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The cash for classrooms question;Briefing;Analysis

Education action zones have brought pound;5 million of private money into education so far. But at what price to schools? Jon Slater reports.

There's no such thing as no-strings-attached private investment in schools, as ministers are starting to discover.

Companies which exist to make profits were never likely to come over all philanthropic after a few warm words from ministers. Small donations may come gratis, but companies expect returns on any significant investment.

Education action zones are the most ambitious attempt yet to involve companies in schools. But while ministers claim to be happy with the private sector's response it has yet to match the hype.

So far, only pound;5 million has been raised by the first 25 zones - well short of the pound;19m needed. And much of this is in kind. Companies such as American Express - which is providing cash, staff time and expertise in Brighton's zone - are willing to offer help but there are no blank cheques.

The Tories encountered similar difficulties attracting private-sector investment for city technology colleges. It was planned to open 20 new hi-tech schools backed by business. In the end, only 15 emerged and in a desperate dash for cash a tobacco company was allowed to display its logo in a school.

If the private sector is going to do the business for Blair in schools, then ministers will have to offer them something in return. But the Government needs to be clear what it wants business to do and offer rewards accordingly.

Some companies, such as Nord Anglia (see Where the smart cash is?), are clearly aiming to cash in. Kevin McNeany, its chairman, openly admits that it is in education for the money. "We are a commercial company ... if we are to become involved we intend to make that profit rather than take it."

He believes private companies can provide services to schools so efficiently that there is scope for both savings for the school and profit for the company. But he questions whether public opinion will tolerate companies running whole schools for profit.

Katharine Raymond, director of the Social Market Foundation, a think-tank which has taken a close interest in zones, believes that the companies may get what they want. "There needs to be an alternative to LEAs ... I think this Government will eventually go down the path of letting specialist organisations run schools under contract. Who cares if organisations make a profit as long as kids get educated?" But most companies do not become involved in schools to make a profit. At least not directly. They have no interest in running schools or selling services to them but they are willing to get involved in other ways. Schools are often provided with branded materials designed to complement the curriculum. As Ms Raymond says: "Sainsbury's don't want to run schools; they sell beans. But they might make a contribution to a new home economics wing."

Companies, such as ADT, the security firm, who contributed towards the start-up costs of Wandsworth city technology college have at least two good reasons for such involvement.

The first is publicity. Firms benefit from being seen to make a positive contribution to the community. But they can also exploit the untapped marketing opportunities available in schools. "The added value to business from being involved in schools is clear," said a Consumers' Association report last year. "They can increase consumer awareness of both the company and their brands."

Potentially, this is a boon for schools. If they can persuade firms to contribute towards capital improvement or provide alternatives to expensive textbooks then they free up resources which can be used elsewhere. But is allowing advertising into the classroom a price worth paying?

Juliet Wells, co-author of the Consumers' Association report, believes the important thing is the standard of material provided.

"It could be of benefit to schools. But there is a great deal of material around which has very little educational value," she said.

Accusing fingers were pointed at McDonald's when it offered schools resource packs which invited children to identify the words "chicken McNuggets". Survey results show parents would welcome more formal guidelines.

Companies who become involved may also influence the curriculum. Increasingly firms realise that skill levels are vital to profitability. Peter Clark, senior education policy adviser at the Confederation of British Industry, believes that "the main reason for companies getting involved is that schools determine the quality of the future workforce".

The CBI is campaigning for businesses' concerns to be incorporated in the curriculum review.

It has three main goals - higher expectations, more emphasis on personal development (including key skills, careers, community education and economic citizenship) and more coherence, especially post-16. Local partnerships give business the chance to pursue these aims at a micro level.

To some extent, the CBI and others are pushing at an open door. The principle of business involvement in schools sits well with New Labour's key aims. Tony Blair's modernisation of Labour has brought with it a shift in attitude towards public-sector services. Support for the parent over the teacher, the consumer over the producer.

When ministers talk about "what works", they are going beyond pragmatism, they are making a statement of principle. If consumers aren't getting a fair deal then something must be done - whatever the effect on the foot soldiers.

So are zones a way of pulling in more business investment into deprived areas or a radical new way of running schools?

It looks suspiciously like they are the former pretending to be the latter and in attempting to be both they are in danger of doing neither.

The evidence does not yet show (if indeed it ever will) that business running schools equals best practice.

And despite the urgings of Nord Anglia, the Social Market Foundation and some of his advisors, effectively privatising schools may prove unthinkable, even for Blair.

But whatever path ministers choose they cannot take business support for granted.

There is a willingness among companies to work in partnership with schools. A CBI survey found that 88 per cent of businesses had links with education.

But many prefer to do their own thing. Local arrangements are often seen as better suited to the needs of the company than national initiatives.

As James Graham, manager of McDonald's education service, said: "If what we're doing marries with it (the zone) then fine.

"But we don't have the financial resources to put behind an action zone."


American Express: Business: Finance, credit cards, currency.

EAZ: Brighton.

Activities: Staff help children in local primary school with teaching, cash donations, sharing of business expertise.

Benefits to company: Publicity, communication skills of staff have improved by helping in schools.

McDonald's: Business: Fast Food EAZ: North Somerset.

Activities: Limited involvement in the EAZ (a reading scheme with one school). However, the company spent more than pound;450,000 on educational activities such as work experience, teacher development and governor support in 1997. It has been criticised for disguising advertising as curriculum aids.

Benefit to company: Involvement in education softens its hard corporate image. Children are key customers.

CfBT: Business: Not-for-profit education services.

EAZ: Lambeth, south London.

Activities: Employing specialist teachers to demonstrate literacy and numeracy. Looking at the possibility of managing after-school clubs; producing individualised lesson plans; reviewing local authority budget.

Benefits to company: "It is like asking why Save the Children save children" according to Neil McIntosh, the chief executive. Involvement in the zone gives CfBT the chance to prove its worth.

Newcastle United FC Business: Football.

EAZ: Newcastle.

Activities: Six-figure sum spent on education initiatives - including a study support centre and scoring goals for success programme which rewards good attendance and discipline with football coaching.

Benefits to company: The club sees its work as putting something back into the community. Much-needed positive PR after club directors described local women as "dogs".

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