In this context, the cost of education is not the same as education spending but is instead the amount a school district would have to spend to obtain a given level of performance, as measured by test scores, graduation rates and perhaps other output measures.
If there are too many vendors, all using their own systems and methods, then HR becomes the administrator of many other organizations, reducing the overall effectiveness of this option.
All districts require a superintendent and a school board, for example, and the same central administration may be able to serve a significant range of enrollment with little change in total costs.
Second, education requires certain physical capital, such as a heating system and science laboratories, which require a certain scale to operate efficiently and therefore have a high cost per pupil in small districts.
Third, larger districts may be able to employ more specialized teachers, putting them in a better position to provide the wide range of courses required by state accountability systems and expected today by students and parents.
Finally, teachers in larger districts have more colleagues on which to draw for advice and discussion, interactions that presumably lead to improved effectiveness.