TORIES RESPONDING TO SUPPLY SIDE DEMANDS
There are signs that the Tories are beginning to respond to education providers concerns that free schools will not be allowed to make a profit or surplus.
Under the revised Tory reforms, based loosely on the Swedish system of “free” schools, governing bodies could contract out the operation of the school – including teaching – to a private company and, this is fairly crucial, the company would be allowed to charge a “management fee”. The system of charging management fees is being seen as a way to incentivise private firms to run schools. Just one pioneering school has been allowed to do this in England- Turin Grove school in Edmonton, north London .The management fee is paid to Edison Learning which has a sound track record of running Charter schools in the States.
In April 2007, the governing body, working with the local authority, granted a contract to Edison Learning, to lead and manage the school for three years. The school is a 1500 strong non-selective comprehensive whose intake is challenging. Attainment on entry is very low. Free school meals are taken by just over 40% of students. The proportion of students for whom English is not their first language is very high (62% across the school). There is a much higher proportion of students with learning difficulties and/or disabilities than the national average. However the latest Ofsted inspection rated its performance as satisfactory and improving .The Council and governors appear to have been pleased with the progress made by Edison. However, the Council and the governors at Turin Grove School have recently decided that the school should become an academy from September 2010.
It does seem that the Tories are looking at the Edmonton model in some detail and the management fee is the way they might go to help entice more suppliers into the market. But a three year contract might well be considered too short to be worthwhile by many providers .
John McAleavy of Edison told the Guardian that the management fee model is a good business model , but added significantly “Low profit and long contracts is the approach. That’s the sensible way to do it.” John McAleavy said that Edison would “of course” be interested in running schools under the management fee system. “We’d do it because we think we have something we can offer and we also think that for governing bodies it provides them an opportunity to stipulate very demanding KPIs [key performance indicators]. They can write demanding performance indicators into the contract and feel comfortable to holding us to account.”
Local authorities have always championed the fact that they are held democratically accountable for their schools, which is true, but hasn’t stopped some local authorities allowing failed schools to continue operating over prolonged periods. Providers argue that a contract provides all the accountability you need, and a failure to deliver means an end to that contract or financial penalties. What is clear is that providers need incentives to run state schools. Altruism is not enough.