The Education Bill – a charter for marketisation

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The Education Bill now going through Parliament contains the legislation needed to put the policies in the White Paper Schools Achieving Success into practice. The issues in the White Paper which have provoked most widespread opposition are specialist schools and faith schools. While these do not require new legislation, the Bill continues the promotion of a more divided and selective system.


– While most specialist schools will be created from existing secondary schools, the Bill provides the opportunity to bid to open new specialist schools in the form of ‘Academies’ (the re-named ‘city academies’). One organisation aiming to take advantage is the Church of England, which has stated that it wants to set up 100 more CofE secondary schools (dwarfing the handful of Muslim schools which may emerge).
– The Bill perpetuates the privileged position of foundation schools (mainly ex-GM schools) over community schools in terms of the employment of teachers – by the LEA in community schools, by the school governing body in foundation schools.
– The Bill also proposes to deepen the academic-vocational divide. At age 14 some students will take the ‘academic’ route. Others will follow vocational courses based not just in schools but in FE colleges and workplaces, a two-tier system leading to two-tier futures.
– Meanwhile, the powers of LEAs are further eroded. The interests of school management over elected local government are reinforced by the creation in each LEA of a ‘schools forum’, which will comprise representatives of school governing bodies and headteachers. Initially it will determine how much of the LEA education budget should be delegated to schools (and if it doesn’t, the Secretary of State can). Having set up this unelected management body, it seems likely that the Secretary of State will use the authority given her in the Bill to expand its powers further at the expense of LEAs.

The Education Bill is a charter for marketisation

However, the really new elements of the Bill concern moves towards deregulating the school system in the interests of marketisation. It is a case study in how to create a market out of a public service by establishing the legislative framework within which a market dynamic can be incubated. While it creates a hospitable environment for the future implementation of free trade in education services under a future GATS agreement, its main purpose now is to foster market processes which are not imported into the school system from outside but are organic developments within it.

By ‘marketisation’ I mean the process of turning school from a public service into a commodity. One form this takes is privatisation, though that loose term has several different meanings, ranging from the outright transfer of provision to the private sector, as with PFI building projects or supply teacher agencies, to the contracting-out of provision to private companies, as with LEA services in a number of authorities deemed to be ‘failing’. It is the operations of companies like Nord Anglia and Capita which have attracted most attention, and the Education Bill opens new doors for them. When an LEA wants to open a new school, or to turn round a school deemed to be failing, it must invite proposals from external partners, including private companies. The Secretary of State, not the LEA, has the final say in whether the private company gets the contract.

But there is another form of marketisation in the school system which is, I would argue, at least as important in the Education Bill. Not private companies coming into the school system from outside for profit but the development of market activities by schools themselves. So there are two market dynamics which New Labour wants to foster. One is exogenous marketisation – education-for-profit companies coming into the school system from outside. The other is endogenous marketisation – the incubation within the school system of entrepreneurial activities for profit by what I will call ‘school companies’.

The key section of the Bill is Chapter 3, which empowers school governing bodies to form, become a member of or invest in companies to purchase or provide services and facilities to schools and communities. This enables schools to operate as commercial companies, including, presumably, as a company under the Companies Act, being able to borrow capital from banks. The Bill says that governing bodies must gain consent from its LEA, but ‘Regulations may restrict the circumstances in which a local education authority may refuse to give any consent…’ – in other words, LEAs will not be allowed to block this initiative.

The educational goods and services schools can sell are management and teaching. Management ranging from ‘consultancy’ imposed on a ‘failing’ school by the Secretary of State to the taking-over of an entire school. Teaching, in the form of curriculum materials and entire lessons on-line or on CD, and in the form of inputs from imported specialist teachers. The model is Thomas Telford school in Shropshire, which has made large profits from the sale of its GCSE courses on-line. These developments will be accelerated by the shortage of teachers in many urban schools, and in some secondary subjects, and by the use of classroom assistants as substitutes.

School companies will be able ‘to exercise relevant LEA functions’. This could presumably include the provision of LEA services and monitoring functions to other schools for profit.

In addition, schools will be able to sell ‘community services ‘. These are not defined in the Bill. The Summary Booklet suggests health services, childcare and adult education as examples, but for an entrepreneurial school the business opportunities could go far beyond these.

In addition to selling goods and services, schools will also be able to bid to run other schools. One route is to propose an Academy. These state specialist schools are set up under private school legislation, so they are outside LEAs, funded directly by government, and exempt from having to recognise trade unions. Proposals for Academies are approved by the Secretary of State, and don’t need the agreement of the local LEA, which can be compelled to hand over land for the purpose (Education Bill, Schedule 7).

The Bill also provides for federations of schools to be established under one governing body. Labour has said before that too many schools are too small to attract effective managers – a federation of schools could offer the size and the salary to attract super-managers (and overcome the shortage of applicants for headteacher posts in many areas). But for marketisation enthusiasts it has another attraction – the opportunity to accumulate a chain of schools under the management of one school company governing body.

There have been two well-publicised instances of this development. One is the take-over of two Surrey secondary schools by ‘3Es’, a charitable trust set up by the Kingshurst City Technology College in Solihull with the avowed aim of establishing a chain of schools. The White Paper holds up 3Es as a model. The other example is the sponsorship by Thomas Telford school of a new Academy in Walsall, using the profits from their sales of online exam courses. The head of Thomas Telford has stated that he intends to establish a chain of up to 25 ‘branded’ state schools in the region (TES 29-6-01).

Labour’s vision of a federation of schools run by a school company has some similarity to its policy of Primary Care Trusts in the NHS. PCTs are essentially federations of GPs, run by a board on which GPs predominate, which are legally and financially independent and have the freedom, like hospital trusts, to engage in for-profit activities.

Entrepreneurial companies need a compliant workforce. Conscious of the strength of the teachers unions, the White Paper says that ‘Teachers will not be transferred to other agencies’ (6.24) – apart, as experience has shown, from teachers employed centrally by LEAs. However, it states that ‘We will amend legislation to enable heads to bring in additional teachers employed by others’ (5.28). Under the Bill schools could for example employ staff in shortage subjects supplied by a private company. Furthermore, a governing body may provide staff to any such company it is involved in. So staff could be appointed by a school company rather than the school itself, either to work in the school or to be hired out to other schools for profit.

In order to give school management the flexibility they desire, the Secretary of State can exempt schools from teachers’ pay and conditions provision (she must consult teachers but not necessarily take any notice of what they say). She can also exempt schools from any curriculum provision (again, after consulting parents, though not, it should be noted, teachers) (Chapter 2). And, just to make sure that there can be no obstacle to the New Labour project, there is a catch-all clause in the Bill (Chapter 1) empowering the Secretary of State to exempt a school or LEA from any education legislation she chooses.

In short, the Bill is a charter for schools to:
– Sell goods and services
– Employ staff
– Set up new schools
– Take over existing schools
– Control the curriculum
– Control teachers’ pay and conditions
– Disregard LEAs
– Borrow capital
– Make profits

I have distinguished between what I have called endogenous marketisation – schools setting up companies to make money either by selling goods and services to other schools or by taking over other schools – and exogenous marketisation – private companies moving into the school system for profit.. Of course the two are not incompatible. On the contrary, we are likely to see symbiotic partnerships between school companies and education-for-profit companies.

While exogenous marketisation takes money out of the school system in the form of profit of external companies, endogenous marketisation redistributes money within the school system in favour of entrepreneurial schools. This will reinforce patterns of inequality between schools as the additional funding will enable successful entrepreneurial schools to improve facilities, staffing etc., literally at the expense of others, as well as no doubt ensuring record-breaking salaries for their headteachers and managers.

Marketisation both feeds and benefits from two other developments currently under way concerning teaching and teachers. The commodification of teaching – turning it from an activity into an object which can be bought and sold – requires a more standardised, prescriptive and modular curriculum, suitable for plug-in inputs from classroom assistants or information technology. It also requires the Taylorisation of the workforce, in other words the breaking down of teaching into component parts needing different levels of teaching skill, which can be delivered by a stratified workforce – a small minority of high-paid curriculum developers and managers, a larger body of qualified teachers, and another tier of less-qualified and lower-paid staff – the classroom assistant, now about to be re-engineered as a sub-grade of teachers. (Again, both developments are paralleled in NHS reforms).

How far will the opportunities for marketisation be taken up? What is not on the foreseeable agenda is wholesale privatisation, for two reasons. First, it would be political suicide for Labour. Secondly, there isn’t enough profit to be made out of the school system. What is on the agenda is the continuing cherry-picking of profitable bits by education-for-profit companies. The extent to which they are likely to be joined by entrepreneurial school managements is unclear, not only because of the profit problem but also because most headteachers and governing bodies will not be driven by the values of market entrepreneurialism. Many schools will want to take advantage of the opportunities offered by deregulation in order to defend and extend a progressive vision of school as a public service. The danger is that, once unleashed, marketisation has its own logic. Cash-starved schools may find opportunities for income generation hard to resist. Competition from successful entrepreneurial schools may force others down the same road (just as extra funding for specialist schools has). Offers of junior partnership from for-profit companies may seem attractive. And if GATS is ratified it will unleash a new wave of market forces in the education system.

And if you find this diagnosis of the Bill exaggerated or extreme, just think how in 1997 accurate predictions of what was to happen under Labour’s first term in office would have sounded.