Councils face up to final taboo;Briefing;Analysis

Barry Hugill

Goodbye to LEAs? Barry Hugill looks at the threat to local democracy from education's emerging service industry

During the long, dark days of the Thatcherite ascendancy Labour councillors would reassure each other that one day things would get better. As Kenneth Baker drove through his 1988 Education Reform Bill they wrung their hands and bemoaned the slow strangulation of local authorities.

A decade later and Lord Baker can be seen in a more benign light. Sure, he was tough on local authorities, but nothing like as tough as David Blunkett. Back in the Baker days the likes of Steven Byers, an up and coming Tyneside councillor and Blunkett, the former leader of Sheffield City Council, fulminated at the ignominy of the Tory assault on local democracy.

But times change and it was a different Blunkett who last year launched education action zones - the first stage in what could become the almost total emasculation of LEAs.

This January the Secretary of State spelled out Labour's attitude to town and county halls with a brutal frankness. LEAs deemed to be failing will be taken over by private companies or other more successful authorities.

The handing over, earlier this year, of Kings' Manor, a comprehensive in Guildford, Surrey, to a private company was, according to Tony Travers, the London School of Economics expert on local government, an act of epoch-making significance. It was the final taboo. No Conservative government has contemplated such a thing. But New Labour was quite relaxed about it. Almost anything could now happen. It is by no means certain LEAs will exist in 10 years' time.

LEAs have for almost a century overseen the massive growth from a system that provided little more than elementary education to one where schooling is compulsory to 16. During their golden age, in the 1950s and 60s, they controlled mini-empires providing everything from nursery provision through to adult education classes, offering courses as diverse as flower arranging and advanced engineering.

They presided over the expansion of advanced further education and were entrusted with the creation of the new polytechnics, thus playing a crucial role in the development of today's mass higher education system.

They held a stranglehold over all but education in the traditional universities. Two of the most important men (rarely were women involved) in any city were the chief education officer and the chairman of the education committee. Most parents would know the name of the CEO - certainly not the case today.

Change began in the 1970s and it was a Labour minister, Shirley Williams, who first challenged LEA autonomy. She placed much more emphasis on specific grants: money allocated by Whitehall to LEAs to be spent as Whitehall decreed. Previously, authorities had received a sum of cash every year to spend much as they liked.

This year more cash will be allocated as specific grant than at any time before, boosted by New Labour's ballooning Standards Fund (see stats, to come). While ministers are beginning to make good their promise to increase investment in education, they have seized on powers inherited from the Tories to pressurise local government into holding down overall spending. The result is that Whitehall has increased its stranglehold of council expenditure. Schools may benefit but local discretion - and social services budgets - have lost out.

There is scarcely an economist in the country who does not believe that within 10 years all education funding will be directly controlled from Whitehall. An ever-increasing proportion of funding will go direct to schools, the rest to "service providers" who may, or may not, be LEAs.

Faced with the prospect of extinction the LEAs are putting on a brave face. Graham Lane, chairman of the Local Government Association education committee, insists that authorities have come to terms with the new realities. He says it is a myth that they spend large sums on bureaucracy and points out that all councils are delegating 85 per cent, or more, of their budgets to schools.

To say that the Government is hostile to LEAs is not strictly true. There are those, most notably Tony Blair and the young men he has gathered around him in the No 10 Policy Unit, who would be more than happy if LEAs would just curl up and die. But others, notably Blunkett and John Prescott, the deputy Prime Minister, are happy for them to have a continuing role providing they can deliver the goods.

New Labour is about raising educational standards and it doesn't much care who handles this on the ground. This is arguably the most prescriptive government of the century (note last week's precise stipulation on the correct way to teach maths) and if private contractors can get better results then so be it; if LEAs can do as good a job then that's fine as well. They can compete with each other for the contracts.

The clearest indicator of what the future holds can be found daily in the pages of the Financial Times. UK quoted companies involved in education and training consistently outperform the FTSE All-Share index. Companies such as Nord Anglia Education and the Spring Group have done particularly well.

Twenty years ago teacher recruitment was the exclusive responsibility of LEAs. Now the largest teacher recruitment agency is the Spring Group, the company backed by Michael Milken, the convicted US junk bond trader who invested pound;109m in 1996 via his US company Knowledge Universe. Total turnover is in the region of pound;279m.

Nord Anglia, the first UK educational consultancy to be listed on the stock exchange, runs independent day schools, nurseries, language schools and has moved into another area once the preserve of LEAs - the careers service. It has a turnover of pound;48m and pre-tax profits of pound;2.7m.

Tony Travers believes that in the not too distant future the only services LEAs will be left with will be those no one else wants: possibly special needs and transport.

Does it matter who runs education providing the results are right? Mr Blair thinks not and many parents might well agree. Certainly if 3E's Ltd, the non-profit-making company linked to Kingshurst city technology college in Solihull, can turn round Kings' Manor and boost exam performance, there will be few complainants.

As Tony Travers, points out, though, there is another issue at stake. LEAs are elected, the boards of private companies are not. But does anyone care anymore about local democracy?

Well Tony Blair does. This is why he is so in favour of elected mayors. Electoral turn-out in municipal elections is shockingly low - in the worst cases (parts of Liverpool) it has been known to slump below 10 per cent. Nationally it remains well below 30 per cent. Blair believes that the introduction of personalities (mayors) will revitalise local democracy.

London will have an election next year and there is little doubt that other cities will follow suit. The elections will be fought on local issues and it is inconceivable that education will not figure prominently even in London where schools will not officially be part of the mayoral brief.

Outside London, the new breed of mayors could well use their executive powers to contract out most educational services to the private sector, confident that they will be highly efficient and able to provide a platform on which the mayor can seek re-election.

Alternatively a candidate might want to stress "local" control, might campaign for a specific Birmingham or Leeds approach to education, might promote the democratic credentials of an LEA as opposed to the private sector.

Whatever happens education, and its local control, could once again become a major political issue. Mayors elected on a large turnout will have the clout to stand up to Westminster. They will be under pressure to deliver on education and to do so will demand back some of the powers now resting with Whitehall. Democracy could yet be the saviour of the LEA.


CAROL ADAMS, Shropshire's chief education officer, has thought long and hard about the future of LEAs and, like almost everyone else, is confused.

"More and more is prescribed by central government and it's very difficult to know what the future holds. It is possible that we could end up with a completely free market, but if that happens what becomes of local democracy? And is there not a danger that schools could find themselves spending so much time deciding which provider to buy from that they neglect actual teaching?" she asks In 1998 Shropshire County Council was split into two with the creation of the new Telford and Wrekin Council. In a unique "joint agreement" initiative the by now much smaller Shropshire agreed to "sell" its new neighbour a number of services including advisory, music and library. In return it buys from Telford and Wrekin special needs provision and support. The deal is worth pound;10m per year.

Ms Adams admits it was, in part, a reflection of the changing political climate. "Increasingly LEAs are likely to buy in provision from the private sector and that is a route that we don't want to go down."

A report from management consultants, Windsor and Co, has praised the "value for money" service provided by the LEA. The report says: "The Shropshire advisory service has the least level of criticism that we have seen in any LEA over the past 10 years."

Ms Adams added: "We have learnt a great deal about operating in the new business environment. We have shown we can manage contracts and handle bids. It will be fascinating to see how we compare with private companies.

"The local government White Paper has made it clear that in future LEAs should concentrate on their 'strategic' role rather than their traditional one of service provision."

Christine Davies, Telford and Wrekin's corporate director for education and training, has no problem with this change.

"The role of an LEA is increasingly to be an advocate for children and other learners. They are central to our work. We are doing this in partnership with others, including Shropshire.

"But we are also happy to work with the private sector. We have an information technology network linking schools and libraries which we provide in partnership with a private company. And we are currently discussing with Microsoft and Channel 4 ways of working together on curriculum materials."

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