Coffee House

Michael Gove: why I won’t allow profit-seeking schools (yet).

26 December 2012

Why aren’t there more free schools? Halfway through this coalition government and we have just 72; we’d need 400 opening a year simply to keep pace with population growth. When I interviewed Michael Gove for our Christmas double issue, I asked him about all this. I didn’t put it in the magazine as this is a rather technical issue, but I thought some Coffee Housers may be interested. Gove said he expected free school project to follow Moore’s Law of semiconductors (ie, capacity doubling every two years).

Under this government, within a year of legislation passing, you’ve got a couple of dozen schools established and a year later, like Moore’s Law of Microchips, you have double the capacity entering the system, in fact that’s twice as fast as Moore’s Law.  I think it is an unprecedented level of new school creation.

That’s the optimistic case. But there is a major, government-created factor retarding the efforts of education entrepreneurs. One is the government ban on profit-seeking schools, which excludes the fastest-growing groups and leaves the project in the hands of charities. There’s only one profit-seeking school: IES in Brandon, Suffolk. It’s the first UK outpost of Sweden’s no1 school chain, so advanced they were teaching Cambridge University Exam Board’s International GCSE at a time when no English state schools entered pupils for the test.

But IES operate as a business: ie, they have shareholders who require a return on investment. The profit margin in the Swedish school sector is small, perhaps 3 per cent, so we’re not talking megabucks. We’re talking a principle: as the Swedes found, profit-seeking schools open in communities where new schools are needed most. The expand quickest, whereas charities tend to have a run a few flagship schools, which donors can visit.


Even the Swedish left now back profit-seeking schools, accepting that this model best promotes social justice, why are the British Conservatives squeamish? Why say to IES: thanks for coming to England, but forget about offering council estate kids another choice because we don’t like your profit motive?

Here’s what Gove had to say:-

What I said to them [IES] is the same argument that Andrew Adonis has made: we’ve created the opportunity for you to demonstrate what you can do and win the argument in the public square. You have an organisation that has been criticised, in some cases demonised, now running a state school.  I am utterly confident they will achieve amazing things but the way in which the case will be made for that organisation to expand on whatever terms is through its success.

I was talking to Arthur Brooks at the American Enterprise Institute when we were in Washington and he talked about the Rule of One.   The point that he made is you can try to win any argument you like through statistics. To say: ‘if you look at the trend over time and the concentration of independent and autonomous schools in Swedish municipalities, then it produces this’. Before for the debate to change more broadly, you need to say: visit this institution.  Come and look at this institution, how can you object to it?

I went to see IES in Suffolk a few weeks after it opened, and it is quite an extraordinary school with a head who reminds you that Britain has the best teachers in the world. One of the teachers told me he went there because he was sick of the state sector defeatist approach: that if the school’s in a bad neighbourhood, there’s nothing that can be done with the kids. IES Brandon is a brilliant new school, replacing a school the council earmarked for closure. It’s is an example of how community power can trump bureaucratic inertia – it ought to be something Tories should champion. But Gove believes it’s up to the schools, not the politicians, to change British public opinion on profit-making schools…

You or I could make the argument about why the profit motive depends far more upon satisfying parents and pupils than it does anyone else and therefore it will be the best driver of progress in education but people are going to be predisposed to believe that on the basis of a set of assumptions that they have about public policy and life more generally.

I put to him that this was a depressingly familiar line of argument:  the politician is simply there to be blown in the wind.  As a Secretary of State, Gove has the power to fast-forward this and allow profit-making schools then let the results speak for themselves at election time. I asked him: why doesn’t he just use this power?

 I hope it’s been the case that, over the last couple of years, we’ve tried to lead or steer public opinion in a variety of areas.  It seems to me here though that we have the perfect opportunity to allow the case to be made by a pioneer. The lesson of reform is that, sometimes, people are too cautious and then sometimes people overreach – and only hindsight will be able to tell us in which is which…. In the same way, if you look at the lessons of some reformers, some like the Swedish government that introduced free schools, didn’t quite realise how dramatic the change was going to be until afterwards.  Others knew that it was a big battle – Margaret Thatcher and trade union reform – but they ate the elephant in chunks.

The second factor retarding school expansion is HM Treasury’s refusal to allow existing state schools to borrow. On this, Gove had more to say – I’ll blog about that later.

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  • Coffeehousewall

    There is nothing wrong with a school being run as a business as long as parents can withdraw their children relatively easily. If a school holds a monopoly of provision then the profit motive can easily take attendance for granted and subvert education.

  • JstMyWondering

    As Long as the Books are Transparent 100% Accounting.. then the Intelligent Public can Work out the Disparity of the System…NO More Wool Over the Eyes…No More Aggregious Payments Claiming to have Super Human Skills..Surely more Efficient Value for Soul.

  • Andy

    Totally transforming Education is quite simple. All we have to do is privatise it. If you give parents a voucher which has a value of £x and can be redeemed at a Private school – send your son to Eton !! – or a Free School or a former LA school which has become a charity. That too would break the power of the teaching unions. There would be thousands of employers instead of a few who can be easily bullied. And lets also start to lift standards. Proper exams instead of the rubbish we have now. The teacher trolls will be out in force today !

  • johnebolt

    should be noticed that IES have been bought by a US hedge find.People should also look at thr OECD about Swedish educational decline and about how markets in education lead to greater social divisions. Better than ideological rants based on ignoance and prejudice. Or even the cleat evidence that academies have made no measurable difference in England.

  • Andrew Lawrence

    Michael Gove grow some balls and give the free school sector a massive boost. The state sector is failing the country and our kids it can’t be turned around we are pouring billions of taxpayers pounds into a broken system.

    Bring in a law that protects free school providers from any future Govt that want to shut them other than when they are not achieving results.

    If you a real radical rather than a publicity seeking politician this will be a no brainer.

  • FF42

    The problem is that education is not amenable to industrial style efficiencies. If you get a fee per student, your only way to squeeze out a profit is to spend less: on teachers or facilities. These kind of savings tend to be noticed by parents and it’s telling that private schools tend to trade on smaller class sizes, better paid teachers and superior facilities, compared with state schools. If you like, they marketing a less efficient delivery.

    The only other way to make a profit is to pad the fees. There has, I gather, been a deal of controversy about this in Sweden.

    Incidentally, it appears Swedish Free Schools are struggling commercially. see here. The overall number of school children is falling and the proportion applying to free schools has plateaued at about 10%. What I take from this is that there is a wide range of quality in free schools, as there is in state schools. Most parents would prefer to send their children to a good state school, but prefer a good free school to a bad state school.

    • Colonel Mustard

      Distinguish between an analysis and an agenda please. Too many of the latter, especially from LEA/NUT vested interests, masquerade as the former.

      Impartial observers, like me, ask ourselves just why LEA/NUT teachers and educationalists have such an axe to grind over free schools when it appears that they have more than enough on their plates with the atrocious standards in failing state schools. Is it dog and manger?

      • Chrysalis

        To what extent do you call yourself impartial???? You describe ‘atrocious standards in failing state schools’ where the factual evidence (just look at the data) does not support your blanket assertion. You talk about ‘vested interests’, which is hardly impartial language, but discount the possibility that maybe, just maybe, the people working in the profession might just happen to know what works and what doesn’t.

        Dog and manger? No. Emperor’s New Clothes? Yes.

        • Colonel Mustard

          Touched a raw nerve eh? Show us the data and declare your own interest. I don’t work in education and am not a member of NUT. How about you?

          • ToryOAP

            Have you noticed Colonel how quIckly the teacher trolls find a post that goes against their agenda, just as the police trolls gathered to attack Mitchell? I would give a great deal to discover the coordinating force behind these lefties and trolls.

            • Colonel Mustard

              Yes! Note Chrysalis’ comments. He is a “researcher in education” and works for a local authority (maybe a comrade of Dr Nick) and I bet that if he is not actually a Labour party member/activist he certainly never votes Tory!

              The worst aspect of education in the UK is that it is infested with left wing activists with a political agenda.

              • dalai guevara

                No, the worst thing in the UK is that the discussion about good schooling is infested by political ideology. I cannot recall any education system in the western world (some superiour to ours) where this ever was an issue of the magnitude it is in the UK. Why is that? Is it partly due to the fact that those parents who pay an arm and a leg for it want to be reassured of the ‘value’ they are getting?

                • Colonel Mustard

                  I agree but the reality is that left wing ideology predominates and has predominated in education. I think the reason is that the UK is still going through a politically engineered left-wing cultural revolution that on some levels is quite insidious. “Progressive” is never challenged by consequences but is just presumed at face value. That impoverishes debate.

                  For leftists political ideology appears to underpin everything and is the imperative for everything. The subject at issue is always harnessed to the ideology to the extent that it becomes impossible to debate beyond the propaganda, whether it is education, immigration, the NHS or the economy.

                  Because the left do this with everything I think they assume the right do too, but it is harder to identify any political ideology in what Gove is doing, beyond trying to improve the education of children.

                • dalai guevara

                  I would agree with you that party political stance should be removed from the debate. But as soon as we introduce the money aspect (my point earlier), it for some reason becomes an issue again. Whilst Gove has an agenda when making exams harder, introducing new forms of schooling etc, we witness fees for higher education (not ability filtering) taking over in other places. We also witness a gradual move to running school for profit – what good could come out of that?

            • Coffeehousewall

              Who pays their wages and who is ultimately benefiting from every media outlet being silenced by troll activity?

          • Chrysalis

   (Some decline since 2007 under Labour, but still good internationally).


            And no, not a teacher, not in NUT. A researcher in education.

            • Colonel Mustard

              I’m suspicious of Pearson but even so the data does not appear to support your argument. As for the BBC…

      • FF42

        It’s hard to refute your accusation of having an agenda when you don’t bother to engage with any arguments. For what it’s worth I think free schools can have a useful but limited role to play. If 90% of Swedes go to local authority run schools and 10% go to free schools, the authority run schools are more important and that is where you are best focusing your effort. It’s arithmetic not ideology..

        • Colonel Mustard

          I’m the one asking the questions. Declare your interest.

          • Coffeehousewall

            The leftists never declare their interest.

      • Sweetpea

        I am not a teacher, I do not work for a teaching union or a local authority and I have no connection with any organisation in the education sector. But I know this much: there is no evidence to support the Government’s agenda on school reform. Academies perform worse than maintained schools; academy pupils are more likely to take GCSE “equivalent” exams (BTECs); academy pupils less likely to achieve EBacc (1/33); Free Schools and the best performing academies (former grammar and independent schools) have far fewer free school meal pupils.

        • Colonel Mustard

          But you are a notorious lefty so you might as well be. And anything you write here reeks of agenda.

          • Coffeehousewall

            I look forward to many free schools everywhere. I hope to begin to be involved in setting up one in London soon.

  • andagain

    “Even the Swedish left now back profit-seeking schools, accepting that this model best
    promotes social justice, why are the British Conservatives squeamish? Why say to IES: thanks for coming to England, but forget about offering council estate kids another choice because we don’t like your profit motive?”

    Because they are in coalition with the Liberal Democrats.

    • Coffeehousewall

      No, because they are in total agreement with the Lib Dems. They all have the same agenda.

  • michael

    “Gove believes it’s up to the schools, not the politicians, to change British public opinion on profit-making schools…”

    Yes, but having an opinion that is different from the beeb’s is not politically correct. Sharing such opinion is tantamount to sedition, and acting upon it is treason. With the full weight our Chinese style bureaucratic state, as the past few months have demonstrated, set upon your obliteration, patience is probably the most expedient path for political self preservation.

  • Andy

    Free Schools are a great idea. An even better idea would be education vouchers which could be redeemed at State Schools, Free Schools or Private Schools. Allied to this I would allow Schools to leave Local Authority control and I would allow private education companies to buy them. And so yes I would allow people to make a profit out of schools. I deplore this idiotic British attitude against the motion of ‘profit’.

    Anything that destroys Local Authority control and the power of the teaching unions is to be welcomed. Far too many children have had their lives blighted by these backward fascist forces.

    • Chrysalis

      “….destroys local Authority control….”. I work for a Local Authority, and every time I read the words that you just wrote, I KNOW that you are just quoting rhetoric that you’ve read or been told by some politician. Instead of aping what you have been told by other people, why not find out for yourself whether Local Authorities really DO have any control over schools. They don’t, and haven’t had any real influence for many years. Research it for yourself.

      I know what you have said will attract lots of ‘likes’ from people who also believe what they have heard, but I’m afraid neither LA’s or Unions have much influence in schools, and you are just swallowing nonsense without finding out the facts. I hope that schoolchildren can learn to think for themselves better than many adults can………

      • ToryOAP

        Weren’t my fault guv. It was someone else what f*+cked up all the skools. Certainly wasn’t left-wing councils and ideology and left-wing unions. It must have been Fatcher.

        • Coffeehousewall

          Yes, everything is down to Fatcher! That is the easy answer the Left uses. Unfortunately I know too many mediocre teachers, and too many excellent ones who have decided to leave teaching. What has scuppered education is the equal outcomes tripe.

      • Andy

        ‘I work for a Local Authority’. Thus I hear the voice of vested interest. If LEA’s have so little influence on education as you claim we can cheerfully abolish them. They are, by your own admission, a total waste of money.

        • Chrysalis

          You have just demonstrated that you have no idea at all about what a Local Authority does. You think that all they do is try to control schools by what you call vested interest. Since you know and understand so little, there is hardly any point responding to you. I can only hope that you will take the trouble to find out for yourself about the roles that a LA carries out, and maybe you will stop posting no sense on blogs.

          • Andy

            Ah no arguments then only abuse. Quite typical from Labour trolls.

            • marklu

              So far as I can see Chrysalis simply could not be bothered to explain to you because your reply “Local Authority=Vested interest” gave no indication of any desire to seriously discuss the issue. Whereas you resorted to abuse by calling him/her a troll.

              The trouble for Chrysalis is that it is quite difficult to disprove a a well hackneyed negative. Education politics debate is littered with simple slogans that misrepresent what actually goes on and take some time to explain.

              “Only17 teachers sacked in 40 years” and “plummeting down the league international tables” are recent cases in point from the right. Knee jerk labelling of Gove as elitist from the left.

              Local Authorities have considerable responsibilities but little real power. They have to ensure that there is educational provision for all in their area, yet are not allowed to comission schools. They are often left with the job of placing children in schools if thier parents are too feckless to fill in the forms, or if the local school’s admission procedures effectively exclude some. They also have an advisory role and are charged with imropoving schools, though at the end of the day it is individual school governors who make key appointments. The cannot directly employ or sack a teacher. Some control eh?It was Ken Baker who introduced Local Mnagement of Schools 25 years ago, yet Local Authority Control remains a thme as misleading as the others I have highlighted

              As for unions, There is one , and only one major intervention by a union that has derailed or significantly changed government policy. That was in 1993 when the High Courts agreed with NASUWT that the testing arrangements were a legitimate dispute based on the issue of work load.

  • The BBC Sucks BBC’s

    Just bring back grammar schools & introduce education vouchers, that’ll solve our educational woes & that is UKIP policy.

    • HooksLaw

      UKIP do not promise to bring back grammar schools. They merely promise to ‘encourage’ them. Perhaps you can tell us what UKIPs policy is on secondary schools and the teachers they will need to run them and the parents who will have to send their children there.

      • The BBC Sucks BBC’s

        As a former teacher I can tell you that UKIPs policy on education is the best thing that could happen the education, namely vouchers, parents get a voucher which they can top up & use it to send their kids to private schools, so hopefully we finally reverse the destruction the ghastly leftwing teaching unions have wreaked on our society via the failed comprehensive system.

        • Coffeehousewall

          I think that the voucher scheme, together with free schools as an aspect of the education provision would truly revolutionise education. This is why it will not happen.

  • Chrysalis

    I am puzzled by: ” so advanced they were teaching Cambridge University Exam Board’s International GCSE at a time when no English state schools entered pupils for the test” This suggests that this Swedish school is somehow better than state schools. In reality, maintained schools were prevented by legislation from teaching the IGCSE because it was not allowed to count on the league tables. I know, because I had to deal with requests from state schools in the past, asking whether they could please start teaching the IGCSE. The response from central government was “No”.

    However, there is no reason to let facts get in the way of journalistic impact or political dogma……It just seems a sad situation when the author of an article would prefer truth to become a casualty of a ‘good story’.

  • Warren Valentine

    All very well if you have headteachers with integrity. “Satisfying parents and pupils” in the current education climate boils down to a hopelessly short term statistic – achieving 5A*s – Cs incl. English and Maths. There are a number of ways pupils quality of education can be cut, the breadth of the curriculum reduced, the life and joy of education completely sucked out to achieve just that.
    Until the name of the game is changed, profit making schools are a bad idea because it will simply serve to bolster the incentive to go down such dodgy dark roads. How can we be sure all our school leaderships (SLT + governing bodies) have integrity and provide a proper education – that needs addressing first.

  • Robert Castlereagh

    Why no more free schools has to relate to a left wing conspiracy working through unionised teachers to persuade relevant communities against backing local projects.
    In this way in all urban areas left wing local authority control of is retained to indoctrinate our little ones in the way of the Marxist Common Purpose State.

    • Dr_Nick

      Hardly. Most free schools are in Labour-controlled, urban areas.

      But why let facts get in the way of ignorance and prejudice?

      • Robert Castlereagh

        You know damn well that there is a Socialist conspiracy to destroy the legitimate will of Mr Middleof the road to get out of the EU, stop the tsunami of immigration and destroy the aims of Gove to modernise education.
        Sadly indoctrination of the young starts in schools with our unionised teachers.

      • Colonel Mustard

        Ask yourself why? It is probably more to do with choice and comparison. Free schools will thrive in areas were state-sponsored mediocrity and LEA/NUT Marxist suffocation of opportunity drives parents to seek alternative freedoms.

        And you are hardly impartial since the company you work for appears to specialise in privately selling consultancy services to “partner” LEAs which pay for it from taxpayer funding. A nice little back-scratching monopoly threatened by free schools?