Private US company to profit from running academies

Deals at up to 12 schools linked to improving exam performance and pupil behaviour
14th November 2008, 12:00am


Private US company to profit from running academies

An American education company is set to sign a series of multi- million pound deals to run academies for profit, The TES can reveal.

Edison Schools is in advanced talks with academy sponsors to take charge of three schools within the next year, and as many as 12 in total.

The company will charge each academy around Pounds 1.2 million for a three-year contract, with about 20 per cent of the fee directly linked to improving school performance.

The controversial move pushes the Government's ban on running state schools for profit to its limit. It also follows a policy shift that has paved the way for profit-making companies to run alternative provision for excluded and vulnerable children.

Academy sponsors themselves are not allowed to operate their schools for a profit. But Edison Schools will be able to take money out of the schools' budgets in return for hitting targets.

Mark Logan, managing director of Edison's UK operation, said the company would deliver value for money and sustainable improvements. The fee includes providing a senior management team, training for staff and a system that strictly monitors pupil performance.

Teaching unions have condemned the plans for privatising state schools.

John Bangs, head of education at the National Union of Teachers, said the move opened the doors for other international companies to follow suit.

"The expansion of Edison into running academies is deeply worrying," he said. "They may well be trailblazing.

"The fact that they are academies, with their level of independence, opens up the possibility for other global education companies to come in and make a profit."

Edison Schools said it had received increased interest from local authorities following the launch of the Government's National Challenge scheme, which has threatened to close schools where fewer than 30 per cent of GCSE pupils attain five good grades, including in English and maths.

The company's plan to run academies is based on a model it is using at Turin Grove School, formerly known as Salisbury School, in Edmonton, north London. It took over running the school in April last year, the first time a for-profit company had struck such a deal.

The management team, until today led by Trevor Averre-Beeson, the former head of Islington Green School in north London has since hit 14 of its 16 performance targets. The number of exclusions at the school has fallen from 300 a year to zero. Exam results have also improved, up from 12 per cent of pupils achieving five good GCSEs with English and maths in 2006 to 19 per cent this year, although that represents a slight dip on 22 per cent in 2007.

Edison Schools also expects to expand its work with local authorities. The move would be similar to a deal the company recently signed in Northampton, where it is working with 20 schools. Part of the contract would be based on payment by results, with exam grades, value-added scores and Ofsted ratings being taken into account.

John Dunford, general secretary of the Association of School and College Leaders, said research had proved that the most effective way to improve performance was through help from other schools, rather than private companies.

"The line between the public and private sectors in state education has become much less clear," he said. "The most important thing has to be that school improvements are sustainable and last after any outside organisation has left.

"School managers have to take a view of what will work for them, but all the evidence we have found shows that school-to-school support delivers results."

Edison Schools is well established in the United States, where it runs around 100 charter schools, which enjoy similar freedoms to academies. The company, which struggled financially after its launch, has enjoyed mixed success.

In England, its operation has grown over the past four years and now works as a consultant to at least 60 schools. It caught the attention of Lord Adonis when he was junior schools minister, and Michael Gove, the shadow schools secretary, has visited Turin Grove to see the company's approach.

Mr Averre-Beeson said that a business contract and profit incentive helped to ensure that the company performed at a high level.

"We are not embarrassed about being a profit-making company," he said. "That is what allows us to innovate and bring school improvement. We are interested in expanding our influence and becoming a main player. If we are not doing a good job at a good price, people will not use us."


1992: Founded in New York. The company spends three years researching its model for school design.

1995: First four schools are opened. The company has since expanded to operate about 100 charter schools, the US equivalent of academies.

1999: Floated on the US stock market, but four years later taken back into private ownership after financial difficulties.

2002: UK operation founded in Colchester, Essex. The company now works as a consultant or partner with more than 60 schools.

2007: Takes over the running of Salisbury School in Edmonton, north London, in a Pounds 1 million deal to improve its performance, the first such for-profit contract.

2008: Announces plans to take over the running of academies in series of profit-making deals. It will run the curriculum and leadership of the schools, but not act as sponsor.

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