ARK Schools: an example of philanthrocapitalism
Earlier this month, the Department for Education announced that Amanda Spielman, the current chair of Ofqual, will be replacing Sir Michael Wilshaw as Chief Inspector of Schools. Spielman has never been a teacher; her background is in corporate finance and management consultancy. She is closely associated with ARK Schools, a multi-academy trust which runs 34 schools in London, Birmingham, Hastings and Portsmouth. ARK Schools is the educational arm of an international children's charity founded in 2002 by a group of financiers. The chair of the ARK Schools board, Paul Marshall, received a knighthood in the Queen’s Birthday Honours, for services to education and philanthropy. He is the co-founder, with Ian Wace – chair of ARK’s global board – of Marshall Wace Asset Management Ltd, a big hedge fund. Of the eight trustees of ARK Schools, five are hedge fund managers. None have any background in education.
Marshall also leads the DfE’s non-executive board. He is one of a number of financiers whose philanthropic interest in schools has led them to become directly involved in government since 2010. John Nash, the ‘academies minister’, was chair of Sovereign Capital, a private equity firm which invests in education services, until he was ennobled and made parliamentary under-secretary of state for schools in 2013. Theodore Agnew, whose various business interests include a partnership in the private equity firm Somerton Capital, led the Academies and Free Schools Board at the DfE from 2013 to 2015. The new head of the Board, Tom Attwood, is also chair of HG Capital. All three men have their own multi-academy trusts.
But ARK Schools is in a class of its own. It is by far the most successful and influential MAT, a ‘system leader trust’ that is constantly name-checked by ministers. ARK’s King Solomon Academy, in Marylebone, has been hailed as ‘the best non-selective school in England’. The school serves an area with high levels of child poverty; 58% of its pupils are eligible for free school meals, and a significant number speak English as an additional language. Last year’s exam results were indeed extraordinary: 93% of students achieved A* – C in five GCSEs, exceeding the government’s floor target by more than 50%. If the story of the market-driven reform of public education in the USA and England is a story of miracles – the 'Tennessee miracle', the 'Florida miracle' – then perhaps this could be called the Marylebone miracle.
The miracle was achieved using methods developed by American charter schools – more specifically, by the ‘charter management organisation’ known as KIPP (the Knowledge is Power Program). ARK’s brand of ‘high quality inner city education’ is copied wholesale from KIPP, as Paul Marshall acknowledges: ‘We model ourselves on the American KIPP schools that have 80 per cent on free school meals and send 80 per cent to university’. Charter schools, publicly funded but privately controlled, have been instrumental in the growing marketisation and privatisation of American public education since the 1990s. KIPP was established in 1994 by a pair of young teachers, and generously supported by philanthropists like Don and Doris Fisher, the founders of Gap clothes. It now runs 183 schools in 20 states. The schools are typically in inner city areas, serving ‘urban minority’ children. According to the KIPP website, more than 87 per cent of their pupils are from low-income families, and 96 per cent are African-American or Latino. KIPP’s educational philosophy boils down to the idea that the problems faced by these students – poverty, parental unemployment, racism, violence – are ‘no excuse’ for educational failure or underperformance. They can be overcome by sheer force of ‘great teaching’, combined with ‘grit’ and ‘resilience’ on the part of pupils.
KIPP and its many imitators – Uncommon Schools, Mastery Prep, Success Academy – exist in a symbiotic relationship with the accountability system imposed on American schools by George W. Bush. The No Child Left Behind Act of 2001 mandated annual testing in English and maths from the third to the eighth grade, setting a target of 100% proficiency by 2014. Schools which failed to make Adequate Yearly Progress towards that target faced closure or ‘charterization’. The system rapidly gave rise to what one observer calls an ‘achievement gap mania’, as the economic and social misery of ‘urban minority’ students, including the long-term underfunding of their schools, was manifested as measurable differences in performance in standardised state tests. ‘Closing the attainment gap’ then took on a very specific meaning. The imperative was to show that poor African American or Latino children could match or exceed the standardised test scores of their more privileged peers – or, to use the charter schools’ own rhetoric, that they could be made ‘college ready’ by a ‘rigorous’ academic education – even in districts where school budgets were being cut.
In order to achieve this aim, KIPP developed a distinctive educational model, which has become known as ‘no excuses’ schooling. Its main features are: an extended school day, week, and year; an intensive focus on literacy and numeracy, at the expense of other areas of the curriculum; a standardised teaching method based on direct instruction and drilling, rather than interaction between students; a highly standardised curriculum, with ‘scripted’ lessons that are tightly focused on specific test and exam content; and micromanagement of students’ behaviour, using rigidly-applied systems of positive and negative reinforcement. This is the model that was pioneered by KIPP, and copied by other charter chains, whether non-profit or for-profit. It is geared towards a single aim: maximizing test scores while controlling costs. This ‘culture of training’, as Roger Titcombe puts it, has been introduced into English state schools by chains like ARK Schools and the Harris Federation. The King Solomon Academy is, in fact, a near-perfect replica of a KIPP School, down to the motto – ‘Climbing the mountain to university’ – blazoned above the reception area (the US original is ‘Climbing the mountain to and through college’).
It is not only a question of school culture, however. Serious money has been put into securing the King Solomon Academy’s miraculous GCSE results. At a time when the freezing of the education budget has left all schools facing a funding cut of around 8%, ARK academies are protected by the largesse of their sponsors. A recent report by Schools Week claims that ARK Schools received £3.6 million of private funds last year – nearly £106,000 for each school in the chain. In the brave new world of venture philanthropy, there is nothing wrong with using profits generated offshore – most hedge funds are domiciled outside the UK – to back a privately-controlled ‘network’ of schools, whose exam results are then held up as an example to defunded local authority schools. After all, as the former chair of the ARK Schools board, Lord Fink, told the Evening Standard: ‘everyone does tax avoidance at some level’.
Paul Marshall’s hedge fund was originally domiciled in the Cayman Islands (in 2010, in response to an EU directive, the bulk of the funds were quietly moved to Ireland). Marshall Wace LLP was briefly in the public eye in 2008, as one of the hedge funds that were short-selling bank shares during the crisis. Like other hedge funds, it holds a diverse portfolio which includes education services alongside pharmaceuticals, IT, healthcare, retail, and so on. The firm currently has positions in Pearson PLC and the Scholastic Corporation, for example, as well as in the TAL Education Group, a provider of after-school tutoring services in China. Last September, Marshall Wace formed a ‘long-term partnership’ with the American company KKR, when the huge private equity firm took a 24.9% stake in the hedge fund. Education is a significant part of KKR’s business. In 2013, it acquired a big stake in Cognita, the chain of private schools founded by the late Chris Woodhead, Chief Inspector of Schools from 1994 to 2000 (Cognita told Education Investor magazine that it would use the new funds to drive its expansion into Asian and Latin American markets). KKR also invests in Laureate Education, which runs more than 80 for-profit universities and colleges across the world, and Tarena International, ‘an innovative education platform that combines live-distance instruction, classroom-based tutoring and online learning modules to students in China’.
The most dynamic sector of the global schools business is education technology. The accountability systems that are reshaping public education in England and the USA are also creating new markets for tech and software companies. The most important of these markets is, of course, the market in tests and assessments. Last year, Fortune magazine reported that the US testing industry – a product of No Child Left Behind – was worth around $2.5 billion, having grown by 53% in just three years (the industry is dominated by Pearson). And the business of testing is increasingly automated. Here in England, the government’s latest test – the ‘multiplication tables check’ for 11-year-olds – is entirely on-screen. The DfE claims that the new test is ‘an exciting opportunity to explore further ways of reducing burdens on teachers through innovative use of technology in testing and assessment’.
Another growth area is data management – more precisely, the use of computer-based data systems to store and process test results and other information. These ‘management information systems’ are close cousins of the computer business systems studied by Simon Head. They allow schools’ senior leadership teams to track and assess the performance of both students and teachers in great detail – comparing, ranking, setting targets, and identifying those in need of ‘support’. Such systems are an integral part of the ARK Schools model. The trust’s sponsor profile, on the DfE website, describes a ‘highly data-driven culture’, in which ARK’s ‘central team’, led by CEO Lucy Heller, regularly receives ‘granular school performance information’ from the 34 academies, via ‘standardised systems for reporting to the centre’. The information is analysed using ARK’s ‘data dashboards’, and used ‘to drive improvement and to hold school leaders to account’. This highly centralised management structure, in which ‘decision making processes’ are reduced to the analysis of purely quantitative data – principally test and exam results – is partly the creation of Amanda Spielman, who was part of ARK Schools’ original management team. It is difficult not to feel that this ‘school improvement model’ bears the stamp of her previous experience at KPMG, Kleinwort Benson and Nomura.
The education technology industry is a world in which Silicon Valley start-ups – companies with names like Udacity and DreamBox, backed by ‘angel investors’ and hedge funds – share the field with big multinationals like Pearson. In 2013, a team of market analysts estimated the value of the ‘ed tech’ market at $8.38 billion. Investment may have increased by as much as 503% between 2010 and 2014, with hedge funds and private equity firms playing a leading role. To give one example: KKR, the private equity firm which now has a significant stake in Marshall Wace, also backs Weld North Holdings, an education investment company which ‘operates a platform of digital and SaaS [Software as a Service] education solutions’. Weld North recently acquired Intellify Learning, a Boston-based start-up offering ‘a state-of-the-art cloud-based platform that provides learning analytics and data management services to collect, measure, store, access, distribute and visualize learning metrics’.
ARK is currently developing its own data management service. In January, the trust launched Assembly, ‘a secure cloud-based platform that connects existing school data systems’. According to the project’s director, ‘one of the common threads that unites start-ups in ed tech is that they usually launch without a link to the MIS [management information system]. That limits uptake – and good companies have folded because of this.’ Assembly is, of course, a non-profit venture.
ARK has also been experimenting with computer-based instruction. In 2018, the trust plans to open the Pioneer Academy, ‘a new all-through blended learning school with an emphasis on technology’. According to the proposal submitted to the DfE, blended learning is ‘the combination of traditional class-room based teaching [sic] with online learning’. It was developed by American charter school operators like Rocketship and Carpe Diem. Rocketship, founded in Silicon Valley in 2006, runs ‘a non-profit network of public elementary charter schools, serving primarily low-income students’. Their educational model – described by a former employee as the ‘stripped-down efficiency model’ – has changed a number of times since 2006. But one element remains constant: pupils at Rocketship schools, who are aged five to ten, spend a significant part of each day engaged in ‘individualised learning’ – in other words, intensive test preparation – on computers. John Danner, co-founder of the chain, believes that, as educational software improves, children could spend as much as 50 per cent of the school day learning from computers. (Danner is now CEO of Zeal Learning, a for-profit company offering ‘the first blended tutoring platform in the world’.) Rocketship staff are divided into ‘master teachers’ – frequently young Teach for America recruits, whose training consists of a five-week summer camp – and hourly-paid assistants (‘individualised learning specialists’) without any kind of teaching qualification, who supervise online instruction.
ARK’s Pioneer Academy – to be built on a disused football ground in Barnet – will use a version of Rocketship’s ‘classroom rotation model’. This, in turn, ‘includes four sub-models: Station Rotation, Lab Rotation, Flipped Classroom, and Individual Rotation’. This impressive-sounding taxonomy, part of the job ad for the founding principal of the new academy, is literally cut and pasted from a paper put out in 2013 by the equally impressive-sounding Clayton Christensen Institute for Disruptive Innovation, in San Francisco. Christensen, a professor of business administration at Harvard, is the guru of blended learning, and a firm believer in its potential to ‘disrupt’ existing systems of public education. He sees the shift to computer-based instruction as a means of ‘eradicating rules that restrict class size and student-teacher ratios’. ARK told the TES, rather more coyly, that blended learning offers ‘an opportunity for revised teacher roles’; the Pioneer Academy proposal notes that online learning will be combined with ‘instruction and input from the teaching assistant’. Clayton Christensen’s view is that ‘computer-based learning on a large scale is less expensive than the current labour-intensive system, and could solve the financial dilemmas facing public schools’. ARK told the TES that blended learning will ‘improve cost efficiency through both staffing and school design efficiencies’.
ARK has always had excellent political connections. Paul Marshall, who is about to step down from the DfE’s non-executive board, is a big Lib Dem donor; he was co-editor, with David Laws, of the Orange Book, and an adviser to Nick Clegg during the Coalition (Laws, once a schools minister, recently took a job with ARK). Lord Fink, the previous chair of ARK Schools, is a former treasurer of the Conservative Party. Baroness Sally Morgan, the one-time Blair aide who was chair of Ofsted from 2011 to 2014, has been an adviser to the ARK board since 2005. (As Arpad ‘Arki’ Busson, one of the charity’s founders, told an interviewer in 2006: ‘Whether it is a Labour or Tory government is totally irrelevant to us’.) Sir Michael Wilshaw was ARK’s Director of Education when he was appointed Chief Inspector of Schools; he will now be replaced by Spielman, the trust’s research and policy director until 2012.
Ron Beller and Jennifer Moses have also been closely involved in ARK from the beginning. Former Goldman Sachs executives, they co-founded the King Solomon Academy in 2007. Beller remains chair of governors at KSA, and a trustee of ARK Schools, while Moses sits on ARK’s global board. Something of a political power couple in New Labour’s final years – Moses was briefly head of Gordon Brown’s Policy Unit on Financial Markets – the pair moved to California after the spectacular collapse of Beller’s hedge fund, Peloton Partners, in 2008. In San Francisco they set up a new hedge fund, Branch Hill Capital, and ‘a new charter school organisation that will leverage technology in the classroom’.
Even by the standards of the genre, Caliber Schools’ marketing material is pretty weird. Five-year-olds at the Caliber Beta Academy will ‘take ownership of their learning journey’, which seems to mean that they will do an hour of writing every day (developing ‘fluency in grammar, syntax, prose, non-fiction and poetry’), take daily classes in computer coding and robotics, and undergo ‘mindfulness coaching’ as part of a ‘Positive Behaviour Intervention System’. But the essential outlines of the model are clear: a lot of computer-based instruction (‘students practice on i-Ready and other online programs’), fewer qualified teachers (an end to ‘the traditional one-teacher-per-class model’), and more unqualified assistants (an ‘apprenticeship model’). In the same year that they set up Caliber Schools, Beller and Moses founded Ed-Mentor LLC, a venture capital firm specialising in educational technology companies.