APPENDIX 3
Memorandum from the Society of Education
Officers (RPS 06)
The Society of Education Officers is the professional
organisation for Directors and staff working in education services
in Local Education Authorities in England and Wales, and in Education
and Library Boards in Northern Ireland, and in related organisations.
It works in partnership with the Association of Chief Education
Officers. This paper responds to the issues identified in Press
Notice 29-98/99 of 7 July 1999.
1. What do we mean by "private companies"?
Private companies are organisations whose ultimate
accountability is exclusively to the members of the company, and
not to any external body. If they contract to provide educational
services their accountability is exclusively in the details of
the contract itself.
2. How do we define the limits to the private
sector?
The private sector need not be narrowly limited
in the provision of public services provided contracts are properly
defined. Clearly the private sector cannot have the power to raise
taxes including the Council Tax and Non-Domestic Rates. Ultimate
accountability for spending money raised through taxation and
for entering into long term financial commitments including borrowing,
must rest with the elected representatives who are responsible
for the taxation whether local or national. Decisions on strategic
planning and issues such as the supply and location of school
places should rest with democratically elected representatives
and not with the private sector. After that it becomes a matter
of judgement as to how best to deliver services in each locality.
The requirements of the Best Value initiative include the active
consideration of alternatives to in-house providers. The key issue
in each case is the exercise of political and professional judgement
as to how best to deliver a particular service. The judgements
must be controlled by local elected members, advised by impartial
and disinterested officers. While there may be few limits to the
private sector, there should also be few limits to direct public
sector provision if it can be shown that it is at least equally
effective.
3. What specific benefits do we expect commercial
companies to bring to the running of schools?
We do not believe that commercial companies
have any special expertise in running schools or in providing
educational services to schools. It is notable that those currently
in the field use managers who have had substantial experience
as employees in the public sector. A number of the DfEE select
list of consultants operate as private sector/LEA partnerships.
It is possible that a commercial contract, with financial penalties
in the event of failure, makes the company focus more relentlessly
on the specific outcomes required. Subject to the contract, the
company can pursue the defined objectives without outside "interference".
But these characteristics are not exclusive to working with commercial
companies, and there are good examples of successful operation
in a "businesslike" manner in the public sector. Equally
there are poor commercial companies whose performance does not
match that of the public sector. We are not opposed in principle
to the use of commercial companies but we are opposed to the assumption
that they automatically bring specific benefits. There is no evidence
to support that assumption. A substantial shift towards the use
of private commercial companies on an unproven assumption that
they will bring benefits could prove to be a costly and disruptive
mistake. On the other hand, if a specific organisation, private
or public, can solve some of the more intractable problems of
schools and the education service, then they deserve praise and
reward whatever kind of organisation they are, and we should all
be prepared to learn from their success.
4. The nature of the process by which educational
services are contracted out to the private sector, and how the
views of parents and others can be taken into account during the
process.
We believe that the decisions about whether
to use in-house providers or private contractors should be open.
What matters is the outcomes and quality of a particular service.
The Best Value approach should be followed, but decisions must
rest with the LEA, who must not adopt the approach that they are
simply handing over a service to a third party if it is contracted
out. Managing the contract is an essential task and many LEAs
have developed skills in this area with the contracting out of
non-educational services. It is regrettable that current contracting
out takes place largely in the context of failure or alleged failure.
That is bound to create a climate of hostility and suspicion.
Punishing LEAs with enforced contracting out of services does
not encourage LEAs generally to adopt a creative and positive
approach to the use of the private sector. Central and local government
should work together to extend the "modernising" agenda
to develop, and not restrict, the enabling and leadership roles
of local authorities. Contracting processes should always include
the option of the LEA making direct provision on the basis of
fair competition.
The current process leading up to the contracting
out of LEA services involves DfEE nominated consultants assisting
in the process. In some instances (eg Liverpool) the consultant
prepares an initial diagnosis and then has a follow-on contract
to assist in the implementation of a recovery plan. We believe
that the initial diagnosis should be seen to be fully independent
and not influenced by the possible inducement of a follow-on contract
for implementation.
For LEA services to schools it is essential
that schools should be fully consulted about the terms of the
contract, especially in relation to customer satisfaction and
complaints procedures. This is particularly important where the
contractors' performance is dependent on the schools themselves
meeting specific educational targets. Although contracts for non-educational
services such as school catering and cleaning may not be directly
comparable, the experiences gained in developing and managing
such contracts should be a valuable guide.
5. Accountability and evaluation mechanisms
Accountability and evaluation mechanisms are
essential features of the detailed contract. They may be relatively
straightforward provided that the appropriate effort and care
are put into their determination, but this must include recognition
of the democratic responsibilities of elected members. We are
concerned about the accountability of the Council itself if large
parts of its services are contracted out to the private sector,
and about the leadership role of the Director of Education and
his or her management team.
We believe in strong and responsible local government.
it is essential that councillors themselves feel full responsibility
for services even where they have been contracted to the private
sector. Enforced contracting out can lead to blame for poor service
being diverted to the contractors, or to central government for
having forced the change. That leads to ineffective management
and leadership. Councils must retain the power to invoke penalty
clauses, and to terminate contracts where necessary.
The most effective LEAs are characterised by
strong and skilful leadership by the Director of Education and
the Council itself. In one sense, such leadership is already exercised
in a context where the central function—running schools—is
"contracted out" to governors and head teachers through
mandatory delegation. But the direct management of support services
is an important vehicle for exercising leadership especially in
strategies for raising standards. Contracting out support services
will mean new leadership skills on the part of Directors and it
remains to be seen whether such an arrangement will be as effective.
6. The impact of private sector involvement
in one school on neighbouring schools
There will be concerns that private sector involvement
in one school will lead to an attitude that that school must succeed
by any means, regardless of the consequence for neighbouring schools,
that patterns of admissions may change unfairly, and that the
school will cater only for pupils from families that retain commitment
to its ethos and success. We do not believe that such concerns
are exclusive to schools with private sector involvement. Competition
in many areas is intense. Any school receiving extra support after
failure or near-failure and having new strong and single-minded
leadership may impinge on neighbouring schools. Few lessons will
be learned from private sector involvement in one school alone.
The challenge for the education service is to raise standards
across the board. There are many examples of raising standards
in individual schools—often involving heroic efforts on
the part of the leadership. We have yet to sustain such improvements
in schools everywhere.
7. Whether it is appropriate for profits to
be made from the management of state schools and other services
currently provided by local education authorities
There is a natural reluctance to accept that
tax-payers money should be used for private profit. Ideally if
there are profits to be made they should be put back into improving
services (or used to reduce taxation). It is fundamentally wrong
for the private sector to be given exclusive access to local authority
services as appears to be happening with some LEA services at
present. If there is open competition, experience with compulsory
competitive tendering suggests that the public sector will quickly
adapt and that the tax-payer will see value for money without
funding private profit in the longer term.
8. The difference between the approaches taken
by different types of commercial company involved in this field
Evidence will no doubt be given by the companies
themselves. However, we suspect that there may be as much variation
with categories (for-profit or not-for-profit) as between categories.
It was evident in compulsory competitive tendering for non-educational
services that while some companies relished the intense competition
of tendering for the lowest price, other very successful companies
in the field did not compete, preferring to secure business elsewhere
by negotiation. For some driving down costs was the key, for others
securing comfortable contracts and a good return was the approach.
9. Are there any lessons to be learned from
experience in other countries?
It is essential to study the experience of other
countries. Our impressions, gained from the experiences of our
members who have visited the United States of America in particular,
is that there are some interesting and valuable examples of private
sector involvement, but that no-one has yet produced a universal
model that is superior to public sector management. Every option
for raising standards should be pursued with an open mind, but
we are wary of assumptions that the private sector has resolved
all the problems of managing public sector education—it
has not.
Society of Education Officers
October 1999
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