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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Is defeat in Stoke the beginning of the end for Paul Nuttall?

The Ukip leader was his party's unity candidate. But after his defeat in Stoke, the old divisions are beginning to show again

In a speech to Ukip’s spring conference in Bolton on February 17, the party’s once and probably future leader Nigel Farage laid down the gauntlet for his successor, Paul Nuttall. Stoke’s by-election was “fundamental” to the future of the party – and Nuttall had to win.
 
One week on, Nuttall has failed that test miserably and thrown the fundamental questions hanging over Ukip’s future into harsh relief. 

For all his bullish talk of supplanting Labour in its industrial heartlands, the Ukip leader only managed to increase the party’s vote share by 2.2 percentage points on 2015. This paltry increase came despite Stoke’s 70 per cent Brexit majority, and a media narrative that was, until the revelations around Nuttall and Hillsborough, talking the party’s chances up.
 
So what now for Nuttall? There is, for the time being, little chance of him resigning – and, in truth, few inside Ukip expected him to win. Nuttall was relying on two well-rehearsed lines as get-out-of-jail free cards very early on in the campaign. 

The first was that the seat was a lowly 72 on Ukip’s target list. The second was that he had been leader of party whose image had been tarnished by infighting both figurative and literal for all of 12 weeks – the real work of his project had yet to begin. 

The chances of that project ever succeeding were modest at the very best. After yesterday’s defeat, it looks even more unlikely. Nuttall had originally stated his intention to run in the likely by-election in Leigh, Greater Manchester, when Andy Burnham wins the Greater Manchester metro mayoralty as is expected in May (Wigan, the borough of which Leigh is part, voted 64 per cent for Brexit).

If he goes ahead and stands – which he may well do – he will have to overturn a Labour majority of over 14,000. That, even before the unedifying row over the veracity of his Hillsborough recollections, was always going to be a big challenge. If he goes for it and loses, his leadership – predicated as it is on his supposed ability to win votes in the north - will be dead in the water. 

Nuttall is not entirely to blame, but he is a big part of Ukip’s problem. I visited Stoke the day before The Guardian published its initial report on Nuttall’s Hillsborough claims, and even then Nuttall’s campaign manager admitted that he was unlikely to convince the “hard core” of Conservative voters to back him. 

There are manifold reasons for this, but chief among them is that Nuttall, despite his newfound love of tweed, is no Nigel Farage. Not only does he lack his name recognition and box office appeal, but the sad truth is that the Tory voters Ukip need to attract are much less likely to vote for a party led by a Scouser whose platform consists of reassuring working-class voters their NHS and benefits are safe.
 
It is Farage and his allies – most notably the party’s main donor Arron Banks – who hold the most power over Nuttall’s future. Banks, who Nuttall publicly disowned as a non-member after he said he was “sick to death” of people “milking” the Hillsborough disaster, said on the eve of the Stoke poll that Ukip had to “remain radical” if it wanted to keep receiving his money. Farage himself has said the party’s campaign ought to have been “clearer” on immigration. 

Senior party figures are already briefing against Nuttall and his team in the Telegraph, whose proprietors are chummy with the beer-swilling Farage-Banks axis. They deride him for his efforts to turn Ukip into “NiceKip” or “Nukip” in order to appeal to more women voters, and for the heavy-handedness of his pitch to Labour voters (“There were times when I wondered whether I’ve got a purple rosette or a red one on”, one told the paper). 

It is Nuttall’s policy advisers - the anti-Farage awkward squad of Suzanne Evans, MEP Patrick O’Flynn (who famously branded Farage "snarling, thin-skinned and aggressive") and former leadership candidate Lisa Duffy – come in for the harshest criticism. Herein lies the leader's almost impossible task. Despite having pitched to members as a unity candidate, the two sides’ visions for Ukip are irreconcilable – one urges him to emulate Trump (who Nuttall says he would not have voted for), and the other urges a more moderate tack. 

Endorsing his leader on Question Time last night, Ukip’s sole MP Douglas Carswell blamed the legacy of the party’s Tea Party-inspired 2015 general election campaign, which saw Farage complain about foreigners with HIV using the NHS in ITV’s leaders debate, for the party’s poor performance in Stoke. Others, such as MEP Bill Etheridge, say precisely the opposite – that Nuttall must be more like Farage. 

Neither side has yet called for Nuttall’s head. He insists he is “not going anywhere”. With his febrile party no stranger to abortive coup and counter-coup, he is unlikely to be the one who has the final say.