News Analysis Private provision adds up to a masterclass in conflict

3 May 07
Outsourcing education services to private companies is meant to iron out performance problems, but its critics in the public sector claim it's a far from ideal solution that often makes things worse.

04 May 2007

News that the US-owned firm Edison was to take over the management of a north London school was greeted with a mixture of dismay and confusion by education unions last week.

'This is extraordinary. It is a waste of money [that] would be better spent on children's education… than lining Edison's pockets,' was the immediate reaction of National Union of Teachers general secretary Steve Sinnott. After further consideration, however, the union amended its line. 'They're not running the school,' an NUT spokeswoman told Public Finance. 'They're just acting as a recruiting agency.'

The confusion reflects the more nuanced way the commissioner/ provider split is being driven in education compared with health. Many of the services provided by private companies to schools and local authorities are led and delivered by personnel until very recently employed by the same state education sector.

'There's no equivalent type of institution in the private sector,' says Unison national officer Margie Jaffe. 'So they just bring in people from other local education authorities; they don't actually add anything in terms of skills and experience.'

In the case of Salisbury Secondary School in Edmonton, north London, Edison UK – a subsidiary of Edison Inc, which at one point held 65 state education contracts across the US – will directly employ the new head teacher and his two senior assistants.

All were formerly employed by local education authorities, most notably head teacher Trevor Averre-Beeson, who gained professional acclaim for his turnaround work at Islington Green School, also in north London.

'This is not a “takeover”,' an Edison UK spokesman told PF. 'The governors and the local authority are still running the school. Edison provides a package which includes the head, his two assistants and the Edison programme, with 25 days per term of additional on-site training, support and consultancy from the Edison team. Most are ex-heads or ex-heads of department at local authority level.'

The three-year contract with the London Borough of Enfield is worth £900,000 and Edison has contracts with around 50 other schools to provide support services to deal with poor performance in certain subjects.

Since the early 2000s, when 'failing' local education authorities were subject to compulsory outsourcing by the Department for Education and Skills, the market for educational services has been dominated by the likes of Capita, Amey, Nord Anglia, Mott MacDonald and Serco – often more associated with construction or facility management.

Malcolm Trobe, president of the Association of School and College Leaders, says the rationale for bringing the private sector into the classroom and head teacher's office was 'not watertight'.

He can see the logic of schools' facilities management services being run by external organisations as these firms can offer the expertise and economies of scale.

'But when it comes to the leadership of the school, the arguments about economies of scale simply don't hold water and the expertise is dependent on the quality of their recruitment,' he says.

The push to turn local authorities from providers to commissioners of education was embodied in the Education and Inspections Act 2006, which paved the way for quasi-independent trust schools. That also means that local authorities are gradually stepping back from providing the extra education support services that schools need, says Trobe.

'But we'd anticipated that would mean that where a school requires support, say in their science teaching, the local authority would commission that from another school in the area. But with Edison they've taken it to the extreme and are commissioning a commercial company.

'There are issues here for quality assurance and the bottom line is always: if a private company is making a profit out of it, why can't the public sector do it in a more cost-effective way?'

Such arguments have been at the heart of discontent in Bradford, where Serco is seven years through a ten-year contract to manage the entire education service – effectively replacing the local education authority. After a compulsory £50m outsourcing, the latest primary school league tables put Bradford second from bottom.

'They haven't delivered,' says councillor Philip Thornton, until recently chair of the children and young people scrutiny committee. 'There's been a tremendous amount of disappointment.'

Elaine Simpson, managing director of Serco Education, acknowledges 'things didn't get off as fast as they could have' in Bradford but she dismisses the negative focus on the league table position as 'political sniping'.

The contract was awarded by a Conservative-Liberal Democrat coalition and the council's Labour group has never supported it, she says, adding that in 14 other league tables, particularly for secondary school pupils, Bradford's scores have improved.

Serco also manages education services in Walsall and Stoke-on-Trent, where progress has been more marked. And whereas Simpson confirms that most of the expertise Serco sells to the state education sector came from there in the first place (including herself), she argues that it is only as an outside contractor that educationalists can reach a 'grown-up' working relationship with elected members.

She concedes there is a dilemma for the future success of the outsourcing model. Noting that it has been secondary rather than primary schools that have improved in Bradford, she says: 'My worry as an educationalist is that for sustainability you need to really start making progress with the younger children and then follow that through the system.

'But how do you make sure you get some improvement at the other end of the scale while also doing the fundamentals? In a five-year contract, any improvement you make for three-to-five-year-olds isn't going to have any impact on your results'.


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