If Gove has won a battle for free schools, why are they so expensive?

31 July 2010

Toby Young suffers from Status Anxiety

One suggestion, often mooted, is that academy trusts will be able to set up schools in unused office buildings. As the leader of a group hoping to set up one of England’s first free schools, I’ve been looking into this and it’s far from inexpensive. For instance, there’s an unused office building near me that is just about big enough for a small secondary school. Problem is, it’s on sale for £6.8 million and it’ll probably cost the same again to fit it out. That’s a total of £13.5 million. Not as much as the cost of a new build, but not chump change either. How is my charitable trust going to raise that kind of money?

Lease it, you say, and I’ve looked into that too. The building in question is owned by a property developer and if he’s going to be persuaded to invest £6.8 million in converting it for school use, he’ll want a guaranteed return of £13.5 million plus 8 per cent, i.e., £14.6 million. And like most property investors, he’d expect to recoup over a 15-year period. In other words, my charitable trust would have to promise him an annual rent of approximately £1 million for the next 15 years. But who’s going to guarantee that lease? Even if the government promises to pay my school a sufficient amount per pupil to cover the annual rent, there’s still a risk that the school will fail or have its funding cut by a less sympathetic secretary of state. (Ed Balls, for instance.) Who’s going to insure that risk?

If commercial companies were able to set up schools, as they are in Sweden, raising the money for a new build or guaranteeing a lease wouldn’t be such a problem. But given the government’s insistence that only charities can do so, it looks like the Department for Education will either have to stump up the capital or go into the underwriting business. And, of course, the Treasury won’t allow it to do that, at least not on a grand scale.

I’m a fan of Michael Gove and welcome his educational reforms. But the timidity of the 2010 Academies Act, combined with a parsimonious Chancellor, will mean that very few free schools are set up over the lifetime of this parliament.

Toby Young is associate editor of The Spectator.

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Anxiously stable

August 5th, 2010 10:11am Report this comment

Ever get the feeling you've been cheated?

Tim Carpenter LPUK

August 6th, 2010 3:47pm Report this comment

This is, unfortunately, one of the problems inherent in the mindset of Gove and his policy - still too much (central) control.

He wants control over who can set up, how they are set up, admissions and curriculum all via, ultimately, a central gatekeeper.

For curriculum, if you go beyond requiring literacy (encompassing critical reasoning and communication) and numeracy, then you rapidly get political or ideological.

If you limit your solutions, you concentrate your problems.

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