Gawain Little: Who stands to benefit from the for-profit schools frenzy

Last week (July 2013) reports that the Department for Education was exploring the full privatisation of our schools hit the headlines.

The "cash for classrooms" scandal as the Independent called it was based on a proposed redesign of academy regulations, leaked to the paper by concerned civil servants.

Under the alleged proposals academies and "free" schools would become profit-making businesses using hedge funds and venture capitalists to raise money.

They also included recommendations that schools should be able to sell off land leased to them by the local authority.

The entire story has been strenuously denied by Education Secretary Michael Gove and Deputy PM Nick Clegg.
Possibly the most interesting denial, however, came from "free" school owner and cheerleader Toby Young.

Young wrote on his blog: "Free schools and academies are all, without exception, owned by charitable trusts ... Gove has no plans to allow for-profit companies to set up, own or operate free schools or academies. There is one case of the Education Secretary allowing a profit-making company to manage a free school - IES UK Buckland ... however, the school in question is owned by a charitable trust and IES is employed by that trust on a fixed 10-year contract."

The language of this denial is eerily similar to a call Young made over a year ago in favour of allowing profit-making companies a role in British education. Young told the TES in February 2012: "The Secretary of State should either allow for-profit education management organisations to set up, own and operate free schools or at the very least put a procurement framework in place that enables free school charitable trusts to outsource the management of their schools for such organisations. "I'm sure plenty of management companies would be prepared to bear some of the capital cost of setting up a free school in return for a 10-year contract."

You're left wondering if Young is actually denying the reports about Gove's plans or just complaining that the minister has only taken the first step towards full privatisation.

It's not the first time such ideas have been leaked from the DfE. Similar stories were reported in September 2011, January 2012 and February this year.

So, what would stated-funded for-profit education look like? There are precious few examples to examine because most developed countries have wisely steered clear of introducing the profit motive into compulsory education. However, Chile has a significant for-profit schools sector, introduced as part of a wider privatisation drive under the Pinochet dictatorship. According to a synthesis of research by Rick Muir of the Institute for Public Policy Research, for-profit schools in Chile increased segregation, have failed to raise educational standards and do not perform as well as their not-for-profit equivalents. One study found that "the commercial schools operated at lower cost, which they attribute to their ability to pay lower salaries and hire less-qualified teachers. They conclude that this may be why these schools are underperforming."

And then there's Sweden. There for-profit schools were introduced under a voucher scheme from 1992 onwards. Gove praised this system in 2008, saying: "We have seen the future in Sweden and it works. Standards have been driven up. If it can work there it can work here."

But these claims were dealt a blow two years later. Sweden's National Agency for Education director Per Thurlberg said: "The competition between schools that was one of the reasons for introducing the new schools has not led to better results. The students in the new schools have, in general, better standards, but it has to do with their parents and backgrounds. They come from well-educated families."

Sweden's results in international rankings such as the Trends in International Mathematics and Science Study have declined considerably since the mid-1990s and the system is now seen as a classic example of privatisation gone wrong. Recent studies show that on average Sweden's for-profit schools employ fewer staff and have a higher percentage of unqualified teachers.

A further warning of the dangers of for-profit schooling were provided in May, when JB Education collapsed after owner Axcel, a private equity firm, decided it had to put shareholder returns before students' education. JB Education ran schools that catered for 10,000 children and young people. Chief executive Anders Hultin said: "It's extremely regrettable it will affect the students."

With all this damning evidence against them you could be forgiven for wondering why Gove and the current government are so keen on introducing for-profit schools. There are those who stand to gain - it's just students are not among them. One potential beneficiary is Edmund Lazarus, a close personal friend of Gove and a significant donor to the Tory Party. Lazarus is a founding partner of private equity firm Bregal Capital, which set up private schools company Cognita in 2004. It's headed by former chief inspector of schools Chris Woodhead. In 2012 Cognita and Lazarus were in the news over allegations of improper pension claims. They were mentioned as major potential beneficiaries of the introduction of for-profit schooling and lobbied heavily in 2011 for Gove to widen the involvement of for-profit schools in the system.

The basis for for-profit schools is already being prepared through a series of measures introduced by the current government and the Blair government before it. We have academies and "free" schools totally separated from any form of local accountability. The precedent exists for "free" school charitable trusts to outsource the management of their schools to for-profit organisations. The pension liabilities such private providers would have to take on have been substantially reduced through the gutting of the Teachers Pension Scheme alongside other public-sector schemes. Lib Dem Chief Secretary to the Treasury Danny Alexander said while the pensions "reforms" were being pushed through that "the new pensions will be substantially more affordable to alternative providers ... we are no longer requiring private, voluntary and social enterprise providers to take on the risks of defined benefit that deter many from bidding for contracts in the first place."

But of course the key way these "alternative providers" have secured profits in those countries that allow a public-funded for-profit sector to operate in education is through employing less qualified staff and paying teachers less. The government has already removed the requirement for children in academies and "free schools" to be taught by qualified teachers and is in the process of deregulating teachers' pay so every school sets its own pay levels.

Those who don't want to see our education system go the way of Chile and Sweden, with falling standards and increasing inequality, should be standing shoulder to shoulder with teachers in their fight against pay deregulation and to protect fair pensions.

Labour's shadow education secretary Stephen Twigg says the Labour Party is fully opposed to for-profit schooling. If that is so it must not only promise our children a qualified teacher in every classroom but must commit to reverse changes to teachers' pay and pensions, and to bring academies and "free" schools back within the local authority schools family. Only then will our children's education be free of the dangers posed by marketisation and schools for profit.

Gawain Little is Oxfordshire secretary of the National Union of Teachers and on the union's national executive. This article appeared in the Morning Star on 8 July 2013.

Introducing 'Education for the People'

Education, we are told, is the most important thing shaping people’s futures and determining their life-chances. If you want to get a job, if you want a future at all, you have to get a good education, get into a good school, get a degree. In an era when unemployment and under-employment in low skilled jobs is becoming once again a major social reality, these messages of course wield a huge power. Policy-makers in the political mainstream argue about whether education is the key to economic success in the knowledge economy or whether it is vital in preserving the social order and preventing the kind of riots seen returning to Britain’s inner cities in 2011.

  

Yet for all the noise made about education, the reality of what is happening to our economy and our society and the reality of what is happening in our schools, colleges and universities tells a different, more complex story.

Just as the British economy is being further wrecked by austerity policies that reinforce its already deep structural weaknesses, so the education system appears increasingly incapable of delivering on either of its supposed purposes, let alone fulfilling any progressive vision. The Coalition government has returned to the policies of the Tory governments of the 1980s with a vengeance, further fragmenting the education system, fostering damaging competition, promoting the private sector and continuing the state centralisation of control over the content of education. Yet for all its aspirations to make education fulfil a dual role of rendering profits for its City friends and maintaining the social order, it cannot fully stifle the frustrations caused by its attempts to rein in democratic access to education. These aspirations and frustrations are finding expression, whether in the form of student protests or alienated urban riots.

Similarly, the idea that education can substitute for the role that redistribution and industrial policy used to perform for social democrats has been fully exploded. The financial crisis and the austerity assault, and the chronic weakness of the UK economy, coupled with the rise of high-skilled economic competitors in China and India has revealed Britain’s focus on skills at the expense of creating jobs and new industries to be an empty delusion. ‘Education, Education, Education’ was always an empty slogan, not just because it issued from the mouth of Tony Blair, but also because the fundamental idea behind it was rotten.

In this pamphlet, the Communist Party argues that it is time for the labour movement to go back to first principles about what education is, what role it plays in society and what it can be made to do to serve the working class and its allies.

We argue that the left and the labour movement needs to base its analysis on a sound understanding of the role that education plays in capitalist societies. This will enable a better  understanding of how it can be made to fulfil its potential in assisting the forces pushing toward an alternative path to socialist development.

This also means basing our immediate demands and our immediate objectives on a sound understanding of where we are now. We have to understand not just the immediate balance of class forces but also how the current conjuncture is rooted in the historical development of our education systems in the context of the development of British capitalism.

The task then is to articulate a progressive vision of what education is and should be for. This must be based on an understanding of what benefits the working class and its allies and the emancipatory role that education can play, but it must have its eye firmly on the current balance of class forces and the prevailing ‘common sense’. To repeat the old adage, we need to start from where people are, not where we would like them to be.

The Communist Party offers some proposals as to what should be at the core of a progressive education programme for the labour movement, as a contribution to an emerging debate on the broader left and in the labour movement. Our proposal is that a future progressive vision of education needs to be organically rooted to an Alternative Economic and Political Strategy. We are not in the business of dealing in utopias, but of developing an education programme that forms part of part of and reinforces the struggle for national economic and political renewal and which advances the political and economic interests of the working class in the process.

The pamphlet then goes on to make some suggestions about the form and content of an education system that could give expression to the kind of programme we set out. Too often, debate about education on the left starts from the wrong position. Too often debate is shaped by an understandably reactive response to government attacks: the need to defend this kind of school or that kind of funding pot. Instead, we are urging that the left and labour movement start from what we want education to do and begin to debate and discuss the kind of education system that could achieve this.

Finally, we argue that if the left and the labour movement are to begin to achieve any of this, then there must be a period of sustained movement building around a common programme based on the immediate needs of the hour, but which can also be seen to open up the way for further advances of a more socialist character. We offer some suggestions about the way in which a movement for education might be built.

Download the full document 'Education for the People' here