Gonski had a bad weekend.

The most recent in a long series of backward steps came on Friday when the Prime Minister announced the reform plan drafted by David Gonski — once scheduled for full implementation this year — will be phased in over five years from 2014. The next day Victorian Premier Baillieu announced Victoria has a better, cheaper alternative to Gonski and will go with that. Queensland Premier Campbell Newman promptly declared himself very attracted to the Victorian plan.

Then Western Australian Premier Colin Barnett, a week out from an election win, went on camera to make clear there will be no federal takeover of Western Australian schools while he is Premier. And to cap it off, federal opposition spokesman on education Christopher Pyne told the media on Sunday that “the states run government schools, not the Commonwealth. School funding policy should originate from them, not the other way around.”

Perhaps all this is just manoeuvring in the run-up to the Council of Australian Governments meeting in April, when three years of reviewing, researching, consulting and intense pressure from the states and the non-government schools is supposed to culminate in a decision.

Perhaps. But the states know anything they agree to at COAG will be null and void after the election anyway. And the Prime Minister knows she will have to stump up most of the money because she needs a plan to take to the election, and she would be delighted to actually face the problem of paying for it.

It now seems almost certain there is very little left of Gonski’s widely acclaimed plan to distribute all government funding to schools according to the size of the educational task they confront, irrespective of school sector.

This dismal story has many morals. Here are three of the more important of them.

First, money. Money wasn’t the only sticking point, but it was a big one. Gonski wanted $6.5 billion on top of an annual state and federal government spend on schools of around $40 billion.

But over the long year since Gonski’s proposal went public the states have been cutting education spending, and federal budget projections have gone from bad to worse. The latest phase-in plan is yet another attempt to reconcile election spending with the appearance of budgetary responsibility.

The days of spending yet more on schooling are over. Per pupil funding rose two-and-a-half times in the 50 years to 2003 and may well have risen further since. There is no evidence to suggest any commensurate improvement in performance and some reason to believe that in key areas performance has declined.

New money won’t be found unless it is used to free up money already in the system. A fundamental flaw in Gonski, and one of several blunders by the government, is in the failure to use the promise of new money as a lever for re-allocating expenditure, including requiring employers and unions to phase out wasteful and ineffective maximum class size limits.

Second, for the first time ever Australian school systems are under the common external pressure of international comparisons, highlighted by the Prime Minister’s “top five by 2025” target, but they lack a common way to respond. The Australian “system” is divided into three sectors in each of the six states and two territories. Each sector has its own mix of funding from three different sources. And the whole set-up is over-politicised by close government involvement and incessant electoral cycles.

Gough Whitlam’s Schools Commission was supposed to fix the problem, but it was beaten within a decade. Gillard’s “national partnerships” have failed also. She succeeded in reviving the national curriculum and in introducing the MySchool website with its nationally consistent data on the circumstances, revenues and performance of every school in the country.

But Gonski was the biggest and by far the most important attempt at a “national” approach. It has consumed three years of that scarcest of resources, political oxygen, three years of effort and hope spent with very little to show for it. In prosperous times a federal government might succeed in subduing the states, or the non-government sector, but not both, and both is what we’re stuck with.

An Abbott government will almost certainly move away from both a big national role and big schools funding. There will be few if any gains for the schools that try to provide for half-a-million or so kids currently in the system who, by Gonski’s estimate, will leave without the most basic literacy and numeracy.

The third moral of the Gonski story is that competition between schools and sectors — badly regulated, highly unequal, and fuelled by public money — is now beyond public control.

Gonski presented strong evidence to show government as well as non-government schools with the easiest educational job get the best resourcing as well as feeding off the rest, taking capable students, families and teachers from where they are needed to where they are rewarded. Those schools have won.

“Residualisation” is moving us toward a system of educational slums and gated communities. There is no point in blaming the schools or any one of the sectors. All are doing what the system rewards them for doing. Much of the problem descends from the Whitlam/Karmel policy of providing public funds without matching public control. By bitter irony, it has thereby contributed to the fall of a Labor successor.

*Dean Ashenden has been a consultant to many state and national education agencies and was ministerial consultant to federal education minister Susan Ryan