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Saturday, 24 March, 2001, 00:51 GMT
Business moves into UK and US schools
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By BBC education correspondent Mike Baker

Some of the biggest changes in education have a way of just creeping up on you.

One striking example was the news release that landed on my desk this week. It was headlined: "Top comprehensive school gives 1m towards city academy".

Excuse me, did I read that correctly? Is there really a school that not only has enough money for its own needs but has a spare million to give to another?

How can it manage this when other schools rely on collecting crisp packets and supermarket vouchers to buy books and computers?

But it was true. The money is being given by Thomas Telford School to help sponsor a new city academy in Walsall.


Thomas Telford is not Eton or Harrow. It does not charge fees nor is it a wealthy ancient foundation.

So where does a school get that sort of money? Selling the sports trophies? Putting the dinner money on a lucky nag at 100 - 1? No, in this case, there was no Del Boy-style dodgy dealing, just entrepreneurial flair.

Thomas Telford School devised its own online information technology course which was so successful it has been bought by hundreds of other schools generating profits many companies can only dream of.

Thomas Telford's donation is part of the government's city academy scheme. This week it announced three more academies, including two which will specialise in "business and enterprise". One of these - the Bexley Business Academy - hopes at some future stage to run a primary school too.

So we now have a school system where five to 11 year olds can specialise in business and one school uses its entrepreneurial profits to fund another.

Whatever next? Will schools form their own companies and take-over other struggling schools?

Quiet revolution

Well, just that is already happening. 3E's Enterprises, the wholly-owned subsidiary of Kingshurst City Technology College, recently announced it was now running not one, but two, other schools.

Add to this the latest list of business sponsors of the new city academies - companies and wealthy entrepreneurs each forking out 2m per school - and you begin to wonder whether we are seeing the corporate take-over of schools.

This quiet revolution goes beyond schools. Local education authority services are increasingly being run by the private sector. A new breed of education management companies - such as Nord Anglia Education plc, Cambridge Education Associates, and CfBT Education Services - is carving out significant chunks of the education market.

Commercial profits are also being made from the supply of temporary teachers to schools. What used to be a local council service is now a multi-million pound business which is making money from fees charged to schools.

Universities have been going down the corporate sponsorship route longer than schools with businesses and entrepreneurs giving their money, and their names, to business schools and professorial chairs.

Huge row in New York

The corporate take-over of education is not just a British phenomenon. Not surprisingly the United States is well ahead of us, despite that country's deeply-held commitment to the values of free, locally-provided schooling.

In New York City a huge row is going on as parents vote on a proposal to hand over five schools to a for-profit school management company. That company, Edison Schools Inc, already manages over 100 schools, serving 57,000 students, across the USA.

The schools are all free to pupils. Edison receives per-pupil funding from school boards and hopes, eventually, to turn a profit.

As yet, despite attracting millions of dollars of investment, it does not have enough schools to generate the economies of scale required to make profits.

In the US the "education industry" - as its been called - is huge business, estimated to be worth around $700bn, or nearly 10% of GDP. There are some 30 publicly traded educational companies eagerly watched by venture capitalists.

However the big difference between the corporate take-over in the USA and in the UK is the controversy it is attracting.

Voucher schemes

In New York City the plan to turn schools over to Edison has provoked huge public debate. When Surrey County Council handed over Kings' Manor School to 3Es the majority of parents hardly seemed to notice.

This contrast between the US and Britain is even more marked when it comes to the ultimate privatisation idea: School vouchers. The idea was first floated in the US but, until now, the only voucher schemes have been small-scale experiments introduced by individual states.

In the UK, by contrast, a voucher scheme for nursery education was introduced nationwide in the dying years of John Major's government.

There was quite a bit of fuss about it but the scheme was introduced fairly quickly and would have continued if Labour had not won the election in 1997.

By contrast, in the US even the local-scale voucher schemes have been dogged by political protest and legal challenge.

Only now - with the election of President Bush - is there a proposal for a national voucher scheme which would divert federal tax dollars from persistently "failing" schools and give them instead to parents as vouchers to "buy" places at other schools, public or private.

Such a scheme would be a huge boon to education management companies.

It seems the corporate take-over of education is proceeding apace on both sides of the Atlantic.

What is curious is that it is accompanied by noise and argument in the US while over here it is a quiet revolution, a stealthy take-over, that is happening almost unnoticed.

Mike Baker welcomes your comments at: although he cannot always answer individual e-mails.
See also:

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