Gove's 'free schools' will be able to profit
Fraser Nelson 11:36pm
In all the excitement, I forgot to flag up to Coffee Housers a fact that we dropped in the leader column of today’s magazine. Michael Gove’s new Swedish schools will, it seems, be allowed to make a profit. I said in the editorial that:
“Crucially, it now looks likely that the new schools will be able to run for profit — as Anders Hultin, the architect of the Swedish system, argued in this magazine last week. This may come in the form of a ‘management fee’. But if this happens, then Britain’s obsession with the quality of schools could blossom into an education industry.”
Hultin’s article was picked up by The Daily Telegraph. Profit, he says, means Britain would have an education industry. Teachers as entrepreneurs. Without profit, Cameron and Gove would have to rely on charities with far less motive to expand and pride themselves on the length of their waiting list – as is the case in Sweden.
It is my understanding that Cameron has agreed: he wants an English education industry. An industry needs to make profit. Now, the profits are only about 3% or 4% - but it makes the fundamental difference between a profit-seeking company or a can’t-be-arsed charity. There is an example, the Engelska Skolan in Stockholm set up in 1993 by two women – one who believed in the profit motive, the other did not. They went their separate ways. The one who didn’t like profits is still running a very-well-regarded school, with a lengthy waiting list. The profit-seeker set up a huge and prestigious chain International Engelska Skolan, which expands every time demand exceeds supply. The profit motive is the best means of getting schools to where the demand is – as several academic studies show.
As Hultin said, it is hard to know on what ground the Conservatives would reject profits when one considers the evidence.
“Just a couple of weeks ago, Sweden’s Social Democratic party made a clear statement dropping its opposition to profit-making schools and saying that its sole concern is whether schools are performing well or badly. They could hardly do otherwise. After 17 years of this educational experiment in Sweden, it is clear that the for-profit chains have greatly helped social mobility. They have given low-income parents a choice of school that only the rich in England have. It would be odd to think that the Swedish left is more relaxed about profit-seeking schools than the British Conservative party.”
Odd indeed. Now, Cameron may ask these schools to take profit as a management fee (this is already done by agencies who run schools for LEAs, and who supply staff to schools – there is a precedent). He can call it what he likes. But Cameron realises that if he wants a home-grown English education industry – something which could well turn out to be a world leader as this young century matures - then he must allow them to make a profit. This, Coffee Housers, is very significant news. Done properly, it means that it could well be a Conservative government that makes the concept of sink schools extinct. I know this Che meme irritates some CoffeeHousers, but this time it is warranted. This would indeed by a Tory education revolution.
Previous
Stuart Beamish
October 8th, 2009 11:53pm Report this commentHaving just heard council spending plans for next year, and waiting to find out where Ed Balls £2bn is coming from in 2011, we need something to carry our schools forward for sure.
Fatbloke on tour
October 8th, 2009 11:59pm Report this commentTrevor
Only half the story.
Will parents be able to mae a profit?
Will schools be allowed to put round the hat?
If not, why not?
You are a libertarian aren't you?
What about home schoolers?
Welcome to the Tory brave new world of cashbacks and top ups.
Eton will get cheaper and the cost to the country will increase and this is called progress by a "progressive" party?
Even Mad mental Mick the mentalist can see the issues with this particluar policy.
Prepare to be disappointed.
JohnPage
October 9th, 2009 12:50am Report this commentCould the 'vouchers' be used as part payment for a 'private education', or not?
Tiberius
October 9th, 2009 1:07am Report this commentIt is indeed huge news, Fraser, as any school bursar would tell you.
What parents and those who would set up schools now need to know, however, is what kinds of entity (limited company or trust, for example) can run a school, and what is their tax status going to be?
This information needs to be publicized. The sooner it is, the sooner people can go back to their constituencies and prepare for action.
Chris Cook
October 9th, 2009 2:31am Report this commentProfit for whom?
Even Keith Joseph drew the line at schools run for the profit of rentier shareholders, and actually advocated a partnership approach.
A John Lewis style cooperative of teachers and admin staff could run a school quite well I am sure with a bare minimum of bean counters and management.
To the extent capital is necessary, "capital partners" could simply share revenues proportionally with investors within an LLP framework.
Victorian era "For Profit" companies are entirely unsuitable for education, as are charities, but it's entirely possible to operate schools as a "social business" operating on a Not for Loss, or "Profit for Purpose" basis.
Fergus Pickering
October 9th, 2009 3:42am Report this commentWait a minute, my old son. Aren't the Public Schools, which most of you lot attended, and which are, I gather from you, the envy of the civilised world, aren't they can't-be-arsed charities?
Oh, and Fatboy, pis off and play with yourself in the coner along with the other paid-up lefties. This is a serious discussion among grown-up people who are actually concerned that their children should learn things.
Alastair
October 9th, 2009 7:30am Report this comment@Fatbloke on tour
Unless I've missed something, this is a straw man.
I haven't seen any mention that parents could get cash back or top up their voucher payments.
strapworld
October 9th, 2009 8:09am Report this commentThere will have to be great care in the handling of this. You can imagine the furore we can expect from the unions. And remember there are so many different unions within the teaching profession. The one thing that could attract their support, of course, could be a fact that successful schools would be able to pay their teachers more. That in itself would end collective bargaining and bring about the demise of these out of date unions.
Of course, Unions are extremely helpful in assisting their members on emplopyment issues but I am firmly of the belief that teachers should be paid on an individual basis and by not paying the best the same as the worst this would achieve great motivation and improve, overnight, the teachers lot.
One last thing. It may have started in Sweden. Call the scheme the New British Educational System, else you will get many people believing that children will be going to Sweden for their education! Such is the state of intelligence in Blair/Browns Britain!!!
Peter From Maidstone
October 9th, 2009 8:48am Report this commentCan't something be done about the Labour trolls that keep posting here. They have no wish to engage in any sort of discussion. There should surely be a level of moderation here which prevents people simply trying to abuse the opportunity for posting. It's getting tedious having to scroll through repeated posts from people who have no sympathy whatsoever with conservatism and obviously only come to the Spectator site to cause a nuisance.
Fatbloke on tour
October 9th, 2009 8:53am Report this commentAl
If this policy dooor gets opened, that is where we will be heading.
Bare bones service for the masses and an Eton discount for the aristo lovers.
How long will it take for the black economy to get involved with the education of children?
There are reasons why even Kookie Krazy Keith J didn't want to go down this road.
Ifear we are going to have a new generation of headteachers with an even bigger Napoleon complex that they have at the moment.
Fatbloke on tour
October 9th, 2009 9:02am Report this commentFergie
If your first paragraph represents your attempt at a serious discussion then I think I will stick to mindless name calling.
Away and throw shite at yerself, ya muppet*.
*
Apologies to Jim Henson lovers everywhere.
And yes ...
Kermit the Frog has a Fergus Pickering watch.
Olaf
October 9th, 2009 9:20am Report this commentI understand the principle and with safeguards I personally can see the potential benefits of this.
BUT a for profit educational system is going to be a very hard sell to many people.
Publius
October 9th, 2009 9:27am Report this comment@Peter from Maidstone
"obviously only come to the Spectator site to cause a nuisance"
That, alas, is their intention. Rather like poisoning the well so no one will come to drink. It's vile, and they're vile, and it is so typical of what New Labour has done to political discourse.
Publius
October 9th, 2009 9:40am Report this commentMr Nelson.
Excellent news on opening up the education sector. It brings the possibility of real choice at last, and real diversity instead of the left-fascist Newspeak version of "diversity". Expect violent and eloquent screams from the vested interests.
David Ossitt
October 9th, 2009 9:43am Report this commentPeter From Maidstone
"Can't something be done about the Labour trolls that keep posting here."
Peter if we ignore them; by not making comment to their asinine drivel, we may possibly drive them away.
It is strange that most give themselves obnoxious nomdeplumes.
Ian Walker
October 9th, 2009 10:02am Report this commentProviding that monopolies aren't allowed to develop, the profit motive is the proven most effective way of driving down costs and driving up standards.
The key will be to prevent the educorps (which will undoubtably develop, and this will be a good thing) from being able to use loss-making techniques to close down rival schools. If every school is required to make a profit on its own merits, this should be achievable.
Nicholas
October 9th, 2009 10:10am Report this commentPeter, David. It's George Galloway, the re-invented has-been from the "Respect Party", or if not him then his doppelganger. Patronising, opinionated, sneering and gobby with a nasty little agenda. No "respect" and not much of a "party". Coffee House very much dragged down since he and Dirty Euro appeared with their imbecilic disruption.
chris as usual
October 9th, 2009 10:10am Report this comment@Peter from Maidstone
Yes, I have sympathy with your remarks.
This blog used to be for (mainly) constructive, non-abusive comment.
Let us stay constructive. Some of the comments are very informative, and helpful.
If the blog gets the reputation of posting any old rubbish then it will fail as people will go away. The enemy know this, that's why they do it.
Fergus Pickering
October 9th, 2009 10:22am Report this commentNah, it's not George Galloway. Galloway is quick-witted and funny. It's just some nameless wanker, as I said.
THX1138
October 9th, 2009 11:57am Report this commentI agree that they should be allowed to make a profit, but if you take away the charitable status doesn't that mean that they would have to charge VAT?
Fraser Nelson
October 9th, 2009 1:17pm Report this commentFergus Pickering, yes today's private schools - including the one I attended (at the MOD's expense) - are are not-for-profit - and they have hardly rushed to expand to compete with each other on price.
Forlornehope
October 9th, 2009 2:49pm Report this commentThe key measure for an investor is return on capital. Setting a "management fee" at three or four percent of turnover would allow an enterprise making good use of its assets to generate a very healthy return. This would encourage much more creative uses of school buildings and equipment. No company with any standard of management would want to leave them sitting idle in the way schools do at present.
This is the real answer to the question of where the money is coming from. It's all sitting there doing nothing just waiting to be put to better use.
Simon Orr
October 9th, 2009 3:29pm Report this commentExcellent news. The Conservatives should see this as their best opportunity to explain and demonstrate how the profit motive can be harnessed for the public good. Once Britain have a public-funded-private-run consensus on education it can be more easily transfered to other areas of the public sector currently devoid of accountability and value for money.
Scottish Cheeselog
October 9th, 2009 4:31pm Report this commentI actually rather like Fatbloke's serial surreal abuse. It reminds me why I haven't voted Labour since 1997 and never will again.
As to Gove's ideas, bring them on. The sooner we can sort out the shambolic spoonfeeding/leftist indoctrination/dumbing down that passes for education in so many schools, the better.
Doug
October 9th, 2009 5:49pm Report this commentFraser Nelson, please answer this. Why are allowing Martin Bright to spread untrue and unfounded smears about Kaminski? It's a disgrace to any professional standard of journalism that you let him publish copy which has the journalistic quality of the Mirror.
Fatbloke on tour
October 9th, 2009 6:11pm Report this commentTrevor
How many sets of body armour would your MOD funded school fees have bought?
Weren't there any state boarding schools that would have taken you in?
Too many people join the forces to play the subsidised private school fee racket and not do any real military service.
Money wasted so the grunts have to make do and mend plus we have a cadre of desk warriors who are a positive menace to those that actually have to do the fighting.
Waiting to see how the good people of SpectatorLand reply to this, shake their head at an outsider just doesn't understand the MOD / FO / middle class gravy train or agree that something is seriously wrong with our armed forces and a "New Model Army"v is the only way forward.
Interested to find out where "Tricky Dicky's " sprogs got their schooling from?
TGF UKIP
October 9th, 2009 7:44pm Report this commentSorry folks but I am extremely sceptical. When it appears to be only hinted at rather than announced, it says to me that it will be so hedged round and restricted to suck up to Polly, the unions and Today, that it will be effectively worthless.
On matters such as this Dave doesn't have the courage of his convictions as he simply doesn't have the convictions - as on so much else.
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