The Swedish case for school profits

Should state schools be able to make a profit? We asked this of you on our Coffee House poll this week. 71 per cent of you said yes, and with good reason. Profit-seeking companies expand when demand is strong: that’s what you want good schools to do. But successful schools not seeking profit have no incentive to expand: it’s an easier life just to let the waiting list grow and jack up the fees. This month, 24 new ‘free schools’ will open – eventually able to educate 10,000 pupils. But to keep pace with the boom in primary school pupils, we’d need an extra 400 primaries alone. Will the ‘free school’ model be enough – depending, as it does, on charities? It’s a live debate in government. Nick Clegg is dead against the principle of profitmaking schools. He has been given a veto, by Cameron, on the issue – and has made clear that he’ll use it. Some of those around Cameron, by contrast, are keen to fit rocket boosters under the free schools programme – and that means including profit-seeking groups like Cognita and International Free Schools. Michael Gove is in the middle. He has no objection to the idea of profitmaking schools, but thinks he’s fighting on enough fronts as it is right now.
  
When Swedish free schools started, almost two decades ago, it was a trickle which then became a flood. But the programme accelerated because socialistic Sweden had no problem with profit-seeking schools – indeed, it has school operators listed on the stock exchange. So what do they make of it? When researching my politics column this week I spoke to Mikael Sandstrom, a former academic who is one of Europe’s experts on free schools. He’s now working for the Swedish government as a State Secretary in the Prime Minister’s office. He spoke at our Schools Revolution conference earlier this year. I thought that CoffeeHousers interested in the Gove experiment might like to know what he has to say. (Note: Sweden has almost no fee-paying schools in its system: when he says ‘independent’ schools he means ‘free schools’ – independent schools run in the state sector and paid a fixed amount per-pupil.)
 
Q:  You once joked that the question shouldn't be whether the profit-making schools should be banned but if the non-profit ones should be - because they responded more slowly to people's demands and are therefore socially regressive. What did you mean?

A:  Well that's based on a discussion I had 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 them 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.

Q:  Don’t Swedish profit-making schools have waiting lists?

A: Some do, but not many. They would, of course, expand if the demand is so high. If anything, it's like a restaurant. Schools may want a little bit of a waiting line, but not too much. So there's a trade-off. If you were to ban new schools in Sweden, you’d probably get the same problem of longer waiting lists for the most popular schools. That would cause social segregation. It always does.

Q: The ‘free school’ programme in Sweden was an unexpected success. Could you say that the success of free schools was accidental?

A: Certainly, its success was not anticipated. Most thought there’d be some religious schools, some Waldof schools, perhaps a village school where the municipality closes down the school the parents would be able to take over. But I don't think anybody really anticipated the extent of the expansion.

Q: In Sweden, even very good schools can look very unimpressive from the outside – they’re often office blocks, looking grubby. Why is that?

A: It's probably that they invest in teachers instead of buildings.

Q: But they're not obliged to spend a certain amount on buildings, like the funding system in Britain?

A: With council-run schools, it varies. But free schools get a block grant, which is determined per-student.

Q: People say that the free school system can work in a small, close-knit country like Sweden but it couldn't work in a far larger, far more complicated country like Britain. How much truth is there in that analysis?

A: It's a very strange argument. Of course you would have to adapt the system to the setting in which you introduce it. But why it shouldn't work in a bigger country is very hard to understand. I’d say it’s probably easier, because you get more competition the closer you are to pupils. Sweden is a very sparsely-populated country. Yet if you go outside the big city regions, and even in the rural areas, you get independent schools. But my impression is it's easier and much less complicated in Stockholm than in the rural areas. For example, say an independent school goes bankrupt. That happened recently and after one week, all but three students had entered new schools. It's easier if you have many schools to choose from, to absorb students from one school that closes down or has some problems.

Q: To start with, the Swedish Conservatives were in favour of free schools but the Social Democrats were opposed. But the last Swedish election they had posters saying “people should choose schools, not the other way around”. What changed their minds?

A: Several things. The Social Democrats really are two movements. One of the movements is sort of the strong state movement; the other part is ‘build for yourself’, consumer co-operatives, that kind of thing. So in that framework [the co-operative movement] running your own school isn't so strange. We even have "people's universities" - post-upper secondary education run by, for example, the trade unions. They get public subsidies of course, but they're really private.

And when free schools became popular, there was a political price for opposing them outright. Now in some municipalities we have perhaps a fifth of students attending independent schools, so it's politically impossible to outlaw them. And also, one point of the reform was to allow independent schools to be established, but one other part of the reform was to let students choose schools. We used to have a very strict system where you had to go to the closest school, and the catchment area of each school was decided in the city hall. You had no choice at all. And that's the second part of the reform: to let children choose schools for themselves, and I think it would be impossible to revert to the old system.

Q: What about the teachers’ unions?

A: Now they have members in both the independent schools and in the public schools, and obviously they can't be against the employers of some of their members just because some are independent. And that's something we see in several areas of Swedish society, that the trade unions, since they're beginning to have members both in the publicly-owned companies and privately-owned companies in the same field of business, they can't be against private enterprise.