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Gove's plan to privatise academies and free schools

(141 Posts)
muminlondon Tue 12-Feb-13 23:37:33

I saw this:

I knew this was the reason for forced academies.

rabbitstew Wed 13-Feb-13 16:58:09

sorry, would like to make some money...

prh47bridge Wed 13-Feb-13 17:48:01

Serious logic failure there.

A school's income is fixed. If they reduce their costs so that they are less than their income they will make a profit. They don't need any extra income to do so.

rabbitstew Wed 13-Feb-13 18:06:20

A school's income does not have to be fixed, if the law allows it to indulge in genuine profit making activities, such as charging out staff to train others for more than the cost of employing them. If what you say is true, then my children's school already makes a profit, as it is allowed to carry over some of its unspent budget each year.

rabbitstew Wed 13-Feb-13 18:06:51

I don't make a profit by spending less than I earn. Serious logic failure if you think that I do.

rabbitstew Wed 13-Feb-13 18:08:20

My children's school also makes money out of hiring out its facilities for parties. That is not a fixed income, surely? It depends how many people want to use it.

rabbitstew Wed 13-Feb-13 18:09:11

And, of course, a school's PTA can make money for the school, too. That isn't a fixed amount.

rabbitstew Wed 13-Feb-13 18:11:55

I am hugely profitable, apparently, because I save money in a bank account. And there was me, thinking that I had to earn more interest on it than I was losing to inflation to actually make any profit out of not spending it.

muminlondon Wed 13-Feb-13 18:36:06

On freedom of information, I'm surprised to hear that tiredaftertwo has had a quick response from the DfE - not that I have tried, but there was a report in the BBC about the DfE facing 'special measures' from the Information Commissioner because it is so bad at responding to requests:

Then there's the Mrs Blurt email story which links one of the @ToryEducation bloggers/special advisers to deletion of information which could have well have been about academy sponsors, for which there seems to be no properly regulated tendering process (it was called a 'beauty parade' by the Academies Commission report).

Another way of making money is a direct commission of up to 10% as for IES Breckland in Suffolk as a provider to a trust. It's another company owned by a big US private equity firm (which also owns Cath Kidston!) - it even advertised directly for parents in SW London to express interest in them running a free primary school so that it can award the contract to itself (a bit like Serco advertising for prisoners?). Serco is another firm that is involved in setting up a free school.

muminlondon Wed 13-Feb-13 18:46:12

Do we even know which organisations have applied to be free schools yet? I can't see the list on the DfE site but they are meant to be publishing it:

prh47bridge Wed 13-Feb-13 19:46:29

You may not call it a profit but a business does. Profit is the excess of income over expenditure. You can increase your profit by reducing your expenditure whilst maintaining your income or by increasing your income by more than your expenditure.

If a school was a business any school which runs a budget surplus would be regarded as profitable.

muminlondon Wed 13-Feb-13 20:12:48

Reducing expenditure may mean employing fewer or unqualified teachers or classroom assistants. It may mean outsourcing everything to IT to accountancy and school dinners or cleaning to which often means quality standards drop. You are more likely to end up with horsemeat burgers, for example. There is a lack of accountability and transparency and, conflicts of interest that may not be immediately apparent if there is a complex chain involving private equity group subcontracting to another firm.

If a school was allowed to make a profit, as a parent would you really trust that the amount charged for uniform or school dinners was not going into someone's pocket? Would you really bake those cakes or give free wine to the tombola without wondering how much the Brand Manager was earning? Shame though - because those voluntary activities bring a community together. Call it the Big Society. Would Nick Clegg or Michael Gove even send their children to a Serco school? Because if they don't, why should we?

rabbitstew Wed 13-Feb-13 20:23:16

Businesses, however, don't generally just get given money to spend, prh47bridge, they have to earn it in the first place, by selling something for more than they paid for it. So your logic seems more flawed than mine, tbh, if you think it is profitable to be given money for something and then not spend it on that something.

tiredaftertwo Wed 13-Feb-13 20:49:52

Not that surprising really - that BBC link says 74% were met within the time limit, even in this poorly performing department.

Thanks for the other links, muminlondon, they are interesting.

School dinners have long been outsourced in state schools haven't they? And unless schools raise their own crops and livestock, someone has always made a profit from the food they serve. I doubt it is that easy to find out who is making a profit from food in schools at the moment. Are you saying that at the moment schools directly employ their own accountants? And all IT expertise comes from within the school?

LA schools that went into budget deficit in the past were under tremendous pressure to cut costs I believe - are you saying they would not have cut staff if they could? And that they would then have been open about it?

Surely one of the lessons of Mid Staffs is that accountability and transparency are not automatically conferred on public bodies because they are public.

rabbitstew Wed 13-Feb-13 21:17:10

And nor are accountability and transparency automatically conferred on private bodies because they are private... ridiculous to claim it is anything other than human nature and self preservation that creates lack of transparency. Privatising things quite obviously does not make them any more transparent - just look at the huge things banks managed to hide from the public until it blew up in everyone's faces, and the privately owned companies offering cheap breast implants.... If anyone thinks academisation and free schools will make things more transparent, they have a very odd way of thinking.

tiredaftertwo Wed 13-Feb-13 21:25:39

I am not claiming that. That would clearly be ridiculous. Who has said that?

rabbitstew Wed 13-Feb-13 21:57:33

You are right, tiredaftertwo, private organisations have been involved in and with state enterprises for a very long time, now. Local Authorities used to do the looking around and deciding which providers to bulk buy from, whereas academy schools can look for their own deals. They will never have the same bulk buying power as the LAs (unless, God Forbid, we end up with colossal academy chains the size of Local Authorities...), but if well run can get better deals than the LA used to get for them. If badly run and not big enough, they will get eaten alive by all the sharks out there... especially after LAs have bowed out altogether, so they can't just go for the option of buying from the LA, anyway, rather than looking elsewhere. But either way, someone within those schools is spending an awful lot of time being paid to look for good deals on electricity, gas, water, IT services, etc, where that salary and time commitment and focus within a school was not needed in the past. I don't believe most schools in the long run will do better than they did when the LA employed people to do this work on behalf of schools, I just believe we'll end up with more people being employed to run around looking for good deals rather than teaching our children - or setting up structures whereby the profit-making entity which set the school up in the first place provides all the services for a profit (to itself).

rabbitstew Wed 13-Feb-13 22:00:20

I can't help noticing that, whilst the private sector is always lauded for being so much more efficient than the state sector, and less generally wasteful, it seems to lose this ability the minute it gets its hands on taxpayers' money.

montmartre Wed 13-Feb-13 22:15:03

There's another thread on this over here btw...

prh47bridge Wed 13-Feb-13 22:16:03

Schools also have to earn their money in a sense. They get paid based on the number of students they have. If a school cannot attract students its income goes down.

Some businesses cut costs in a way that damages the quality of their product. They tend not to last. Consumers rapidly turn away from them towards businesses offering better quality products. And, unlike many businesses, schools are regulated. That seems to currently work a lot better than bank regulation did. Of course, it is possible that a future government will weaken regulation of schools.

It has been a long time since LAs did bulk buying for schools. That was abolished in the 1980s, partly due to schools complaining that they were getting a poor deal and having to pay over the odds. Procurement is a large part of the head teacher's job - not just in academies.

tiredaftertwo Wed 13-Feb-13 23:26:41

Mmm, this is were we need some facts again isn't it? I think you are both right: there is potential to make cost savings through bulk buying but in practice LAs were often bad at this and schools ended up paying over the odds. Since then, some headteachers have probably saved money, and some have fallen for sharp practice by IT sales people.

I think that with such large and complex organisations as schools, you cannot guess what system will be cheaper or more efficient, you need to see the evidence and look at the training given when functions are transferred between sectors, and at the checks and balances in the system (I suspect headteachers may not have had enough support and training on procurement when the shift started - and also that Labour was naive about its new private sector friends). And there will be pressures in both sectors to cut costs at the expense of quality, which is why we need good, effective regulation (I worry about this with the current government), transparency, accountability and all the rest of it.

All I have been saying is that these problems apply to both sectors. And both are clearly here to stay in the provision of public services, so if we want the best outcomes possible we need to look hard at what actually happens and why.

muminlondon Wed 13-Feb-13 23:37:07

Schools closing is the inevitable conclusion but Gove's scattergun policy of free schools over-supplying places where capacity is not needed and forced academisation into the hands of chains means that schools will effectively go bust. It may mean that a chain closes down a school, with little notice and no consultation (and this also makes the responsibility of an LA to provide places unworkable).

One example is here:

Otherwise a chain operating within and across LAs may cause imbalance and suck children out of surrounding schools and cause the others to be in deficit because they are not full. The chains pocket the cash, the taxpayer foots the bill.

muminlondon Wed 13-Feb-13 23:45:44

And the academies conversion programme is so expensive (e.g. the £1 billion overspend because of the consultancy fees, extra insurance and other start-up costs precisely because on their own they do not have the economy of scale, HR or legal department of an LA. On top of that the DfE is bribing schools with extra cash to convert.

tiredaftertwo Thu 14-Feb-13 07:30:06

Yes, I am worried about that about free schools too, I agree. I hope it works (for the children's sake). But I fear it won't - and by then the apparatus that we know works (mostly) will have been dismantled. I know how hard it was to set up a new school before free schools, how difficult it was to prove the extra places were needed. And rightly so, in a way.

I am worried about this in the health system too. Schools and hospitals cannot be allowed to go bust.

The academies funding question though is more complex - as in the article, the DfE says the extra money it to pay for the services previously provided by the LA. I don't know if this statement has been seriously challenged, with data showing that the amount schools are getting exceeds their portion of the previous pot (LA accounts being public)?

rabbitstew Thu 14-Feb-13 07:59:54

I don't know what will happen to small, rural schools under mass academisation. They are far too small to be able to afford to employ the necessary people to go it alone. They will surely have to close or be swallowed up by federations or sponsors? And I doubt they'll have much choice as to who or how, given their isolated position in small, rural communities...

tiredaftertwo Thu 14-Feb-13 08:29:15

Won't they just group together, as effectively they did via the LA? Some of the LA people are being re-employed by groups of academies, I understand, similar to PCT staff moving to CCGs. I don't see why if you group together to buy IT support say, that means being swallowed up - necessarily.

I live in an LA which, some years ago, was not deemed a competent authority (or something like that) by government - I listened to my child's headteacher talk about how vast amount of her time was wasted because of this, as the money had to come through the LA but there were loads of checks and problems because it was so incompetent (corrupt as things turned out). I can't remember the technical terms, but that was the gist - it was impossible to get stuff done.

I wish LAs had been better at this stuff. It is hard to believe quite how bad some of them were.

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