Schools in England were privatised in 1988

5 min read
The Education Reform Act 1998 (ERA) marked the point at which government started the process of privatising England’s state schools. Hywel Thomas, Emeritus Professor of Economics of Education, offered an analysis of ERA in 1990. Chapter 3 of the legislation set out profound changes to school financing, these measures are referred to as the  Local Management of Schools (LMS). The introduction of LMS provides the technological basis for privatisation.

Privatisation: public to private sector

It is important to be clear what privatisation means. The common definition is the process by which a public organisation is passed to the private sector. But it is necessary to clarify what I mean by public and private sector. To this aim I draw on Young’s (1986) definitions:

…the public sector [my emphasis] is used to describe those organisations created directly by government or by local authorities. Their status is usually statutory, or at least heavily dependent on the parent authority. They are financed mainly, and usually entirely, from public funds. Their work is directly linked to public policy, and their organisational structure is such that they are accountable to, and controlled by, ministers or local authority councillors  (Young, 1986, p. 236).

…’private sector‘ [my emphasis] is used as an umbrella term to describe what remains. It thus covers not just privately owned or publicly quoted companies, but interest groups, pressure groups, the voluntary sector, charities and the range of trusts, enterprise agencies and similar bodies that have emerged in recent years. In practice some of these organisations – like companies in which government holds part of the equity – straddle the boundary between the public and private sectors  (Young, 1986, p. 236).

 The voucher system – privatisation US style

A voucher system or voucher plan is a system through which parents are given vouchers in order that they can choose to spend them at any school, public or private, to buy education services for their children. The voucher plan effectively makes parents customers in an education marketplace where they can exercise choice.

Thomas (1990) argues that Local Management of Schools, as created by the Education Reform Act 1988, effectively created a voucher plan. While parents did not have full flexibility to exercise choice, for example, it was not possible to buy services outside the state system, it effectively created a market place with some choice. And turned schools into private-sector enterprises.

Thomas (1990) shows that LMS creates a voucher system through five legislative elements: financial delegation to schools; formula funding, open enrolment; staffing delegation and performance indicators. It is these five elements that recreate the state school as a private sector enterprise.

  1. Financial delegation schools were given day-to-day control over their budgets, where it was previously with the Local Education Authority. It is this move that subtly shifts the school into the private sector, according to Young’s definition above. It is grey, because the school does not entirely have control over its equity, but taken with the other four elements it clearly shifts from public to private. Headteachers and governors gained considerable power over their budgets, they had flexibility in respect to the selection of subcontractors for things such as maintenance and repairs. The essence is the locus of control shifted from public to private.
  2. Formula funding – this element marks the creation of a quasi-voucher system. Funding became pupil driven with 75 per cent of funds allocated by formula and the funds were required to be tied to a pupil. The stated aim was that ‘…schools have a clear incentive to attract and retain pupils’ (Circular 7/88, Para. 105) so emphasising competition and choice.
  3. Open enrolment – parents could move children to more popular schools and the funding went with them. This meant the creation of a quasi-market with schools effectively in competition.
  4. Staffing delegation – boards of governors gained the powers of appointment, suspension and dismissal. This links to future performance management as teachers become more accountable for pupils. Effectively teachers’ employment was connected to pupil performance. Even if, for the time being, the link was not overt, but mechanisms were created.
  5. Performance indicators – examination results and national assessment tests were used as quality indicators. There were two reasons for this: parents needed data to make choices and the government needed a mechanism for assessing the performance of a school through centralised accountability. The latter is an important separation from a shared public project to an outsourced private provision of education.

Final words

The Education Reform Act 1988 and the introduction of Local Management of Schools marked the beginnings of the privatisation of schools using the five elements set out above. This process has developed, almost seamlessly, regardless of political party, through to the present. Having identified the foundations of privatisation, in subsequent pieces of writing I plan to show how this has developed, to look at its impact on teachers’ workload and access to continuing professional development and to look at this in terms of wider political economy.

We should not kid ourselves that our schools remain in the public sector, they haven’t and ERA and LMS were the instruments that allowed it to happen.

References

Thomas, H. (1990). From Local Financial Management to Local Management of Schools. In M. Flude & M. Hammer (Eds.), The Education Reform Act, 1988: its origins and implications. London ; New York: Falmer Press.
Young, S. (1986). The nature of privatisation in Britain, 1979–85. West European Politics, 9(2), 235–252. https://doi.org/10.1080/01402388608424576

7 thoughts on “Schools in England were privatised in 1988

  1. SANDRA CRAWFORD

    It was clear that another level of privatisation took place in 2013-2014. As a Councillor in the Cambridgeshire County Council’s Audit and Accounts Committee, I observed and questioned the “loss” of over 120 million pounds worth of long term assets on the Council’s balance sheet, in July 2014.
    I was told by officers that this was the hand-over of the Academy Schools to private “trusts.”
    The land and property has been leased to private concerns, but the money used to run the schools is, of course, still government money. Gove had spent £25,000 of government money in fees per school to hand over title deeds legally. The loss on the balance sheet was material, as no compensation was paid in cash. I carefully checked this point with the officers, who stated that “they had to do this.”
    A layer of government money is now being used to line the pockets of CEOs and various private profiteers. This means of course, that there is less available to pay teachers, so class sizes go up and quality declines. In some cases the employment of unqualified teachers who are cheaper to employ.
    The myth of privatisation is just that, a myth – it is merely away of profiteering from government money instead of making sure that it all goes into quality services, providing better outcomes and efficiency.

    Reply
  2. Steven Watson

    Yes, it was as a result of the Acadenies Act 2010. Which did indeed take things a whole lot further. Gove expanded the academies programme and in the act any school surplus had to be transferred to the academy on conversion. Land was transferred from LA’s on a 125 year lease (via the DfE – I think property was transferred to the DfE). In some cases the freehold was transferrred to the academy trust. It is breathtaking how much the county council had to write down as a result. There were some nice little earners for lawyers and consultants too.

    We have transferred a huge amount of public assets to the private sector. We have a narrow conservative curriculum and teachers are demoralised and leaving the profession. Their workload and stress levels have increased. Some large Multi Academy Trusts are expanding nationally and internationally by using public money and assets.

    Its an absolute disgrace!

    Reply
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