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The case against for-profit schools

There are no empirical grounds for handing state schools over to the private sector.

New Statesman

There are no empirical grounds for handing state schools over to the private sector.

In recent months we have seen a growing clamour from right-of-centre think tanks and conservative commentators for commercial providers to be able to set up and run schools for profit. The latest in a long line of think-tank reports putting the case for for-profit providers is to be published this week.

Proponents argue that commercial education providers will raise standards in our schools more rapidly and consistently than the existing mix of not-for profit academies, free schools or mainstream state schools. However, the evidence for this claim is weak.

What evidence exists is limited to a small number of cases: among developed countries only Sweden, some US states and Chile have experimented at scale with commercial providers of publicly funded schools. Among those cases, the performance of commercial providers is mixed. In some US states studies show for profits making little difference to pupil test scores compared to not for profits, while in others they do better. Analysis of the performance of free schools or their equivalents in Sweden and Chile show that not-for-profit free schools out perform for-profit free schools.

The OECD finds no evidence for the claim that private providers produce systematic improvements in school results. Rather, the OECD finds that the most important factors in raising educational standards are the quality of teaching, high levels of school autonomy coupled with robust accountability, and comprehensive strategies for narrowing attainment gaps between children from different class backgrounds.

It is sometimes alleged that only commercial education providers have an interest in expanding good schools, because they are driven by the profit motive to do so, whereas not-for-profit and state schools lack this incentive. Competition drives out weak providers and allows good ones to flourish and competition works best when private rewards are at stake.

Properly regulated competition can play a role in improving outcomes in public services. Managed competition in the NHS, of the kind pioneered by the former Labour government, has been shown to have improved productivity.

However, the evidence for the benefits of competition in education is not strong. The OECD's analysis of its 2009 PISA results is clear on this point, stating that 'countries that create a more competitive environment in which many schools compete for students do not systematically produce better results.'

A recent LSE study is often cited to prove that competition in education works. It found that the introduction of sponsored of academies in England by the last Labour government was accompanied by improvements in neighbouring schools. This was an important study, which showed Labour's sponsored academies improving at a faster rate than comparable schools. And contrary to recent claims, this held true even when GCSE equivalents were excluded from the data. The study offers good grounds for believing that allowing new providers into the school system can increase innovation and improve outcomes.

What the study does not show is that competition per se generated these improvements. It is just as likely that better results in schools near academies rose because of wider school improvement programme affecting all schools during that period.

There are good reasons why we should want a more diverse range of providers in our school system. They can bring new expertise, energy and innovation into state education. But they do not need either a competitive school environment to raise standards nor a profit motive to expand. England has a vibrant not for profit independent sector and there is no shortage of not for profit organisations willing to run academies and free schools. Many are expanding very successfully. There is therefore no strong case for introducing commercial providers on either innovation or competition grounds.

None of this is to say that there should be no role for the private sector in our schools system. Private companies already provide school support and careers services. In England we have seen the enormous growth in the use of private home tutors. A key challenge for policy makers is to ensure that this inevitable rise in parental spending on children's education does not lead to wider inequalities in educational attainment. For example, this could include allowing pupil premium funding to be used to pay for more one to one tuition for disadvantaged pupils provided by the private sector.

In all advanced economies, education systems are undergoing change and renewal, often at a rapid pace. Standing against reform is reactionary, not progressive. But we need the right reform. Schools themselves should not be run for profit. They are civic institutions at the heart of the public realm. Parents want to be able to trust that they always put the interests of their children first. There are no empirical, theoretical or normative grounds for handing them over to the private sector.

Rick Muir is Associate Director at IPPR