The New Statesman Profile - Kevin McNeany

This is the man whom Labour trusts to run our schools - and to make millions from doing so. Kevin Mc

No, says the founder and chief executive of Britain's most successful education business, he was never much good as a teacher. He taught for 13 years and rose to be head of English at a further education college, but his talent was entertaining the class. And that, he says with unconvincing severity, is simply "one way of disguising poor pedagogical endeavour".

I'll bet he was good at entertaining the class, because the fast-talking McNeany, the son of an Irish blacksmith, never ceases to entertain me. And maybe, deep inside, he is no more convinced than I am by this Blunkettish disapproval of amusing teachers. But he'll never say so, because the success of his business relies on new Labour ministers continuing to be convinced that he shares their Gradgrind vision of how children should be taught.

McNeany's company, Nord Anglia, was the first, and is still the biggest, of the private companies whose huge fortunes have been built on privatising state education. At 58, he is the most flamboyant, persuasive, combative, and almost certainly the richest, of the commercial moguls created by the shared prejudices of Conservative and new Labour governments: distrust of local councillors and headteachers, worship of the markets, and a conviction that you can improve schools - or anything else - just by sprinkling private sector gold dust over them. One former new Labour education minister (McNeany declines to say which one) told him: "I used to think companies like yours were the enemy, but now I realise that if you didn't exist, we'd have to invent you."

Such companies take over supposedly failing schools and sometimes whole local education authorities. Nord Anglia, which employs 2,500 people, also helps to run school inspections, the careers service and much else besides. McNeany's latest contract - to run the local education authority in the London borough of Waltham Forest, in partnership with the former construction giant Amey - is worth £170m over five years. No wonder Nord Anglia's pre-tax profits are £4m on a turnover of £66.6m and that its share price, just above £1.50 a year ago, is now up to £2.55. As McNeany says, thanks to government policies, investors are beginning to see education as a blue-chip industry.

"I'm basically an entrepreneur who happened to become a teacher," he says. But you can hardly spend 13 years of your life teaching without having some interest in the way children learn. Some companies in the education business are interested in what one of them calls "chore, not core" - in other words, they want to take on the backroom jobs, like payroll management, rather than the core tasks of teaching and learning, which are too controversial. McNeany, by contrast, prefers the core and, far from trying to avoid controversy, he relishes it, being utterly sincere about his uncompromising private sector message.

"Kevin has a keen interest in education," says Neil McIntosh, who runs one of the few other private sector organisations that is also mainly interested in the core work, the Centre for British Teachers. "He never avoids controversy. He is straight, and colourful. He is not there to make a quick profit and get out. He's in it for the long term."

McNeany talks eloquently about the benefits of privatisation, swiftly enough to elide over the odd unproven assumption. A public sector monopoly "leads ineluctably to a worsening of services". Companies such as his "introduce a climate of competition and force everyone to look to their laurels". They can "break the mould, give new opportunities to do well in a new way".

He convinces himself, at any rate, and he is genuinely puzzled and upset at the hostility that education privatisation generates. But he comforts himself that it is only jealousy from the outperformed public sector, and told me recently: "The amount of outsourcing that has actually taken place is minuscule, but it has a disproportionate influence, so we may well have deserved the coverage that people like you give it."

McNeany, twice married and with two sons aged 30 and 15, had what was, at the time, a textbook upbringing for a clever working-class, Irish Catholic boy. The eldest of seven children, his primary school was run by the De La Salle Brothers, and he went from there to St Patrick's College in Armagh, a grammar school run by the Vincentian Priests. Both these priestly orders had the enthusiasm for beating children that distinguished Catholic education in those days, and as St Patrick's also took fee-paying boarders, working-class day boys like McNeany were, he says, "effectively second-class citizens".

But he is as robust a character as you will ever meet, and none of this seems to have bothered him. "In the main, I was well taught," he says, and he went on to study English and economics at Queen's University Belfast, graduating in 1964.

Unable, despite his best efforts, to earn his living as a bass guitarist, he took a job teaching history in a Northern Ireland secondary modern school, before travelling to Leeds, hoping to play in a band he knew there. When Leeds, too, spurned his musical talents, he went to see the parish priest in Headingley, and half an hour later found himself teaching history at a local Catholic school. He accepted the inevitable by getting a teaching certificate and moving to a further education college as head of English.

From this vantage point, he saw the commercial possibilities in the teaching of English as a foreign language, and for that Nord Anglia was founded in 1972. McNeany and his then wife started the company in the front room of their house, but he prudently did not give up the day job for another five years. During the 1980s, the company started to buy and run independent fee-charging schools.

The real expansion had to wait until the 1990s, when it started to look as though companies could make a killing out of British state education. When school inspections were put out to private tender, McNeany was one of the first on the scene, inspecting 38 schools in 1995 and 150 the next year. When the Conservative government gave parents vouchers to purchase nursery provision, Nord Anglia expanded its nursery and daycare centres.

Today, whenever the government wants to privatise another school or local education authority, Nord Anglia is there among the bidders. McNeany insists that it is "not our policy to privatise everything. What we want is diversity." But he certainly wants a great deal more than he's got so far.

How successful is he? McNeany quotes St George's Maida Vale, in the borough of Westminster, which declined steeply after its headteacher Philip Lawrence was stabbed to death outside the school gates. What did Nord Anglia bring to it that a determined public sector rescue effort could not have provided? McNeany says promptly: "We did it with more enthusiasm, more energy and more attack than a local education authority could have done."

Maybe. With the tense, energetic McNeany sitting opposite you, this is easy to believe. Local authorities have been reduced and denigrated by successive governments for 20 years, and many of their best people have been poached by edubusiness. This means that he can truthfully claim that Nord Anglia "now has a greater range than most local education authorities". But there are still talented, energetic and committed people working in some council education departments. Could they not have brought just as much to the school as McNeany's company?

And Nord Anglia has its failures, too. A council report on schools in the London borough of Hackney found that, under Nord Anglia, some progress had been made, but that it had "weakened attempts to get a coherent and cohesive strategic direction across education services as a whole". When the company's contract ends in July, it will be replaced by a new educational trust.

McNeany dismisses the idea that those who run education ought to be elected. Local councils, he says, do not offer "genuine accountability in education". All you need is "a strategy for education in a local area. Schools and groups of schools can do everything else." So the panoply of elected councillors is unnecessary, and the local education authorities his company runs or partly runs - Hackney, Sandwell (West Midlands), Waltham Forest, Westminster - are doing very nicely, thank you.

There is no problem, he says, about taking over public sector staff. "When they come in, there is a moment of realisation that they are working for a private sector company . . . Most of them now get performance-related pay, and they like it." Their trade union can still represent them: "We have an agreement with Unison and recognise unions in all our contracts."

So, the sky's the limit. Nord Anglia is expanding overseas, and has schools in Russia and Ukraine, where McNeany has spent a good deal of his time recently. But it is here in Britain that the company's future will be made. McNeany has his eyes on a much bigger slice of our education expenditure.

He has an ambitious vision. "If all the assets and land in state education were to be ring-fenced, then finance and industry would refresh and renew it," he says. "I am in touch with City institutions that cannot understand why the government does not take advantage of the opportunities available. The government has always failed to make the business case for investment in education."

Privatisation, he says, "is coming fast and will accelerate. The private sector so far has only had the opportunity to work with failing institutions. I think we can make an impact in the middle ground of lacklustre performance."

What all this means, decoded, is that there is no part of the vast amount of money and real estate in Britain's education system which, in his view, could not be used better by the private sector. There is no limit to the areas of education he is willing to run, and there seems to be no limit to the amount new Labour is willing to let him run.

Get used to Kevin McNeany. He's going to be around for a long time.

This article first appeared in the 14 January 2002 issue of the New Statesman, A kosher conspiracy?