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ppp Wednesday, 5 September, 2001, 12:54 GMT 13:54 UK
State education's private ambitions
Estelle Morris and Gordon Brown
Labour need to deliver improvements on education
By BBC News Online's Sean Coughlan

It was not so long ago that the main debate in the Labour Party over private education was about whether it should be abolished.

In the party's 1983 manifesto, private education was attacked as "a major obstacle to a free and fair education system" and the party pledged to remove charitable status, charge VAT on fees and "integrate private schools within the local authority sector where necessary".

In short, the private sector was seen as a problem. Now, after a second consecutive Labour landslide, the private sector - in the form of management companies and contracted-out services - is seen as part of the solution.

The Education Bill calls for failing schools to seek help from external partners - including the private sector. Have your say


In a transformation that might have taken aback the Labour Party of 20 years ago, the private sector is being urged to run individual schools and local education authorities and private finance is being used to build schools.

And there is every sign that in England this role will be expanded.

Islington's schools are now run by a private company

The Education Secretary, Estelle Morris, said: "What matters is what works. Where we think the private sector can deliver we won't hesitate to draw on its skills."

This reflects the current pragmatism of a government seeking ways of making a visible difference in the quality of public services.

And the view from the Department for Education would seem to be that the principle of a freely available state education system can sometimes best be served by buying in private sector expertise.

Blunkett plan

The foundations for this fusion of public and private sectors were laid by former education secretary David Blunkett, who introduced legislation enabling him to intervene directly in the running of local education authorities which were seen as performing poorly.

But instead of civil servants being sent in to rescue struggling authorities, services were taken over by private contractors.

Kings' Manor
Kings' Manor became the first state school to be contracted out to a private company

Among the high-profile authorities which lost part or all of their education services were the London Boroughs of Islington, Hackney and Southwark and in Bradford, Liverpool and Leicester.

Since April 2000, Islington's education services have been run by a company called Cambridge Education Associates, replacing a local authority which had been damned by inspectors as "incapable of improving itself".

In an experiment that could be applied elsewhere, individual schools have been handed over to private companies, which then receive a fee for running the school.

First experiment

The first such school was Kings' Manor in Surrey, which was contracted out to the private sector as an alternative to closure.

This ground-breaking arrangement saw the school re-opening in September 2000 as Kings' College under the management of a non-profit company called 3Es.

The first state school to be run for profit will also be in Surrey, with Abbeylands set to be run by Nord Anglia, with re-opening scheduled for September 2002.

These are not privatisations in the manner of the public sector sell-offs carried out by the Conservatives.

Schools and local authorities are not being sold off, so much as hired out to the private sector. And if private sector companies fail to make improvements, the option remains for services to return to the state sector.

Contracting out

And to further complicate matters, local authorities might themselves seek to bid for contracts to run services in other areas, which might be seen as the public sector operating within the private sector.

Unlike many public-private partnerships outside education, this type of contracting out of services is primarily about standards rather than raising money.

The money that would have been spent on local authorities is diverted to private contractors, which have to meet agreed performance indicators.

In such schemes, with standards-raising built into contracts, the government hopes to ensure that there will be measurable improvements in test results and exam performance.

But there are also public-private schemes, usually involving local authorities, which are intended to raise funding for major capital projects.

Private finance

These private finance initiative deals, typically involving an arrangement in which a private company provides capital in exchange for taking over a long-term contract to run services, have had a mixed reception.

As an example, in April a group of Norfolk head teachers protested about proposals for the premises management and catering in schools to be contracted out for 25 years in exchange for funds for school improvements.

The scheme would yield 90m for schools - the kind of money that would make a big difference to upgrading buildings. But heads expressed their concern at how the price could be paid in losing control over their own schools.

Such balancing acts between the need for quick cash injections and possible long-term disadvantages of private finance deals will be played out across the country.

The government will want to be able to say in a few years' time that there has been a measurable improvement in the quality of education services.

And that could mean a further expansion of the use of the private sector in schools.

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