Private sector plans early deals to crack free schools market

23rd July 2010 at 01:00
Companies to offer reductions in service costs in return for future business 'worth millions'

Private sector companies are aiming to become "investing partners" in state-funded free schools before they even open, in order to secure contracts worth millions further down the line.

The companies intend to offer free or discounted advice and project management to teachers, parents or other groups while they set up the new state-funded schools, in return for a guarantee of support service business once they are established.

The model was outlined to The TES by Mouchel, which already has a #163;30 million-a-year business selling support and "back office" services such as payroll, procurement, ICT and training, to mainstream state schools and now wants to expand it to free schools.

It aims to offer them the project management it has previously provided to academies preparing to open, as a loss leader to try to crack the new market.

Marcus Fagent, Mouchel's education sector leader, said he thought competing companies offering the same range of services would be doing exactly the same thing. He believes it could help plug a gap in state funding for free schools as Government budgets come under pressure.

"Obviously in the academies market the creation of academies has been quite well funded," he said. "We have been paid via the DCSF (Department for Children, Schools and Families), as was, and that has covered the cost.

"But of course in the new market I think we all expect there will be less money to do that so deals like this will become the norm."

Mr Fagent said support service contracts in a secondary school could be worth up to #163;1 million a year.

John Bangs, NUT head of education, said: "There is a lot of stuff about parents running free schools, this is (Michael) Gove's 'big society' contribution.

"But it is rubbish, basically. The reality is that free schools represent the biggest offer to private companies, and parents and teachers will be contracting them to do everything except the basic governance."

Mr Fagent stressed that his company would not get involved with the actual ethos of free schools. But he did say the initial support it offered could include "the creation of educational visions" as well as writing business plans and creating management structures.

"That all takes time and effort, so we would support them in doing that and we think that would cost quite a bit of money, quite a lot more money than is available to them at the moment," he said.

"So we would give them that at a discounted rate or, in some cases, free against the value of the service downstream. It keeps us as a behind-the-scenes partner. We are not driving the educational ethos, we are a support partner."

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