State schools being run for profit

7th August 2009 at 01:00
Should teachers worry? Two experts take issue on proposal

Continuing our summer series, two policy experts take issue with one another over the proposal that companies should be allowed to manage maintained sector schools to make money:

  • Have your say and cast a vote in the poll on the right
    • Helen Flynn is a national executive member of the Campaign for State Education and says `Yes, private companies can go bankrupt or simply fail; essential public services have to keep on running'

      Three main arguments should lead teachers to the obvious conclusion that they must care very much about the idea of state schools being run for profit: ethical; feasibility; and whether education - a public good under current legislation - can be reliably placed in private hands.

      An ethical argument would say that if taxpayers' money has been set aside for the education of children, it should not be made available for commercial profit. But more importantly from a teacher's perspective, education incorporates so many more elements than what is simply measurable and can, therefore, be manipulated to produce a financial profit.

      Of all the essential public services, education is the most holistic and can uniquely affect the life chances of an individual. As the Plowden Report of 1967 asserts: "At the heart of the educational process lies the child." This runs counter to the "heart" of any private company's remit, which is to yield a profit.

      Guiding a child through the first years of their life is a truly complex process. Teachers care for children, help them to develop an enquiring and reflective mind, act as role models, understand each child's home life, and can evaluate special needs. How could these skills be commodified to yield a profit?

      While some products of teaching can be measured, many others cannot. Happiness, confidence, self-esteem, fulfilment, tolerance and love of learning are significant outcomes that are less easy to measure but are immeasurably important when it comes to how well children will be able to steer their way through life.

      The second argument concerns whether private companies can make a profit on state schooling. Are state schools really so inefficient that significant efficiency gains can be produced in order to deliver shareholder dividends? In a political arena famous for constantly shifting the goalposts via ceaseless initiatives, would private companies be able to make the necessary quick adjustments to their business plans and cash flow forecasts to guarantee dividends? And how exactly can requirements such as Every Child Matters, inclusion, special educational needs provision and exclusion targets be made profitable? How many managers would you need to implement innovative practice, or would we simply re- style headteachers as chief operating officers?

      In the efficiency drive, it would seem likely that teachers would assume a role more akin to graduate technicians. High-stakes testing would become even higher stakes as the National Curriculum would be ever more narrowly "delivered" so that the requisite results could be achieved in order to guarantee shareholder dividends and the school's relative position in the market.

      After all, the consumers - parents - are always free to shop around. It seems unlikely that profits could ever be of bonanza proportions, or even reliable, after the first phase of efficiency savings had taken effect.

      Can you successfully and reliably privatise a public good, such as universal education, over time? Some in the private industry think not. In 2005, Lord Brown, then BP's chief executive officer, told the World Economic Forum: "The public sector and the private sector are different. It is dangerous to introduce private sector practices into the development of the essential public services."

      It is interesting to ponder why for the last 30 years British government has continued to look to the private sector to "transform" essential public services. After all, whereas private companies can go bankrupt or simply fail, essential public services have to keep on running.

      So what would happen if private companies decide there is not enough profit to be had or they fail? Who would bail out the schools? As we have seen from the recent banking collapse and various failed private finance initiatives, it is the state that acts as the safety net.

      Recent history from the United States has shown us that an experiment in running public sector schools for profit has substantially failed. From ambitious beginnings in 1992, Edison Schools had been forced by 2008 to give up on most of its contracts for managing public sector schools. Now renamed Edison Learning Inc, the company has diversified from the management of schools into marketing supplemental services such as testing, summer schools and tutoring.

      If a school is to be run for profit, it should be nothing to do with the financial variety. "Profit" derives from the Latin verb "proficere", meaning "to advance", and this is the type that should concern teachers. They should worry that children in their care do, indeed, advance, grow and learn during their years at school.

      But they should have no truck with pupils being used as generators of annual dividends for faceless and remote shareholders.

      Anna Fazackerley is the head of the education unit, Policy Exchange think-tank, and says `No, our centralised education system simply does not trust teachers to use their experience'

      It is hugely telling that those who argue against schools running for profit do so with emotion rather than evidence. In her impassioned defence of the status quo, Helen Flynn warns that teachers will be recast as "graduate technicians", headteachers as CEOs and pupils as "generators of annual dividends for faceless and remote shareholders".

      Such language is reminiscent of the sort of novel one only reads on a foreign beach under a very big umbrella in August, and does not get to the root of any of the real issues we ought to be discussing.

      First, let us tackle the obvious question of why we need change in the schools system. Teachers are broadly agreed that years of centralisation have removed their ability to do things in new ways, slowing them down with exhausting layers of new bureaucracy. The message coming out loud and clear from Whitehall has been that officials and ministers know better than those in the classroom how teaching should be done.

      In her argument, Flynn underlines the importance of a teacher's cumulative knowledge. Good teachers act as role models; they understand what makes pupils tick; they can see beyond exam results to develop the whole child. Of course this is right. But the fact is that our centralised education system simply does not trust teachers to use their experience in this way.

      Plans to free things up, taking a sizeable proportion of schools away from central and local government control and allowing new providers to run them, would be good for teachers. It would give them the freedom to try new ideas and to shape education based on their experience of what really works in classrooms. They could even test this freedom more literally by setting up their own schools.

      So what has all this got to do with profit? Why can't we simply allow charitable and non cash-making organisations to run these new schools? The crunch issue here is volume. The Swedish "free schools" system, often cited as a model for us to follow, has been driven by profit-making chains of schools, which use their returns to invest in new schools and improve on their success. The question that politicians here would rather avoid (for fear of unleashing a torrent of emotion) is can we really open thousands of excitingly free state schools without the support of the private sector?

      This issue is already starting to come to a head with the academies programme. Although not fireproof, it makes sense to have federations running a number of schools because they can scale up success, share educational experience, resources and back-office support, and develop leaders who can then move around within their group. But there are only five groups with five or more academies open or planned. Some of these are already close to capacity. Crucially, a significant number of potential multi-academy sponsors say they have been put off by the inability to make a profit.

      Tony Blair and his advisers were well aware that there was no logical reason to exclude for-profit companies from the academies programme. Blair realised that he would be artificially limiting the supply of schools by not allowing profit, but dropped this particular political potato because it felt too hot.

      In his first term, when his political capital was high, Blair's team fully privatised a number of failing local education authorities. And there is plenty of evidence that this is working. A recent analysis of those authorities by employers' organisation the CBI shows they have improved significantly faster than other authorities.

      Of course, other parts of the public sector have been opened to private contractors in recent years: notably prisons, hospitals and welfare-to- work. This prompts unions to champion schools as the last bastion of the public sector, to be defended at all costs. But the truth is that the evidence on private involvement in these sectors is also positive. For example, private brokers operating programmes through the new deal for disabled people have been more successful in getting people back to work than voluntary or charitable providers.

      Nonetheless, creating sufficient capacity in the market is an issue more likely to excite policy wonks than teachers. And the idea of more freedom is attractive in principle, but what about in practice? Will working conditions be harmed in pursuit of filthy lucre?

      Crucially, in Sweden, free schoolteachers feel much happier in their jobs. Recent polling by the Swedish Confederation of Business showed they are more positive than teachers in state schools in 11 out of 13 categories. Teachers at free schools take more pride and enjoyment from their work and receive more interesting tasks.

      This is the sort of real evidence we should be listening to.

      Back story.

      • The Conservative party is keen to emulate parts of the "free school" system in Sweden, where hundreds of schools are run by education businesses which receive state funding.
      • Last year, the Government opened the door to let for-profit groups run pupil referral units.
      • Several companies have expressed an interest in running British state schools if they are allowed to make a profit.
      • A report by Policy Exchange think-tank said that if Conservatives wanted more providers of schools, "for-profit groups are more likely to have the necessary scale".


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