Selling off the schools system

Michael Gove says his education policies will help Britain’s poorest pupils, but will they just comp

Are we witnessing a new schools revolution? If so, it has got off to a shaky start. This summer, the Secretary of State for Education, Michael Gove, was forced to retract overblown claims about the new academies and then apologise for his careless announcements on funding cuts to the Building Schools for the Future (BSF) programme. As the new term began, few schools had completed the application process to become academies. And only 16 "free schools" will be opening in 2011.

But if Gove's interview in last week's NS is anything to go by, the coalition is hiding its disappointment well. Gove is particularly skilful at deploying egalitarian language to promote what many see as a subtly divisive agenda, in which thousands of maintained schools in poorer areas could be left struggling from funding cuts and competition from government-favoured independent state schools. The resulting problems in local schools will surely be blamed on Labour, New and Old.

The Academies Act, enabling the conversion of schools into academies, is now law - it was pushed through with unseemly haste in late July. Behind the scenes, Department for Edu­cation officials have apparently been offering head teachers "help and advice" on the merits of conversion.

Many schools are now in a difficult position. As one chair of governors of an outstanding urban secondary school told me: "Nobody thinks that academy status itself will improve our position, or bemoaning the local authority either - but we are facing real cuts in funding and the possibility of redundancies. It's purely about money." She said she had worked out that her school would receive an extra £1.2m if it became an academy, though roughly half of that would be spent on buying back services.

Despite the fanfare about the new pupil premium, details of which will be announced this autumn, few heads of schools with high numbers of children on free school meals - and therefore likely to benefit from the premium - believe that this will make up even a small proportion of the shortfall in funding cuts from other sources.

According to Councillor Mary Arnold, lead member for children and families in Brent, north London, there is a fear of reductions in funding for local authorities' central services, which support special-needs education, school improvement and curriculum and professional development. "The dilemma for governors could be: if one school becomes an academy, will there be anything left for central services and, by implication, for our school?" she says.

Meanwhile, the lure of a new free school may prove tempting to a few ambitious or worried parents, especially - as Gove seems to suggest in his NS interview - as we move closer to a crude schools market in which parents, frequently unaware of the complex funding and admissions priorities that shape our hierarchical and unequal education system, are simply encouraged to "choose to shop at Waitrose rather than Tesco". Not a word about those who do end up at Tesco, to use this snobbish comparison, nor the many thousands more who might actually trust in central government to provide a decent school in every neighbourhood.

Arnold fears that, in Brent, "groups of pro­fessionals and parents will be bidding [for free schools] like Toby Young's group in Ealing, as they can't get their children into good local schools. There will also be interest from groups whose children usually underachieve."

The government insists that all schools, bar the existing grammars that convert to academies, will be "all-ability" schools and retain an admissions code. Yet many fear a future relaxation of admissions policy, meaning schools could quickly be pitted against one another in a scramble to win the so-called best pupils. The losers here would undoubtedly be the disadvantaged pupils, bar the very brightest, who would be siphoned into the new academies and free schools.

Arnold also fears further segregation along class and ethnic lines, given that evidence from the Swedish free schools "shows that ethnic-minority-based schools become segregated in the second generation".

So what role will private companies play in the new school set-up? Astonishingly, 75 per cent of Swedish free schools are run for profit. In the UK, companies such as Pearson, Serco, Tribal, Nord Anglia, Edison Learning, Cambridge Education and even the Premier League have expressed an interest in running schools or providing support services in the sector. Gems, the world's biggest provider of independent education abroad, now run by the former Ofsted chair Zenna Atkins, says that several groups have already approached it.

Jon Berry, an education campaigner based in Hertfordshire, is fighting against the encroachment of Kunskapsskolan, a private company that runs 32 schools in Sweden. It has taken over its first UK academy in Richmond, west London, and has also expressed an interest in several schools in the Hertfordshire area. According to Berry, it is "offering not-for-profit services but it's pretty clear that it has a profit agenda down the line. It pays its teachers by exam results and, as in the academies, tears up [national agreements on] teachers' pay and conditions." The challenge is to get parents to see that "these schools offer no clear benefit to them. But you can understand why working-class communities might say: 'We'll grab whatever is going.'"

So where is the opposition to the plans coming from? This month, the increasingly effective Anti Academies Alliance will be launching a campaign called A Fight for Every School, which supports local resistance to plans to convert schools to academy status without proper consultation. Public anger has undoubtedly been fuelled by the cuts to BSF funding and Gove's telling lack of care with detail.

As for Labour, Ed Balls did a credible job of opposing the Academies Bill and BSF cuts, but the party is compromised by its pro-market, pro-choice line of the Blair years and by its failure to support local authorities as leading players in providing high-quality local provision.

The coming political struggle is not, as the coalition would have it, between stifling centralisation and the local freedom to flourish. After all, academies and free schools will be accountable to central government and their private paymasters only. Similarly, support for freedom of heads and teachers is entirely compatible with democratic accountability and a strong role for the local authority.

Polls consistently show that parents are far happier with local schools than the press leads us to believe; moreover new studies, such as one by Bristol University released last month, indicate a shift in public mood and that most people would be happy with less choice and for the state to make big decisions for them. There is a sober case for more planning and investment (and higher taxation) in the interests of both fairness and improved school quality. But who in the current climate has the political courage to make that kind of alternative argument?

Melissa Benn's book on education "The New Class Wars" will be published by Verso in 2011

We don't need new education

In the run-up to the general election, the Conservative Party promised to provide 220,000 new school places over the next ten years.

Once the Tories got into power, legislation enabling the creation of free schools and the conversion of successful state schools into academies was introduced in the Commons, and the Education Secretary, Michael Gove, announced that more than 1,000 schools had already expressed an interest in converting.

Gove was forced to back down quickly on this claim after publication of the full list of schools made it clear that many were simply "registering an interest". The Academies Act is now law, but so far only 153 schools have definitely announced plans to enter the scheme, almost all of them in better-off parts of the country.

The free schools have run into similar problems. The New Schools Network, an organisation awarded £500,000 by the coalition to speed up the process, has indicated that up to 700 groups have been in touch from around the country.

However, recent press reports suggest that, despite enthusiastic government backing and the relaxation of critical planning regulations, only 16 will open in September 2011. Some high-profile projects are among those facing delays, including the Bolingbroke Academy in Wandsworth, south-west London.

Melissa Benn

Melissa Benn writes for the Guardian and other publications on social issues, particularly education. She is the author of several books of non-fiction and two novels, including One of Us (2008), and reviews books for the New Statesman

This article first appeared in the 13 September 2010 issue of the New Statesman, France turns right

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What Marx got right

...and what he got wrong.

1. You’re probably a capitalist – among other things

Are you a capitalist? The first question to ask is: do you own shares? Even if you don’t own any directly (about half of Americans do but the proportion is far lower in most other countries) you may have a pension that is at least partly invested in the stock market; or you’ll have savings in a bank.

So you have some financial wealth: that is, you own capital. Equally, you are probably also a worker, or are dependent directly or indirectly on a worker’s salary; and you’re a consumer. Unless you live in an autonomous, self-sufficient commune – very unusual – you are likely to be a full participant in the capitalist system.

We interact with capitalism in multiple ways, by no means all economic. And this accounts for the conflicted relationship that most of us (including me) have with capitalism. Typically, we neither love it nor hate it, but we definitely live it.

2. Property rights are fundamental to capitalism . . . but they are not absolute

If owning something means having the right to do what you want with it, property rights are rarely unconstrained. I am free to buy any car I want – so long as it meets European pollution standards and is legally insured; and I can drive it anywhere I want, at least on public roads, as long as I have a driver’s licence and keep to the speed limit. If I no longer want the car, I can’t just dump it: I have to dispose of it in an approved manner. It’s mine, not yours or the state’s, and the state will protect my rights over it. But – generally for good reason – how I can use it is quite tightly constrained.

This web of rules and constraints, which both defines and restricts property rights, is characteristic of a complex economy and society. Most capitalist societies attempt to resolve these tensions in part by imposing restrictions, constitutional or political, on arbitrary or confiscatory actions by governments that “interfere” with property rights. But the idea that property rights are absolute is not philosophically or practically coherent in a modern society.

3. What Marx got right about capitalism

Marx had two fundamental insights. The first was the importance of economic forces in shaping human society. For Marx, it was the “mode of production” – how labour and capital were combined, and under what rules – that explained more or less everything about society, from politics to culture. So, as modes of production change, so too does society. And he correctly concluded that industrialisation and capitalism would lead to profound changes in the nature of society, affecting everything from the political system to morality.

The second insight was the dynamic nature of capitalism in its own right. Marx understood that capitalism could not be static: given the pursuit of profit in a competitive economy, there would be constant pressure to increase the capital stock and improve productivity. This in turn would lead to labour-saving, or capital-intensive, technological change.

Putting these two insights together gives a picture of capitalism as a radical force. Such are its own internal dynamics that the economy is constantly evolving, and this in turn results in changes in the wider society.

4. And what he got wrong . . .

Though Marx was correct that competition would lead the owners of capital to invest in productivity-enhancing and labour-saving machinery, he was wrong that this would lead to wages being driven down to subsistence level, as had largely been the case under feudalism. Classical economics, which argued that new, higher-productivity jobs would emerge, and that workers would see their wages rise more or less in line with productivity, got this one right. And so, in turn, Marx’s most important prediction – that an inevitable conflict between workers and capitalists would lead ultimately to the victory of the former and the end of capitalism – was wrong.

Marx was right that as the number of industrial workers rose, they would demand their share of the wealth; and that, in contrast to the situation under feudalism, their number and geographical concentration in factories and cities would make it impossible to deny these demands indefinitely. But thanks to increased productivity, workers’ demands in most advanced capitalist economies could be satisfied without the system collapsing. So far, it seems that increased productivity, increased wages and increased consumption go hand in hand, not only in individual countries but worldwide.

5. All societies are unequal. But some are more unequal than others

In the late 19th and early 20th centuries, an increasing proportion of an economy’s output was captured by a small class of capitalists who owned and controlled the means of production. Not only did this trend stop in the 20th century, it was sharply reversed. Inherited fortunes, often dating back to the pre-industrial era, were eroded by taxes and inflation, and some were destroyed by the Great Depression. Most of all, after the Second World War the welfare state redistributed income and wealth within the framework of a capitalist economy.

Inequality rose again after the mid-1970s. Under Margaret Thatcher and Ronald Reagan, the welfare state was cut back. Tax and social security systems became less progressive. Deregulation, the decline of heavy industry and reduction of trade union power increased the wage differential between workers. Globally the chief story of the past quarter-century has been the rise of the “middle class”: people in emerging economies who have incomes of up to $5,000 a year. But at the same time lower-income groups in richer countries have done badly.

Should we now worry about inequality within countries, or within the world as a whole? And how much does an increasing concentration of income and wealth among a small number of people – and the consequent distortions of the political system – matter when set against the rapid ­income growth for large numbers of people in the emerging economies?

Growing inequality is not an inevitable consequence of capitalism. But, unchecked, it could do severe economic damage. The question is whether our political systems, national and global, are up to the challenge.

6. China’s road to capitalism is unique

The day after Margaret Thatcher died, I said on Radio 4’s Today programme: “In 1979, a quarter of a century ago, a politician came to power with a radical agenda of market-oriented reform; a plan to reduce state control and release the country’s pent-up economic dynamism. That changed the world, and we’re still feeling the impact. His name, of course, was Deng Xiaoping.”

The transition from state to market in China kick-started the move towards truly globalised capitalism. But the Chinese road to capitalism has been unique. First agriculture was liberalised, then entrepreneurs were allowed to set up small businesses, while at the same time state-owned enterprises reduced their workforces; yet there has been no free-for-all, either for labour or for capital. The movement of workers from rural to urban areas, and from large, unproductive, state-owned enterprises to more productive private businesses, though vast, has been controlled. Access to capital still remains largely under state control. Moreover, though its programme is not exactly “Keynesian”, China has used all the tools of macroeconomic management to keep growth high and relatively stable.

That means China is still far from a “normal” capitalist economy. The two main engines of growth have been investment and the movement of labour from the countryside to the cities. This in itself was enough, because China had so much catching-up to do. However, if the Chinese are to close the huge gap between themselves and the advanced economies, more growth will need to come from innovation and technological progress. No one doubts that China has the human resources to deliver this, but its system will have to change.

7. How much is enough?

The human instinct to improve our material position is deeply rooted: control over resources, especially food and shelter, made early human beings more able to reproduce. That is intrinsic to capitalism; the desire to acquire income and wealth motivates individuals to work, save, invent and invest. As Adam Smith showed, this benefits us all. But if we can produce more than enough for everybody, what will motivate people? Growth would stop. Not that this would necessarily be a bad thing: yet our economy and society would be very different.

Although we are at least twice as rich as we were half a century ago, the urge to consume more seems no less strong. Relative incomes matter. We compare ourselves not to our impoverished ancestors but to other people in similar situations: we strive to “keep up with the Joneses”. The Daily Telegraph once described a London couple earning £190,000 per year (in the top 0.1 per cent of world income) as follows: “The pair are worried about becoming financially broken as the sheer cost of middle-class life in London means they are stretched to the brink.” Talk about First World problems.

Is there any limit? Those who don’t like the excesses of consumerism might hope that as our material needs are satisfied, we will worry less about keeping up with the Joneses and more about our satisfaction and enjoyment of non-material things. It is equally possible, of course, that we’ll just spend more time keeping up with the Kardashians instead . . .

8. No more boom and bust

Are financial crises and their economic consequences part of the natural (capitalist) order of things? Politicians and economists prefer to think otherwise. No longer does anyone believe that “light-touch” regulation of the banking sector is enough. New rules have been introduced, designed to restrict leverage and ensure that failure in one or two financial institutions does not lead to systemic failure. Many would prefer a more wholesale approach to reining in the financial system; this would have gained the approval of Keynes, who thought that while finance was necessary, its role in capitalism should be strictly limited.

But maybe there is a more fundamental problem: that recurrent crises are baked into the system. The “financial instability” hypothesis says that the more governments and regulators stabilise the system, the more this will breed overconfidence, leading to more debt and higher leverage. And sooner or later the music stops. If that is the case, then financial capitalism plus human nature equals inevitable financial crises; and we should make sure that we have better contingency plans next time round.

9. Will robots take our jobs?

With increasing mechanisation (from factories to supermarket checkouts) and computerisation (from call centres to tax returns), is it becoming difficult for human beings to make or produce anything at less cost than a machine can?

Not yet – more Britons have jobs than at any other point in history. That we can produce more food and manufactured products with fewer people means that we are richer overall, leaving us to do other things, from economic research to performance art to professional football.

However, the big worry is that automation could shift the balance of power between capital and labour in favour of the former. Workers would still work; but many or most would be in relatively low-value, peripheral jobs, not central to the functioning of the economy and not particularly well paid. Either the distribution of income and wealth would widen further, or society would rely more on welfare payments and charity to reduce unacceptable disparities between the top and the bottom.

That is a dismal prospect. Yet these broader economic forces pushing against the interests of workers will not, on their own, determine the course of history. The Luddites were doomed to fail; but their successors – trade unionists who sought to improve working conditions and Chartists who demanded the vote so that they could restructure the economy and the state – mostly succeeded. The test will be whether our political and social institutions are up to the challenge.

10. What’s the alternative?

There is no viable economic alternative to capitalism at the moment but that does not mean one won’t emerge. It is economics that determines the nature of our society, and we are at the beginning of a profound set of economic changes, based on three critical developments.

Physical human input into production will become increasingly rare as robots take over. Thanks to advances in computing power and artificial intelligence, much of the analytic work that we now do in the workplace will be carried out by machines. And an increasing ability to manipulate our own genes will extend our lifespan and allow us to determine our offspring’s characteristics.

Control over “software” – information, data, and how it is stored, processed and manipulated – will be more important than control over physical capital, buildings and machines. The defining characteristic of the economy and society will be how that software is produced, owned and commanded: by the state, by individuals, by corporations, or in some way as yet undefined.

These developments will allow us, if we choose, to end poverty and expand our horizons, both materially and intellectually. But they could also lead to growing inequality, with the levers of the new economy controlled by a corporate and moneyed elite. As an optimist, I hope for the former. Yet just as it wasn’t the “free market” or individual capitalists who freed the slaves, gave votes to women and created the welfare state, it will be the collective efforts of us all that will enable humanity to turn economic advances into social progress. 

Jonathan Portes's most recent book is “50 Ideas You Really Need to Know: Capitalism” (Quercus)

Jonathan Portes is senior fellow The UK in a Changing Europe and Professor of Economics and Public Policy, King’s College London.

This article first appeared in the 22 June 2017 issue of the New Statesman, The zombie PM

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