Free schools will invite corruption unless we fix them now

American free schools went through 20 years of shady deals because of their shoddy legislation. Now Britain is heading down the same path.

The coalition government pulled a clever trick with free schools. While swathes of normally vigilant people became consumed by worry about the suitability of Toby Young running a school, few of them realised that Free schools were largely a tiny distraction from a much wider-spread and more important education reform: “academisation”, the quasi-privatisation of state schools.

“Quasi-privatised” does not mean for-profit. UK state schools cannot be profit-making (though significant parts of the right would like it to be). No, academies are considered quasi-private because they are run by private non-profit companies, independently set up for the purpose of running schools. Before the change, most schools were owned and operated by local authorities. Academies effectively by-pass localism and instead get money directly from central government, which then contracts the non-profit organisation to run the school service via a “funding agreement”. Free schools are simply new schools that went through a special bidding process before they start up - but once their doors are open they are an academy like any other. And by “any other”, we are now talking about the majority of schools, since over half of England”s secondary schools operate as academies.

The first academies opened under Labour, built in areas where schools historically struggled to flourish. It was argued that giving the new school leaders greater flexibility would help with meeting the unique demands of teaching in challenging areas. A local “sponsor” was also commonly sought – someone who could bring capital, business acumen and a “brand name” to overcome the area’s poor reputation. However, this small, almost micro-managed, bundle of schools under Labour grew profusely post-2010. The coalition extended academy rules – all new schools must now be academies – and gave existing schools the opportunity to “convert”, giving up their link to the local authority in favour of direct cash and extra freedom. Enthusiasm for the change was revealed in a recent National Audit Office report where the vast majority of convertor Heads said they welcome greater freedom. The recent GCSE performance tables also suggest that academies do appear to be improving exam scores at faster rates, though only marginally.

So letting schools “go free” sounds great. But in the US, where a similar system has been operating for over twenty years, there have been some spectacular problems.

In Arizona the government went hard for autonomy when the policy began in the early 90s. Similar to Gove they encouraged speedy take-up and within two years had over a hundred schools. But the speed meant the State Department for Education could not keep up: the approvals process was not rigorous, schools started failing without a clear process for closing them, and financial issues mounted up.

Unlike in England, for-profit groups are allowed to run schools in thirty-two of America’s fifty states. While the impact of for-profits on student achievement is still debatable, several infamous for-profit “disasters” have left people questioning the appropriateness its appropriateness in education.

The most widely-reported early failures were in the Edison School network. Set up by Chris Whittle in the 1992, Edison aimed to make profit via efficient yet brilliant schools. Initially luring pupils in with promises of free laptops and bilingual education, once schools were taken over Edison closed libraries, sacked employees, and released misleading performance data. The laptops and bilingualism were also soon abandoned. Some argued this demonstrated the worst excesses of for-profit greed; others, that bad financial decisions in Edison’s early days meant cutbacks were more a scrabble for cash than anything sinister. Regardless of motive, the moral of the Edison story is that handing money over to an autonomous private company makes it hard to track, and even harder to enforce its sensible use.

Another common racket in the US is around real estate. In several states, non-profit school organisations created real estate “sister” companies that purchased buildings which they then rented back to the non-profit school company, often at rents far higher than market value. Hence money from the taxpayer - given to the school for the pupils’ benefit – actually went into paying rent to a for-profit company only able to gain the deal because of its close connections to the non-profit group. In a similar bout of high jinks, six Imagine charter schools – with more than 4,000 students enrolled - had to be unilaterally closed last summer in Missouri when a complicated real estate scandal was uncovered.

Of course, financial irregularities are not solely an academy problem. All schools can fall foul of misdemeanours. But the legislation governing Academies was pushed through in five days using a “compressed” Parliamentary process normally reserved for anti-terror laws. Much of the rushed law remains unclear and open for exploitation. For example, while academies must be run by non-profit groups, the non-profit company can hire for-profit organisations to manage the day-to-day operations of the school or for the lease of premises. These are precisely the types of loopholes in law commonly exploited in US.

One way to circumvent inevitable problems would be listening to those in the US already wise to such scams. “States didn’t realise that bad people would want to get involved, but there will always be some people who care more about the dollars than the kids” says Dr Louann Bierlein Palmer, Professor of Educational Leadership at Western Michigan University. From the late 1990s onwards Palmer analysed the differences in charter school laws springing up as each state implemented the policy in its own way. Gradually she noticed that some legal frameworks encouraged fast take-up, while others were too slow, but in either case without clear laws, financial and legal issues soon took hold.

In response Palmer and her colleagues created a list of “model laws” against which US states are ranked each year. This week’s release of the 2013 report shows that more states than ever are coming around to her way of thinking. In 2011 Maine was the first state to enact almost all 20 laws; in 2012 the state of Washington joined them. She notes that “the trick with these laws is that we want to be effective but not heavy handed”.

So what of England? How close are we to the model? The coalition cannot be faulted for encouraging autonomy and a fast take-up: on the measures ranking “freedoms” England would receive almost full marks. The bigger problem is that our current system hits almost none of Palmer”s “quality control” requirements. And those are the ones really important for avoiding disasters.

What could England improve? First, increased transparency about the way new academies (i.e. free schools) are opened. The British Humanist Association recently won a two-year Freedom of Information battle just to get a list of applicant group names, school location and religious affiliation, and the DfE still are considering using the power of veto to over-ride the ruling – all over a list of names. In the best US States there is complete transparency of the entire application process (For instance, Maine’s list is published online), and rightly so given the schools are taxpayer-financed.

There could also be clearer processes for renewing or revoking academy “agreements” as the current rules are too patchy. Campaign groups are already complaining that Roke Primary School is being forced to close (or, more likely, be taken over by an academy group) while schools with similar performance records which already operate as academies are being allowed to limp on. Perhaps this is because the government does not want to admit that academies are not a panacea; possibly it is because of finance — in the US charters have often been allowed to stay open far longer than they should because financial contracts they signed meant closing would involve prohibitive financial penalties. Finally there needs to be clearer guidance around the use of for-profit organisations, and an ability for the public to “follow the pound” as Margaret Hodge recently suggested.

The coalition government may have boosted the quasi-privatisation agenda without too much fuss, but the US's experience should be a serious warning. If its history is anything to go by, there is a need for much more transparency in the opening and closing processes of schools and for tighter financial accountability. Without both of those it’s all-too-likely that the free schools program will end in tears. Or a courtroom.

Photograph: Getty Images

Laura McInerney taught in East London for six years and is now studying on a Fulbright scholarship at the University of Missouri. She also works as Policy Partner at LKMCo.

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Inside the Momentum rally: meet the Jeremy Corbyn supporters challenging Labour’s rebel MPs

The Labour leader's followers had been waiting a long time for him to come along. 

Ed Miliband’s leadership of the Labour Party is at stake. As the news filters through the party’s branches, hundreds of thousands sign petitions in his support. But this is no online craze. By evening, thousands of diehard fans have gathered in Parliament Square, where they shout “Ed, Ed, Ed,” to the beat of a drum. Many swear Ed was the only thing keeping them in the Labour Party. They can’t imagine supporting it without him.

Am I stretching your credibility? Even a Milifan would be hard pressed to imagine such a scene. But this is precisely Labour’s problem. Only Jeremy Corbyn can command this kind of passion.

As the Shadow Cabinet MPs began to resign on Sunday, Momentum activists sprang into action. The rally outside Parliament on Monday evening  was organised with only 24 hours notice. The organisers said 4,000 were there. It certainly felt to me like a thousand or more were crammed into the square, and it took a long time to push through to the front of the crowd. 

In contrast to the whispered corridor conversations happening across the road, the Corbyn fans were noisy. Not only did they chant Jeremy’s name, they booed any mention of the Parliamentary Labour Party and waved signs denouncing rebel MPs as “scabs”. Other posters had a whiff of the cult about them. One declared: “We love Jeremy Corbyn”. Many had the t-shirt. 

“Jeremy Corbyn brought me back into the Labour Party,” Mike Jackson, one of the t-shirt wearers, told me. He had voted Remain, but he didn’t care that the majority of the Shadow Cabinet had resigned. “He’s got a new Shadow Cabinet. It’s more diverse, there are working class voices at last, there are women, the BME community. It is exactly how it should be.” Another man simply told me: “I am here for Corbyn.”

The crowd was diverse, but in the way a university campus is diverse, not a London street or school playground. They shouted angry slogans, then moved aside obligingly for me to pass through. Jack, a young actor who did not want to give his full name, told me: “I used to vote Green. I am joining Labour because of Jeremy Corbyn. I like the guy. He listens. I have seen friends frustrated with him, but I really think he can do it.”

Syada Fatima Dastagir, a student, has supported Labour for years - “Old Labour”. She thought Corbyn would survive the coup: “I voted Green and Plaid Cymru, because I didn’t think Labour supported its roots. This has brought Labour back to its roots.”

This belief that Jezza will overcome was present everywhere in the crowd. When I asked Momentum organiser Sophie Nazemi if she thought Corbyn would go, she replied: “He won’t.”

She continued: “It is important that we demonstrate that if there is a leadership election, Jeremy will win again. It will be three months of distraction we don’t need when there is likely to be an election this year.”

Instead of turning on Corbyn, Labour should be focused on campaigning for better local housing stock and investment in post-industrial towns, she said. 

Whatever happens, she said Momentum would continue to build its grassroots organisation: “This is more than just about Jeremy, whilst Jeremy is our leader.”

As I moved off through the chanting crowds, I remembered bumping into Corbyn at an anti-austerity march just a year ago. Although he had thrown his hat into the ring for Labour leadership, he was on his own, anonymous to most of the passers by. In the year that has passed, he has become the figurehead of an unlikely cult.

Nevertheless, it was also clear from the people I spoke to that they have been waiting ages for him to come along. In other words, they chose their messiah. The PLP may try to bury him. But if these activists have their way, he’ll rise again.