The privatisation of national assets has always been a highly politically charged topic. Harold Macmillan famously likened Margaret Thatcher’s programme to “selling off the family silver”. Yet for all the scaremongering, the result has generally been a huge success. The UK’s car industry has gone from basket case to one of the most efficient in the world. Nobody today would seriously call for the renationalisation of BT, which is spending over £2bn on super-fast broadband, whilst our flag carrier, BA, is still a national champion; in fact, it is one of the most successful airlines in the world. The experience of privatisation is therefore one of success.
Yet there are still areas where private enterprise cannot tread, and not because it couldn’t succeed, but because it is politically unpalatable. Education is one such example, yet it is potentially an area where the private sector could really make a difference.
The Free Schools movement has shown that there is an appetite to break free from the chains of state control. Later this year, 79 new free schools will open their doors for the first time. These schools are funded on a comparable basis to other state-funded schools but possess a number of freedoms, including the ability to set their own pay and conditions for staff, freedom from following the National Curriculum, greater control of their budget, freedom to change the length of terms and school days, and freedom from local authority control. Yet for the private sector to really make a difference, we must ask ourselves whether we are prepared for companies to be able to profit from their services?
This was the question asked at a recent Insight Public Affairs roundtable, chaired by Graham Stuart MP, Chair of the Education Select Committee, and attended by a cross section private education providers, on whether private companies should be able to make a profit from running schools.
What struck me was the willingness of the private companies around the table to get stuck in, and not, as many will claim, with the cream of the educational spectrum, but starting from the bottom. This is significant. Schools can only open where there is demand and presently the greatest requirement for additional capacity is in the inner cities where educational standards are lower. This means that the schools must be inclusive and open to all. It doesn’t make sense to go niche as this limits intake.
Investment is also long term. Private companies will only prosper through economies of scale, that is, they must take over or open not one or two schools but many schools. The number talked of by individual companies in the seminar was the opening of 30 schools or more. This is exactly the kind of investment that our schools need.
What about standards? Will private companies ensure a high level of education? Of course, it is in the interests of the company to set a clear standard across its estate, and a high standard at that. These schools will be there to attract pupils and their parents, and that won’t be possible with a defective product. No parent would willingly send their child to a bad school.
And this is the point. Private companies will be selling a service and that service will have to be consistent to back up and enhance the company’s reputation and brand across all its schools. It will not work if a company has a bad school and a good school because only the bad school will be talked about. Private companies will therefore invest considerable sums to ensure that their schools follow a standardised and high quality format. And with several companies operating in education there will finally be real parental choice. The incentive for companies to provide high quality education is in the simple fact that parents will be able to take their children elsewhere.
And finally, the schools will be set up by companies that must look to the long term to ensure a justifiable return on their investment. Remember, Rome wasn’t built in a day. However, Free Schools have been built upon the enthusiasm of the parents who want a better future for their children. What happens when those children have passed through the school? Will the parents still be as interested? Evidence from the continent shows a peak of interest followed by sharp falls. If we are to achieve the sort of critical mass we have witnessed with academies we must look at the profit motive. In Sweden true success was only achieved once the schools could make a profit. If we want our education system to prosper and receive the investment it so needs maybe we should allow the companies themselves to prosper too.