THE Federal Government should hand complete responsibility for primary and secondary schools to State and Territory governments, a new report has urged.
A report from the Melbourne School of Government has backed the controversial option for reforming the nation's school system.
The report will also be handed to the government's review of the federation, specifically urging the handover as the government considers the options.
It found if State governments had sole responsibility it would be the most efficient way to run, fund and regulate schools.
However, it has also recommended the Commonwealth retain its oversight of how schools are teaching the national curriculum, and not withdraw further funds from schools.
The report follows the Abbott government's removal of many "strings" that had been attached to schools funding, which states had to complete to receive money.
University of Melbourne research fellow and report author, Bronwyn Hinze said the stagnant or falling national literacy and numeracy results showed "new approaches" were needed to lift students' results.
She said if states took over full responsibility, it would remove the burden of excess regulation and make it easier to target education at the needs of particular communities.
"Another benefit of this approach would be a greater ability to assess the needs of all schools and to target funding to those with the greatest educational needs," she said.
"This would go a long way to reducing the growing equity gap in outcomes and resources."
The report indicating a hand-over would also let more money flow directly to schools, to improve teacher quality, rather than be bound up by regulating Canberra-imposed conditions.
Education Minister Christopher Pyne has previously said his preference was for efforts to improve teacher quality and school autonomy, despite Labor and unions pushing for the return of needs-based funding.
The government had stripped $30 billion from schools over 10 years, in last year's budget, which the Opposition has repeatedly called to be returned to state coffers.
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