Watch out for a new supremo

Observations on schools

When you think of education, the first name that comes to mind is probably not Sunny Varkey, an extremely rich Dubai businessman. But it soon will be.

Starting with 18 fee-charging schools in Dubai, mostly for expats, Varkey pioneered cut-price (he prefers the term "affordable") fee-charging schools in Britain earlier this year, and already owns 13 of them. Now he has signed a deal that gives him a foothold in the state sector, merging his British education outpost, Global Education Management Systems (Gems), with 3E's, a company that manages a clutch of state schools.

3E's is Tony Blair's favourite education company. Opening one of its schools, he said it "apparently stands for "education, education, education - I've heard that phrase before, and wonder if they should be paying me royalties". They could certainly afford to. The company's wealth began with Kingshurst, near Birmingham, the first of the city technology colleges created in the late 1980s by the then Tory education secretary, Kenneth Baker. The colleges got a huge state handout supplemented by a much smaller sum from business. Kingshurst's then principal, Valerie Bragg, teamed up with her husband, Berkshire's former chief education officer Stanley Goodchild, to create a company based on Kingshurst to manage other state schools. The company flourished. It won the management contract for two Surrey schools, provides services for many more and is already running one of the new, government-supported city academies. Though Kingshurst had been almost entirely paid for by the taxpayer, Bragg and Goodchild have always run 3E's as a private company. Profits go back to their Kingshurst Trust and they take only what they call "modest" salaries.

Varkey's fortune is based on education and healthcare in the Gulf - he owns the top private hospital in Dubai, has ex- panded into India as well as Britain, and plans soon to set up in the US. His will be the first fee-charging British schools to be run as a chain, taking advantage of economies of scale in a similar way to a supermarket, with centralised purchasing and teachers shared among schools. The aim is to open up a new market by charging fees that start at about £6,000 a year - less than half the normal cost. The product will be less luxurious, with a narrower curriculum, perhaps teaching only core subjects, and class sizes similar to those in state schools. But in a market-driven education system, you get what you pay for.

The proportion of British children who attend fee-charging schools has stayed at between 7 and 8 per cent for decades, but Varkey envisages perhaps doubling that number with 200 new schools. His target market is the 50 per cent who, according to a poll, would send their children to a fee-charging school if they could afford it.

Since he is offering little that a state school can't offer, the extra pupils are likely to come from families who do not want their children mixing with the sort you get at local comprehensives. This would damage state schools, removing their customers and narrowing their social base. State schools in areas where Varkey operates will consist overwhelmingly of children from poorer families.

It's rather neat. The company that plans to deliver a crippling blow to British state education is to be put, through its merger with 3E's, in charge of great chunks of it. If you want to know who will win - the cut-price schools or our state education system - ask Sunny Varkey. It looks as though he'll control both of them.