Profit in education: where we are now
An overview of policies and controversies from
around the world
Helena See
May 2012
1
Contents
1. Introduction
2
2. Sweden
4
3. Chile
5
4. Debate: for-profit provision and the effect on socio-economic stratification
6
5. United States
7
6. Debate: for-profit provision and the effect on attainment
9
7. The developing world: examples from India, Africa and Mexico
10
8. England
12
9. Conclusion
15
10. Further reading
17
11. Notes
18
Introduction
The movement towards greater private sector involvement in public services is one of the
most significant and overarching long-term trends in UK policy. Twenty years on from
the start of the UK’s Private Finance Initiative (PFI), public-private partnerships
characterise a steadily increasing number of public services. From early capital projects
focused on the building of schools, hospitals, and transport infrastructure, we have seen
conscious attempts to build markets in new areas including welfare, social care, and the
criminal justice system. Payment-by-results models have the potential to revolutionise
areas like welfare-to-work and the rehabilitation of offenders, and the government is in
the process of introducing outcome payments for further education providers that
achieve job outcomes for unemployed learners.
Within the compulsory education sector, however, the explicit exclusion of for-profit
providers remains largely unchallenged. Nick Clegg has been emphatic on this issue from
an early stage in the Coalition, declaring “yes to greater diversity; yes to more choice for
parents. But no to running schools for profit, not in our state-funded education sector.”
2
Yet the trajectory of government policy and of broader trends in public service
innovation increasingly mean that the exclusion of private companies from mainstream,
compulsory education can no longer be taken as read. The UK, like many other
countries, must confront the question of whether government aims can be achieved more
effectively by allowing profit-making organisations to participate in public education
systems, and if so, whether this is to an extent which justifies the diversion of funding
from the public sector.
This paper is concerned with identifying the circumstances in which profit-making has
come to play a role in public education, and the effects that this has had on education
systems and societies around the world. There are a number of mechanisms that have
been used to facilitate the public funding of for-profit providers in other countries. One
of these is school vouchers, which are issued by governments and can be used by parents
to pay for their children to be educated at the school of their choice – private or staterun, for-profit or non-profit. Alternatively, some governments fund for-profit providers
through tax credits, by making educational expenses, including private school fees,
deductible from taxes. In some countries, these schemes are universal, in that the
vouchers or tax credits are made available to all pupils, whilst in others, they are only
made available to pupils from certain disadvantaged groups.
The only countries to permit the participation of profit-making organisations in
universal voucher-style schemes are Sweden, Chile, and some US states. The experiences
of each of these countries are considered in this paper, with a brief exploration of the
policies, their political context, their public reception, and the key debates that have
framed them. This is followed by a short section on the developing world, where forprofit education is playing a vital role in a very different context. Finally, the paper
provides a summary of the current status of profit-making in the English education
system from the school sector through to further and higher education, and reflects on
how it relates to the policies and issues explored in earlier pages.
3
Sweden
The Swedish ‘friskolor’ system is the most frequently-cited example of for-profit
provision in public education, as well as the template for England’s own free school
system.
Friskolor are privately-run, publicly-funded free schools, funded at the same level per
pupil as state-run, or ‘municipality’ schools. The majority are for-profit, but all are
subject to strict charters which prohibit academic selection and the charging of tuition
fees, with admission on a first-come, first-served basis. Around 900 of these free schools
exist today, educating around 96,000 pupils in 2009-10.1
The friskolor system dates from 1992, when a Conservative-led coalition introduced a
school voucher scheme, and enshrined the right of parents to choose the school their
children attend in law. The initial expectation of ministers was that schools set up under
the system would be specialist, and run by parental cooperatives. By the late 1990s,
however, the majority of free schools were generalist and run for profit by private
companies.2 In 2008, 64 per cent of Swedish Free Schools were run by joint-stock
companies, and applications for new licenses are now predominantly from for-profits.3
Advocates of for-profit provision in the UK point out that the profit motive was
ultimately the central driving force in the growth and development of the Swedish free
school system, arguing that the English free school movement will remain lacklustre
without similar impetus. In a report on profit-making schools for the Adam Smith
Institute, James Croft argued that:
In Sweden, while the enthusiasm of not-for-profit innovators was important at the
beginning, that idealism and drive petered out over time, giving way to more sustainable
commercial interests.4
Nevertheless, the friskolor sector remains a relatively small part of the Swedish school
system as a whole, with only around 10 per cent of Swedish pupils attending free schools.
This may seem surprising from the perspective of a UK debate which frequently
overlooks the wider context and origins of the friskolor system. A 2010 LLAKES
Research Paper highlighted the tendency of UK policymakers to view Swedish free
schools in isolation from Sweden’s “historical tradition of policies on educational
equality that culminated in the 1960s in one of the most radical comprehensive school
4
systems in Europe.” Its author Susanne Wiborg suggests that, whilst English observers
focus on a sector which operates “on the periphery” of Sweden’s education system, in
Sweden free schools have received much less public attention because they are nonselective, well-integrated into the local school system, and were never conceived of as a
revolutionary policy with transformative power for education as a whole.
Chile
Alongside Sweden, Chile is the only other country in the world to allow for-profit schools
to participate in a universal voucher scheme. Over half of Chilean pupils attend statefunded private schools, so that, perhaps uniquely in the world, only a minority of pupils
are educated within the state system.
Chile’s voucher system was introduced under General Pinochet in 1981 as part of a
radical programme of educational reform to decentralise school management. Like the
Swedish system, the reforms enabled private schools, both for-profit and non-profit, to
be funded on the basis of enrolment at the same level per pupil as public schools. In
contrast to Sweden, however, schools were allowed to select students on the basis of
academic achievement or on interviews with parents.
By 1988, more than 1,000 new schools had been created, and total school enrolment
increased. Whilst around 20 per cent of pupils attended government-funded private
schools at the outset of reform, by the end of the 1980s this figure had increased to over
30 per cent. By 2009, over half of Chilean pupils attended state-funded private schools.
However, evidence collated in a recent OECD report suggests that, over time, private
schools responded to the reforms by increasing selection, rather than by expanding and
improving productivity:
Data from the 1980s signal a segregation of students, such that government-dependent
private schools were better able to attract better students. Evidence suggests that schools
were, in fact, sensitive to the market incentives of demand-side subsidies, but private
schools responded by enhancing their ability to attract better students instead of improving
productivity. Government-dependent private schools were allowed to reject students, and
parents sought not necessarily the most productive schools, but those with the most
advantaged student populations.
5
5
The impact of the voucher system on socio-economic segregation was a major theme of a
series of widespread student protests in the 2000s, including the Penguin Revolution of
2006, and the Chilean Education Conflict of 2011-12. Both protests demanded a reversal
of the decentralising policies introduced in the 1980s, and a return to greater central
governmental control. In addition, the protests of 2011 demanded the exclusion of forprofits from the school voucher system, a moratorium on the creation of new voucher
schools, and an explicit ban on for-profit provision throughout the education system –
including higher education as well as the school sector.
The Social Democrat President Michelle Bachelet responded to the Penguin Revolution
with a range of educational reforms in 2006, including a ban on academic selection, the
establishment of new central regulators, and the introduction of a right to quality
education as well as the freedom to choose. In 2008, the government introduced a new
subsidy for socio-economically disadvantaged students, which schools can receive in
exchange for meeting equal opportunity and educational improvement obligations. Since
leaving office, Bachelet has claimed that her government was prevented from excluding
for-profit provision from the education system in the wake of the Penguin Revolution by
opposition parties.
Debate: the effect of for-profits on socio-economic stratification
One of the key issues in public debate about profit-making in education is the impact
that allowing schools to be run for profit has on the socio-economic stratification of
society as a whole.
In her LLAKES research paper on Swedish free schools, Susanne Wiborg outlines a
“process of segregation within the public education sector” similar to that often
postulated by critics of England’s academies programme. Whilst popular schools
have experienced sharp increases in applications, less popular schools have entered
a downwards spiral of declining pupil numbers and falling funding. Reflecting
specifically on the application of Swedish reforms to England, she suggests that,
given the Swedish reforms appear to have increased inequality even in the context of
a very egalitarian system, “In the context of a more divided system, similar reforms in
England may have more damaging effects on inequality and school segregation.” a
Reviewing the evidence on Chile, a recent OECD study of the effect of voucher
systems on socio-economic stratification noted that, “the introduction of demandside subsidies and school choice had no clear positive effects on equity; if anything,
the reforms of the 1980s may have contributed to socio-economic segregation in the
school system.” b
6
The majority of countries considered in this OECD study do not allow for-profit
schools to operate within their state-funded systems, so its results cannot be taken
as evidence regarding the effect of for-profit schools on stratification. Nevertheless,
it is worth noting the report’s conclusion that ‘universal’ voucher schemes, in which
vouchers are available to all students, have twice the degree of socio-economic
stratification as non-voucher systems, whilst ‘targeted’ voucher systems, in which
vouchers are provided only to disadvantaged students, have very similar levels of
socio-economic stratification to countries which do not use vouchers. c
a
Wiborg, S. (2010), Swedish Free Schools: Do they work?
OECD (2012), Public and private schools
c
Ibid.
b
United States
State funding of private schools is one of the most contentious issues in US public
education. As state and local government carries primary responsibility for education,
with locally elected school boards setting policy across a range of areas, a variety of
different models for allowing for-profits to participate in public education can be found
across the country. Broadly speaking, they fall into two categories:
1. Voucher systems, including both universal and targeted models.
2. Scholarship programmes, which provide tax credits to individuals and businesses
for contributions that pay for students to attend private schools. Nearly all of
these programmes are targeted at specific groups, such as those from low-income
backgrounds and those with special needs.
The Friedman Foundation for Educational Choice, whose founder Milton Friedman was
an early theorist and advocate of school vouchers, estimates that around 220,000 pupils
are currently enrolled in voucher schemes and tax scholarship programmes. Nineteen
states as well as Washington, D.C. offer one of the two schemes.
Although Presidents Nixon and Reagan were both supportive of school voucher policies,
the first programme was not rolled out until 1990, when Milwaukee established what is
now the largest programme of its kind in the US. Around 15,000 students in Milwaukee
now use vouchers, with 26 per cent of students receiving public funding to attend schools
7
outside of the Milwaukee public school system in 2006-7. In 1995 another voucher
scheme was introduced in Cleveland, Ohio, and in 1999 Florida became the first US state
to establish a state-wide voucher programme. Vermont, Maine, and Washington D.C. all
introduced voucher schemes in the 2000s.
Over the last 18 months, the combination of fiscal constraints triggered by the financial
crisis and the wave of Republican victories at state and local level in the 2010 midterm
elections has led to what has been termed the ‘voucher renaissance’. Voucher and
scholarship programmes have been created or expanded in states including Virginia,
Florida and Indiana, whilst similar proposals have been debated in New Hampshire,
Pennsylvania, Wisconsin, South Carolina, Ohio, and New Jersey, amongst others.
Republicans in Louisana have succeeded in passing legislation that will expand a small
New Orleans voucher programme to the entire state, making vouchers available to
around 380,000 lower-income students in low-performing schools. In Virginia and
Florida, Republicans have passed bills to introduce tax credits for contributions to
private school scholarship programmes.
Controversy over school vouchers in the US has been particularly tied up with
entrenched debates about the place of religion in education. As many private schools
eligible for public funding through voucher schemes are also religious schools, the policy
has attracted opposition on the grounds that state spending on sectarian schools
constitutes a violation of the first amendment, which prohibits government from
establishing religion. In 2002, the US Supreme Court ruled in Zelman v SimmonsHarris that an Ohio voucher programme did not violate the first amendment, even
though 96 per cent of pupils enrolled in the programme ended up attending religious
schools. The decision was made 5-4 by a conservative majority.
8
Debate: the effect of for-profits on educational attainment
Much of the debate around running schools for profit centres around the impact on
educational attainment. This can be a difficult issue to assess, as most of the data
available relates to publicly-funded private schools as a whole – both for-profit and
non-profit – rather than to for-profit schools specifically.
Two important studies in the US have compared the effects of for-profit and nonprofit charter schools on test scores. The first, by Hill and Welsh, concluded that
there was no evidence to suggest that the type of ownership had an impact on
educational attainment either way.a The second, by Peterson and Chingos, found
that for-profit schools had a positive impact on attainment in Maths.b
In Chile, a study by Chumacero and Parades found that pupils in for-profit voucher
schools scored more highly than pupils in government schools, but that pupils in nonprofit voucher schools performed more highly than those in for-profits.c Similarly,
research on the Swedish system by Gabriel Sahlgren found that for-profit free
schools raised average test scores by 4.50 points, whilst non-profit free schools
raised average test scores by 5.74 points.d
A distinct area of research interest is the effect that voucher systems have on overall
educational attainment within the community. Susanne Wiborg notes that the
international research community has not been able to reach a consensus on this
issue, largely due to national differences in school systems and the differing
influences of other social factors.e In Sweden, the two most recent studies by
Björklund et al,f and Böhlmark and Lindahlg found no significant evidence that the
growth of free schools had increased overall pupil attainment. The evidence from
Chile is mixed, with some studies suggesting that greater competition between
schools in the community has no positive effect on overall attainment, and others
finding that increased competition improves the test scores of pupils in both statefunded private schools and municipal schools.h
a
Hill and Welsh (2008), ‘For-profit versus not-for-profit charter schools: an examination of Michigan test scores’,
Education Economics
b
Peterson and Chingos (2010), ‘Impact of for-profit and non-profit management on student achievement’, Program
on Education Policy and Governance Working Papers Series PEPG 09-02, Harvard University
c
Chumacero and Parades (2008), ‘Should For-Profit Schools Be Banned?’ MPRA Paper 15099, University of Munich
d
Sahlgren (2010), ‘Schooling for money: Swedish education reform and the role of the profit motive’, IEA
e
Wiborg, S. (2010), Swedish Free Schools: Do they work?
f
Björklund, et al. (2006) The Market Comes to Education in Sweden: An Evaluation of Sweden’s Surprising School
Reforms (New York: Russell Sage Foundation)
g
Böhlmark and Lindahl (2008) ‘Does School Privatization Improve educational Achievement? Evidence from
Sweden’s Voucher Reform’ IZA Discussion Paper No. 3691
h
OECD (2012), Public and private schools
9
The developing world
Whilst debate about private provision of public services in the developed world has
tended to revolve around value for money and the impact on quality, burgeoning interest
in private provision in the developing world has been driven by a more urgent need to
expand capacity in public services.
A recent Institute for Fiscal Studies report on private education in Mexico noted “the
rapid expansion and increasing importance of private education in developing
countries”.6 Where state funding for investment in public services is lacking, but demand
for education intense, the private sector can be the only motor for the expansion of
educational provision. Even where state provision does exist, poor quality, or the
perception of poor quality can mean that even low-income families are willing to pay
tuition fees.
This provides important context for the appeal of voucher programmes and education
subsidies in a number of countries. Such considerations played a part in the introduction
of Chile’s voucher programme in 1981, and in the programme of private school subsidies
introduced by the Mexican government in February 2011.
The dynamism of private educational provision in the developing world has been
highlighted by the work of Professor James Tooley, who has written about the extensive
private provision he found in some of the poorest areas of India, China, and Africa:
In the areas officially designated as ‘slums’ of three zones of Hyderabad’s Old City, we found
918 schools, of which only 35 percent were government schools, fewer than the 37 percent
of unrecognized private schools. In total, 65 percent of schoolchildren in those low-income
areas attended private unaided school. In the Ga District of Ghana (the low-income
suburban and rural area surrounding the capital city of Accra) we investigated 779 schools
in the same way, finding that only 25 percent were government schools and that 64 percent
of schoolchildren attended private school.
In the ‘poor’ areas of three local government districts (one rural, two urban) of Lagos State,
Nigeria, we found 540 schools, of which 34 percent were government, and the largest
proportion, 43 percent, were private unregistered. An estimated 75 percent of
schoolchildren were enrolled in private schools.
We also conducted research in the small shanty town of Makoko, in Mainland, Lagos State,
and in the slum of Kibera, Nairobi, Kenya (reportedly the largest slum in sub-Saharan
10
Africa). In both cases, the large majority of poor children attended private, not public,
school.
In each location, the private schools are run largely by proprietors, with very few receiving
outside philanthropic support and none receiving state funding. Roughly equal numbers of
boys and girls attend private unaided schools, which have better pupil-teacher ratios,
higher teacher commitment, and sometimes better facilities than government schools. A
significant number of places in private unaided schools are provided free or at reduced
rates to serve the poorest of the poor.
7
International chains like GEMS, the world’s largest provider of private education, have
developed strong records in the provision of education to deprived children across the
developing world. GEMS Education offers low-cost, private education designed to be
accessible to a broad community across a range of countries including India, the United
Arab Emirates, and the UK. GEMS also seeks to increase the capacity of education
systems in the developing world by building schools and providing scholarships –
however it should be noted that this work is carried out by the not-for-profit,
philanthropic arm of GEMS, the Varkey GEMS Foundation, and is thus quite distinct
from its core business. Indeed, the organisation itself points out that, as up to 70 million
school age children worldwide do not have access to education, “We believe we have an
obligation to act upon this by impacting one hundred underprivileged students for every
child enrolled at a GEMS school.”8
11
England
Maintained school sector
No school, including free schools and academies, can currently be run for profit in the
UK. Indeed, Nick Clegg has been emphatic that this will remain the case under the
Coalition Government, with his unequivocal declaration of “yes to greater diversity; yes
to more choice for parents. But no to running schools for profit, not in our state-funded
education sector.”
The reality of profit-making in the English education system is more complex than this.
The successful Breckland Free School bid has demonstrated that the management,
rather than ownership, of free schools by for-profit companies is acceptable under
current legislation. In the Breckland case, Internationella Engelska Skolan (IES), one of
Sweden’s largest and most successful school chains, has been contracted to run the
school in a £21 million 10-year contract, and will be able to make a profit from the
operation.
The Breckland model of contracting out a school’s entire management marks the
continuation of a much older trend towards contracting out school services to private
companies. A recent Policy Exchange report drew attention to the extent to which the
private sector is already delivering substantial proportions of publicly-funded education
at the fringes of the education system. Across a range of areas including nursery
education, SEN provision, alternative provision, and school improvement services, it
found that many local authorities are outsourcing provision to private companies, of
which many are for-profit.9
Proposals to give profit-making a more official status in state-funded education in
England have come from a number of sources. Policy Exchange has proposed a model of
‘social enterprise school’ which would allow private companies to set up and run statefunded schools according to a ‘John Lewis’-style system of mutual ownership. The model
was explicitly billed as a possible “halfway house” for advocates of for-profit provision in
the context of a political climate which seems predominantly unconducive to profit in
education in principle.10 Proposals for government-funded scholarship programmes
along the lines of some US schemes have also been made, such as the ‘Open Access’
programme called for by the Sutton Trust, which would provide a state subsidy of £5,500
per pupil for bright children from lower-income families to attend private schools. From
12
within government, a recent review of alternative provision recommended trialling the
kind of ‘payment by results’ scheme that has revolutionised areas including welfare-towork and the rehabilitation of offenders.11
For-profit school sector
Whilst the majority of independent schools in the UK are non-profit organisations – just
over half have charitable status – for-profit independent schools educate around 15 per
cent of all pupils in the independent sector.12 This includes schools owned and operated
by chains, as well as those run on sole proprietor and family partnership models.
In his report on profit-making schools for the Adam Smith Institute, James Croft notes
that average fees in this sector are £7,500 per year, with 41 per cent charging fees less
than or equal to average state spending per pupil in the public sector. Such schools,
charging fees at the lower end of the independent market, attract “a high proportion of
first-time buyers of independent education.”13
Advocates of profit-making schools argue that non-profit private schools have no
incentive to expand, and are more likely to respond to increasing demand by raising
prices than by increasing places. Mikael Sandstrom, a former academic and Swedish
government advisor, illustrated this argument in an interview with the Spectator with
reference to a discussion with the headmaster of a non-profit making independent
school:
He runs a very popular school with a waiting list. You have to put your kid on the waiting
list when they’re born, and they have to be born early in the year otherwise they won’t make
it. I asked him why they don’t expand. “It’s too much trouble,” he said. “We would have to
find new buildings, we’d have to expand the staff.” You would not, of course, hear that from
a profit-making school. They’d say “Of course we’ll expand, because we’ll make a larger
profit.” And having a long waiting list causes segregation, because it’s the well-off parents
who think about placing their kid in line for a school when they’re born.
14
Croft suggests that similar dynamics to those at work in the developing world are
operating in the UK, as for-profit organisations expand access to private education at
relatively low costs to those who might not otherwise have been able to afford it. Citing
the example of independent school chain-owner Cognita, he points out that profit-
13
making companies have successfully extended bursary provision at former charitable
trust schools by capitalising their funds.15
Further education
Recent regulatory changes contained in the 2011 Education Act mean that further
education colleges, unlike schools, are able to privatise by dissolving themselves and
transferring their assets to another organisation.
Although the regulations stipulate that the corporation’s assets may then only be used
for charitable educational purposes, attempts are being made from within the sector to
create a new business model that would enable surplus cash from the college to be used
to pay dividends to shareholders, thus enabling colleges to attract private equity
investors. A model proposed by the Barnfield Federation, which runs Barnfield College,
would enable public funds from the Department for Education to be paid into one
company, whilst a separate company would act as a vessel for private equity investment
and pay dividends to shareholders. It was reported in the Guardian that the Federation,
which also runs a chain of academies in Luton, is exploring the possibility of extending
this model to academies, were the necessary change in the law be made to allow it.16
Meanwhile, government attempts to achieve closer integration between further
education and welfare-to-work are beginning to bring the kind of payment-by-results
models associated with the Work Programme into skills provision. Following the
introduction of a year-long Job Outcome Incentive Payment (JOIP) pilot in 2011,
learning and skills providers are able to claim 2.5 per cent of their adult skills budget to
improve their capacity for achieving job outcomes for unemployed learners. At the end of
the pilot in 2012, the JOIP may be fully implemented as a specific payment for individual
learner outcomes.
Higher education
The 2011 higher education White Paper Students at the heart of the system set out plans
to create a “level playing field” between state-funded and private providers. Under the
White Paper’s proposals, private institutions would have been given access to taxpayer-
14
backed student loans of up to £9,000 a year, and brought them under the same
regulatory system as state-funded universities. Currently, undergraduates studying
approved courses at private institutions are able to access loans of a maximum of £6,000
a year. Advocates of reform argue that traditional state-funded universities also stand
much to gain from a levelling of the playing field, as current regulations make it difficult
for traditional institutions to realise their huge potential to leverage substantial
investment from private equity.17
Failure to secure a place in this year’s Queen’s Speech for a Higher Education Bill has left
the issue of private provision in a state of hiatus. Nevertheless, at least one significant
development has been marked by the sale of the College of Law to Montagu Private
Equity. Under the arrangements, approved by the Charity Commission, the proceeds
from the sale will be used to establish a fund for legal education scholarships, which will
retain the charitable status and Royal Charter. The college’s legal education and training
business, together with its degree-awarding powers, will be transferred to Montagu, and
run as a for-profit entity.
Although the College of Law is one of only five private providers of higher education with
degree-awarding powers in the UK, as a charity with a Royal Charter, it could set an
important precedent for other, state-funded universities. Times Higher Education
reported that Eversheds, the law firm which drew up the plans, anticipated that the
model could be used by state-funded universities to attract private equity investors, or
even to facilitate the partial sale of such institutions to private companies. On selling a
partial stake to a private investor, universities could transfer a portion of its assets to a
separate company that could then be bought by the investor.18
Conclusion
Although for-profit provision is already a fait accompli in many areas of the English
education system, any attempt to open up the school sector to profit-making providers is
likely to be highly controversial. The idea of the state paying for some children to attend
private schools is inherently more problematic in countries which, like the UK, have high
levels of inequality. In this country, as in Chile and the US, it reignites the perennial
debate about selective versus comprehensive systems – do we use public funds to
empower a finite number of lower-income children to succeed, or do we try to raise the
15
level of the entire system? In countries like Sweden, where inequality is low, and profitmaking free schools are well integrated into an education system with one of the most
radical comprehensive traditions in the world, it is much less contentious.
The profoundly different social contexts in which these systems operate also make it
difficult to assess how the evidence on profit-making providers in other countries might
relate to the UK, were a similar system to be introduced. Many commentators in this
country and in the US have urged caution in assuming that the Swedish free school
model could be transplanted into these radically different societies, were it to be deemed
desirable. Wider contextual factors including housing policies, school admissions
criteria, and levels of residential mobility are all likely to condition the outcomes of
increased private sector involvement in the education system. Ultimately, therefore, it
may be that only a pilot scheme in this country can give us a more definitive answer – a
step which would in turn be highly dependent on political will.
Politicians from both sides of the political spectrum have acknowledged that there would
be no alternative but to allow for-profit companies to participate in state-funded
education if the evidence is found to support it. In 2009, the former Labour Cabinet
Minister James Purnell said that, “If allowing state schools to be run by profit-making
companies encourages equality of capability, we will have to allow it.” Michael Gove has
conveyed a similar attitude, declaring himself to be “a pragmatist, not an ideologue, so I
don’t have any particular opposition to involving any organisation that is going to
improve our education.” Even the current Shadow Secretary of State for Education
Stephen Twigg, with his new emphasis on evidence-based policy, might find it difficult to
oppose for-profit provision if it is shown to improve overall outcomes.
Like so many issues in education, profit-making is tangled up in a complex web of
evidence, values, and political imperatives. How these strands are negotiated is likely to
determine the future of for-profit provision in the UK, and the character of our education
system in years to come.
16
Further reading
The Brookings Institution (2010), Expanding Choice in Elementary and Secondary
Education: A Report on Rethinking the Federal Role in Education, available at
http://www.brookings.edu/reports/2010/0202_school_choice.aspx
Croft, J. (2011), Profit Making Schools: Unlocking the Potential of England’s
Proprietorial School Sector, Adam Smith Research Trust, available at
http://www.adamsmith.org/sites/default/files/resources/ASI_School_report_WEB.
pdf
Institute for Fiscal Studies (2012), The returns to private education: evidence from
Mexico, available at http://www.ifs.org.uk/publications/6153
OECD (2012), Public and Private Schools: How Management and Funding Relate to
their Socio-economic Profile, OECD Publishing, available at
http://dx.doi.org/10.1787/9789264175006-en
Policy Exchange (2012), Social Enterprise Schools: A profit-sharing model for the statefunded school system, available at
http://www.policyexchange.org.uk/images/publications/social%20enterprise%20sc
hools%20-%20feb%2012.pdf
Tooley, J. and Dixon, P. Private Education is Good for the Poor; A Study of Private
Schools Serving the Poor in Low-Income Countries, Cato Institute, available at
http://www.cato.org/pubs/wtpapers/tooley.pdf
Tooley, J. E.G. West Memorial Lecture, Institute for Economic Affairs, available at
http://www.iea.org.uk/events/the-eg-west-memorial-lecture
West, E.G. (1965), Education and the State: A Study in Political Economy
Wiborg, S. (2010), Swedish Free Schools: Do they work? Centre for Learning and Life
Chances in Knowledge Economies and Societies, available at
http://www.llakes.org/wp-content/uploads/2010/09/Wiborg-online.pdf
17
Notes
Wiborg, S. (2010), Swedish Free Schools: Do they work? Centre for Learning and Life Chances
in Knowledge Economies and Societies. Available at http://www.llakes.org/wpcontent/uploads/2010/09/Wiborg-online.pdf
1
2
Ibid.
Croft, J. (2011), Profit Making Schools: Unlocking the Potential of England’s Proprietorial
School Sector, Adam Smith Research Trust. Available at:
http://www.adamsmith.org/sites/default/files/resources/ASI_School_report_WEB.pdf
3
4
Ibid.
OECD (2012), Public and Private Schools: How Management and Funding Relate to their Socioeconomic Profile, OECD Publishing. Available at http://dx.doi.org/10.1787/9789264175006-en
5
Institute for Fiscal Studies (2012), The returns to private education: evidence from Mexico.
Available at http://www.ifs.org.uk/publications/6153
6
Tooley, J. and Dixon, P. Private Education is Good for the Poor; A Study of Private Schools
Serving the Poor in Low-Income Countries, Cato Institute. Available at
http://www.cato.org/pubs/wtpapers/tooley.pdf
7
8 Varkey GEMS Foundation,
http://www.gemseducation.com/MENASA/investors/contents.php?pageid=33
Policy Exchange (2012), Social Enterprise Schools: A profit-sharing model for thestate-funded
school system. Available at
http://www.policyexchange.org.uk/images/publications/social%20enterprise%20schools%20%20feb%2012.pdf
9
10
Ibid.
11 Charlie Taylor, Improving Alternative Provision, Department for Education. Available at
https://www.education.gov.uk/publications/eOrderingDownload/improving%20alternative%20
provision.pdf
12
Croft, James (2011), Profit Making Schools
13
Ibid.
14 Spectator, ‘The Swedish case for school profits’, available at
http://www.spectator.co.uk/coffeehouse/7210842/the-swedish-case-for-school-profits.thtml
James Croft, ‘Private school model ‘improves equity’’, Public Service Europe. Available at
http://www.publicserviceeurope.com/article/903/private-school-model-improvesequity#ixzz1t93t6G8u
15
Guardian, ‘Academy schools federation hopes to run college for profit’, available at
http://www.guardian.co.uk/education/2012/mar/25/academy-federation-run-college-profit
16
Reform, What can the private sector bring to higher education? Available at
http://reform.co.uk/blogs/1110/view
17
Times Higher Education, ‘College of Law sale sets legal precedent for raising of funds’, available
at http://www.timeshighereducation.co.uk/story.asp?storycode=419753
18
18