Secret plans to allow schools to be run for profit, says Independent

Janet Downs's picture
Plans for schools to be run for profit are being made in secret, says the Independent. This site has published several articles over the last couple of years saying just that. Here are some of them:

1 Education Secretary Michael Gove said he was in favour of profit-making companies running state schools before the last election.

2 A thread comment highlighted a Policy Exchange report co-authored by the New Schools Network before the last election. This said that profit-making schools should be allowed: all that was needed was to classify schools as “independent”. Academies and free schools are technically “independent” schools.

3 The Co-op College said for-profit providers were being encouraged to run free schools as long ago as 2011.

4 Serco has been involved in plans to open a secondary school since before the last election.

5 The Adam Smith Institute advised the Government to allow profit-making schools (April 2011)

6 Ex-schools minister, Lord Hill, told the BBC he was “relaxed” about the idea of schools being run for profit.

7 The Daily Telegraph praised Gove for for acting “unobtrusively” in paving the way for state schools to make a profit (January 2012).

8 Conservative think tank, BrightBlue, advocated running schools for profit (January 2013).

9 Zenna Atkins, who recently resigned as CEO of Wey Education* in an acrimonious split, said: “the deconstruction of the education function within local authorities” offered a chance to “make a substantial return to investors”.

10  The CEO of Barnfield Federation, which wanted to run a further education college for profit, said he would investigate “creating a new business model for schools by establishing a private company that would raise funds from private equity and pay dividends to shareholders” in March 2012.

11 A Policy Exchange report recommended that “owners” of state schools ie LAs or trusts should procure services from private sector Education Management Organisations (EMOs). But even this report rejected selling schools to private companies which would become responsible for operating state-funded schools. The author wrote there would be a conflict of interest between the need to give shareholders a financial return and the educational need of the child.

That’s the crucial point: there’s a conflict of interest. And the first duty of for-profit firms is to their investors. That why Axcel, the private equity group which bought the Swedish for-profit school chain JB Education in 2008, decided to close three of its schools and sell off the other nineteen because too many losses were being recorded. When this happens pupils are left potentially without a school. And there’s a lesson to be learnt from the collapse of Southern Cross Healthcare in 2011.

When private investors become involved in education, it’s not altruism, “it’s an investment.” (Sam Freedman, ex-advisor to Michael Gove, April 2008).



*In its announcement (January 2013) of Atkins’s resignation which alleged that Atkins “had breached her fiduciary duties and her conduct was not commensurate with her duties and responsibilities as Chief Executive Officer”,Wey Education said it had submitted a bid to the Department for Education “to open a new Academy School, the Anglo-Latinoamerican Primary School Academy”. This raises the question about how many for-profit firms are trying to open free schools.

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