Like bees round a honeypot

19th December 1997 at 00:00
It's boom time for private-sector companies wanting a share of the latest business. Worth a potential Pounds 5 billion, its name is education. Neil Sears reports

It has happened so fast that we could be forgiven for having missed it, but, under our very noses, schools have been funding one of Britain's fastest growing industries.

While national attention has been focused on what educational reforms have meant for teachers and children, those reforms have also had an unprecedented impact on a group once rarely heard of behind the school gates: business people.

With increasing budgetary freedoms given to headteachers and governing bodies, and the chiselling away of local education authority powers, an ever lengthening list of business opportunities has presented itself to the private sector.

Once, LEAs dealt only grudgingly with private firms, buying textbooks from them through necessity. Now, schools are working directly with private-sector companies offering everything from a few hours' teaching cover to weeks of specialist consultancy.

And, while these new education industries are in their infancy, with enormous potential for growth, entrepreneurs are circling Britain's 25,000 schools like bees around a field of honeypots.

"It's still a bit like the Wild West," says Ray Mercer, one of the two owners of private supply teacher agency Capstan. "It's totally unregulated."

Mr Mercer, entrepreneur though he is, believes new Government rules will be necessary to regulate this frontier territory. Yet he is convinced that private businesses are transforming schools for the better.

According to its champions, private enterprise will free heads and teachers from distractions and allow them to concentrate on teaching, while their classrooms are buffed to a brilliant shine by private cleaning firms, and the school paperwork is flawlessly completed by private office management teams ...

Critics have a different vision, one in which teachers find themselves working for penny-pinching private companies, with their wages under irresistible pressure.

Sadly for the critics, private firms appear to be in schools to stay.

It was the 1988 Education Act and local management of schools which created the conditions under which entrepreneurs could expand their educational operations - and subsequent developments ensured continued growth.

At present, the exact amount of money that business is making out of schools remains difficult to calculate; when asked, the Department for Education and Employment confesses it has no idea. But, with the state's total expenditure on schools standing at some Pounds 18 billion a year, and increasing portions of individual budgets outside of teachers' salaries being freed up to be spent wherever schools like, education is already potentially a Pounds 5bn business, and growing.

"I suspect that the people who could tell you how much the schools market is worth won't, because they're making so much money," says Professor Ted Wragg of Exeter University. "The whole idea of handing public services like inspections over to private enterprise is scandalous."

Yet even Professor Wragg accepts that private enterprise is too solidly entrenched in education for it go out the way it came.

"I don't think we'll go back to having local authorities as sole providers, " he says. "There was a lot of aggravation when you had to wait three weeks and fill in four forms to get one 14-amp plug."

Professor Peter Mortimore, director of the London Institute of Education, believes we could be in just the first phase of the revolution. As LEAs shrink, he says schools are increasingly looking at binding into clusters and buying in bulk from the private sector.

"Schools are finding that it's not efficient to operate on a small scale, " says Professor Mortimore. "If you had 40 schools operating together, things could be much more cost-effective.

"And my gut attitude is that we might well come to one of the management consultant companies setting up a means of managing staffing issues, salary issues and all the back office side of things for those groups of schools, in the same way that local authorities used to.

"But we are at a crossroads, and where we go depends on the attitude of central Government."

The management consultants have, in fact, decided which way we are going to turn at that crossroads, and are already at work.

Among them is Graham Walker, who heads the government services department at Arthur Andersen accountants. He is helping educa-tion minister Estelle Morris to find ways of cutting bureaucracy in schools, and is working with both the DFEE and local authorities to create an explosion in the number of Private Finance Initiative schemes in education.

Just one PFI scheme is in motion: Colefox School in Bridport, Dorset, is being built anew in a deal with Jarvis PLC. For the next 30 years the school buildings will be maintained by Jarvis in return for a flat annual fee from the LEA. Mr Walker says that many more schemes are on the verge of being signed.

"With creative PFI schemes we will find new ways in which the private sector can help schools and LEAs to achieve their objectives," says Mr Walker.

"I believe that schools will be putting all their back office services into the private sector within a few years - and if you have one company servicing 200 or 300 schools, the whole thing could work much more efficiently."

The Labour Government has already given clear indications of just how keen it is to do business with businesses. A new scheme similar to PFI - the Public Private Partnership Programme - is up and running, and droves of businessmen have been invited into the DFEE to discuss how they can work together with the state.

Last month, Education Secretary David Blunkett declared that five PPP programmes were to be piloted with the aid of Pounds 1 million of Government money. School repairs could only be tackled through working with private expertise, he said.

"The Public Private Partnership Programme has advisers on hand for LEAs and schools to develop these new multi-school or multi-service publicprivate partnerships," said Mr Blunkett.

The Centre for British Teachers in Reading is one of a number of operators attempting to offer a whole range of educational services. Originally simply a provider of teachers and teaching expertise overseas, CfBT inspects more schools than any other organisation in Britain, carries out teacher training, offers consultancy packages, and has won a key Government literacy and numeracy project contract. From January it will be offering a supply teaching service, too.

"The market is opening up - and I don't have any doubt it will continue to grow," says CfBT chief executive Neil McIntosh.

"I would like to develop to the point where the schools that come to us come to a one-stop shop. In principle there's no reason why private companies shouldn't run whole schools."

Barbara Copland, marketing director of the Castle View school catering company, says that "turnkey projects", in which all the teachers have to do is open the doors and teach, with the construction of the school and all of its maintenance and paperwork cared for by dedicated professionals, could hardly be closer. Castle View already has a "facilities management" division getting ready to help manage consortia of schools for cash.

"We're involved in one joint project with five schools," says Mrs Copland. "We're working with other companies to build and run them. Watch this space. "

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