Adam Luck reports on the troubled English Schools Foundation

From the terrace of the Royal Hong Kong Yacht Club, early evening drinkers sip sundowners and take in the view: a blood-red sunset framing vertiginous skyscrapers down to the harbour front. For years expatriate British teachers have relaxed here, reflecting on the fact that tomorrow they face well-behaved pupils eager to learn, in immaculate schools with lavish facilities and activities galore. The average teacher’s salary of pound;67,000 comes with extras - school fees and accommodation are subsidised, and exclusive holidays are on offer: beaches in Thailand, outback adventures in Australia and skiing in Japan. Weekends can pass in a blur of barbecues and boat trips to idyllic islands for al fresco Cantonese seafood banquets.

Sounds like a dream come true? Well, for some it has been, but things are changing at the English Schools Foundation (ESF), which employs 800 teachers - 640 of whom are British - in 19 schools and was an icon for excellence in colonial times. The ESF encompasses 12,000 pupils following a British curriculum, although by 2008 it will have switched to the international baccalaureate. Such is its reputation among the professional classes that 14 per cent of its students are Hong Kong Chinese, a proportion which is rising. The waiting list is long. A*-C passes in 2004 stood at 92 per cent for GCSE and 86 per cent for A-level, and ESF students go on to Ivy League, Oxbridge and top London universities by the score. Not bad when you consider many do not have English as their mother tongue.

Recently, however, the ESF has been attracting media attention for reasons that have nothing to do with its educational excellence. Despite its well-earned reputation as a honey pot for British teachers, the organisation has become more like a hornets’ nest - with a sting in the tail to come.

Last week 400 teachers attended an extraordinary general meeting of their staff association where they voted by an overwhelming majority to withdraw goodwill and “review work practices”. The object of their anger was ESF’s chief executive, Heather Du Quesnay, who arrived in February from the UK’s National College for School Leadership.

Ms Du Quesnay is an experienced campaigner, having been head of education in Hertfordshire and Lambeth - where she was also briefly chief executive - before being appointed head of the NCSL in 2000. In October Ms Du Quesnay, who came to Hong Kong with a brief to shake things up, unveiled a swingeing round of cuts to ESF teachers’ pay and perks; some reckon it amounts to 10 per cent or more. And that’s on top of a pay cut of nearly 4.5 per cent imposed last year.

At last week’s meeting, Julian Harniess, head of English at South Island school and chairman of the Association of Professional Teachers of ESF Schools, said the work to rule could mean restricting extracurricular activities to school hours only, refusing to attend staff meetings and refusing to co-operate with new initiatives. He said the association would also be taking ESF to court over the wage cuts. “The question will be, ‘Can I afford to give up all these hours for meetings, extracurricular activities, preparation, drawing up new initiatives and marking?’ And I think the answer will be, ‘No, I can’t’. Then we will see whether she (Ms Du Quesnay) is prepared to take us to court, because I can promise you we are going to be taking her to court. ESF will not be the place it was before.”

Ms Du Quesnay has warned teachers that they risk being sued for breach of contract if they work to rule. Mr Harniess told Friday magazine: “They have been bullying and aggressive, and are clearly prepared for a fight. But so are we. The whole process has been fairly acrimonious and the morale of teachers is at rock bottom. This is a demonstration to the government that management can control teachers’ pay. It’s all very cynical.”

Set up in 1967 by the colonial government of Hong Kong, the ESF was a comfort blanket for expat parents reluctant to send their children home to boarding school. Thirty years later, when the UK handed Hong Kong back to China, the new Beijing-approved administration promised it would be business as usual. For the new pro-China elite and ESF management there was, however, a financial time bomb in the classroom. This was the government grant, which currently stands at HK$278 million (around pound;21 million) a year and makes up 28 per cent of the ESF budget.

In 1999 the new government froze the subsidy, ruling that it gave ESF an unfair advantage over other international schools in Hong Kong, and recommended a phased withdrawal, to be completed by 2008.

The appointment of Arthur Li as education secretary in 2002 brought a further hardening of the government’s attitude. Mr Li harbours ambitions to lead Hong Kong, and no one was left in any doubt that he would take a tough stance on the ESF.

Anticipating Mr Li, the ESF attempted to reform itself. Jonathan Harris, a former chief education officer for Cornwall, was appointed chief executive in 2003 with a mandate to modernise the organisation, but lasted barely six months. His agenda for change was apparently too much for powerful forces within the ESF hierarchy which had a vested interest in maintaining the status quo. Then, in February 2004, three top ESF officials - the chairman, vice-chairman and treasurer - were forced to resign after the executive committee failed to ratify their choice to replace him.

Within days, a letter from Mr Harris to the executive committee had been leaked. It painted a damning portrait of paranoia, profligacy and bad management.

Mr Li had his pretext. The next day he announced: “I hope I don’t have to come down on the ESF like a ton of bricks.” He ordered an independent audit of the ESF, and the organisation duly found itself buried beneath a truckload of bricks in November last year when the audit commission released a report that highlighted excessive wages and organisational paralysis, and questioned whether the subsidy should exist at all.

Speaking from her office perched high above central Hong Kong and with bird’s-eye views of the Happy Valley racecourse and the Kowloon Hills, Heather Du Quesnay says: “We appointed external consultants and they came back with figures which demonstrated that ESF teachers are paid considerably more than their peers in the UK, Australia and Hong Kong’s international schools. This has been an issue ducked for so many years.”

Teachers reacted with fury to the subsequent cuts, pointing out that the ESF management had failed to reveal the figures in the consultants’ report - claiming contractual confidentiality - and that Ms Du Quesnay had ignored her own remuneration committee, which cautioned against action. The chief executive’s refusal to reveal her own salary - widely rumoured to be adjacent to pound;200,000, sweetened with a substantial end-of-contract bonus and garnished with additional perks - has further infuriated teachers and parents.

One senior teacher says: “She is over here on a fat wage packet and once she has finished slashing our pay packets will no doubt pick up a nice bonus. Why doesn’t she offer to show us the way and cut her own pay first?

“As far as I am concerned she is just a Blairite hatchet-woman imported from the UK to do the dirty work, but when she leaves we will be left to pick up the pieces.”

Ms Du Quesnay laughs off such accusations, but does not deny that her job has made her unpopular with the teachers. She argues that the criticism is a diversion from the main point: that ESF teachers are paid more than in the UK, Hong Kong and many rival markets and that even after the cuts they will still fare better than their colleagues.

Under a 12-point scale, basic monthly salaries range from pound;2,198 to pound;3,848, but most ESF teachers are towards the top of the scale, according to management, and Hong Kong has low tax rates. Managers also point to incentive allowances that averaged pound;7,200 in 2003-04, end-of-contract gratuities and various perks. Teachers claim these are overvalued, and in some cases worthless.

Julian Harniess says: “I brought up a family of five on my wages and I don’t have lots of savings. You have to remember that teachers here do not get pensions and that the cost of living is very high, not least in terms of rent.”

David James, the head of ESF’s flagship Island school until he retired this year, says the teachers are worth the money: “ESF teachers are among the best-paid British teachers in the world, but I don’t think that is a bad thing. Why shouldn’t they be well paid? They are contributors to an excellent schooling system that is one of the best in the world.”

In the new year the ESF will begin a new recruitment round in the UK for teachers to start in September 2006; job vacancies run at around 10 per cent a year, so there may be more than 70 teaching posts plus headships.

Ms Du Quesnay says: “The ESF is teachers’ heaven and the ethos of the schools is absolutely superb. The pupils are work-focused, discipline problems are unknown and our provision in the visual and performing arts is very strong.” Those posted to the purpose-built West Island school, for example, will find fully equipped gyms, a swimming pool and extensive athletics and sports facilities overlooking the sea.

For teachers sitting in an icy staffroom in sleet-soaked Britain, the prospect of sundowners in Hong Kong may still seem alluring. But when they open the recruitment pages of The TES in January, the advertisements from the ESF are likely to be jostling for space with notices painting a rather different picture.

Mr Harniess says: “We will be placing ads during the recruitment drive. We will be stating the facts about what teachers will face when they come out here. We are determined to fight the management on this.”

All of which might make Hong Kong sound a little too much like a home from home.