Gove's plan to privatise academies and free schools

[muminlondon]

I saw this:

www.independent.co.uk/news/education/education-news/secret-memo-shows-michael-goves-plan-for-privatisation-of-academies-8488552.html

I knew this was the reason for forced academies.

Umm, yes of course, just like under LAs. Not saying it is not a problem, just it is not a new one. Like so much else. So it is hard to show it will get worse. That's what I keep coming back to.

What I want (no reason why any of you should supply it ) is the things that are really different from what went before - like the lowering of the bar about the need for school places for free schools (I could given time lay my hands on documents to demonstrate that), arguably less accountability through local democratic processes, and so on?

No, the way of grouping together is changing, as changes are made to funding of locality groups. Or at least it is where I am. So it is not the same problem. There is less goodwill and more tension around it all, now - less easy trust between schools, more paranoia that the bigger ones are being too bossy and skewing things in their favour, more paranoia that one or the other will become an academy and force all other schools in the area to follow suit, as has happened elsewhere in the LA. Silly to say the huge ramp up of tension in teaching and schools is not a huge problem.

"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."

That is not a profit!

Jesus Christ, it's a basic English word with a meaning.

I didn't say that either. Perhaps you'd like to read through the thread, and note the number of times you have attributed something to me that I did not say. And then been rude.

"Less goodwill" "more paranoia" "increased tension - none of these things are verifiable in the short term. All sorts of things cause tension among teachers and schools, and it will vary from area to area - no way of proving it is increasing nationally or what the cause is.

OK, I really am giving up now. I was interested in establishing some proveable facts that I could use to join the chorus of opposition to the changes Gove is making. It isn't impossible, it doesn't rely on twisting statistics or becoming a governor, there is a lot of information out there about the national picture: I have found some, but I was interested in more. As Labour started this change, I cannot see any other way to get politicians to engage with the possible problems except to confront them with undeniable facts. It would be different if Labour opposed all this - we could just collect our badges and shout with them.

AThingInYourLife - Yes, it is a basic English word with a meaning. It means the difference between the amount earned and the amount spent in operating a business. What on earth is your definition? If a the income of a business is greater than its expenditure (once depreciation and any other adjustments are taken into account) it makes a profit. Therefore if a school becomes a business and its costs are less than its income it is making a profit.

rabbitstew - For a small school it would make sense to buy services from elsewhere. Indeed, it can make sense for a larger school as well. Some LAs are already offering to sell services to academies.

prh47bridge - I can see that with that technical definition of profit, why the economy is in such a mess and nobody can trust accountancy firms. Normal people in the street (ie the vast majority of people) would view a profit as MAKING more money than you spend, not spending less money than expected and ending up with a saving. It's like saying you made a profit because you bought fewer widgets than you originally budgeted for this year, regardless of whether you sold any of the widgets or not - ie made a profit even though you didn't end up with more money than you spent out, you just ended up with fewer widgets (none of which you necessarily sold...).

tiredaftertwo - all of life cannot be condensed by human beings into pure facts, figures and statistics and you cannot ignore things that are difficult to verify in the short term (although I don't see why you think peoples' feelings are impossible to verify or irrelevant to what happens??? what do you think caused the boom and subsequent bust? it certainly wasn't common sense and hard facts....). If you keep thinking that statistics are that pure a science, you are deluding yourself and will never get anywhere. That's why we have politics - your view of what you perceive to be a verifiable fact, affected by your personality and personal philosophy. And if you take peoples' feelings out of the equation as irrelevant, including, for example, the majority view of the entire teaching profession, then you are doing nobody a good service and will probably in all fairness find that you don't get much useful data from the statistics collected, because different people tend to interpret them differently however much they think they are taking "bias" out of their interpretation.

You asked for evidence that academies were not performing as well as equivalent LA maintained schools. The success in London of the London Challenge - which Gove keeps omitting to mention - is summarised by the BBC with a link to the report if you care to read it.

The Academies Commission report also gives an insight into the weaknesses of the programme at the moment - admissions policies, transparency (lack of), freedoms no greater than available to all schools, the 'beauty parade' of sponsors. Not really about privatisation but there is already evidence from the US and Sweden. Is that what you're after?

Some LAs have been bad but there are crap chains too. At least with an LA you can write to your councillor, go to meetings, talk to someone local.

rabbitstew - No, spending less money than you expected does not result in a profit. I have not said that at any point. Spending less money than you have coming in results in a profit.

If I make a batch of lemonade for £100 and sell it for £200 I have made £100 profit (ignoring any other costs to keep it simple). If I manage to make the next batch for £90 and sell it for £200 I have made £110 profit - I have increased my profit by reducing my costs. Is that really so hard to understand?

'Spending less money than you have coming in results in a profit.'

A private school makes money by attracting pupils and has the freedom to alter its prices. As a charitable trust it may also have legacies, donations, investments, etc. A private academy chain that makes money from the state has a single revenue stream, a single customer, but parents are not the clients. It can't put prices up - it can only save money. If it only manages to get hold of half the lemons available it will get less funding. But it didn't have to buy the kitchen or train the chefs in the first place - the state has supplied the infrastructure and training. (Here is where the analogy is complicated because children - the lemons - are alive.)

prh47bridge - what is difficult to understand about the fact that academy schools are not selling anything to the children they teach - they don't negotiate the money they get, they get what the government gives them to spend on the children's education and if they don't spend all of that, they are saving some of it, not making a profit on it. Spending less money than expected is exactly what they are choosing to do, surely? Or are you saying that they can get more money into their budgets from their sole client than LA schools by driving a hard bargain?!...

Amazed that you think making batches of lemonade and then selling them bears any resemblance whatsoever to being paid a fixed amount to educate children (and not, thankfully, go on to sell them...).

On second thoughts, the existing private sector hasn't contributed to initial training either (in terms of degrees or PGCEs) and that is also true of private health. But there is professional development. It's easy for a teacher to transfer to the private sector but harder to go back and be sufficiently accredited. If a chain has a very distinctive method it may also get harder over time to transfer to other chains/schools.

muminlondon, just popping back in to thank you - yes, that's exactly the sort of thing I was after, that's great (I assume it was me you were talking to, although I didn't actually ask exactly that).

Absolutely about democratic accountability - I did mention that lower down I think.

Thanks again

If you view savings as profit, I can see a huge incentive not to plough any of them back into improvements for the following year - you could trot merrily along, doing just well enough not to have your funding withdrawn, but not spending enough to be a truly fantastic education provider, instead keeping your "profits" to pay... what? Your profit-making academy chain?

tiredaftertwo I have been looking for references to Sweden and found this article on them sliding down the PISA rankings for standards and equality of opportunity.

And here is a NY Times article on charter schools saying they are no better and sometimes worse than the schools they replace. There was a report about this recently saying that if charter schools replace schools at the bottom, there is no movement upwards and if they come in at the top of the market they stay there (can't find the direct link).

Exactly like the divide between sponsored academies and outstanding converter academies (some grammars) which are unlikely to be chained to a chain. Profit-making is therefore likely to begin at the Findus lasagne end of the market (consumed by those with little alternative) rather than the Fortnum and Mason end.

"If I make a batch of lemonade for £100 and sell it for £200 I have made £100 profit (ignoring any other costs to keep it simple). If I manage to make the next batch for £90 and sell it for £200 I have made £110 profit - I have increased my profit by reducing my costs. Is that really so hard to understand?"

No, that is easy to understand.

But in your example you are making something and selling it.

That's where your profit comes from.

If you can cut costs, you can make more profit.

But that is nothing like what "profit making" schools will do, unless they are charging fees.

The plan is more akin to a situation where every child is entitled to free lemons and you take ownership of previously publicly owned lemon trees and get given public money for handing out the lemons.

The lemon distributors are all trained using public money.

Children must be given free lemons, but they are also required by law to eat a lemon every day until they are 18.

So if you spend less than you are given of the public money you are given for providing the lemon service you are saving money.

But you are not creating anything even close to a profit.

Except in neo-liberal land where we all pay our taxes so public money can be given to corporations.

If, hypothetically, schools are allowed to become profit making their main income will be the grant they receive annually from the government. If they are able to run the school and provide a proper level of education for less than the amount of that grant they will have made a profit. If they can cut costs they will increase their profit.

To take the lemon analogy and change it a little, let us say it costs the government £10 per child per year to distribute the lemons. They now subcontract the distribution to an outside company and pay them £10 per child to distribute the lemons. If the outside company reduces costs so that it only costs them £9.50 per child they will make a profit. The government's costs have not changed, every child is still receiving free lemons and the company handling the distribution is making a profit.

A lot of our taxes do go to companies who provide various services to government.

FFS more Gove news - venture capitalists hired to cut 1,000 posts at the DfE

www.guardian.co.uk/politics/2013/feb/14/michael-gove-us-consultancy-education-cuts

"A lot of our taxes do go to companies who provide various services to government."

Yes they do.

And in many cases that money is being wasted providing spurious "profit" to companies who cut corners, provide a worse service and trouser the difference.

But as you say, the cost to the public purse remains the same.

It is not a true profit.

It is just taking public money and giving it to shareholders in public companies.

No value is created.

So, what suffers when costs are cut? Let's say staffing costs in schools typically account for between 75 to 85% of the overall school expenditure and premises costs 10 to 12%. So cutting costs could mean fewer staff, cheaper (younger, unqualified) staff. Or children taught in corridors. Or older computers. The money then goes to into the CEO's bonus and to the US private equity partner.

prh47bridge - you are doing an excellent job of describing all that is wrong with the way things are run.

If private schools perform better than state schools in general (as is claimed, particularly when looking at exam results and university entrance) and all private schools spend more per child on their education than state schools, then they must be very badly run not to be able to cut so many corners that they can educate children on less than the government hands out to state schools. Because apparently that is possible. Particularly if you don't worry about buildings that are falling down, new computers, experienced and well qualified staff, good sports facilities, up to date books etc. To save money on what the state is giving you, you are choosing not to provide an awful lot that could be provided - which obviously you would choose to do if you could view your savings as profit, rather than as savings for big projects, or currently unaffordable projects/facilities in the future which all have to be ploughed into the school. Profits can be taken out of a school to benefit the owners of the business, rather than having to be ploughed back into the school. I therefore do not like the description "profit" where there is no such thing - there are always improvements that can be made with the money SAVED.

I am not trying to justify schools making a profit. All I have said in that regard is that I have no ideological objection to them doing so provided the cost to the state does not increase and provided the standard of education is maintained or improved. If the result of making a profit is to damage the education provided or increase costs to the state then I would be against it.

I understand and, to a degree, share your concerns. Note however that a business typically only distributes a small proportion of its profits to shareholders, retaining the rest for investment in long term projects.

Saving money does not necessarily involve choosing not to provide things. It can involve providing them more efficiently. For example, my local primary school recently purchased some PCs. I know how much they spent on those PCs. They could have purchased better PCs at significantly lower cost if they had looked at different suppliers instead of simply sticking to the supplier they had used previously.

I have an ideological objection to profits being made on taxpayers' money which are then not returned directly to the taxpayer for investment elsewhere.

I thought you probably did. However, we have never had a situation like that in this country nor are we ever likely to. Any supplier to government can be said to be making a profit on taxpayers' money regardless of whether they are supplying PCs, paper clips, training courses or other services.

My concern is that we get value for money as taxpayers. If there is a choice between the government doing something itself or paying a company less to do the same job to the same standard I would go for paying the company every time.

It is the same choice businesses make all the time. There was a time when many businesses needing to ship goods regularly ran their own fleet of lorries, for example. Now, even if the lorry still carries the name of the business, the vehicle and driver are probably supplied by a specialist transport operator like Eddie Stobart because it is cheaper to buy the service from Stobart than it is to do it yourself.

My concern is that we never get value for money as taxpayers and paying the company doesn't actually seem to have improved the chances of this happening in the long term.