"How does that work then?"
Basically it won't. It is based on the total lack of understanding Civil Servants and Politicians have of the Biological Science of Poupulation Statistics.
If we take the whole population of the Nation it will contain all ability levels (or height range, or how fast they can run). Most people will fall within a particular range, with a few above or below. It may well be fair to say that people who fall above, or below these arbitrary points are high or low ability and need different systems appropriate to their conditions.
The problem starts when someone invokes "STATISTICS" and says that in the population 2% are one grouping and 5% are a different category.
The biologist would say that if you take a large enough, completely random, selection of people you will get a sub-population which mirrors the full one. In such a sub-population you would expect to see something resembling the 2% and 5% pattern seen in the original.
The Politician on the other hand states that "In EVERY" group of people 5% will be category 1 and 2% will be category 2.
In schools this is patently NOT TRUE. It only works with a RANDOM selection. The population within any one school is NOT random. Various social factors result in areas with a sub-population which tends towards the higher or lower end of the scale. School populations reflect this distortion.
If you only make decisions based on a percentage rather than an actual ability it becomes a mockery. The bottom percentages in the school which excludes low ability may well be equivalent to an "average" ability in the "dump school".
In some schools, the average ability is so low that children who need special help do not come in below the bottom % cut-off based on the averages for that school, and as such are deprived of the extra care they would have been given in a different school. It isn't a fair system.
Quack!
GtD.