Should government treat schools like dustbins and teachers like refuse-collectors? The public has had nearly two decades to become accustomed to the idea of public services being contracted out to private companies. Yet it remains sceptical about the extension of private sector tentacles to two cornerstones of the welfare state: health and education. And that public commitment to a state-run health and education service is founded on more than tradition or sentiment.

Other things being equal, the public sector should be able to deliver services at lower cost than the private sector for one simple reason: in a private company, shareholders have some call on any surplus. Investment will always be reduced by the demand for dividends. However, private firms have sharper incentives to operate efficiently, so they may in reality deliver “best value”.

Much of our education system can and does benefit from private- sector involvement: educational publishers are crucial to the Government’s literacy and numeracy strategies. Local management has granted schools the autonomy to shop around for peripheral services such as cleaning or transport. But would creating a competitive market be similarly beneficial to a school’s core operations, namely governance and teaching?

The difference may lie in the unquantifiable extras inherent to these core services. As the recent teaching awards demonstrated, the best teachers take on informal responsibilities far beyond their job descriptions. It may be difficult to reduce such responsibilities to a series of quantifiable deliverables that a contract with a private provider would demand.

The education system is already accused of valuing what can be easily measured, rather than trying to measure what is truly valuable. Any contract would further emphasise the former, at the expense of the latter.

And what about the costs of failure? In the private sector, failure is ultimately punished by the loss of the business itself.

Employees will suffer when a business closes but - at least in theory - those employees have contributed to that failure.

But in education, failure of a private provider would inflict considerable and irreversible damage on entirely blameless children. Of course, this is not to argue that there isn’t failure in the public sector nor that such failure hasn’t damaged generations of children. But it is to argue failure in schools is better dealt with through public policy rather than the market.

Also, while the Prime Minister may, as he said recently, be bearing the scars of resistance to change in the public sector, the recalcitrance of even the teaching unions does not compare with the hostility of organisations such as the Confederation of British Industry to the regulation of business.

Listening to business leaders talk about the the minimum wage or energy taxes it is worth remembering that, in a privatised education system, every Department of Education and Employment circular would be attacked as a burden on business. How would a privately run service have responded to recent reforms such as the introduction of a citizenship curriculum, a fairer admissions process, or targets for cutting exclusions?

Schools urgently need to reconnect to their communities. To do this, they need to draw on the potential energy already stored in those communities. If this is to happen we may need to think creatively about breaking the nationally controlled, local education authority-managed monopoly on state schools. But the challenge for everyone from individual teachers to the Secretary of State, is to make schools more responsive to their own immediate stakeholders, not distant shareholders.

Matthew Taylor is director of the Institute for Public Policy Research and former assistant general secretary of the Labour party