Profit is the key to success in ‘Swedish schools’

30 September 2009

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Anders Hultin, an architect of the Swedish government’s voucher system, says the Tories’ plan to emulate it will fail unless they encourage a new breed of education entrepreneurs

But an audit of the new schools reveals a striking statistic — and this is where David Cameron and his education spokesman, Michael Gove, should take note. Of our new breed of successful ‘free schools’, 75 per cent are profit-seeking. Why? Well, what happens is that the schools tend to expand as fast as demand requires — if they are oversubscribed, they will open a new school rather than ask parents to add their name to a waiting list. But in order to expand, they need to have made money. Without the profit element, the Swedish example shows that the number of new independent schools would be very small and most of them would have a religious purpose.

In fact, the Swedish model that gets so much international attention today would not exist without the acceptance of profit-making organisations. It is a simple matter of incentives. Why should an enterprising teacher set up on their own, and make a career out of innovating in education, when that could mean financial ruin? The solution to these problems is profit. Not a vast profit; some schools make no profit at all. But they behave like businesses, treating parents as customers — and this is what counts.

Take, for example, Carlsson school in Stockholm: an excellent institution, but one run as a not-for-profit charitable trust. Because it lacks proper incentives to expand, it deals with surplus demand by asking parents to form a queue. And it is a very long queue. Parents who are considering Carlsson for their child must send in an application when their child is born. Many miss the cut. And thanks to the school’s strict first-come-first-served policy, along with the academic calendar, many of those children who do make it are benefiting from the time of year in which they were born. It is best to have a birthday between January and April if you want to get into Carlsson.