We have seen the future in Sweden and it works,” Michael Gove told the Daily Mail in 2008. A few months earlier, Gove and other leading Conservatives had visited schools in Sweden for the first time, a journey that they would repeat in the following years.

“They’ve done something amazing,” he said in a video made for that year’s Tory party conference. “They challenged the conventional wisdom [and] decided that it was parents, not bureaucrats, who should be in charge.”

Sweden’s 800 friskolor make up about a sixth of the country’s state-funded schools. Introduced in 1992, they gave parents the ability to use state spending on education to set up new schools and decide where to send their children. In that decade, friskolor were made easier to set up, with companies given the right to make a profit from running them; other schools were decentralised and a voucher system, allowing parents to choose their children’s school and then awarding funds based on parental demand, was introduced. Tony Blair praised the Swedish model in a 2005 government white paper. For Tories, Sweden’s schools held out a simple message: that competition could transform state education in England.

That message was appealing because it came from “a social-democratic country, far to the left of Britain”, as Gove put it. This was true but only up to a point. The reforms that he enacted after 2010 – notably the introduction of free schools, the speeding up of academisation and changes to the curriculum – owed as much to US “charter schools” as to educational reforms in Sweden.

Even as Gove cited Sweden’s successes in education, its international standing was in decline. Since 2000, standards there have fallen more than in any other country ranked by the Organisation for Economic Co-operation and Development (OECD) using tests known as the Programme for International Student Assessment, or Pisa. Results released in 2013 rated Sweden below Denmark, Finland and Norway by all three measures – reading, maths and science – and worse than the UK. In 2014, 14 per cent of students performed too poorly to qualify for secondary school at 16, a deterioration of 10 per cent on the 2006 level.

Last year, the OECD published a report in which it warned: “Sweden’s school system is in need of urgent change.” Underinvestment is not the problem. The Swedes spend more on education as a percentage of GDP (6.8 per cent) than the OECD average (5.6 per cent). The report describes an education system in chaos, hopelessly fragmented, failing those who need it most. It criticises its “unclear education priorities”, “lack in coherence” and “unreliable data”.

Swedish schools lack “discipline” and “a calm work environment”, which makes it hard to attract good teachers, says Barbara Bergström, the founder of the Internationella Engelska Skolan, one of Sweden’s most successful free-school chains. The country is expected to face a deficit of 60,000 teachers by 2019.

While first- and second-generation immigrants in England and many other countries perform above the national average, in Sweden they have been blamed for dragging standards down. In March this year, Anna Ekström, the director of the government-run Swedish National Agency for Education, claimed that immigration was “not an insignificant” factor in declining attainment. The proportion of students from immigrant families rose from 11 to 15 per cent between 2000 and 2012 and has increased sharply since the beginning of the migration crisis.

Perhaps most galling for Swedes is how schools appear to be increasing inequality, rather than eroding it. “We need to put our focus on building equality into the system,” Gustav Fridolin, Sweden’s education minister, said recently. The voucher system has created more opportunities for middle-class parents to ensure that their children attend the best institutions. The OECD report called on Sweden to “revise school-choice arrangements to ensure quality with equity” and “improve the access of disadvantaged families to information about schools”.

Bergström notes that only 14 per cent of students assessed using Pisa tests attended free schools. Moreover, even before the reforms of the early 1990s came in, the country suffered because it lacked a culture of rigorous testing.

Schools were merely “telling themselves and their parents that things were getting better” when there was no evidence that they were, says Andreas Schleicher, the OECD’s director for education and skills. He views free schools as “more symptom than cause”.

Above all, Sweden’s decline is “the story of a weak education system that has devolved more and more responsibility to local and school level without doing much to raise aspirations, monitor progress and deal with underperformance”, Schleicher says. “The difference is that England has an established exam system and, more importantly, Ofsted. At least you’ll know when things start to go wrong.”