Bradford city centre is a poor advertisement for the efficiency of the private sector. Businesses change faster than the fasciae over their doorways, and the many fine Victorian buildings, which in any other city would have been snapped up by developers, stand empty. Just down the road Bradford City football club (home:the Bradford and Bingley Stadium), recently of the Premier League, almost went bust in the summer after some horrendous business moves left it with debts of around pound;13 million. But private enterprise is not dead in Bradford, where England’s most ambitious educational affair with the business community is taking place.

In May 2000 Ofsted found a “poverty of aspirations, both in the schools and the LEA”. The authority failed the inspection and a year later Bradford, like Leeds and five London boroughs (Hackney, Haringey, Islington, Waltham Forest and Southwark) before it, had its services contracted out to a private company. The pound;360 million, 10-year contract with Serco QAA was signed last summer, leaving only a handful of functions - school places, buildings and salaries - within the remit of education director Phil Green and his six remaining officers. Inspectors are due back at Bradford’s education department on Monday to assess progress.

Serco Group - which has its business roots in early-warning defence systems and traffic light maintenance - may seem an unlikely contender to run schools. But Quality Assurance Associates (QAA), the subsidiary it acquired in 2000, has expertise in inspections and school leadership programmes. Certainly, Serco’s directors see the potential: highlights from last year, touted on the firm’s website, include “new educational business established; with pound;35 million first year turnover, including contracts in Bradford and Walsall”. This is good news for the Serco Group, which made profits last year of pound;46.4 million. But is it good news for Bradford?

Education Bradford, as the company running support services for schools is called, was set up last year and has taken charge of 1,200 former LEA staff. It has a remit to raise levels of achievement and inclusion as well as improve community cohesion. Specific targets agreed with the council before the contract was signed include raising the proportion of pupils gaining five GCSE A*-Cs to 50 per cent by 2004 - from a provisional 35 per cent in 2002 - and improving the attainment of boys and children from ethnic minorities. No one underestimates the scale of the revolution required.

While there are successful schools in the metropolitan district, including 12 beacon schools, some are still reeling from a pound;186 million reorganisation that began in 1999 when the system of lower, middle and upper schools was discarded in favour of a two-tier system. The Ofsted report brought further disorientation to the inner-city schools in Bradford and nearby Keighley that serve some of the most deprived wards in Britain.

The city has a long history of under-investment in its schools. On top of that, Bradford has - in common with other northern towns associated with the textiles industry - a problem of racial segregation in its schools, memorably described in the wake of the riots of summer 2001 by Sir Herman Ouseley, former chairman of the Commission for Racial Equality, as “virtual apartheid”. Certainly, heads believe it will be difficult to transform the levels of achievement here in the way that Education Bradford’s “incentivised” contract demands. While the company expects 45 per cent of GCSE pupils to be getting five A*-Cs by 2003, schools are aiming at an average of 41 per cent. “Individual schools have yet to be convinced that the additional programmes Serco QAA promised, and which are now being introduced by Education Bradford, will lead to significant improvements in schools,” explains Education Bradford’s website. Meanwhile, an Audit Commission survey of headteacher attitudes to the new body, commissioned in advance of Ofsted’s imminent visit, is said to be lukewarm.

Even so, there is a newly energised mood among some. Liz Metcalf, headteacher since 1990 of what is now Undercliffe primary, has 320 children in her newly expanded school. She says Ofsted’s judgment in February, when the school was found to have serious weaknesses, “brought things to a head”. Some 80 per cent of her pupils speak English as an additional language, and the cramped school site is being expanded (Undercliffe is awaiting completion of a new building over the road, but in the meantime meetings are held in a converted lavatory, while classes are taken in temporary classrooms).

Ms Metcalf believes such difficulties can be overcome. “Underachievement has been blamed on children and parents,” she says. “We need a change in culture. They (Education Bradford improvement officers) are sharpening up my thinking.”

Bruce Berry is head of Belle Vue boys’ school and a longstanding member of the powerful Bradford secondary heads lobby, which some believe to have been instrumental in the drubbing Ofsted gave the LEA after its last visit. As chair of the funding group, Mr Berry has been closely involved in one of Education Bradford’s most controversial moves - reorganising funding for special educational needs. Spending on SEN statements has been capped this year, and Education Bradford plans to reduce the figure by 50 per cent by the end of its decade in control. The changes, whereby “families” of schools “negotiate” for a slice of the budget, were mooted late last year and implemented this summer. “It was a private sector approach of moving fast,” says Mr Berry. “Education Bradford got flak from heads and Sencos. But it’s happened and it raises the decision-making powers of people at the chalk face.”

Another of Education Bradford’s ideas for school improvement is the formation of multi-professional teams. School improvement officers, staff employed through the ethnic minority achievement grant, educational psychologists, education welfare officers and SEN staff will work in four local teams that will serve clusters of schools and thus avoid the duplication and lack of coherence Ofsted identified. Other strategies include linking poorly performing schools with high-achieving ones, setting up partnerships between all-white and all-black schools to try to break down cultural barriers, and developing the newly introduced citizenship curriculum.

A team of six secondary heads, to be co-ordinated by former head David Kershaw, will offer “support and challenge” to Bradford’s secondary heads. Mr Kershaw, who took Coundon Court school in Coventry from 10 per cent GCSE A*-Cs to 70 per cent during his 23 years of headship, and who is committed to Bradford for the next five years, tells colleagues that headship is “the greatest job in the world”. His enthusiasm for school improvement is palpable. “The benefits, the joys, the pleasure and the satisfaction are immeasurable,” he says.

Headteachers seem to welcome the team’s input. “We’re always crying out for support - we can’t complain if it comes with a challenge,” says Bruce Berry. “To be reflective practitioners, we may need an outside stimulus.”

Education Bradford’s director of strategy, Tony Thornley, adds: “Schools value the opportunity to have someone with relevant experience to act as a critical friend.”

While successful schools can expect to see little of the team, struggling ones are more likely to have a member with them for most of the time. Mr Kershaw’s temporary placement in Bradford Cathedral community college has largely restored order to the corridors and professional pride to the staffroom - the number of GCSE pupils gaining five A*-Cs more than tripled to 17 per cent this summer - although plans for a city academy have alarmed some neighbouring heads (see box).

Education Bradford knows it still has a “hearts and minds” war to wage, as scepticism about the motivation and methodology of the private sector lingers. Indeed, some of its initiatives have already backfired: at one point, all employees were sent stress balls bearing the company logo. “That was tacky,” says one head. Having an “interim” leadership team replaced after six months by a permanent one only added to the uncertainty; and the division between “client side”, as the old LEA is called, and Education Bradford is also confusing.

Shinaz Anwar-Bleen, headteacher at Iqra primary school in Manningham, is one of just three black or Asian heads in the authority. Her school, created during the reorganisation in Bradford, was burnt down in September 2001, just a year after it opened. Paul Brett, then leader of the team, came to see the damage. “They were there and they listened. But then things petered out,” says Mrs Anwar-Bleen.

Governors at Iqra are frustrated at the lack of progress in replacing the gutted building - a responsibility that remains in the hands of the LEA. The delay has been blamed on a wrangle with loss adjusters. It is in such areas that the new division of functions becomes difficult. “It does become very blurred,” says Mrs Anwar-Bleen. “If Education Bradford puts pressure on me to raise targets and my buildings are not up to scratch, somebody’s got to jump in and do something about it.”

Few doubt there will be a weeding out of personnel in the drive to raise standards. “Weakest heads face axe,” announced the Bradford Telegraph and Argus front page, following an interview with Education Bradford’s managing director, Mark Pattison. The story prompted a reassuring email to all heads within half an hour of the paper reaching the newsstands.

But, in some respects, the private-sector character of Education Bradford is camouflaged by the fact that most of its senior team have spent their professional lives in the public sector. Mr Pattison, for instance, reputedly on a six-figure salary, came from the unitary authority of Blackburn and Darwen, where he was director of education.

Meanwhile, Tony Thornley says he has been “a teacher for yonks”. He was a head in Leeds for a decade before becoming an inspector for HMI, where his brief included work with inner-city schools in challenging circumstances. He joined Education Bradford in February this year “with some trepidation”. He says: “I was not sure that a public service could be efficiently delivered by a private contractor. I was nervous that profit would drive everything. But our focus is very much on getting it right for the schools.” His second worry was Bradford itself, with its huge difficulties. “That’s still a concern,” he says. “But I’m enormously encouraged by the spirit and the wish in many of our partners that things should be better.”

One year on, and impressions among the partners are mixed. “It has seemed a slow process - and a long time in seeing where we might be going,” says Beryl Powell of Atlas primary school in Manningham. “It’s taken them this first year to get their people in place, but they seem to be genuine and they seem to be listening. It seems as if somebody’s taking notice in Bradford after all this time.”

Certainly, people outside Bradford are taking notice. Education Secretary Estelle Morris gave the privatisation her blessing when the Serco contract was signed last summer, and visited in May this year, two years after the failed Ofsted. Professor David Hopkins, head of the standards and effectiveness unit, spoke at the launch of Education Bradford last March, and the new chief inspector of schools, David Bell, addressed the first meeting of the revamped primary heads association in June. Film producer and New Labour stalwart David Puttnam chairs the Capital of Culture board, and David Mallen, former education chief in East Sussex, chairs Education Policy Partnership, a stakeholder body set up to moderate Education Bradford.

Education Bradford managers, using the language of the private sector, refer to schools as their “customers” - and, as users of the services provided by the company, they are. Yet schools are also their workers. In a city with the industrial heritage of Bradford, it’s a point not lost on heads and teachers. “Their bonuses depend on us delivering,” says one. Beryl Powell adds: “They’ve got a big job to do and they’re earning a lot of money. I’ve got a big job to do - I don’t get big carrots.”

Bradford is bidding to become European Capital of Culture in 2008. The Ofsted inspectors may have pause to reflect on the campaign slogan: “One landscape, many views.”

ALL IN THE MIX

Bradford Cathedral community college has long been a thorn in the side of education managers. Less than a quarter of a mile from the old education offices at Flockton Road, the historically troubled school was still prompting “very serious concerns” from HMI last December, having earlier been failed Ofsted. Executive headteacher David Kershaw came in at short notice and found “800 vulnerable young people and a lot of worried staff. The thing was burning. It was a long time since I’d come across such bad behaviour.”

A temporary senior management team (Education Bradford paid for two experienced associate heads and a middle-school head as well as Mr Kershaw) has restored order and improved prospects. Results have leapt in a single year. At key stage 3 the proportion reaching level 5 in English has increased from 12 to 60 per cent, while at GCSE the figure for students getting five A*-C grades has risen from 5 to 17 per cent.

But Bradford Cathedral community college is the kind of problem Education Bradford must solve. It was suggested earlier this year that the school combine with nearby Dixons city technology college to form a city academy on a split site. The CTC would specialise in technology and Bradford Cathedral on arts. Mr Kershaw welcomes the proposals, which would bring in pound;20 million, but concedes that local heads are less keen. “They are anxious. And some are angry.”

Fears centre mainly on admissions. But Mr Kershaw says Education Bradford has guaranteed to respect local, catchment-based admissions for Bradford Cathedral. He sees the proposed college sharing resources with other schools, funding teaching posts in feeder primaries and providing all-round services for this deprived community. “There could be a post office on site, a social services office, a housing department, midnight basketball leagues, a sixth-form centre for south Bradford. An academy working in partnership with local schools could be a catalyst of change for the good.”

Education Bradford managers also see a way to begin to tackle the city’s racial log jam. Bradford Cathedral serves poor, insular, white estates while Dixons’s selective admissions reflect Bradford’s racial make-up. Sir Stanley Kalms’s Dixons group has pledged pound;1 million of the 20 per cent input the Government requires from the private sector. If approved for government funding by the DfES, as seems likely in this large-scale New Labour testing ground, the school could be open by September 2004.