House of Commons - Education and Employment

Select Committee on Education and Employment Seventh Report

THE ROLE OF PRIVATE SECTOR ORGANISATIONS IN PUBLIC EDUCATION

Promoting partnerships

Promoting partnerships between public and private sectors

29. The scale of private sector partnership with public education is considerable. For example, in two initiatives—specialist schools and Education Action Zones—additional private sector funds have been levered in for educational use. In specialist schools £25 million of resources from the private sector has been injected into state-funded education since May 1997.[27] The Comptroller and Auditor General reported that for 1998-99, 80 per cent of first round Action Zones attracted significant additional funding from the public and private sectors.[28] Of course it is not just financial benefits which these initiatives have sought. The DfEE has reported that, among the first round of Action Zones, which have been running for 12-16 months, there are "early signs that they are doing well". Examination results in 1999 show Action Zones are raising educational standards: at Key Stage 2 there has been a six per cent improvement in English and a 12 per cent improvement in mathematics, compared with national figures of five and ten per cent respectively. There has also been a two per cent improvement in the number of pupils gaining one GCSE compared to a one per cent improvement nationally.[29]

30. Although there is considerable partnership activity between public and private sectors, only a relatively small number of authorities will require the intervention of private sector organisations to provide management services. Currently, only two local authorities have signed contracts with external service providers, although several more authorities are likely to follow a similar path (see Box 3, page viii). The Minister told us that the DfEE was considering expanding the market for external service providers.[30] Subsequently, the DfEE advertised for additional organisations to join its list of approved providers for local authority contracts.[31]

31. We have considered whether there is sufficient capacity in the private sector to meet the likely demand for management services in local authorities where traditional approaches to service provision have significantly under-performed. During our inquiry we took evidence from four of the ten contractors on the DfEE's list of approved providers. The majority of organisations on the DfEE's approved list have experience of both delivering educational services in the public sector as well as providing management skills in the private sector. This balance of skills and experience brings particular benefits based on the combined strengths of the public and private sector organisations. Among the potential benefits of introducing the private sector into the management of maintained schools are:

- innovative and original educational strategies;

- a new pool of managerial talent; and

- alternative sources of funding.

There is no innate advantage in involving the private sector in the management of schools and each case must be examined on its merits. We do not consider that private sector organisations are inherently more skilled or are more likely to achieve high standards than public sector organisations. There are well known examples in other Government departments where the contracting out public services has led to disappointing results. In many cases of private sector involvement the same staff will be delivering the service after it has been transferred to an external provider. Mr Neil McIntosh of CfBT Education Services stated that the staff employed by a private company were often the same staff, or had the same skills and experience, as those employed by the LEA. He argued that what made the difference was not the calibre of staff, but the way in which the service was managed.[32] Mr McIntosh noted the example of CfBT Education Service's management of Berkshire's careers service. He told us:

Mr McIntosh concluded that in his experience private companies could manage education services better than some schools and better than some local education authorities, but that they "would not be better than the best local authority and would not be better than the best school".[34]

32. In our report on the role of headteachers we considered whether school leaders should have teaching experience, and concluded that school leaders required a balance of education and management skills for all but the most exceptional individuals.[35] Similarly we conclude that the most effective intervention and involvement in local authorities will probably rely on external organisations having both the management skills associated with the private sector, as well as the experience of delivering educational services in the public sector. We consider that organisations without any direct experience of managing education services will need to work in partnership with those possessing that expertise to regenerate under-performing education services. We therefore recommend that the DfEE should develop means by which exemplary public sector organisations, particularly local education authorities, may work more easily with other, less successful, parts of the state education service and with private sector providers.

Promoting partnerships within the public sector

33. We were told that there may be a reluctance for some LEAs to look to other, more successful LEAs for advice and support. In Mr Neil McIntosh's view, the idea of Birmingham LEA bidding for contracts with Liverpool LEA would "probably be less attractive to Liverpool than Nord Anglia bidding for Liverpool".[36] On the other hand it was the NUT's opinion that partnerships between LEAs would be "less disruptive, create fewer uncertainties and would probably be more successful than the outsourcing solutions being attempted by the Government".[37]

34. The Secretary of State has recently announced that measures to improve standards in secondary schools where less than one quarter of students are achieving five good GCSEs.[38] Measures will include partnership with other schools with good results. Schools which are struggling to reach the benchmark of 25 per cent of its pupils achieving five good GCSEs will be twinned with a partner school—a beacon or a specialist school or another school with a proven track record—to share problems and come up with common solutions. We believe that a similar scheme for promoting partnership between local authorities would a valuable means of raising standards. We recommend the Government should consider establishing and funding adequately a scheme to 'twin' under-performing local authorities with successful authorities to help spread good practice and to develop solutions to common problems. In this context, we note the addition of Camden LEA to the Department for Education and Employment's list of approved service providers to help turn around under-performing LEAs in other areas.[39]

35. We have considered whether the current model of contracting out puts public sector organisations at a relative disadvantage to commercial organisations because of the financial penalty clauses in the contract. For example, district auditors may prohibit local authorities from entering a contract where financial penalties are applied if performance targets are not met because this will expose public funds to undue financial risk. We are concerned that the most successful LEAs will not be able to work with under-performing authorities because of the nature of the contracts currently being developed for LEA intervention, particularly the financial penalties which are applied if targets are not met. We recommend that the DfEE should consider whether different types of contract are required to allow successful local authorities to work in partnership with private sector organisations.

36. Building on local good practice, the Secretary of State announced a pilot scheme to recruit a number of experienced headteachers who will work with schools at risk of failing.[40] Ten experienced, high calibre headteachers will be appointed, each working with up to five schools through a Memorandum of Agreement between with local education authorities, Dioceses and Foundations. The headteachers will work with and support the existing management and governing bodies of schools to help raise standards, and will have at their disposal additional resources to tackle improvement issues. We believe that an approach of this kind would work well with local authorities which are struggling to deliver acceptable standards of education services. Therefore, we recommend that the Government should establish a scheme to allow highly experienced LEA officers from successful authorities to support the work in under-performing authorities. Such a scheme would need to take account of the potential disruption to the successful authority which might second some of its officers for a period of time.

37. In addition to developing means to allow successful local authorities more easily to work with under-performing authorities we recommend that the Government should establish mechanisms to enhance the capabilities of a cadre of high quality public sector education administrators who could support under-performing LEAs. The National College for School Leadership might act as a model for such a development.

Promoting partnerships with schools

38. There are relatively few examples of private sector partners providing, under contract, management services to individual schools. In the London Borough of Hackney, CfBT Education Services provided an interim headteacher for a primary school in special measures. Following an initiative by Surrey County Council, King's Manor School in Guildford will close in September 2000, and a new Foundation school, King's College, will replace it. Under contract to Surrey County Council, 3E's Enterprises will provide management support to the school. Estelle Morris told us that the process at King's Manor School in Guildford seemed to experience some early success, and the she hoped the DfEE could build on that through their City Academies initiative (see paragraphs 43-46).[41]

Experience in the USA

39. The visit of the Education Sub-committee to schools in Boston, Massachusetts, and Raleigh, North Carolina, provided examples of innovative partnerships between the public and private sectors.[42] Much of the visit centred on the development of charter schools; these are publicly funded schools outside the control of the school districts. While these schools are not allowed to select students, they are not subject to the same regulations as other public schools. Charters to establish and run schools are awarded by State education boards. Any organisation can apply, although some States restrict direct applications from profit-making organisations. During the visit, the Education Sub-committee visited charter schools run by a range of organisations, including local community groups, teacher partnerships and for-profit companies which ran charter schools in a number of States.

40. Members of the Education Sub-committee were told that the charter school initiative is relatively new, and in Boston and North Carolina accounts for only 4 per cent pupils registered at state funded schools. It was therefore too early to tell if the charter school initiative would make a significant and lasting contribution to raising standards of achievement in schools. In some respects charter schools have been at the forefront of innovation: it was clear that these schools were providing opportunities for innovation and were challenging existing structural orthodoxies. We were also told that not all charter schools were successful, indeed some had not had their charters renewed and their students had moved to local district-run school.

41. The Education Sub-committee also met representatives of the business community in Boston and Raleigh who were undertaking extensive work in partnership with the public education system. Organisations such as the Boston Private Industry Council, the Boston Plan for Excellence and the North Carolina Business Committee for Education all ran a number of programmes promoting interaction between schools and the business community. These organisations helped schools to provide alternative perspectives to dealing with problems as well as offering financial incentives for schools to innovate and respond to the challenges facing them. It was clear that the business commitment seemed long-term and systemic, and was not driven by the personal commitment of a few individuals. Members of the Sub-committee were told that real improvements in educational standards when the business and education communities worked in genuine collaboration.

42. Members of the Education Sub-committee were impressed by the way in which some charter schools in the USA could promote both innovative partnerships and opportunities for new and challenging experiment. We recommend that the Department for Education and Employment should take careful note of such international experience and progress using it to inform its own work on City Academies and other similar initiatives.

City Academies

43. During our inquiry the Government announced a new initiative to address the long-term under achievement on some schools. The scheme, to be called City Academy schools, would seek partnerships between Government, the voluntary sector and the private sector. The Minister hoped that with extra resources, some freeing up the curriculum and opportunities for innovation, it would be possible to find solutions for long-term under-achievement in some schools.[43] The Minister confirmed that City Academies would be established under legislation created for City Technology Colleges.[44]

44. We were told that the DfEE plans to issue a prospectus inviting partners to develop a number of City Academies. The Minister hoped that the first City Academies would be opened in September 2001.[45] The criteria for the development of City Academies would include:

- they will be located in areas where there is a concentration of under-performing schools, or where there is process of school reorganisation, so that the City Academies can be built into the reorganisation plans;

- they will have to have plans for the education of all the pupils in the school being replaced by the City Academy;

- essential parts of the National Curriculum would have to be taught, but there would be encouragement for curriculum innovation and flexibility;

- City Academies could only employ teachers who had Qualified Teacher Status, but there would be flexibility in the length of the school day and school year.[46]

45. Potential partners from the private sector would be able to establish City Academies only in areas identified by the DfEE. Estelle Morris told us she did not think it appropriate to have a list of approved partners who may bid for City Academies, unlike contracting out LEA services where there is an approved list.[47] Professor Michael Barber told us that the DfEE would, within the existing legal framework, "discuss with potential sponsors what they see as the barriers and how to we can systematically remove them to establish the school and get the kind of management they would like to see."[48] The Minister told us that promoters of City Academies would not have the same type of relationship with the DfEE as service providers have with the local authorities that they provide management services for. As such, there would not be financial incentives or penalties linked to performance and standards at the City Academy.[49]

46. We note the City Academies proposal as evidence of the Government's willingness to study constructive and imaginative solutions to existing problems in the education system. Nevertheless we are concerned that the experience of City Technology Colleges might suggest some difficulties in attracting substantial contributions from the private sector. The Department for Education and Employment should not rule out other private sector options which are available through independent contractors in relation to interventions in LEAs and in individual schools such as King's College, Guildford. In light of this we urge the Department to reconsider seriously their funding options for City Academies.

27 HC Deb 1 February 2000, vol 343, col 488W. Back

28 HC Deb 11 January 2000, vol 342, col 146W. Back

29 HC Deb 11 January 2000, vol 342, col 146W. Back

30 QQ. 166-167. Back

31 Ev. p.73, para 3. Back

32 Q. 16. Back

33 Q. 16. Back

34 Q. 13. Back

35 Ninth Report from the Education and Employment Committee, Session 1997-98, The Role of Headteachers, HC 725-I, para 5. Back

36 Q. 14. Back

37 Ev. 29, para 25. Back

38 Speech to the NUT, 1 March 2000. Back