to me the principal problem with GCSE's is grade inflation- ultimately are exams to test relative ability or absolute?
Nope, disagree.
Its about teaching to pass exams rather than teaching how things actually work thats the problem. GCSEs just before the national curriculum so they are being blamed but I honestly think its teaching to targets rather than teaching to understand things thats the issue.
Not only that there is also a problem with tiered papers and school policy.
School A likes to teach kids to understand properly. So they take the decision to enter kids of a certain ability to do a lower paper. They then teach so they know the kids fully understand the subject to that level. To pass the lower paper and get a C they need 75%.
School B is more concerned with its league position and grades. So they take the decision to enter kids of a certain ability to do a higher paper. They then teach them to pass the examine, by knowing how to answer certain questions, knowing that they only need to get 30% to get a grade C.
In theory, what ends up happening is School A pupils might get slightly lower grades but they have the understanding and ability that is useful in life. Whilst School B pupils might get slightly higher grades as they could pass the exam but its bloody crap as they still lack understanding and the ability to use that skill in real life.
Changing the exams isn't going to solve the problem imho. It might be a step in the right direction, but unless you can find a way to teach that ensures the subject is properly taught and so kids have an application for what they are taught beyond the exam room it won't change one of the major issues.
As for a two tier system under O Levels. The idea that GSCEs have stopped this is something of a myth because of two tier paper systems. Schools are not always necessarily doing the thing thats in the best interest of the kids, and system means that average ability kids have decisions made about the highest grade they can achieve and the way in which they are going to be taught anyway. Its just not as obvious and is being misused by some schools.