Think Tanks
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Think tank calls for creation of Social Enterprise Schools
“John Lewis” style, social enterprise schools should be piloted in some of the most deprived areas of the country. A report published recently by leading think tank, Policy Exchange, says that the government should consider allowing private companies to set up and run schools under a social enterprise model. Teachers should be encouraged to take a stake in the school which would create strong incentives to drive up standards.
The report – Social Enterprise Schools – says that allowing private providers to take over the running of publicly run schools will create new places at a time when there is a severe shortage in many parts of the country.
Much of the opposition to private provision ignores that fact that profit making already exists in large parts of the state education system:
- Private companies already provide education to some of the most vulnerable children – those with special needs and those who have been excluded from mainstream school. Brent and Medway both spent 31% of their special educational needs 2010/11 budget on services provided by private companies
- Over half of all free nursery education is delivered by the private and voluntary sectors. 87% of Middlesbrough’s 2010/11 spending on nursery education, for example, went to for-profit providers in that sector
- Private companies have been involved in school improvement programmes for a number of years. Following direct intervention from the Secretary of State in 2000, Cambridge Education secured a £105m contract to run education services in Islington from 2000-07
- The private sector also provides all kinds of services in schools. In 2009/10 school spending on “other professional services” – IT, facilities management, catering – was £572million
The report notes that in both Sweden and the USA, 100% profit making companies are allowed to operate publicly funded schools. Recent figures indicate that 64% of Free Schools in Sweden are operated by for-profit companies. 56% of Charter Schools in the US are managed by for-profit providers.
The report acknowledges that full on profit making in schools would be politically difficult to introduce immediately. Instead the government should set up pilot schemes across the country to test the effectiveness of social enterprise schools, initially in the most deprived areas of the country. These schools would be set up and run by private companies. 50% of any surplus could be distributed as a dividend to shareholders on an annual basis while the remaining 50% would have to be reinvested in the school.
New schools providers should, if they wish, be encouraged to operate outside of the traditional structures which apply to teachers’ pay and conditions.
The pilot schools would operate under strict conditions:
- A social mobility test. Any social enterprise pilot must operate within areas of greater deprivation and ensure that enrolment includes at least 20% of students eligible for free school meals and hence the pupil premium
- A performance test. A rule could be introduced such that the operators of a social enterprise secondary school would receive no share of any surplus unless a certain proportion of their pupils made the expected level of progress
- An “asset lock”. Free School buildings and facilities procured by government could not be sold off for private gain. An exception to this principle would be made in those instances where the providers are prepared to invest their own capital to build a new school from scratch
James Groves, head of education at Policy Exchange, “Given the huge challenges which our education system faces in the coming years, the government should continue to push the boundaries of the status quo.
“This report challenges the idea that there is simply a choice between for-profit and not-for profit schools. A “John Lewis” model of school where private companies, including teachers and school staff are encouraged to personally invest offers one such innovative alternative.”
