Private school model 'improves equity'
by James Croft
26 September 2011
Profit making and a commitment to creating opportunities for the disadvantaged are not fundamentally incompatible
In yet another setback to the implementation of the British Conservatives party's free school policy, the leader of their Liberal Democrat coalition partners, Deputy Prime Minister Nick Clegg, declared recently that entry requirements would not be relaxed to accommodate for-profit development. His concerns arise from scepticism that organisations motivated by maximising the benefit to their investors can possibly have a contribution to make to improving social mobility.
While apparently convinced of the free school effect, and prepared – sensibly – to concede that there is nothing intrinsic to the business framework that precludes a commitment to quality, Clegg suggested that admitting profit would only further skew implementation of the policy to the benefit of the middle classes.
Doing away with the requirement that new school proposals should be parent initiated and led, and allowing businesses to make the running, would only accentuate a tendency he claimed was already evident – for providers to cater only for relatively well-off communities, so avoiding the additional costs and risks associated with overcoming socio-economic disadvantage.
Clegg may be right that – in a system where the level of funding is prescribed by government, caps are placed on surpluses, and there is no scope for providers to evolve high-end models and charge top-up fees – then intervention to prioritise resources to the neediest areas, and application of a pupil premium-style incentive may be necessary. He is wrong, though, to suggest that profit-making and a commitment to creating opportunities for the disadvantaged are fundamentally incompatible.
As researchers from the EG West Centre at Newcastle University have convincingly shown in successive reports, in more open markets across the developing world, it is more often than not school businesses – not their amply resourced government school competitors – that are finding the means of making 'education for all' possible. At a grassroots level, in many of the poorest communities of the developing world, 'mom and pop' private enterprises may be found offering a solid grounding in literacy and numeracy at prices affordable to slum dwellers.
A little further up the fee scale, private school chains make the running in devising and taking forward truly scalable solutions: overcoming the challenges of making low cost loans work; enabling students to pursue studies in their spare time so that they can continue to work; cross-subsidising schools at the low end of the market with fee income from the high end; harnessing other revenue streams to finance lower-cost provision; and indeed going beyond their remit and setting up charitable schemes.
Inspiring examples of the latter include Delhi Public Schools' takeover and development of a succession of struggling government schools in villages across the Mewat and Punjab regions; the extensive bursary provision provided through Educor's Social Responsibility programme in South Africa; and the Columbian Federation of Coffee Growers' extensive subsidy of rural schools for its workers.
International school chain GEMS has long been recognised as an outstanding provider of low-cost education in the developing world context and a leader in philanthropic support for the underprivileged. Building on a decade of effort toward international cross-subsidisation, in 2010 the organisation's founder established the Varkey GEMS Foundation to improve the standards of education for underprivileged children around the world.
While such initiatives are more common in countries where a lack of resources has constrained the development of state infrastructure, forcing governments to look to non-state actor' for assistance in realising their policy goals, for-profit effort to expand access to independent education is also evident in markets where there is no apparent necessity for it. In the United Kingdom, for-profit Cognita has successfully extended bursary provision at a number of former charitable trust schools by capitalising their funds through the acquisition of the schools' assets and businesses.
In the course of my research to date, taking account of commercial discounting, I have found numerous examples of proprietorial schools in England offering fee assistance at levels that rival those of their charitable trust run counterparts. This is all the more surprising given that 40 per cent of these proprietorial schools offer their education on fees less than the average per pupil funding in the state sector.
If Clegg's interest is truly in 'what really works in breaking the link between background and life chances' he needs to get to grips with this evidence and recognise the effectiveness of the private school model for widening access and improving equity.
James Croft is education fellow at the Institute of Economic Affairs
In yet another setback to the implementation of the British Conservatives party's free school policy, the leader of their Liberal Democrat coalition partners, Deputy Prime Minister Nick Clegg, declared recently that entry requirements would not be relaxed to accommodate for-profit development. His concerns arise from scepticism that organisations motivated by maximising the benefit to their investors can possibly have a contribution to make to improving social mobility.
While apparently convinced of the free school effect, and prepared – sensibly – to concede that there is nothing intrinsic to the business framework that precludes a commitment to quality, Clegg suggested that admitting profit would only further skew implementation of the policy to the benefit of the middle classes.
Doing away with the requirement that new school proposals should be parent initiated and led, and allowing businesses to make the running, would only accentuate a tendency he claimed was already evident – for providers to cater only for relatively well-off communities, so avoiding the additional costs and risks associated with overcoming socio-economic disadvantage.
Clegg may be right that – in a system where the level of funding is prescribed by government, caps are placed on surpluses, and there is no scope for providers to evolve high-end models and charge top-up fees – then intervention to prioritise resources to the neediest areas, and application of a pupil premium-style incentive may be necessary. He is wrong, though, to suggest that profit-making and a commitment to creating opportunities for the disadvantaged are fundamentally incompatible.
As researchers from the EG West Centre at Newcastle University have convincingly shown in successive reports, in more open markets across the developing world, it is more often than not school businesses – not their amply resourced government school competitors – that are finding the means of making 'education for all' possible. At a grassroots level, in many of the poorest communities of the developing world, 'mom and pop' private enterprises may be found offering a solid grounding in literacy and numeracy at prices affordable to slum dwellers.
A little further up the fee scale, private school chains make the running in devising and taking forward truly scalable solutions: overcoming the challenges of making low cost loans work; enabling students to pursue studies in their spare time so that they can continue to work; cross-subsidising schools at the low end of the market with fee income from the high end; harnessing other revenue streams to finance lower-cost provision; and indeed going beyond their remit and setting up charitable schemes.
Inspiring examples of the latter include Delhi Public Schools' takeover and development of a succession of struggling government schools in villages across the Mewat and Punjab regions; the extensive bursary provision provided through Educor's Social Responsibility programme in South Africa; and the Columbian Federation of Coffee Growers' extensive subsidy of rural schools for its workers.
International school chain GEMS has long been recognised as an outstanding provider of low-cost education in the developing world context and a leader in philanthropic support for the underprivileged. Building on a decade of effort toward international cross-subsidisation, in 2010 the organisation's founder established the Varkey GEMS Foundation to improve the standards of education for underprivileged children around the world.
While such initiatives are more common in countries where a lack of resources has constrained the development of state infrastructure, forcing governments to look to non-state actor' for assistance in realising their policy goals, for-profit effort to expand access to independent education is also evident in markets where there is no apparent necessity for it. In the United Kingdom, for-profit Cognita has successfully extended bursary provision at a number of former charitable trust schools by capitalising their funds through the acquisition of the schools' assets and businesses.
In the course of my research to date, taking account of commercial discounting, I have found numerous examples of proprietorial schools in England offering fee assistance at levels that rival those of their charitable trust run counterparts. This is all the more surprising given that 40 per cent of these proprietorial schools offer their education on fees less than the average per pupil funding in the state sector.
If Clegg's interest is truly in 'what really works in breaking the link between background and life chances' he needs to get to grips with this evidence and recognise the effectiveness of the private school model for widening access and improving equity.
James Croft is education fellow at the Institute of Economic Affairs
COMMENTS
I don't think that taking company performance in the developing world and suggesting that this would apply in the UK is a valid assumption. It is also the case that private schools in this country have only, on the whole, shown any interest in helping the poorest when their charitable status has been threatened. Thirdly, we should perhaps wait to see what happens to those ex-private schools which now have academy, incl. "free" school, status.
Unfortunately, I cannot make an overall comment on the success or otherwise of the private school model in terms of education, because private schools are not subjected to the same level of scrutiny as state schools. However, I do know that the closest private school to me is one which would not be tolerated in the state sector.
Anonymous
I made this very point in an article about Nick Clegg and Free Schools, which led to a useful debate with a self-styled "educational campaigner". It's a shame that many Lib Dems believe that profit is essentially wasted capital that could be put to better use.
Tom Papworth - Liberal Vision
