Schools as a business ...

[MN164]

I have a gut bad feeling about schools making a profit - groups like Cognita and Alpha Plus (50 schools in the UK between them).

I was trawling around the lists of options and noticed one that is owned by a private investor group and crossed it off my list (list includes all flavours, state, co-ed, faith, private, grammar etc).

Is that wrong and narrow minded?

Wealth concentrating itself around an increasing small percentage of people is bad for pretty much everyone - there are only so many cars, yachts, private jets and houses one person can buy. Meanwhile, public services and amenities are constantly pared back and the disposable incomes of the masses decrease, which doesn't increase employment opportunities for everyone - the 1% don't need 99% of the world's population to cater for them... most people are thus surplus to requirements...

It is worth looking carefully at whoever is running any school. For example a decade or two back Wandsworth Council's education department had a far better reputation than Lambeth's and their schools were correspondingly sought after. (Actually quite a model for economic generation as 30 years ago both boroughs were in a similar place economically but good schools helped bring in a more affluent working population including entrepreneurs, and an impressive virtuous circle was introduced.)

I am not sure I would worry too much about, say, venture capitalists. I was told at one point by someone who should know, that an additional 1,200 children looking for private school places are coming into London each year. This has resulted in a hefty expansion of prep school places (Fulham Prep, Knightsbridge Prep, Newton Prep and many more are less than two decades old and many existing schools have grown) leading to an 11+ log jam, especially for West London boys. The advantage of backing from venture capitalists is that they can raise the money for a big bang. First rate facilities from the get-go, a head-hunted Head, experienced Heads of Department recruited first. Build the reputaiton, wait five or so years and then put up the fees and reap the profits as parents clamour to get their children in. Each will have its own USP but they will only survive if they deliver what the customer wants.

My guess is that the need to balance the books early and thus recruit inexperienced teachers has led to instability in schools like the West London Free School. I would be particuarly interested in knowing who was behind any Free School I was considering and how much start up capital they had to get the school running.

One reason we ended up taking the private route was our state alternatives were not at all attractive. At the time the local secordary had 93% on free school dinners, and indeed when my son got to 11, our LEA was unable to offer him any place at all. Apparently at the time they were short 20 Primaries and 3 Secondaries. In fairness the local school has improved immensly, but is still seen as focussing on providing a safe learning environment for those from more challenging backgrounds rather than stretching the more able. Hence local disappointment when people heard the newly announced Free School will be run by an evangelical Christian group. It did not take too much Googling to find links between some within the Church and the creationist movement.

London's population growth means more schools are needed, both state and private. Governments (this and the last) have clearly decided that they cannot afford the capital funding and so have looked to other sources. This means it is more important than ever to know who controls policy at your child's school and what their motives are. I get venture capitalists and profit. I would be very wary of a non-mainstream religious group.

The point is not who pays how much tax. The point is that wealth narrowly distributed, concentrated in a few hands. The fact that the top 1% earn enough to pay 30% of all taxes only shows how the wealth gap has grown. This is not something to brag about! It's a side effect of a worsening situation.

It would be better is a larger number (like 1000x the current number) of people had a share of this concentrated wealth. Then many more people would be productive. Many more people would be sharing the burden of tax.

Crucially, the more people have a modest share of wealth the lower taxes would be for everyone as there would be a lesser need for welfare.

And by the way, focussing on income tax is not enough. The true position is that the lowest earner pay a higher/equal percentage of their income in taxes than the top earners. The position is not "progressive" at all.

The % of income paid in taxes is about the same across the top and the bottom (35%) so it's not like the top 1% are paying a higher rate - they're not.

www.ons.gov.uk/ons/resources/l5bothrichestandpooresthouseholdpaysimialrtaxes_tcm77-368775.png

I suggest you take some maths lessons! If 1000x the current number shared the wealth currently shared by the top 1% that means it would be spread across 10x the population, so you will be shifting 90% of it overseas!

More importantly, you say that focussing on income tax is not enough then proceed to do exactly that. Try looking at the complete picture. In 2012/13 the richest 20% of households had an average income before taxes and benefits almost 15 times that of the poorest 20%. After taking tax and benefits into account that ratio drops to 4 to 1. Sounds a pretty progressive system to me.

I thought we were talking about the richest 1%, not the richest 20%?... After taking tax and benefits into account, that ratio drops to what?

I suspect the ratio of the wealthiest 1% to the poorest 1% would be too embarrassing for words, as would the wealthiest 1% to the poorest 20%...

How about the wealthiest 10% to the poorest 10%? It's just ridiculous to compare the "wealthiest 20%" to anything, as there is such a colossal difference between those at the bottom of that band and those at the top - they are far from being a homogeneous group.

(Mind you, the top 10% is also pretty silly, given that I should imagine there are also huge wealth differentials in that group...).

Still, if you don't count the top 20%, then you are forced to count people who have professional advisers specialising in tax avoidance dealing with their money... Much easier to talk about those who have enough money to be taxed, but not enough to avoid tax... the ratios look a bit better, then...

I was just accounting for the economy growing 10 fold under this scenario too .... obviously .... no mistake at all ...

"In 2012/13 the richest 20% of households had an average income before taxes and benefits almost 15 times that of the poorest 20%. After taking tax and benefits into account that ratio drops to 4 to 1. Sounds a pretty progressive system to me."

Those ratios are at the highest levels ever .... perhaps it's not progressive enough?

If the gap opens wider then even more people will need welfare support. Just how rich does the top x% need to be before this becomes clear?

When there have been revolutions in the past - say, in France or Russia - I didn't get the impression this was because the wealthiest 20% were thought to have too much power and money. I rather got the impression it was because a far tinier proportion of people had become so disproportionately wealthy and powerful that they pissed the rest of the 20% off...

A couple of points:

1. Who pays for a service and who provides it are totally different. The NHS is funded through taxes but buys services from private companies (GPs , drug companies, equipment suppliers etc) - so the argument of profit making provision should be separate from the funding and tax arguments.

1. The richest 1% of the UK own £761 bn of wealth ONS data.

This is a one-off payment of £12k per person if spread across the country, equivalent to about 6 months median wage

The top 1% currently pays around £50bn of income tax each year, around £1,000 per person for the country.

To get £1,000 a year from a lump sum of £12,500, you would need to return about 8%, which is much higher than the majority of investments.

So actually we are better off taking the income tax and leaving them with the lump sum.

Oh, yes, of course - silly us, it's a choice between everyone in the country getting a one-off payment of £12,000 and 1% of people in the UK owning £761bn of wealth between them. Not, of course, that anyone could possibly know how much the richest 1% actually do own, given that they spend one hell of a lot of money on hiding those little details. It's because they're so bl**dy good at it that they proportionately so little tax...

It's actually a bit scary to think that the richest 1% could afford to give everyone in the UK a £12,000 lump sum if they suddenly lost track of their senses.

"So actually we are better off taking the income tax and leaving them with the lump sum."

The famous "trickle down" that is so evident in my local area. It's not particularly clear how the uber wealthy are spreading the £love£ amongst the 20% NEETs.

MN164 My comment has nothing to do with trickle down. Trickle down is the theory that people who set up companies which are profitable employ people and thus make everyone richer.
This has not been been as evident over the past 30 years due to globalisaton of labour intensive industries and the influx of high net worth foreigners.

I guess this highlights the tension between free marketeers and those with a social agenda. Is massive concentration wealth for the few more important than quality of life for the majority?

Not worth debating such a fundamental political difference. Free marketeers are clearly fine with widespread poverty, unemployment, high levels of NEETs etc. just so long as the "promise" of wealth appears to exist for everyone because they are "free" to accumulate wealth if the "choose".

You could, alternatively look at the evidence and discover that poverty is falling faster than it ever has at any time in history. Unemployment in the UK is falling as is the number of NEETs. People with different political views may disagree with you about the best ways to improve the quality of life for the majority and alleviate poverty. That doesn't mean they don't care.

MN164 You do realise that the Rotherham scandal has its roots in the left view that they are the tolerant and nice group, so what they support must be right and any criticism is driven by hateful arseholes and not worth listening to.

Problem is, it appears you can only make it look like work pays if you considerably lower the living standards of those out of work - the low paid remain stubbornly low paid. It doesn't seem like a huge improvement in quality of life to increase the number of people working in order to survive rather than thrive. Cheap labour does not equate to quality of life - in fact, working really hard for little reward is most peoples' definition of a very poor quality of life. Also, lowering tax and taking more people out of paying tax altogether because they aren't really well paid enough to be able to afford to pay tax, doesn't seem to encourage pay to go up, it just seems to be reducing the amount of tax coming in to pay for services that make us all feel like we have some kind of quality of life, and increasing profits for the most wealthy and powerful, making the contrast in standards of living between the richest and poorest ever starker and more depressing. This seems to me to be a very unhealthy state to be in. And one that nobody seems to have worked out how to get out of.

Selective statistics don't make evidence for a full picture. Unemployment and NEET rates have fallen just as zero hour contracts have exploded.

• The largest group on zeros are under 25
• Zeros average working week is 30% or more less than full time

Is this improving quality of life or just symptomatic of market abuse of a labourforce?

Sure have a "job" but don't expect any benefits, holidays, pension or job security. In fact from one week to the next you might not have a clue what your income will be. But at least you won't be a NEET.

What a lot of myths in one post.

Zero hours contracts (or casual labour as we used to call it) suit a lot of people. It is quite right for the government to stop employers using zero hours contracts that prevent the employee from looking elsewhere for work but it would be a mistake to ban them.

If you are on a zero hours contract you are entitled to benefits. Depending on the number of hours per week you work on average you may be entitled to Working Tax Credit, Child Tax Credit, Housing Benefit, Council Tax Support and Income-based Jobseeker's Allowance.

If you are on a zero hours contract you are entitled to paid holidays (7.24 minutes for each hour worked - more if other staff doing the same job get more than the statutory minimum holiday). You are also entitled to automatic enrolment into the company's pension scheme.

If you are on a zero hours contract and employment is continuous you have the same protection against unfair dismissal, etc., as full time employees.

It is true that one of the down sides is that you don't know from one week to the next what your income will be. However, it provides flexible employment on the same basic terms as most workers. It puts you under no ongoing obligation to accept work with no consequences of refusing. A zero hours contract would not suit me personally but I know some people working zero hours contracts who don't want to move to any other form of employment as it suits them.

This is, however, getting a long way from the subject of secondary education.

It's still educational, though.

What does continuous employment mean?