Public pleasure over private regret

21st September 2001 at 01:00
In the run-up to the schools' White Paper privatisation was in the spotlight. Ministers were enthusiastic. Unions were alarmed. But the reality has turned out to be much less dramatic than the rhetoric. Warwick Mansell reports

ONE issue dominated coverage of the recent launch of the Government's latest schools White Paper.

The 74-page document, Schools Achieving Success, put forward a mind-boggling selection of ideas and proposals in what was presented as an overhaul of secondary schooling.

However, it was the concept of privatisation which monopolised the headlines, with reporters and commentators wrestling with how much influence the Government proposed to give companies in the running of schools.

The debate had, after all, been running for most of the summer. Privatisation had been in the spotlight during the election campaign after leaks of a report from the Institute for Public Policy Research, which has strong links to new Labour, suggested that private contractors should be given much greater powers within the health service and over schools.

The weeks following the election were equally strong on suggestions of the potential involvement of corporations in state schools. The Government suggested, in a policy paper presented to governors' representatives, that it was prepared to allow firms to appoint a majority of school governing bodies.

In an interview with the Financial Times, schools minister Stephen Timms put forward the idea that individual school departments might be handed over to private management.

And there were even suggestions that ministers were considering giving companies the right to hire and fire teachers in state schools. Neil McIntosh, of the not-for-profit firm CfBT, claimed that firms had won this argument with the Government.

So were these hopes and fears realised? In every case, the answer is no: unions were right to claim that the paper represented a watering-down of their expectations of privatisation.

The first signs of this emerged over the summer as the plans were delayed following an outcry from the unions. According to one version, Downing Street supported some of the more radical ideas, the Department for Education and Skills was less keen and the whole move folded in the face of opposition from the Trades Union Congress, led by the National Union of Teachers and the National Association of Schoolmasters Union of Women Teachers.

In the eyes of the entrepreneurs, the issue of whether firms would be given the right to employ teachers was the most crucial. The White Paper makes clear that, when a school works with a "partner", "staff would remain employed by the LEA or governing body, as now".

Although several companies to whom The TES spoke this week talked about their enthusiasm for the opportunities the paper presents, privately there were almost unanimous sighs of disappointment.

Henry Pitman, chairman of the Tribal Group, which is on the Government's list of companies approved to take over struggling local authorities, said that the American version of privatisation, as practised by the publicly-quoted firm Edison, had been ruled out.

Edison's control over its 140 schools is much stronger than that any English firm is likely to enjoy, because the company employs teachers and school managers directly.

Without this power, said Mr Pitman, companies will find it harder to deliver improvements. He said: "It's difficult to run any business, and in particular it's difficult to turn around and improve a business, without full management control of staffing.

"If companies aren't going to be able to control the inputs, how can they control the outputs?" Insufficient hire-and-fire powers were cited as a key factor in the failure of not-for-profit firm CfBT's bid to turn round Rams Episcopal school in Hackney. (See panel).

If the firms could not employ staff directly, the next best thing would have been for them to be given the ability to control school governing bodies, through appointing the governors. But, again, there is no provision for this in the paper.

That does not mean it will not happen. In fact, it already has. Surrey County Council last year closed Kings' Manor, a community comprehensive in Guildford, and re-opened it as a voluntary-controlled school under the management of a non-profit making firm, 3Es. (See panel).

Current rules for voluntary-controlled schools allowed the company to appoint a majority of the governors. But it was impossible for this to happen while the comprehensive was a community school. The White Paper will not change that.

So what remains for the private sector? There are three main areas. Firstly, the paper says ministers want to "encourage" all schools to establish new partnerships with, for example, voluntary organisations, faith groups or private firms.

FE colleges with vocational specialisms might work with schools, faith groups might help to build a school's ethos and a company could provide management support for a headteacher. Although some of these ideas are relatively new, they are not radically different from what is already happening in schools.

Secondly, and more controversially, local authorities will have to invite bids from companies and indeed "any third party" whenever there is a need for a new school. The winning bidder would be responsible for building and running the school. Although the Local Government Association has expressed reservations about the fact that ministers, and not councils, will decide who wins these contracts, again the prospective rewards for the private firms will be limited.

This is because, at up to only 30 a year, the number of new schools will be relatively small. And again, private companies will not employ staff directly, though one could imagine the Kings College model operating.

This means that the market for firms interested in running schools will focus on tackling failure. Local authorities will be forced to consider bringing in a partner to "help turn around" any school which is adjudged weak by inspectors.

The size of this market should not be underestimated - 547 schools were adjudged failing in 1999-2000. With budgets of up to pound;4.5 million each, there is scope for the private sector here.

But this looks like consultancy support for schools, with companies possibly appointing interim heads, but not employing staff, rather than full-scale takeovers.

And will companies rush to take on difficult schools, when the possibility of high-profile failure is considerable? As John Simpson, director of education at Tribal, said: "Running schools in potentially the most challenging circumstances seems to me to be about the best thing any organisation can do in terms of social justice.

"But there are risks associated with such contracts."

None of this means that the private market in education, valued last year at pound;5 billion by finance house Capital Strategies, will not continue to grow.

Mr Simpson talked excitedly about the opportunities created by the extra Government investment in computers, buildings and teachers' professional development, which were all predicted in the paper. He welcomed the encouragement for schools to seek management support. But none of these are new areas for private involvement.

As Graham Lane, education chairman of the Local Government Association, put it, the key is that the public sector remains in control.

He said: "The real danger was companies taking over employment of staff. If that had happened, you would have had the privatisation of the state education service in this country. I think it would have made the position of any Labour minister untenable, and I think people would have begun to ask questions about the future of the Labour party.

"It is to the great credit of Estelle Morris that it wasn't allowed to happen."

Private support for and ability to profit from state education will continue to grow. However, the nature of the involvement will not be quite what was hoped for or feared.


THE former Kings' Manor comprehensive was a failing school, with a falling roll, when Surrey County Council decided to hand it over to private management in 1998.

3Es, the not-for-profit arm of Kingshurst City Technology College, Solihull, won a 10-year contract after winning over sceptical parents, and immediately set about reproducing much of the Kingshurst ethos.

Kings' Manor closed last July, having been been guided out of special measures with the same group of teachers but under an interim head appointed by 3Es.

The school then re-opened as Kings College, a foundation school with mainly new staff and with 3Es allowed to appoint the majority of governors.

The school, which received around pound;1 million from the council for refurbishment, has won plaudits in its first year for improvements in pupil behaviour and exam performance. The proportion of pupils gaining five or more good GCSEs rose from 17 to 26 per cent this year.

And pupil rolls are set to rise - the number of Year 7 pupils choosing the school rose fourfold this year compared with the last year of the old school, said principal David Crossley.


CfBT was the first company to take over the day-to-day running of a failing school when it won a one-year contract to drive improvements at Rams Episcopal primary in Hackney, east London.

The school was one of 18 "named and shamed" by schools minister Stephen Byers in 1997, and had been in special measures for more than three years when CfBT's involvement began in September 1998.

The company initially seconded a head, Marianne Harris, and ran the school in partnership with Hackney council and governors.

However, the promise of a turnaround quickly proved to be a mirage: the school remained in the failing category when the not-for-profit company left in July 1999.

CfBT's chief executive, Neil McIntosh, said the firm's lack of control over staffing undermined its chances. The local authority and governors vetoed recommendations to remove a staff member and demote two others, while Ms Harris was replaced against CfBT's wishes, said Mr McIntosh.

The school was closed and re-opened under the Government's Fresh Start scheme a year ago.

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