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Privatisation and values

Labour's plans to hand over failing schools to commercial firms took another half-step forward this week with the news that Nord Anglia is taking over the management of Abbeylands school in Surrey. This is not yet full privatisation - the company will simply draw a management fee. Complete takeover of a maintained school is not possible under existing law and it remains to be seen how far Labour's promised legislation would take us down that road. But it is enough to give rise to further protests about profiting at the expense of children's education.

Firms have been doing just that for years from ancillary services such as school meals, cleaning and transport, where the objectives are clear and private-sector involvement has been driven by efficiency savings. But when it comes to handing over the running of whole schools or education authorities, wider social and political questions arise. Decisions about values and priorities have to be made. Moreover, it is not as clear how the broader public interest in children's education can be reconciled with the imperative to maximise profits.

Some companies even question whether it s possible to make any profit out of schools (page 14). Michael Sandler, an entrepreneur and authority on the for-profit education industry in the United States, which is 10 years ahead of ours, told an Adam Smith Institute seminar last week that the conflict between the interests of shareholders and stakeholders in schools was "irreconcilable".

Failing authorities and schools may provide justification for such handovers, faute de mieux. It is even arguable that the public-sector rescues of authorities like Liverpool owe something to the threat of private takeover concentrating the minds of managers and managed alike. But it remains to be seen whether it is possible to devise contracts for running schools that guarantee the accountability to stakeholders, broad curriculum and achievement for all expected of the public sector.

If they are feasible, such contracts - up to a standard rather than down to a price - might even benefit education. Governments can ignore schools and authorities which complain it can't be done for the money. But they have to listen to commercial operators who can simply decline the business.

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