In the first of a series, Geraldine Hackett looks at where the Government is afterits first year in office

ONEyear on and Labour has already thought the unthinkable - the partial dismantling of state education.

Stephen Byers, the school standards minister, has been telling MPs that Labour has abandoned its belief that the state must provide everything. A possible alternative is to be tried out as part of the experiment with education action zones.

Mr Byers said: “The purpose of education action zones is that the Government believes that there is a third way in public services.”

And, as he explained to MPs in February, Labour does not reject ideas just because they originated from a Conservative government and it does not believe all services must be state-provided.

The third way, he said, was an ideology-free zone and future policy would not judged as either right or left-wing.

He said: “Education action zones can be the forerunner of ensuring that a third way forward is developed for our schools and that it is done not in a dogmatic way, but in practical way that puts the interests of our children first.”

Mr Byers, however, has yet to clarify whether the zones are to be a limited experiment in drawing on external sources of funding or a test whether education is better left to private companies.

Since then, David Blunkett, the Education Secretary, has sought to quell local authority and teacher union fears that the Government is embarking on a covert operation to privatise education.

According to Mr Blunkett, education management consultants could be paid a fee for operating a zone, but private companies will not be able to take a profit slice from school funds.

Labour’s policy advisers insist that the third way is nothing more than a pragmatic approach to the difficulties involved in running large public services. There is a need, they say, for innovative partnerships between the public and private sectors. It is vital not to allow ideology about state provision override what works best.

On the right, however, the interpretation is less ambivalent. Dr James Tooley, education director of the Institute for Economic Affairs, believes Labour’s third way is in reality Margaret Thatcher’s first way dressed up in new clothes.

“Education action zones are the Government’s flagship policy and if they work there will be hundreds of them,” he says.

Dr Tooley believes ministers are re-packaging privatisation in a way that reassures the vulnerable that they are not about to be abandoned.

He favours the further rolling back of the state that he believes Labour has in mind. Such moves will, he insists, improve the schooling on offer in deprived areas.

“The middle classes don’t send their children to sink schools, but others do not have a choice. The main gain from education action zones is that they allow private companies to run and manage schools. Private companies have to be more responsive to the wishes of parents,” he says.

From inside Labour, there are other permutations on what exactly is meant by “the third way”. Ian Corfield, a former head of research at the Fabian Society, believes the theory implies greater autonomy for schools. The third way, he suggests, is a way of dispensing with control of education by local authorities.

The role of the state would be confined to powers of intervention in times of crisis. The Government could send in hit squads or close schools considered to be failing.

There is general agreement among academics that the zones will become a political focus in the way that grant-maintained schools became the Conservatives’ Holy Grail. The lesson from that experiment may be that local authorities were able to adapt rapidly in order to frustrate the Government’s ambitions for a grant-maintained system. Ten years on and after much preferential funding, only 1,000 schools had opted to become GM.

It remains unclear whether Labour is claiming a new ideological underpinning for its policies or whether it is merely being pragmatic in a climate that constrains public spending. Mr Byers is fond of saying “what matters is what works” and, presumably, what matters even more, is what works and doesn’t require a substantial contribution from the Exchequer.