Schools as a business ...

MN164 I was talking about GP's and drug suppliers who are, and always have been, private companies. I totally accept the Labour PFI deals had a lot of flaws, but that doesn't mean profit making services don't and can't work.

Straggle why are prisons, hospitals, state schools and forests monopoly services?

How about the commercial arm of the ministry of justice?

Profit-making does not work for a monopoly essential service - prisons, hospitals, state schools, forests, court service, etc. The problems are partly in the procurement - complex agreements, conflict of interest, differing priorities. But also the user does not pay directly, the provider is not accountable and yet it can be hard to break contracts without penalties. So there is still waste, but with lack of effective oversight, and the state has to bail them out when they fail.

In the private education sector no one forces you to apply and you are paying for it directly, so competition could force providers to offer something worthwhile. But the biggest profit-making, private-equity based chains still make their biggest profits in captive markets (e.g. ex pat workers in Dubai who can't access state schools). Those chains have been much less successful in this country - e.g. GEMS, which sold the majority of its prep schools bought 5-7 years earlier. In a competitive market you have winners and losers. The disadvantage us that children could see their schools close down or lose staff very quickly, or when the chain loses interest, all long-term planning and investment stops.

The vast majority of healthcare visits in the UK are to private profit making providers (GPs) and all the drugs you use are from private, profit making companies. The funding is via the state, not direct from your pocket, but still going to a profit making enterprise.
So if you use a GP, why not a profit making school?

Also, why are libraries more important than food?

The only thing I am idealogically wedded to being funded socially is the police.

MN164

Do you use any other profit making company in your daily life? Why should education be different?

I don't think that all of the "profit-making" schools are based on a model where investors take profits via the annual school income. Cognita for example was set up on a capital growth model. So the fund would invest in the sites, the buildings and the overall business of the school and look to increase this in value in the medium term. Quite often they would buy schools which were proprietor owned and, where possible, grow the school. Obviously there have also been cases when closing the school has been the appropriate option.

I think that it is wise to check how well you agree with the ethos of the school, and this may be one important aspect. But don't assume that there is a steady stream of cash flowing from the schools to the investors, because that isn't the only way, and often not even the main way, in which investors make money.

They would still have to be run like a business though because if they can't make ends meet the school would have to close.

I agree that it sounds suspicious.

I am on the finance committee of a large secondary school. I can definitely say that the school is not run to make any profit. In fact, we are facing a deficit over the next few years because the underfunding from the government. All the schools in the our LEA are facing a deficit.

I think you might be referring to academy chains rather than local authority run schools, but having looked at converting to an academy last year I can assure you that the school would not have made a profit if it had converted. The accounting system is different and the funding comes from central government rather than the local authority, but there is no profit to be made.

When schools first became academies there was a financial incentive but that has long since gone.

Schools have to be run like a business these days. Our school has an annual budget of circa £8m, so how else can it be run?