Select Committee on Education and Employment Seventh Report


THE ROLE OF PRIVATE SECTOR ORGANISATIONS IN PUBLIC EDUCATION

Principles underpinning private sector involvement

18. Although we agree that a pragmatic approach to raising standards of achievement is necessary, we do not believe that the underlying principles of public accountability should be disregarded by the DfEE, by local education authorities or by school governors. The DfEE noted that local authorities and governing bodies had to bear in mind three general principles when contracting out services:

    -   the law does not allow them to abandon their responsibility for raising standards;

    -   the choices they make about how to carry out that responsibility must be motivated by the best interests of pupils; and

    -   they must ensure that any expenditure represents the best possible value for money.[19]

19. We note above our support for the Government's intention to intervene in under-performing local authorities. We accept this approach is necessary, but it should be based on clear principles that underpin intervention by private sector organisations. We welcome the DfEE's three general principles, but we recommend that the additional principles set out in the following paragraphs should guide any involvement by private sector organisations in public education. These will provide a frame of reference when considering the involvement of private sector organisations, the form that such involvement might take, how it should be monitored and assessed, and the means by which contractors are held accountable.

Capacity to improve

  20. The most important factor is whether the authority has the capacity to improve without external support. Inspections by OFSTED and the Audit Commission will help inform this judgement. Similarly the DfEE will also wish to consider the performance of the local authority. The Secretary of State should also canvass the opinion of key stake-holders in the authority, including headteachers, governors and parents, before reaching a conclusion. We consider that a long history of under-performance should automatically trigger serious consideration the contracting out of the management of an LEA's education service. We recommend that a clear case should be established that the LEA does not have necessary skills and commitment to address the causes of under-performance. Only then should private sector or alternative external involvement be seen as the only means of addressing the LEA's weaknesses.

Form of private sector involvement

  21. The form of involvement by the private sector in education varies considerably. As the figure below shows, this can range from the input of an individual school governor who is based in a private sector organisation and can bring the skills, experience and culture of that organisation to the management of the school to the contracting out of the management of entire local authority education services.

FIGURE 1: RANGE OF PRIVATE SECTOR INVOLVEMENT

Light involvement.......................................................................................Heavy involvement
School governors based in the private sector Consultants appointed for specific projects on time-limited contracts Direct support from private sector for state-funded schools. For example, City Technology Colleges, or the wide range schemes funded and managed by private sector organisations. Formal relationships between schools and private sector organisations, for example Education Action Zones Contracting out of education service to private sector, for example individual school or whole LEA

22. Although the contracting out of the management of education services has been our principal concern in this inquiry, the relationship between private and public sectors in education ranges much wider. The relationship between the public sector organisation and the private sector contractor should reflect the needs of the local education service in that community. We note that a rigid model of intervention has not always been imposed where the Secretary of State has concerns about the performance of failing authorities. For example, in Liverpool significant improvement in the education authority's performance led to the decision to establish a monitoring board to over see progress rather than contract out the management of the education services to a private sector organisation. The partnership board will monitor progress against a contract, prepared by external consultants KPMG, between the education department and the schools within the authority.[20] The improvement in Liverpool's performance followed the secondment of a Chief Education Officer from another LEA. We discuss in paragraph 35 how other local authorities can second senior staff members to support other authorities. We do not see that a single model of involvement in under-performing authorities of schools can be found which meets the varying needs of all authorities. We support the Government's policy that a wide range of solutions to the problem of under-performing local education authorities should be developed.

Public accountability

  23. A theme identified by many who submitted evidence to us was the need for clear and effective lines of accountability. We consider this issue in more detail in a separate section below. At this point, however, we state a principle which should underpin any consideration of the transfer of public education services to organisations working in the private sector. We recommend that the ultimate responsibility for the quality of service provided to users of the education services remain with locally elected representatives. This principle is at the heart of public accountability, and should not be compromised by the involvement of private sector organisations in service delivery.

Consultation with stake-holders

  24. Mr Brian Oakley-Smith of Cambridge Education Associates, part of the consortium chosen to run Islington education service, told us that during the negotiation process for the contract with Islington authority they had met representatives of the education committee and with headteachers of Islington schools, but it was not considered to be "a proper part of the tendering process for us to do public presentations".[21] The Audit Commission expressed the view that given the considerable significance of the education service to the local community, LEAs should ensure that service users and the wider community were fully consulted over proposals to externalise services.[22]

25. We were told that consultation with elected members of local authorities had been an important part of the process in authorities which had signed contracts with private sector organisations (see paragraphs 48-49). The Minister told us that prior to any decision and announcement about possible intervention in a local authority, the DfEE would have established a relationship with the authority to discuss how to address its weaknesses. This had been the case for "every local authority where we have intervened".[23] The Minister also told us that the DfEE's Standards and Effectiveness Unit had met both the elected members and the officers of the authority, and that the Minister had met elected members and headteachers in the authority in all the cases where intervention was seen as necessary.[24]

26. We note that in the local education authorities which have already signed contracts with private sector organisations, elected members were closely involved with the selection of contractor and contract negotiation. Nevertheless, we are concerned that this process did not included significant opportunities for potential bidders and the selected contractor to seek the views of parents and others with a direct interest in local education. We recommend that potential contractors should make a serious attempt to consult local parents and others with an interest in education.

Monitoring the effects of intervention

  27. In the examples noted above, private sector approaches to management and service provision have been introduced to raise standards of achievement in historically under-performing areas. This approach can act as a spur to action in the local authority or school in which intervention is deemed necessary. Intervention can also have an effect on neighbouring schools and authorities as a result of old orthodoxies being challenged and new forms of competition being promoted. Mr Stanley Goodchild of 3E's Enterprises argued that, although 3E's had only recently been awarded the contract for the King's Manor School in Guildford, it was not only benefiting that school but it was benefiting education in the whole area.[25] The DfEE acknowledged that improving a weak school is "bound to have an impact" on other schools, including "influencing parental choice" but that this was no argument for "allowing a school to carry on failing".[26]

28. The involvement of the private sector in the management of public education services can have major effects on neighbouring schools and authorities. We therefore recommend that the effects of such involvement on the LEA's or school's immediate neighbours should be monitored. This monitoring should include a wide range of performance indicators, including, but not limited to, examination data, school improvement measures, pupil exclusion rates, the impact on applications and acceptances at individual schools. The results of this monitoring should be included in annual reports by the local authority or individual school on the progress of the contract (see paragraph 52).


19  Appendix 2, para 7. Back

20  Ev. pp. 75-76. Back

21  Q. 282. Back

22  Appendix 5, para 12. Back

23  Q. 164. Back

24  Q. 164. Back

25  Q. 3. Back

26  Appendix 2, para 29. Back


 
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