“Edubusiness” vultures circle

Submitted by Matthew on 18 April, 2012 - 9:14

This week owners and administrators of private capital will assemble in London to share ideas about how state education can be further opened up to their insurgency.

Education Investor magazine (yes, it does exist) is hosting a conference to bring together established edubusinesses such as Pearson (owners of the “awarding body” or exam board Edexcel), academy sponsors (including Balfour Beatty and ARK), and representatives of private equity companies, some of whom have given large amounts of money to Education Secretary Michael Gove in recent years.

According to material published by the GMB union, Gove has received almost £650,000 in donations, sponsorship and remuneration, the bulk of it in the last four years.

The biggest individual contribution came in 2009 as a cash donation of £150,000 from Martin Calderbank, a founder of private equity group Stirling Square Capital Partners. In 2010 Mr Calderbank set up Agilitas Partners, and someone from Agilitas will attend the Education Investor conference. Agilitas’s website argues that money can be made these days by investing in businesses which will benefit from “favourable political trends”. Such as extending the opportunity to set up for-profit schools, perhaps?

Other private equity firms are also looking to get involved. They sense the Tories want to widen the extent of for-profit schooling, as in Sweden, one of the models for Gove’s “free school” project. Currently it is possible for profit to be made out of state-funded schools, but only via various forms of contracting-out and in compliance with complex EU procurement rules. However, the charitable trust which oversees a “free school” in Brandon, on the Suffolk/Norfolk border, has recently called in a Swedish for-profit company to run the institution. This company will be able to siphon off any “surplus” state-funding over the course of its ten-year contract. Private capital already runs chains of Academies, and funds independent schools.

Such capital must expand, and find new markets. Perhaps this prompted the donations made to Gove not only by the founder of Agilitas but also by representatives of a company owned by Sovereign Capital, who finance the Alpha Plus Group of independent schools, and by Aurum Fund Management, who put money into ARK?

Sovereign Capital is sponsoring workshops at this week’s conference.

Information about the sessions indicates what lies in store for English state education if private capital gets its wish.

A further drastic reduction of the role of local authorities in education will help pave the way for schooling-for-profit.

Public spending cuts will enforce “partnership” with private capital. Job-losses, pay cuts and attacks on working conditions will drive down operating costs, and “surplus government properties” may be handed over as sites for profit-making schools. Among those addressing the conference are the Chief Executive Officer of the Alpha Plus Group, the Managing Director of Serco Learning, the Vice-Chancellor of London Metropolitan University, and former New Labour Education Secretary Charles Clarke.

Gove won’t be present, but his acolytes will be.

Confirmed attendees include members of Policy Exchange, the right-wing think-tank which Gove helped found, and the New Schools Network, which does the donkey-work for companies or individuals setting up “free schools”.

NSN likes to style itself an education charity and not part of government. Yet it is run by an ex-advisor to Gove and Boris Johnson.

Trustees of Policy Exchange also serve as trustees or staff at NSN. In 2010, without advertising it or putting it out to tender, Gove awarded a grant of £500k to NSN.

Gove took scores of additional powers under the Education Act rushed through Parliament soon after the Election. He cannot yet mandate schooling-for-profit in the state sector because the Liberal Democrats oppose such a policy. But for how long?

Will the policy appear in the next Tory manifesto? Hedge funds and private equity companies have been manoeuvring for some time to push for it. Their spokespeople already claim that a focus on profit will raise standards in the classroom and re-knit the bond between school and community.

Like the NHS, state education is set to become “a big opportunity for the for-profit sector”, as a Prime Ministerial advisor told private equity executives in the US last year. It too will be shown “no mercy”. Shadow Education Secretary Stephen Twigg pledged his opposition to for-profit state schools at the NASUWT Conference. Holding Labour to this pledge is a vital first step in any fightback.

Ultimately, though, such a fightback requires a reckoning with the private investors behind Gove.

• GMB report on funding to Michael Gove here

• Education Investor conference website here

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