How car dealers can run state schools

If you've got £2m, you can "sponsor" one of new Labour's academies, and control teachers and curricu

Jack, aged 15, was expelled from one of the first of the government's shiny new city academies last September. Jack had been on the verge of expulsion from his secondary school more than once in the previous four years. Then the school closed and a city academy opened in its place on 8 September. Within a week, the head had spoken to Jane, his mother (names of both mother and son have been changed). Jack never went back to school. His letter of expulsion is dated 31 October.

When the city academy started, it required a smart uniform, to be purchased from one particular supplier. Jane, a single mother with three children, who works part-time, was eligible for a tiny uniform grant. It did not get anywhere near covering the cost, however, especially as the suppliers did not cater for Jack's size - today, aged 16, he is six feet tall and weighs 17 stone.

Jane says Nigel McQuoid, the headteacher, advised her to withdraw him to avoid the stigma of having him expelled, though there may have been a misunderstanding between them. She at any rate telephoned the local education authority to talk about this. Officials however said she must wait for the school to expel her son, otherwise no alternative would be found for him.

Jane pleaded with the headteacher to give her son a little more time to adjust to new, stricter standards. But out he went and, for the rest of Jack's GCSE year, no other local school could be found for him. He was at home for five months. "He was getting depressed - he suffers from depression anyway. After a time, he just wouldn't come out of his bedroom, not even for his meals," says Jane. She tried telephoning the head to plead with him, but "they wouldn't put me through".

Nor would anyone at the education authority speak to her. "They'd have been round fast enough if I'd kept him out of school," says Jane. "No one wanted to know." At last, in January this year, the authority found him a part-time place at a halfway house for excluded pupils. Jack has now enrolled himself on a college bricklaying course.

Jack's school was one of the first 12 city academies, billed as the government's big idea to end low achievement in the inner cities. Ministers want at least 200 of them. They are private schools, owned by commercial sponsors, but charge no fees. The average cost of creating a city academy is £23m, which is about double the average cost of setting up a new local authority school (estimated to be between £10 and 15m). Sponsors are supposed to chip in with £2m, leaving the taxpayer to find £21m on average.

For that £2m, or less than 10 per cent of the capital cost, the sponsor controls the school, the teachers, the curriculum, the admissions and exclusions policies, the design of the buildings, and pretty well everything else. The sponsor owns the land. No one seems quite clear what the legal position would be if a sponsor decides that he can do without a playing field in the corner of the school, and remembers that it's prime development land.

Those academies that have already been created boast better exam results than the schools they replaced, and so they ought to. They have much more public money than state schools; they can select up to 10 per cent of their intake on "aptitude"; they can spend their money on whatever they like; and, because they control their own admissions and exclusions appeals panels, they can more easily offload difficult pupils on to neighbouring schools.

Of those first 12 academies, five so far have received the full £2m from sponsors, according to a recent analysis by the Times Educational Supplement. Half the sponsors are taking up to five years to produce their share of the money. And even when they do pay up, sponsors are finding ingenious ways of paying the money back to themselves.

For example, Sir Peter Vardy, sponsor of the King's Academy in Middlesbrough and a favourite of Tony Blair, has arranged that organisations connected to him bill the academy for £290,214. This includes a truly remarkable financial arrangement. Sir Peter is an evangelical Christian and a creationist, as is his brother David Vardy, a representative of the Billy Graham Evangelistic Association. (The school teaches that Darwinian evolution is just one theory about our origins, and that the idea that God created us all, literally in seven days, deserves equal consideration.) David Vardy is "project director" at the King's Academy and, for his time, the school - that is to say, the taxpayer - pays out £14,039 to Billy Graham's organisation.

For marketing and advertising, the school uses Vardy Marketing, a division of Sir Peter's company, Reg Vardy plc. Did the work go out to tender? Not exactly. Sir Peter's spokeswoman says: "We have been unable to find keener prices or more creative and appropriate ideas than can be provided in-house." Sir Peter plans to set up seven more academies.

The £2m or less from sponsors is a fig leaf: these schools are simply being privatised. In Barnet, north London, Peter Shalson, chairman of a venture capital company, is required to put in only £1.5m. The excuse is that some of the playing fields of the school his academy will replace are being sold for development, which will bring in the other £500,000. In Nottingham, a city academy was opened without any money at all coming from the private sponsor - the excuse being that, in 1989, he found £2m for the city technology college which the academy replaces. The government has already been heard to mutter that perhaps in future the £2m need not be cash - "gifts in kind" will do. This means such things as a generous hourly rate for the services of an elderly executive, too tired to be useful and too senior to fire.

The only test for entry into the elite club of millionaires who are going to control Britain's best-funded state schools is possession of £2m. Government ministers, and their educational guru Sir Cyril Taylor, appointed by the Conservatives nearly two decades ago to run city technology colleges - the model on which the academies are based - have trawled the country for sufficiently wealthy people. So sponsors are normally people or organisations with no experience or knowledge of education. They include the chairman of Saga Holidays, and the construction giant Amey plc, as well as the car dealer and evangelist Sir Peter Vardy. Of these, only Sir Peter has any experience of running a school. He founded Emmanuel College, one of the city technology colleges.

Even in Sir Peter's empire, there are doubts. "How are we going to ensure that the 200 sponsors who come through are suitable people and can run a school?" asks McQuoid, head of Emmanuel College before taking over at King's. "How do we know that they will all make good use of the £25m or so of government money they will get? You could get people who really are what some people think Peter Vardy is - people who want to use it for commercial purposes, or to impose their religion." His solution - which will not satisfy everyone - is that they should all be made to take lessons from established academy sponsors such as Sir Peter.

That perhaps is why the government is trying to bring on board the Church of England and the private fee-charging schools. The National Union of Teachers' special unit on privatised education reports that Tony Blair's ubiquitous education adviser Andrew Adonis, the powerhouse behind the policy, went to a meeting of the General Synod and told members that the Church should become a major partner in 57 academies. At least the Church has some experience of running schools, though it runs them - according to one of its policy papers - to inculcate "the truths" of Christianity.

As for fee-charging schools, David Miliband, the schools standards minister, has been trying to interest them for two years. Oundle (boarders' fees: £15,195 a year and rising) showed interest in setting up an academy specialising in technology and science. There are the germs of a grubby little deal in the making. Fee-charging schools are, absurdly, classed as charities. The government is at last thinking of doing something about this - but if the schools get involved in "community projects", they will be all right. Fee-charging schools took the hint, and last year Graham Able, then chairman of the club of top private schools, the Headmasters' and Headmistresses' Conference, said that they are ready to help start academies.

But, as Blair might say, never mind the process: does it work? If city academies can lift achievement, who cares whether they rely on evangelical car dealers? McQuoid claims they will bring up the standards of surrounding schools. They are far more likely to lower them. A new school with twice the public funding of neighbouring schools is bound to be seen as the area's "good" school. It will be the place which knowledgeable and motivated parents home in on, and such parents can work the system so that they get the school they want.

Moreover, academies have that precious right to select 10 per cent of their pupils on "aptitude". McQuoid insists he will never use it, and says: "I do not see what those academies which do use it are thinking of." None the less, some are using it, and the National Union of Teachers says: "Expectations on academies to succeed in terms of academic success and popularity with parents could well lead to more academies using their ability to select."

There was supposed to be an evaluation of the city academies (by the accountancy firm PricewaterhouseCoopers), but either it has not been done, and ministers have expanded the scheme without knowing whether it works; or ministers have received a report, and have decided not to release it. City academies will go ahead regardless, because ministers (or, at any rate, Adonis and Blair) believe there is nothing the public sector can do that the private sector - any bit of the private sector - cannot do better.