We need a proper education industry

IT is time to harness the profit motive to sort out the UK’s schools. That may sound hopelessly radical – but the seeds of a revolution have already been planted, and the green shoots they are generating remarkably promising. Britain’s current crop of private schools are not all charities. As a report out today from the Adam Smith Institute demonstrates, there are already 489 profit-making schools in England, and these are overwhelmingly non-selective, secular, and concentrated in metropolitan areas. Remarkably, 41 per cent of these schools operate on fees less than or on a par with the national average per-pupil funding in the state sector. Both this subset of inexpensive for-profit schools, and for-profit schools in general, significantly outperforms the independent sector as a whole in Ofsted inspections.

It is clear that the profit motive and high educational achievement can go hand in hand, as also demonstrated in countries such as Sweden, where profit-making chains run many state-financed schools. They are seen by the Swedish political left as a way of ensuring better opportunities. The 2002-2011 profit margins at the likes of Kunskapsskolan, one top chain, or its rival Internationella Engelska Skolan, are five to eight per cent.

In Britain, the larger chains include Cognita, which runs 42 schools in England (46 establishments in total across the UK, including nurseries), the Alpha Plus Group, which runs 16 schools and GEMS, which operates 12 schools. A number of overseas-based chains have also moved in to mainstream statutory-age provision. These include Beaconhouse, which acquired Newlands School, Seaford, in September 2009; International Education Systems, which bought Grantham Preparatory, and Schiller International University Group, which opened Wickham Court School, Bromley, a few years ago. The report also identifies 11 for-profit chains of between three and five schools. It is not just UK-based and global groups that are entering the market: firms that specialise in providing nurseries are also diversifying. Kent-based nursery provider Kinder Nurseries, with nine day nurseries, opened its own primary – Meredale Independent School, Rainham – a few years back. Happy Child, having opened its first prep school, Aston House School, has gone on to acquire three others.

The existence of this nascent industry is a great opportunity for the government. Michael Gove, the secretary of state, is quietly introducing revolutionary and welcome changes. Large numbers of schools are being turned into academies, self-governing state schools. Over time, Gove’s excellent reforms will begin to reverse the catastrophic decline of British primary and secondary education. But while the rise of the academies is a success, the coalition needs to do more to encourage the creation of new free schools, also fully financed by the state but set up by parents, teachers and local communities, the first of which will open in September.

As the report argues, the best way to achieve this is for the government to allow profit-making companies to open, build and run free schools, without the need for a charitable vehicle or trust framework, as currently required. Harnessing the profit motive – and beginning the long process of turning education into a proper, modern industry – is the only way forward.

allister.heath@cityam.com
Follow me on twitter: @allisterheath

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