Funny business this profit motive

23rd January 1998 at 00:00
Should private companies be allowed to make a profit from supplying classroom education to children? Should a consortium of schools be run by a business which, quite legitimately, is dedicated to earning as much money as possible?

We are not talking here about the sale of goods and services to schools by private companies, or the many excellent education and business partnerships which exist. It is rather the proposal that schools themselves can be run for a profit, with national pay agreements for teachers suspended.

I have to declare that I am totally open-minded about the possibility of private businesses making profits from running schools. What do I care if some gang of spivs rips off education, or Flybynight plc shareholders loot the public purse?

If voracious City sharks manage to filch scarce cash from the very pockets of the needy, carve a fast buck out of some hard-up downtown school riddled with social problems, take the money and run, then good luck to them. Totally neutral on the issue, that's me.

Do not believe the hokum about how successful such privatisation has been elsewhere. Alongside any real or imagined "successes" should be put many failures and scandals. Some of these took place a few years ago, in the United States, when there was a vogue for what was known as "performance contracting", which involved private businesses being paid to teach children to read.

The same arguments were put forward in favour of "performance contracting" that we hear now: that public provision was failing, business was better and more efficient, the profit motive guaranteed success, the free market would ensure high quality as the inefficient operators went bust.

Many contractors became so desperate for success they stopped at nothing. Handed lucrative contracts, awarded on the promise that they would teach children to read more effectively than did their regular teachers, some simply coached pupils for the tests. In a number of cases they were so incompetent, even that did not work.

No doubt a few of the entrepreneurs who are eager to lick clean the British version of the big jar of jam, will put forward the argument that "efficiency gains" will produce the profits. Ha jolly ha is the answer to that. What is euphemistically called "efficiency" is often a staffing reduction, a service cut, or both.

It is hard to nail someone down to the detail of a contract when it concerns human matters, rather than inert goods. If a dealer who has been asked to supply 50 textbooks only sends 25, no problem. Just wave the contract and ask for the missing copies. Try protesting to shareholders if class sizes go up, or a special needs teacher is sacked.

So much hype is put into the positive benefits of business running education nowadays, it would be easy to forget the down side. Public service is, on the whole, altruistic and open-ended. Professional people do what they feel is needed. Hence the voluntary extra-curricular activities that teachers have run over the years. Private businesses will not usually go beyond the contract.

Remember the poor railway passenger, stuck on a station one evening, gasping for a drink, who tried to buy a cup of tea from a passing vendor. "Sorry, mate," was the reply. "I've only got the concession for selling on trains. People waiting on platforms have to use the buffet." The buffet was shut.

However, I don't want to be accused of not being progressive (Oops! Wash my mouth out with soap and water for even using the word), so I have been trying to imagine whether commercial and educational values can be reconciled, as the headteacher reports to the board of directors of the company running the school ...

"Ah, come in Jenkins, I think you know my fellow directors."

"Er, yes, Mr Fastbuck. It's still a little bit difficult for me to get used to Fastbuck Funeral Services running Swinesville comprehensive school."

"No matter. Now let's look at the balance sheet. I see the art department lost us a few thousand pounds last month."

"Yes, I'm very sorry about that, but the gas kiln in the pottery broke, and we had to get a new one."

"A new gas kiln. Now listen here, Jenkins, we could have fired a few pots for Pounds 50 an hour in the Fastbuck Funeral Services crematorium furnace, if you'd only asked. You've got to make full use of the Fastbuck business expertise and plant. Any of your lads misbehaving and we can take them away in one of the hearses for Pounds 5 a mile."

"I'll try and remember Mr Fastbuck."

"Now what's this about the head of science wanting an additional salary award. How old is he?" "He's 63 next birthday."

"Well he's not got much bargaining power then. Offer him half his present salary, and if the shock is too much for him, we'll do him a half-price funeral with a nice oak casket. What the directors want to know, Jenkins, is what are you going to do about the art department deficit?" "I've been working on that, Mr Fastbuck, and I thought we might hold a jumble sale."

"A jumble sale?" "You know, the parents bring things in and we sell them one Saturday morning."

"So what expenditure would be involved in purchasing these goods, what's the profit margin, and what are the labour costs?" "No, it's not like the funeral business, Mr Fastbuck. People give us things they don't need any more, and then parents man the jumble sale stalls for free."

"I'm sorry Jenkins, I don't understand the words 'give' and 'free' here. You mean, there are no purchase, transport or labour costs, and there is 100 per cent profit margin? Really? So tell me more about these parents who work for no salary. Can any of them handle a shovel?"

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