Press Story

There is no evidence that allowing for-profit schools will boost standards in England, according to a new report published by the think tank IPPR today. The report argues that schools should remain public institutions, situated at the heart of local communities and run in the public interest, with innovation and reform driven by the not-for-profit and public sectors.

IPPR's new report is published in the wake of calls from three centre-right think tanks to allow state schools to be run by profit-making providers. The report systematically reviews the international evidence and concludes it does not support the claim that an expansion of for-profit providers will improve standards. In Chile and Sweden not-for-profit independent school providers generally out-performed for-profit providers, while in the United States the evidence from a small number of cases is mixed.

The report also shows that those countries that have introduced extensive market reforms are not those that sit at the top of the international performance league tables. The report argues that international OECD (PISA) evidence demonstrates more competition-oriented systems tend to produce higher levels of school segregation between children from different backgrounds.

IPPR argues that there is a strong innovation case for allowing new providers to set up or take over schools in a managed framework, but shows that we already have a flourishing not-for-profit school sector in England. With so many not-for-profit organisations willing to get involved in running schools in England, there are no innovation grounds for allowing for-profit schools.

By contrast:

The Institute of Economic Affairs argues that the majority of new free schools in the Swedish case came from the private sector and that these have "been essential to the increase in competition per se. The implication is clear - without the profit motive, the UK's reforms may fail".
The Reform think tank has also argued that "the government should remove restrictions on free schools to substantially increase the number of new institutions and allow the effects of choice and competition to work".
Policy Exchange argued, in a report published earlier this year, that "there are limits to the numbers of groups and individuals ready to sponsor an academy or set up a new Free School' and that 'effectively harnessing the profit motive could really enhance capability and lead to the emergence of new Free Schools at a faster rate".

Policy Exchange also argued that with a 60 per cent cut in capital funding by 2014-15, capital budgets for new school places are heavily constrained. But IPPR's new report says it is much cheaper for the government to raise this capital funding than for the private sector to do so at the taxpayer's expense.

Rick Muir, IPPR Associate Director, said:

"The argument that the profit motive is needed for raising schools standards is simply ideological. It is not supported by the international evidence at all.

"There is a good case for allowing new providers into the system to foster innovation. But given the strength of the not-for-profit sector in this country, there are no compelling reasons for thinking that commercial providers would add any value.

"The financial case for private sector involvement is particularly weak: even at a time of budget cuts across the public sector, the government has recently found hundreds of millions of pounds to meet the rising demand for new school places. In the long term, it is much cheaper for the government to raise this capital funding than for the private sector to do so at the taxpayer's expense."

Drawing on evidence from the OECD's analysis of its PISA results IPPR's report shows that the strongest drivers of school improvement are:

high quality leadership and teaching,
school autonomy in areas like curriculum and assessment in a framework of robust accountability, and
measures that systematically reduce class-based inequalities in attainment.

Proponents of for-profit schools have argued that they will have greater flexibility of teachers' pay and conditions. IPPR's report shows that schools already have a great deal of autonomy in areas such as remuneration and performance management. In so far as recruitment, performance management and professional development can be improved there is no reason why these cannot be undertaken under existing arrangements. It says that evidence from Chile suggests that, if anything, for-profit providers have tended to cut costs by paying teachers less, with a detrimental impact on standards.

Notes to Editors

IPPR's new report - Not for Profit: the role of the private sector in England's Schools - will be available to download from http://bit.ly/IPPR9492

The report shows that the private sector does currently play an extensive ancillary role in England's school system:

Private companies routinely provide all sorts of day-to-day ancillary services to schools and local authorities. On the human resources side these include providing continuous professional development (CPD) programmes and supply teachers. They also include services such as grounds maintenance, IT support and the provision of financial and performance management systems.
Government has contracted private companies to deliver important national education programmes.
Companies have been heavily involved in infrastructure modernisation, especially in new school buildings and IT programmes.
The private sector provides a great deal of specialist and supplementary education in England. This includes for example prison education, some pupil referral units and post compulsory programmes of work-based learning.

There has also been a very significant growth in the market for private tutors providing home-based supplementary learning has grown enormously in recent years. In 2009 11 per cent of parents said that their child received private tuition in an academic subject, with 12 per cent for primary school children and 8 per cent for secondary school children. It is estimated that 38 per cent of children in London have received some form of private home tuition.

Proponents of for-profit schools argue that because the private sector already operates services in other parts of the education system, such as early years and alternative education services, there can be no objection in principle to commercial organisations running schools.

IPPR's report argues that, in addition to the evidence on the performance of for-profit school providers, there are strong reasons in principle why schools should remain public institutions: schools have such complex goals that it is not easy to contract a private company to provide them; to be successful schools require trusting relationships between parents, schools and children which are likely to be undermined by the introduction of the profit motive; and schools should help promote values of public service and civic responsibility which a commercial organisation simply cannot communicate effectively because it is not run exclusively in the public interest.

Contact

Richard Darlington, 07525 481 602, r.darlington@ippr.org