How the coalition is privatising state education

Never mind the future threat of for-profit schools, privatisation of English state schools is already underway.

Never mind the future threat of for-profit schools, privatisation of English state schools is already underway

When Nicky Morgan revealed that she would not rule out paying companies to run state schools, Tristram Hunt denounced the new education secretary as:

“motivated not by improving the learning outcomes for all children, but by the prospect of using state schools to generate dividends for shareholders. Nicky Morgan’s refusal to rule out letting companies make a profit out of our children’s education reveals the [Tories’] true intentions.”

A strong statement, you might think, and exactly what a Labour shadow education secretary should be saying. But here’s the rub.

The government’s academy programme already allows companies to make a profit out of children’s education and Tristram Hunt – and Ed Miliband for that matter – has failed to condemn it.

The academy programme allows for a relatively subtle form of privatisation. Academy trusts – the ‘charitable’ companies which run one or more academy schools – are not themselves allowed to make a profit in the sense of paying dividends to shareholders. However, rules allow businesses and individuals to use academy trusts as profit-making vehicles.

Companies and individuals who sell their own goods or services to their academy trust

A common money-making method is for those who establish academy trusts to then charge that trust for goods or services provided by them personally or by a business in which they have an interest. There is nothing in law to stop this.

Unsurprisingly, this manifestation of the profit motive is often at odds with the best interests of pupils and the taxpayer.

Take for example the Aurora Academies Trust (AAT), a trust established by the controversial global edu-business Mosaica Education Inc which currently runs four state primary schools in England. Mosaica owns a patented curriculum called Paragon. AAT pays Mosaica for the use of this curriculum which all teachers must then use. The most recent available figures show AAT paying £100 per pupil per year for the use of this curriculum.

As Warwick Mansell points out in the brilliant TUC-commissioned report Education Not for Sale, there are all kinds of things wrong with this arrangement.

Firstly, part of a teacher’s job is curriculum development. Teachers are both trained and paid to do this. By paying for the use of a patented curriculum, you’re paying for something that you’d otherwise get for free (unless of course you increasingly get rid of skilled and experienced teachers and replace them with cheap unqualified staff who don’t have such skills).

Secondly, by forcing teachers to follow a patented curriculum you prevent teachers from developing and honing the skills involved in curriculum development. In short you are deskilling the workforce.

This is clearly bad for education and the teaching profession, but it’s rather good for those companies that sell patented curricula as teachers with no experience of developing a curriculum will become increasingly reliant on their products.

To make matters worse, the paragon curriculum has been criticised by Ofsted for lacking local dimension and Mosaica Education Inc has a worrying track record of running schools in other countries, pulling out of many contracts part-way through.

Aside from patented learning programs, there are numerous cases of influential individuals within academy trusts selling their goods or services, or the services of their relatives, to that trust.

Here are two typical examples, courtesy of an Observer investigation: School Partnership Trust Academies which paid £424,850 for legal services to Wrigleys Solicitors, the trust director’s law firm, and for education consultancy to Elmet Education, where another member of the trust is a director; and The Elliot Foundation which paid £452,373 to founding directors for their consultancy services and for travel and subsistence expenses.

Then there’s the Academy Enterprise Trust (AET), a chain that runs 77 schools and was recently criticised by Ofsted for poor performance, which last year was exposed as having made almost £500,000 worth of payments to businesses owned by its trustees and executives. None of these contracts were put out to competitive tender.

Last month it also emerged that AET is setting up an outsourcing business which will provide all non-teaching posts, from secretaries to caretakers, to schools which choose to outsource these roles. First in line to do so will presumably be the AET ‘charitable’ trust on behalf of its 77 schools.

Computers replacing teachers?

Teachers pose a significant problem to those seeking to make money out of state education. Teacher salaries are one of the biggest costs in running schools. So how do you reduce the need for teachers?

The Ark Academy chain has looked to America for inspiration and is setting up a ‘blended learning’ school. The blend is between teachers and computers, with computer-based learning reducing the need for actual teachers. The TES reported on this in June, observing that the “chain’s online learning ‘cost efficiencies’ could mean fewer staff.”

This approach may work or it may not: there is no evidence so far in its favour. It’s an experiment, and those who are carrying out the experiment stand to profit in the short term regardless of its success.

The use of technology in schools presents significant profit-making opportunities to technology businesses that operate academy chains. One chain that is particularly well positioned to take advantage of these opportunities is the David Ross Education Trust, run by the eponymous former chairman of Carphone Warehouse who still has a significant stake in the company.

As I wrote earlier this year, he has been very active in piloting ‘charitable’ programs with the Department for Education to promote and increase the use of technology in schools. Incidentally, his company sells this technology.

Where there are such deep conflicts of interest and where the primary purpose of an academy trust is profit not education, money will be wasted on goods and services which are not needed or which are poor value, and standards will be put at risk.

So how about a simple rule that if you are entrusted with public money for educating children in state schools, no related-party transactions are allowed? That would soon reveal which academy chains were primarily interested in education rather than profit.

Annie Powell is a contributing editor to Left Foot Forward

6 Responses to “How the coalition is privatising state education”

  1. Leon Wolfeson

    “patented curriculum”

    *Patented*?
    Copyright, perhaps.

  2. CGR

    if they do a good job at a reasonable price then go for it !!!!

  3. Guest

    They’re doing a terrible job at completely unreasonable (i.e. a penny over what it’d cost for a standard education) prices, just like everywhere else it’s tried.

    You’ve missed scandal after scandal, I see, and you’re completely uninterested in the medium to long term effects.

  4. blarg1987

    A board which runs schools that owns the companies that provides the schools auxiliary functions is not going to shoot itself in the foot and tell parents that it is doing a rubbish job at an unreasonable price is it?

    I do not agree with the profit motive in our education system, however in the first instance a simple reform would be to make it illegal for people to directly or indirectly own trusts and companies that provide that school’s services.

    IF they suddenly go up in arms it proves that they were not looking out for the school finances but their own.

  5. steroflex

    Didn’t Tristram himself go to a for profit independent school? I think also that Harriet Harman went to a for profit school too. Certainly a lot of politicians send their children to for profit schools. On both sides of the political divide. They want the best for their children, of course.
    What matters so much is freedom of choice. If you genuinely have the choice where to send your children, then it doesn’t matter much if the local school is hopeless. All you do is change. A relation of mine was sending her children to the local school in Saudi until she found out that the head was an alcoholic. Then she changed immediately.
    Without the freedom to choose – and I mean the genuine freedom to choose – you get the old business of ripping off the tax payer.

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