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Monday, 30 September, 2002, 10:55 GMT 11:55 UK
Private 'partners' not 'take-overs'
Estelle Morris and Gordon Brown
Labour has looked for business partners in education
Private sector management has become part of the landscape of the state education system.

And private finance is being used to fund capital-intensive building and modernisation projects.

But although it once seemed that the private sector's role was set for rapid expansion - in practice, the educational entrepreneurs have remained the exception rather than the rule.

The private company running Islington's schools has faced penalties for missing targets

And the chairman of Nord Anglia, one of the leading education companies, says that there has been much "hype" about the involvement of the private sector.

"The number of direct services in schools being contracted out to the private sector has been small," says Kevin McNeany.

And the only "big ticket" contracts have been building projects funded by private finance initiatives, he says.

This government, more than any before, has looked to the private sector to revitalise struggling parts of the state school system.

And when, two years ago, Kings' College in Surrey became the first state school to be run by a not-for-profit private company, it was seen as a trend that other authorities might follow.

But there has been little follow-up to this ground-breaking arrangement.

And the next radical step to be announced - a profit-making company being paid to run a school - might now appear less dramatic than the headlines suggested.

'Not a take-over'

Nord Anglia was awarded this first for-profit school management contract - which has seen Abbeylands School in Surrey re-open this term as Jubilee High School.

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

But Mr McNeany says that there has been no "take over" of the school. Instead his company is providing a service similar to a management consultancy - and has not "usurped any powers".

Another model of the private sector acting in partnership with local authorities is to be developed in the new type of school launched this term - the "city academy".

These flagship schools are intended to provide centres of excellence in deprived areas - and a key element will be the involvement of external partners, including businesses.

The first of these schools, the Business Academy, Bexley, has had a major donation from a property developer - and will see the involvement of 3Es, the not-for-profit consortium which has the contract for Kings' College.


But private involvement should not be confused with privatisation - and with all these schools, these schemes are about raising standards rather than sell-offs to raise money.

The largest scale involvement of private companies in schools has been in the running of education services, in areas where local education authorities had failed.

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 CEA@Islington, replacing a local authority which had been damned by inspectors as "incapable of improving itself".

But the change has not meant any instant improvements.

In Islington, the private contractor has been fined for two years for failing to meet improvement targets for exam results.

The number of pupils getting five good GCSEs has risen - up from 27% to 34% - but it is still far below the national average of 50%.

These standards-related contracts, which are bought-in services, do not affect the ownership of state schools.


But there have been concerns about the more complex arrangements surrounding private finance initiatives (PFI).

These public-private schemes, usually involving local authorities, are intended to raise funding for major capital projects which otherwise would not be available.

These 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, 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.

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See also:

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