Tag Archives: qunagos and the market

THE DAMAGE QUANGOS INFLICT ON THE EDUCATION MARKET BOTH HERE AND ABROAD

THE DAMAGE QUANGOS INFLICT ON THE EDUCATION MARKET BOTH HERE AND ABROAD

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We should all be grateful to Education Investor (June) for exposing the grave problems in the education market.

The latest edition highlights the escalating tensions between private sector suppliers and education quangos (British Council, SSAT, TDA (on the way out), NCSL).

Quangos are competing here and abroad, head to head, with private and not for profit suppliers, using their public funds, inside knowledge and political top cover to steal an advantage over other non-subsidised suppliers.  The charge is that these organisations use taxpayer funding to subsidise their activities, and can exploit “captive audiences” contacts and databases (which can’t be accessed by competitors) built up over time, while fulfilling their regulatory roles and use them  to market their self- serving commercial activities. In contract bids this information is exploited by them but   is not accessible to others, because it is deemed ‘commercial in confidence’.  If anything, in the wake of funding cuts, the activity of quangos in  the market is greater now than it has ever been.Neil McIntosh ,Chief Executive of not for profit CfBT Education Trust,  told Education Investor “Grant aided organisations are most dangerous to independent ones at the moment  when they are told that their grants are being cut’.

Not all though can dip into the Aid Budget, as  the British Council has done, to make up its shortfall (the BC is funded by the FCO-but the FCO has seen it budget cut, unlike the DFID).  The National College for School Leadership, as Education Investor has pointed out, irritates many providers as its role in delivering the professional qualification for head teachers affords it ‘an iron grip on the UK market for school leadership training’.  It is now busy marketing itself abroad where it now competes with both for profit and not for profit providers.

The SSAT is signing up schools abroad too to its Inet school improvement service. It remains something of a mystery, though, to other suppliers, that an organisation responsible for supporting state schools improvement here, with 90% of maintained schools signed up, is qualified to support state schools abroad.  Our position in international league tables might  suggest that  we are hardly regarded as stellar  international  performers, as Ministers are at pains to  keep reminding  us (PISA etc-OK I know Pisa has its limitations but the Government regards it as a benchmark) Nick Gibb, the schools Minister put it as follows in a recent speech “We’re failing to keep pace with countries with the best education systems – falling back in the PISA international rankings, from fourth to sixteenth in science; seventh to 25th in literacy; and eighth to 28th in maths – meaning our 15-year-olds are two years behind their Chinese peers in maths; and a year behind teenagers in Korea or Finland in reading.  We’re still not meeting the expectations of employers – with the CBI’s annual education and skills survey just last month finding that almost half of top employers had to invest in remedial training for school and college leavers.”  The SSAT manages to rise above such awkwardness. Nobody has ever claimed that we have one of the best state systems in the world, although that is the aim of this government which wants our performance to compare with the very best in the world, a laudable aspiration. But we certainly haven’t got there yet. So it’s a  little perplexing   that a quango  which is at the heart of our underperforming system, in support of schools, finds  itself in the position that  it does-  telling  others  how to improve.  Pots and black kettles spring to mind.

The SSAT also won a contract,  a couple of years back ,financed by us taxpayers, to help ‘coasting’ schools ie those schools that should, based on their intake, be performing better. Yet these same schools had been, for some time, paid up subscribers to the SSAT. Its called incentivising failure.  Of course some of these quangos work closely and in partnership with private sector providers and will tell you that their relationship is sound. But they are always the dominant partners.  And talk to these providers and you will find that they believe that the benefits of such relationships do not remotely off -set the damage done to the market, more generally, by quangos presence and anti-competitive activities-in terms of lost contracts and the high costs of participating in a market that  is demonstrably neither fair nor transparent . These activities clearly raise the risks and costs of participation in the market for other suppliers.  And one wonders whether we as taxpayers benefit from these quangos activities. They are not transparent in the way they operate, and measure inputs rather than ouputs.

Of all the quangos cited, the British Council is by far the most unpopular and most damaging to UK commercial interests. Often co-located with British Embassies  abroad and the darling of diplomats and many an MP and Peer, who take advantage of all expenses paid trips abroad  to visit its projects, the BC has considerable political patronage and cover.  But as one supplier pointed out to Education Investor “You have got to go some to compete with an organisation called the British Council that’s operating out of the ambassadors office”.

David Blackie MD of International Education Connect will tell you of many contracts awarded to the British Council without any competition-which cannot possibly deliver value for money either for the client or the UK taxpayer. Kevin McNeaney, now managing Orbital, who is probably the most successful UK education entrepreneur of the last generation, nurses many bruises from encounters with the BC. He told Education Investor, obviously with some feeling, that “the British Council exists to continue the success of the British Council rather than as an enabler for the industry”. The BC continues, though, to pretend that it represents concurrently both cultural and educational interests abroad. Yet it competes with UK companies ie those it purports to represent for the same contracts.  Like other quangos it peddles the fiction that it doesn’t cross subsidise and that it maintains ‘Chinese Walls’ (-What? You ask- like those that operate so brilliantly in the city?)

But clock this. In a recent British Council publication it gave the game away. Expressing the hope that the BC would rapidly expand its commercial operations it said ‘The aims are for the British Council to be seen as an important player in our priority markets and sectors… and to present our contracts business as a fully integral part of our cultural relations programme.’  A prize- for anyone who can spot the wall, chinese or otherwise!  If the British Council, the DFE and the BIS are not supporting  UK education companies abroad (which they are not) then who is? It’s a very good question-if you know, could you let me in on the secret, so I can pass the message on to providers)?

Five senior executives of leading UK education companies wrote to the Government in December of   last year complaining about the conduct of the British Council and other quangos in the market outlining the issues affecting the education market here and abroad , providing  some recommendations to ensure that there is a level playing field in the market and that  the referee isn’t wearing one sides colours. It took the Government five months to reply, presumably because Ministers needed to think long and hard about it, more of which later.

For more on Quangos and the Market look at this months  Education Investor Vol 3 No 5  ‘Hitting the Wall’ -Firms brand quangos barrier to new business

For more on the British Council look at http://www.dblackie.blogs.com/