. Their aim has been to protect the schools as much as possible. This meant that cuts in the schools came late in view of the grave financial situation. It is still not clear if they have reached the bottom yet.

A school crisis?

A school crisis has been defined as an event that threatens the basic or core values of the school and its administration and foundational practices (Pepper et al. 2010). In both communities the professional practice of preschool teachers was disrupted, but the professional learning community in the grade schools was not seriously disrupted. Both in preschools and primary schools the teacher-parent relationship improved, and in the upper-secondary school the cooperation with the welfare and unemployment authorities strengthened the school in the service community and made the teachers more committed to their work than before. This is in agreement with ideas of Ranson (2008) on changing governance in education, where collaboration in creating a community of practice with families is prioritized over focusing on comparison and competition between schools.

Second, a school crisis is often born from uncontainable consequences, which is clear in this case. The political situation is different in the two communities, and the aims of the national government and the unemployment services helped to prevent problems from getting bigger. Third, a crisis demands urgent decision making, which was clearly met in the farming community and probably in the service community as well. In the latter community, the community leadership has focused its savings first on other areas in order to protect its schools, and the school leadership has coped well with unavoidable cuts. The financial meltdown in Iceland was an external consequence to the school. The problems of these communities and the economic boom conditions in Iceland as a whole helped to trigger the meltdown, which seemed to be foreseen better in the farming community than the service one.

Did the community and school leadership respond appropriately to the situation in view of the principles recommended by Pepper et al. (2010)? The farming community clearly saw early signs of a crisis and responded; both communities as well as the association of local authorities and the Icelandic government (Icelandic Association of Local Authorities 2008; Government Offices of Iceland 2009) all agreed to prioritize preschools and grade schools, and have protected those as much as possible. The emphasis on cooperation and communication was clear in both communities, though it could have been better in the rural community. In the service community communication and cooperation between teachers and among teachers, parents, and the community is highly prioritized. Flexibility and resilience are emphasized, particularly in the service community. There are probably more signs of a crisis in the schools of the farming community at the present time, but they started cutting earlier. It remains to be seen if the service community will manage to avoid a real crisis in the years to come, but the financial situation of that community is rather bleak.

This study was conducted on behalf of the Center for Research on School Administration, Innovation, and Evaluation at the School of Education, University of Iceland. Other members of the research team were Anna Kristín Sigurðardóttir, Arna H. Jónsdóttir, Börkur Hansen, Ólafur H. Jóhannsson, and Steinunn Helga Lárusdóttir.