The variation in teachers’ pay in large Multi Academy Trusts

Following my analysis in previous blogs of the variation in teachers’ pay in England, I now look at the difference between pay in the larger academy chains and Multi Academy Trusts (MATs). I used data from the National Statistics School workforce in England (November 2015) data again and identified which Trust schools were part of. I look particularly at the larger groups in both primary and secondary. I make comparisons with maintained schools and academies in general. I would add that this analysis is preliminary, but is consistent with the analysis in my previous blog posts.


The following chart shows mean salaries in primary schools in selected large academy chains. Data labels indicate the number of primary schools in the chain. The maintained and academies and free schools bars are the average by type for the whole state sector.


The following table includes conditional formatting comparing mean salary with maintained primary schools.meansalaryprimarybytrusttable2015


The following chart shows mean salaries in secondary schools in selected large academy chains. Data labels indicate the number of secondary schools in the chain. The maintained and academies and free schools bars are the average by type for the whole state sector.


The following table includes conditional formatting comparing mean salary with maintained secondary schools.meansalarysecondarytrusttable2015


It is notable that as with my previous analysis the mean salaries in academies and free schools is less than it is in maintained schools. This analysis shows that this is true for both primary and secondary schools. It is also important to note that MATs who appear to have higher than average pay are likely to have more schools in London. This is certainly true of the Harris Federation where the average pay is influenced by London weighting. However, it has to be acknowledged that the average inner London pay is higher than maintained schools. In my next post I will look at the differences in London and regional pay more closely.


Thanks to JL @dutaut who observed that AET have 67 schools but only 32 primaries and 30 secondaries: the missing ‘five’ are special schools. Where there are discrepancies like this the schools not included are special schools or all-through schools.

My data can be viewed here.



Why do teachers get paid more in maintained schools? – part 2

I have completed some further analysis using the underlying data from the National Statistics School workforce in England (November 2015) data. I have looked at the differences in teachers’ pay in secondary schools between Local Authority (LA) maintained schools and academies. The question raised in my previous blog was: why do teachers get paid more in maintained Schools than they do in academies?

Today’s analysis drew on the underlying data, where the mean full-time equivalent (FTE) pay for each school is presented. Questions where raised in respones to my previous blog about whether the differences was a result of different academy types i.e. converter academy [1] or sponsor led [2], or whether there was some effect owing to higher salaries in London, for example. My analysis here suggests not and it also supports the analysis I presented in my previous blog. It seems that if you are a teacher you are better off working in a maintained school.

The following chart summarises the difference between average pay in converter academies [1], sponsor-led academies[2], free schools and LA maintained schools.


The mean pay in maintained schools is over £700 greater than in academy converter schools and just over £1000 greater than sponsor-led academies.

Now to look at the differences in pay between the different types of schools types, in relation to London weighting, outer London weighting, London fringe pay and regional pay.

School type, mean FTE pay. London and regional weightings

With the exception of outer London and London fringe, teachers are paid more in maintained schools. In these area pay is higher in the small number of free schools, maintained school pay is comparable to pay in converter academies. Consistently the pay in sponsored academies is less than maintained schools.


I have not yet determined why this is from the data. However, my previous blogs on privatisation would suggest that when a service moves out of the public sector there is a natural downard pressure on teachers’ pay and conditions. Perhaps we are seeing this here.


[1] Converter academies are successful schools that have chosen to convert to academies in order to benefit from the increased autonomy academy status brings. They were introduced in 2010 as part of the Coalition government’s plan to broaden the academy programme and eventually enable all schools to become academies.

[2] Sponsored academies are usually set up to replace under-performing schools with the aim of improving educational standards and raising the aspirations of, and career prospects for, pupils from all backgrounds including the most disadvantaged.

Sponsors are responsible for establishing the Academy trust, the governing body and the appointment of the head teacher. They come from a wide variety of backgrounds including businesses, faith communities, universities and individual philanthropists. Outstanding schools and academies may now also become sponsors themselves in order to help less able schools to improve.
Sponsors no longer have to make a financial contribution, or establish or support an endowment fund, as in the past. However, the Government has said any financial contribution made “at their own discretion” would be welcomed as it would provide opportunities for pupils that are not supported through government funding.

Teachers’ pay in academies and LA maintained secondary schools

Based on the school workforce data for 2015, teachers get paid less working in secondary academies than they do working in LA maintained schools.


The difference looks relatively small on the above chart. But the differences are not trivial as shown below:teachersaldiff2015

Looking at the difference between teachers’ pay in LA maintained secondary schools and secondary academies as percentage of maintained school pay:


In 2015, in an LA maintained secondary a teaching will be earning between about 1.5 per cent and 3.0 per cent more than a teacher in a secondary academy.

It is somewhat different for leadership. They get paid more in an academy than they do in a LA maintained school.leadershipsaldiff

Looking at the differences in more detail:


On the basis of the 2015 workforce census data, teachers get paid less in academies than they do in LA maintained schools. While leadership gets paid more in academies.

Why is this? My analysis of privatisation would suggest that privatising capital leads to the exploitation of the workforce. Is this what we are seeing here?

The exploitation of teachers

In this series of blogs, I have shown that, as a result of the Education Reform Act 1988, the school system has effectively been privatised. This is not been a simple matter of withdrawing public funding from schools and allowing them to operate as independents within a free market. It is quite difficult to see this process, privatisation is obscured, it is difficult to see the existence of markets or the production of commodities. Indeed, when I imagine a market, I recall the Saturday market in East Retford where I grew up, where produce and goods were bought and sold, it was visible and tangible. School privatisation (and it might be by design) is obfuscated. It is understandable, therefore, that when the idea that schools have been privatised is suggested, it is contested in some quarters, because it is not easy to see the exchange of goods, services and money. Still a valid case can be made as I set out previously.

Yet the consequences of privatisation can be predicted, and the conditions of our system evaluated. In my last blog, I looked at the expansion of two Multi Academy Trusts (MATs), in terms of increasing capital, and I explained that capital, in a freemarket, necessarily has to be accumulated. But I will be developing this further in future blogs when I consider the conditions and consequences vis-à-vis teacher workload, pedagogy and practice, professional development, the recruitment and retention of teachers, scholarship and research, school culture and school improvement.

In this blog I will look at the labour processes within the privatised school system and will show how privatisation – as the private capitalisation of schools – leads to the undermining of teachers’ pay and conditions. But before looking at the exploitation argument, I want to restate my position about the privatisation of schools, but in a slightly different way. Hopefully to clarify, summarise and substantiate my argument in previous blogs. From this I develop an analysis of how teachers are necessarily exploited.

The components of privatisation are: the exchange of goods and services for money, and that businesses or enterprises employ capital for production of commodities or the delivery of services. In a state-owned or public system of schooling there are no markets, the national community pools resources to fund schools. The processes by which this service is defined and regulated is through democratic oversight. In a privatised system the rationale is different, a quasi-market is established and what were treated as resources. in the public system, becomes capital. In public systems resources fund provision, in a privatised system capital is used to produce or provide commodities. The delivery of knowledge commodities is a fundamental aspect of school privatisation, as I discussed previously.

In the privatised school system, the school can be considered as the means of production, or more precisely as a means of providing service and adding value. The following process – where Marx probably had a factory in mind – explains how surplus-value is generated by adding value to the component parts. The role of the teacher in a privatised school system is to add value, through instruction, by the transmission of knowledge: knowledge as a commodity [1].

The transformation of a sum of money into means of production and labour-power is the first phase of the movement undergone by the quantum of value which is going to function as capital. It takes place in the market in the sphere of circulation. The second phase of the movement, the process of production, is complete as soon as the means of production have been converted into commodities whose value exceeds that of their component parts, and therefore contains the capital originally advanced plus a surplus-value (Marx, 1981, p. 709).

In terms of labour, surplus-value is the additional work an individual has to do beyond that which they need to survive. In a state-owned public school, the value of labour is set by the state after having engaged in collective bargaining with the teaching unions. The cost of running schools is therefore the cost of teacher labour, support staff, resources and the maintenance of buildings and equipment. In a publicly-owned system any additional work done by the teacher is for the public good. In a privatised system any extra work becomes surplus-value and is given over to the capitalist enterprise in order to generate further capital. When the education system is privatised, it becomes capitalised, the laws of capital come into play – that is, there is a need for capital accumulation by the capitalised school enterprise:

… through capital surplus value is made, and from surplus value more capital. But the accumulation of capital presupposes surplus value; surplus value presupposes capitalistic production; capitalistic production presupposes the pre-existence of considerable masses of capital and of labour power in the hands of producers of commodities (Marx, 1981, p. 873).

As a result of privatisation, teachers are under pressure to create surplus-value; there are constant pressures to accumulate capital and so teachers work harder, for longer, they have to be more productive and at reduced levels of pay, unless teachers collectively protect their pay and conditions. These underlying forces are obscured, the extra commitment required of teachers is usually justified in terms of raising standards. The altruism and public-spirited ideals of teachers are exploited to ensure that surplus-value is being increased. This is not to paint headteachers and MAT CEOs as personally avaricious, but once located outside of the public realm, the nature of capital and capitalisation does its work and turns public and community service into the perverse system of inequality and exploitation as described by Marx.

What Marx demonstrated was that if a capitalist system is left unchecked, and to run its course, capital becomes concentrated, i.e. the wealthy become wealthier. But those working in the system become progressively poorer and exploited. When this idea is translated to public services in neoliberal reforms, the workforce becomes increasingly exploited. In the last four blogs I have presented an analysis of the effects of school policy, beginning with privatisation through the Education Reform Act (1988), then looking at the commodification of knowledge, followed by the capitalisation of schools. I have now completed this analysis, drawing on Marx, and show how this leads to a negative impact on teachers’ pay and conditions. In the next blog I will consider the extent to which this is borne out in reality.


1. As I pointed out in previous blogs, this is a reductive view of the situation to point out underlying forces and does not reflect the wider commitment demonstrated by the profession.


Ball, S. J. (2004). Education for Sale! The Commodification of Everything? The Annual Education Lecture 2004. King’s College, London. Retrieved from
Marx, K. (1981). Capital: a critique of political economy. (D. Fernbach, Trans.) (Vol. 1). London ; New York, N.Y: Penguin Books in association with New Left Review.

Capital and privatised schools

This is part three of my series of blogs which presents a critique of the privatisation of schools in England. In the first part I argued how the Education Reform Act (1988) created, effectively, a voucher plan for schools, a market was created, with per-pupil funding and specification of what schools as private operators would provide as a service, through the introduction of a national curriculum and national assessments. Following this, and having shown how the market was created, in the second part I use Marx’s theory of political economy to show the creation of knowledge commodities. My purpose for introducing the idea of commodity is to show how schools have become capitalist enterprises, outside of the state, and in turn how this has an impact on teachers’ working conditions, pay and access to quality continuing professional development. Overall, in this series of posts, I want to show how the privatised state education system undermines the professional status of teachers. My discussion of teachers’ work will come in the next blog. In this blog, I want to concentrate on the idea of capital. My overall argument is that teachers’ working conditions, how capital works in market-oriented enterprises and the production and provision of commodities are interlinked components of privatisation.

So, in this post my emphasis is on capital in the context of schools. What I will show here, drawing on the work of Marx is that schools, or a chain of schools operating within a marketized system has but one option and that is to accumulate capital. But before sketching out that argument, I should explain the idea of capital.

What is capital?

The Oxford English Dictionary presents an interesting etymology. The first recorded use of capital is c1225 as relating to the head, something at-the-top, to represent the principal or chief or important person. It is interesting that these early references to the use of the term capital in English are representative of power and capacity to coerce subordinates. In the sixteenth century capital broadened its meaning to include financial assets and thereby implying a recognition of the close relationship of money and power. In the nineteenth century, it was to represent profit, advantage and power. The contemporary term, interestingly integrates two aspects, a financial component and power.

The classical political economists Adam Smith and David Ricardo, referred to capital but were not specific about its meaning or indeed its nature. While they both saw capital as related to production of commodities and so to labour value, but apart from recognising that individuals could accumulate capital, they did not give it further consideration. Marx, however, was more precise about what capital was, in the sense of its social function and dynamic nature. Marx, argued that capital could be money, commodities or the means of production. But it had to be in circulation, either money being used to buy commodities and subsequently sell them or, as commodities being sold to buy other commodities. Inherently within the notion of capital is exchange of commodities and money. Like Smith and Ricardo, Marx relates capital to production and the cost of labour. Therefore, within capital, there is a labour cost, since circulation involves commodities. The relationship becomes important when I discuss teachers’ pay and conditions in the next blog but for now I will park the idea here.

Capital provides the means to produce commodities and to buy labour to enable this process. In my previous post I presented an analysis of the commodification of knowledge. The National Curriculum and the existence of national assessment codify knowledge commodities. The work of a school is the transfer of knowledge commodities to students[1]. The notional contract between the student and the school is to provide a minimum addition of knowledge commodity to the child’s level of knowledge on entering the school. If the school does not fulfil its side of the contract the student can go to another school. Or, if the school is not fulfilling its notional contractual requirements, the government can ask another organisation to take responsibility.

If schools are seen as producers or as service providers in the delivery of knowledge commodities in a market, then the role of the leadership becomes that of capitalist. They have to deploy capital for the provision of the service, in other words they have to employ teachers and support staff and maintain the school buildings and market the school. But they also have to accumulate capital to expand and to maintain a competitive edge in the market.

Marx showed that necessity of capitalists to incessantly increase capital. Chapter 25 of Capital Volume 1 sets out a general theory of capital accumulation. In one sense the accumulation of capital might be seen in terms of a thirst for wealth, that no matter how wealthy you are that thirst cannot be quenched. This was the classical political economist view of capital accumulation posited by Smith and Ricardo. For Marx, with a view of capital as dynamic and as money and commodity in circulation, capital accumulation is conceptually richer. The need for accumulation is driven by the need to respond to competition, who themselves will be engaged in capital accumulation, and one significant form of capital accumulation is through expansion in order to try and dominate the market. In Marx’s day that would mean acquiring more factories. In terms of schools, it means that the capitalist school leader necessarily is driven to run more schools. It is this principle that largely underpins the growth of a Multi Academy Trust.

The number of Multi Academy Trusts has grown from 391 in 2011 to 846 by July 2015 (Hill, 2015). The Harris Federation of South London Schools and Ark Schools are two large and established academy chains. I will look at the growth of each of these in more depth. The Harris Federation has its beginnings under the Thatcher government and just after the 1988 Education Reform Act. Phillip Harris, who amassed wealth retailing carpet and furniture, was asked by Margaret Thatcher to take over Sylvan School in Crystal Palace and to establish a City Technology College (CTC) (Graham, 2013). The Harris Federation now runs 41 primary and secondary schools. It is a private limited company by guarantee, incorporated in 2007, with three subsidiaries: Harris Academies Projects Limited, HCTC Enterprises Limited and Harris Professional Services Limited. It held net assets of £343,416,000 in 2015 which has grown from £86,437,000 in 2008 when it ran 6 schools.

Ark Schools was established in 2004 and now runs 31 schools with net assets[2] of £369,539,000 (2015) which has grown from one school in 2006, its net assets were £2,292,000. Ark Schools is part of a group of operations Ark UK Programmes Limited, Ark South Africa Limited, Ark Zimbabwe Trust, Ark Uganda, Ark India and Absolute Return for Kids US, Inc (Ark US). Collectively these hold net assets of £19,389,000 and publish separate accounts to Ark Schools to satisfy the funding agreement with the Department for Education.

The growth of these and other Multi Academy Trusts has been largely achieved through the transfer of state-owned assets to these private companies. However, the accumulation of capital is usually a result of the surplus value generated by the workforce. That is the difference between the exchange value of the commodity (or service provided) and the necessary labour cost i.e. that which the worker needs to live on. It is not clear the extent to which capital is being accumulated by the growing Multi Academy Trusts since their growth, as I have said, is largely through the transfer of capital from the state. However, as I will show in the next blog the undermining of teachers’ pay and conditions can be attributed to the privatisation process. And as predicted by Marx, the exploitation of workers contributes to capital accumulation. In fact the central thesis of the three volumes of Capital is that if the freemarket and its invisible hand is allowed to prevail, capital accumulates and workers become increasingly exploited. I am applying the same thesis in the context of the privatisation of schools. First by showing that there is evidence for privatisation, second by showing that schools now involve knowledge commodities and third by showing, in this blog, the incessant and inherent need for capital accumulation within a capitalist system.

In the next blog, I look at how teachers’ pay and conditions become undermined in these conditions of privatisation. And how this has an impact on teachers’ access to continuing professional development and professionalism and professional standing.


[1] I appreciate how hard teachers work in providing a rich and fulfilling experience at school, as well as in providing pastoral support. My analysis here is abstracted to capital, commodity and labour.

[2] I accept that net assets are not equivalent to capital, but I am assuming that to illustrate capital accumulation these values for net assets are proportional to capital. The growth in net assets therefore indicates the extent of capital accumulation.


Graham, N. (2013, April 26). CarpetRight’s Lord Harris reflects on a lifetime in the rug trade. Financial Times. London.

Hill. (2015, August 31). The rise and rise of multi-academy trusts – latest DfE data. Retrieved from

The commodification of knowledge in schools

Stephen Ball’s well-known lecture on the commodification of education (Ball, 2004), publicised – to some degree – academic discourse on the nature of the privatisation of state schools in  England. Ball focussed on the establishment of a quasi market through the introduction of parental choice. I, on the other hand, want to consider here privatisation through the commodification of knowledge. The question I address is: can knowledge, in the context of compulsory education, be viewed as a commodity? And how does this impact on schools’ cultures and teachers’ pay, conditions and access to continuing professional development. Though the second question I will deal with in a subsequent blog. This also follows my previous blog Schools in England were privatised in 1988.

I will start by explaining what I mean by a ‘commodity’ in a more general sense. I will then go on to show that knowledge as a result of education policy has become a commodity.

The original meaning of commodity – that is before modern times – derived from Latin via French was, was ‘convenience’ or ‘of use to mankind’. In modern usage its meaning has developed to connote tangible items but of worth or of value. The attachment of value is important and recognised by classical political economists. As David Ricardo explained: “Possessing utility, commodities derive their exchangeable value from two sources: from their scarcity, and from the quantity of labour required to obtain them” (Ricardo, 1817, p. 1). Importantly, Ricardo links a commodity’s value to demand, use and scarcity, he also links value to the labour invested in the production of the commodity. Adam Smith developed this idea: “The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour therefore, is the real measure of the exchangeable value of all commodities” (Smith, 1852, p. 13).

The relationship between commodity and labour value is important in explaining how the privatisation of education has led to the increased workload and intensity of work and the reduction in pay and conditions. However, I don’t intend to develop that in this blog, although, it is important to remind the reader that my overall aim in this series of blogs is to show how the privatisation of education, that began with the Education Reform Act (1988), led to the undermining of teachers’ pay and conditions and reduced access to quality professional development.

So far my definitions of commodity suggest tangibility: a product or a precious metal. Marx however, expanding on Smith and Ricardo’s conceptions of commodity provides a less material but metaphysical conception:

A commodity is, in the first place, an object outside us, a thing that by its properties satisfies human wants of some sort or another. The nature of such wants, whether, for instance, they spring from the stomach or from fancy, makes no difference (Marx, 1981).

A commodity, in this respect, loses physical form and and can be an idea, a concept or knowledge. Ricardo and Smith conceptualise commodities as physical items that are exchanged in physical acts. Marx, in contrast, develops the social and psychological significance of commodity and exchange. And of course this leads to social and power relations around relative wealth and exchange.

Before considering the commodification of knowledge in the privatisation of schools. It is worth pointing out that the commodification of knowledge is not something that began as part of education policy in that last 30 to 40 years, it goes back at least a 100 years. Rose (2010) in his monumental history of The intellectual life of the British working classes suggests a transition between the nineteenth and twentieth centuries. For the working class in the nineteenth century the literary canon was accessible to the poorest in society, but in the twentieth century autodidacts found “…the cultural goalposts had moved, that a new canon of deliberately difficult literature had been called into existence. The inaccessibility of modernism in effect rendered the common reader illiterate once again, and preserved a body of culture as the exclusive property of coterie” (p. 394). Rose goes on to observe that “Like other goods, the market value of knowledge increases with scarcity…the exchange value of knowledge can be enhanced by creating artificial scarcities, monopolies, or oligopolies, through such devices as copyright, encryption, and professional accreditation” (ibid.) [1]. And so needs and wants have been created in respect to culture and knowledge as an economic imperative.

If you now relate this to my previous blog on the freemarket and the Education Reform Act (1988) (ERA), the introduction of Local Management of Schools (LMS) confers on education the production and sale of knowledge commodities. Knowledge commodities are identified by introducing performance indicators based on assessments. The introduction of the National Curriculum and four Key Stages, two at primary and two at secondary,  provided a mechanism through which age-specific and discipline-oriented knowledge could be specified. This is exemplified in the following extract from the original National Curriculum for England and Wales. It specifies the knowledge required by pupils to achieve a certain level in a particular aspect of mathematics. End of Key Stage tests were introduced through the 1990s, primarily in English and mathematics. As a result, throughout a child’s school life, there was a state mechanism of quantifying the acquisition of knowledge.

An extract from the 1989 National Curriculum for mathematics. Attainment target 2 (AT2) number, level 4 (DES/WO, 1989)

At the end of Key Stage 4, the General Certificate of Secondary Education (GSCE) was introduced to replace the O level (General Certificate of Education, GCE) and Certificate of Secondary Education (CSE) in 1988. This qualification continues to be taken by the majority of students at age 15 or 16 years old. The examination specification provides a detailed specification of ‘knowledge’ for a wide range of subjects. Although reforms in 2010 brought in by the Conservative and Liberal Democrat Coalition Government reduced the content of the original National Curriculum, the specifications of GCSE examinations continue to provide the codification knowledge at secondary level. The assessments in primary schools fulfil the same function there.

Having identified the way in which knowledge has been specified, quantified and codified in schools, I will now take this back to the concept of commodity and value, and relate this to mechanisms of marketization introduced with ERA. Ricardo, Smith and Marx related commodity implicitly to exchange value, not only must the commodity be identifiable as a tangible object or as codified knowledge, as I have just shown, it is necessary that there is some exchange for other commodities or for money. ERA and LMS provided the possibility of exchange through the introduction of formula funding and performance indicators (see previous blog). The establishment of a voucher scheme is equivalent to individual pupils buying knowledge commodities. Although this is not fully a freemarket system, because the exercise of choice is limited and there is no direct exchange of money between consumer and service provider (i.e. the school), the system is no longer a public provision but is marketized. I will show in a subsequent blog that this liberation, while not fully subject to the invisible hand [2], is sufficiently marketised to have a profound impact on the working conditions of teachers and on the culture of schools. Essentially, however constrained, schools are operating in a market selling a service which allows students access to knowledge commodities. The relationship is different to the school as public and community-owned service offering a broad education to the local community, in particular to their children.

If you want to get a sense of the pervasiveness of marketisation, consider the awareness of older pupils in their recognition that they are consumers within a marketised system.

Increasingly, the students are aware of their worth and I think that’s quite an interesting development…”I’m worth £2200 to this school,” is a phrase that I have known a Year 11 student say to me, as it was a bargaining [ploy] and there was one lady [to whom] I retorted that ..”£2200, You know, you’re not worth the trouble, go to Riverway, we don’t need £2200 of your trouble, or whatever it is” (Head of sixth form, FLightpath school, 1 July 1993: Gewirtz, Ball, & Bowe, 1995, p. 176 ).

What I have demonstrated in this blog is that knowledge can be viewed as a commodity. This has been done through policy, by codifying knowledge through national assessments and the national curriculum. the second component is the introduction of a market. The latter has been achieved by introducing per-pupil funding and performance indicators, which means payment is related to the provision of a service of specified knowledge delivery.

The subtle incremental policy changes have led to the privatisaton of schools, operating a cypto-voucher scheme for the purchase of quantities of officially defined knowledge. What I will show in the next blog is how the marketisation of schools leads to diminishing pay and working conditions of teachers.


  1. Theories of information supply and demand are presented by Goody (1968) and Douglas and Isherwood (1996). Goody describes how literacy was restricted in pre-print societies. Douglas and Isherwood conclude that there is a rational economic strategy to control access and exclude (both cited in Rose, 2010).
  2. The invisible hand was what Adam Smith referred to as the guiding forces of the freemarket.


Department for Education and Science/Welsh Office (DES/WO). (1989). Mathematics in the National Curriculum. London: HMSO.
Douglas, M., & Isherwood, B. C. (1996). The world of goods: towards an anthropology of consumption: with a new introduction (Rev. ed). London ; New York: Routledge.
Goody, J. (1968). Literacy in traditional societies. Cambridge: Cambridge U. P.
Gewirtz, S., Ball, S. J., & Bowe, R. (1995). Markets, choice, and equity in education. Buckingham ; Philadelphia: Open University Press.
Marx, K. (1981). Capital: a critique of political economy. (D. Fernbach, Trans.). London ; New York, N.Y: Penguin Books in association with New Left Review.
Ricardo, D. (1817). The principles of political economy and taxation. London: John Murray.
Rose, J. (2010). The intellectual life of the British working classes (2nd ed). New Haven: Yale University Press.
Smith, A. (1852). An inquiry into the nature and causes of the wealth of nations. London and Edinburgh: T Nelson and Sons.

Schools in England were privatised in 1988

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.


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.

A National Education Service is exactly what we need

Jeremy Corbyn has been floating the idea of a National Education Service since his Labour leadership campaign last year. The idea is breathtakingly simple and, in fact, blindingly obvious. The formation of a fully-funded, cradle-to-grave education service is the antithesis of the outsourced fragmented and anti-democratic reforms that have been creeping in since the 1970s. These are a few of my initial thoughts on the idea.

The National Education Service would provide a coordinated high-quality education service that supports learning from early years, through schools, sixth form, further education, undergraduate, postgraduate to adult and lifelong learning.

Schools would no longer be in a position where they are artificially competing with each other, but they would coordinate their strategies and maximise the use of their resources to better serve local communities and regions. It would mean a change from the current fetishisation of leadership to promote mutual and cooperatively run services, where teachers, parents, pupils and communities are recognised as stakeholders and have a greater say in how schools function.

At present there is a recruitment and retention crisis in teaching, a National Education Service would address this. Teachers would have more professional esteem and have greater control over their work, pay and conditions. The intensity of their work would be reduced by shifting the emphasis from centralised accountability to local democratic accountability.

While some examinations would continue to be important, this would not be at the expense of developing broader skills and more holistic school contributions such as the education of the community and emphasizing inclusivity, collaboration and partnership. Certainly it would move away from excessive compulsory testing for the purpose of accountability. It would mean a departure from a narrowly defined curriculum to one which reflects the needs of the community in which the school is located. The overall aim would be to equip students with the skills and capacities to contribute to society and help them develop as individuals. An overarching aim would be to put education at the heart of making society a more effective, fairer and more inclusive functioning democracy.

In further education, it would mean an end to degenerate privatisation, but provide a service that supports post-16 education, both academic and vocational – without necessarily drawing strong distinctions between the two. It would offer adult learning, whether it be developing skills, allowing people to develop their interests or in helping them prepare for advanced studies. University education would be freely available to all and include opportunity to blend academic and vocational studies. The Open University would be restored to a position where it can offer low-cost and flexible approaches to university-level education.

This is ambitious and the main objection is, simply, that we cannot afford it. My argument is that we cannot afford not to do this. Education is not having the impact on society that it should be, it can do more to improve the quality of outcomes for communities; developing skills and knowledge and helping people make a difference in their lives and to the people around them. While all society’s problems cannot be solved by schools, education can be at the heart of improvement, by equipping the next generation to be more active and effective participants in democracy.

In terms of cost, it has been estimated that the bank bail-out, with all things considered was as much as £1.2 trillion1. Much of this investment went toward the preservation of these institutions and the preservation of the wealth of their key stakeholders. The National Education Service would be fraction of this investment. Of the order of tens of billions each year. Investment that would go directly into the economy but at the same time would result in considerable growth. If it were done carefully this kind of investment would have little impact on the deficit but would have considerable economic and social benefits2.

1.  Episode 5, The End of History. Economist James Meadway citing IMF estimates

2.  I discuss the economics of school spending in the following blog post:

I published this post on the Cambridge Area Momentum site previously

How much should we spend on schools? Part 2: How to fix schools in ten years

In part 1, I described how reducing government spending on schools, in England, offers little economic advantage. In fact, it is highly likely that it would contribute to increasing national debt. I will look at the contribution to the economy in part 3. In this post I answer the question, how much should we spend on schools? And, how much should we spend to overcome the two key issues in education:

  1. The quality of students’ learning, progress and outcomes.
  2. Teacher recruitment and retention.

My solution includes reducing teacher contact time by increasing the number of teachers in schools. This would improve recruitment and retention, as the job would be more attractive. I would increase spending on research and development in HEI, the third sector and in collaboration with schools. I would increase teachers’ pay. Finally I would considerably increase the number of teachers training to teach and also improve the quality of training.

For this post, I have developed a simple spending model to be implemented over a ten-year period. Although this model is simple, I intend that it explains and illustrates the nature of education spending and that it may be the basis of more sophisticated modelling later. Most of all I want to show that funding is not a barrier to developing a world- class school system, with the highest standards of practice, professionalism and innovation.

Increasing pay and teacher supply

I propose the following:

  1. Teachers’ pay increases 3% per year for ten years.
  2. Increase the number of training places for teachers to 50,000 each year – this would be a fully-funded two-year masters course combining school-based practicum/ internship with Higher Education-based programmes. This is intended to add an additional 15,000 teachers into schools each year in order to reduce workload and increase the quality of teaching and learning (see Table 1).
teacher numbers
Table 1: Estimates of increased teacher numbers of a ten-year programme of expansion of teacher-training

Projected spending over ten years

Now I bring these elements together. In Table 2 I have included the cost of additional teacher training, the salaries of additional teachers [1], the total numbers of teachers in schools [2], teachers’ average salaries [2], the cost of increased pay, additional research and development spending (£100 million per annum). I have then calculated total spending as a percentage of GDP.

Table 2: Total projected education spending (based on year 1 prices)
What this shows is that generous investment in schools does not have a major effect on overall spending on education. Notice, in particular, total additional spending in row 8 of Table 2. There is a small increase in spending but as a percentage of GDP it remains reasonable; judging by international comparisons (see Figure 2).

Effectively, then, the problems we have with learning and progress, and teacher recruitment and retention could be solved. It begs the question why does the government choose not to?

In this model, after ten years, education spending as a percentage of GDP would be 5.7% (see Table 2). This is comparable with other developed nations, notably Finland which is often cited as an example of an effective education system  (see Figure 1).

OECD primary to tertiray spending on ed as percent of gdp
Figure 1: OECD comparisons of education spending (as percentage of GDP) for 2012
In part 3, I will look at the multiplier effect to see how additional investment might have a positive long-term effect on GDP.

[1] I have not included an increase in student numbers. However, the model could be scaled accordingly, to consider the effects of increased student numbers.

[2] The current average teachers salary and teacher numbers have been sourced from the  School workforce data. In November 2014, average teachers’ annual pay £37,400. The total number of teachers in England (primary, secondary schools) is 454,900. The total annual salary bill is £17 billion.


Update 9 April 2016. This post is really useful. Argues for education to be treated as infrastructure for the purpose of closing achievement gap

Update 10 April – some analysis of school spending by Becky Allen (2012)[1].pdf

How much should we spend on schools? Part 1

In the last few months I have become interested in the economics of public services. Especially in relation to school funding. Like many people, I accepted that because of the 2008 financial crisis there was a need to reduce the national debt and ensure the deficit was kept to a minimum. This, I thought, would dictate how much we spent on schools.

This was all fine, until I began to realise that there was more to national debt and deficit than reducing government spending. Two things triggered this. First was the surprising election of Jeremy Corbyn to the leadership of the Labour Party in September 2015. Prominent in his campaign was forthright opposition to cuts in public spending. Corbyn argued that there were economic alternatives and this was supported by leading economists. The second trigger was a short exchange between the economist and former Greek Finance Minister, Yanis Varoufakis, on BBC Question Time at Impington Village College, Cambridge, shortly after Corbyn was elected. Here is the clip:

The audience member explains that if he goes out in Cambridge with £10 and buys three pints of beer, he is probably going be in debt. And he says if he carries on in such a way he will go bust.

He says, “Its not difficult guys. Just sit down work out what the country needs to do and work collectively together.”

Varoufakis immediately responds by saying that the country’s budget does not behave like his finances.

“Why not, why not?” Exclaims the audience member.

Varourfakis explains: “In a country total income equals total expenditure” and goes on to explain that for an individual or a household income and expenditure are independent of one another. He then explains the problem of austerity, that if a country cuts spending then it will also cut income.

Now, this I found difficult to grasp. I found it harder still to explain. However, the expenditure model for Gross Domestic Product (GDP, total income) usefully illustrates what Varoufakis is saying. Look at the relationship between income and expenditure using the following expenditure model:

GDP = (Total Consumption – what we spend on goods and services) + (Total Investment – what is invested in machinery, equipment and houses) + (Government Spending) +Net Exports

This simple model illustrates Varoufakis’s point, that the total income (GDP) has to equal total spending. That is everything that we spend or that we invest in equipment or property added to government spending and the cost of net exports adds up to our total income.

Taking this further: according to OECD data, tax revenue in the UK between 2006 and 2012 has been fairly constant at 35 per cent of GDP. So if government spending is reduced and people spend less on goods and services, then income (GDP) will be reduced. In fact Tax revenues are reduced assuming they remain approximately the same proportion of GDP. It does not necessarily achieve a reduction in the national debt, while it may reduce deficit. Indeed it looks like this is what has happened. In the first of following charts, debt has increased in spite of reduced spending. On the other hand deficit has reduced, as can be seen in the second chart.

Public sector net debt
UK national debt (source BBC website)
UK deficit/surplus ( BBC website)

The reason for this is that deficit, as the difference between government revenue and spending, does not reflect the full extent of economic activity. Effectively then, government  reduced spending to reduce deficit but because this has reduced income it has not reduced the national debt.

I argue then, that we should be spending more on education and on schools in particular. This is because increased government spending contributes to economic activity and increased GDP. In my next post I will look more closely at this. But here I want to outline the benefits. Firstly with more school spending we could reduce teacher workload, which would likely have a positive effect on student learning. It would also have an impact on recruitment: the job would be more attractive. Finally, and in reference to my last post, it would permit innovation. The government could invest in research and development that could be undertaken by both practitioners and academics.

Finally, in spite of cuts in public spending, the government has argued it is protecting school spending. In the Autumn statement on 25 November 2015, the Chancellor of the Exchequer George Osborne said:

“I can tell the House that as a result of this spending review, not only is the schools budget protected in real terms but the total financial support for education, including childcare and our extended further and higher education loans, will increase by £10 billion. That is a real-terms increase for education, too” (Hansard).

However, a simple analysis shows that education has faced cuts.  If we look at education as a proportion of GDP  it gives a sense of what proportion of our national income is being spent on public education. The following chart shows that education spending has been cut considerably since 2010.


In conclusion, it seems that cutting spending on education is not going to help in reducing national debt. It might help in reducing deficit in the short-term, but deficit does not seem to be an issue. It is debt that is important. But more important still is improving the quality of education. I fear with cuts in funding and additional pressures on schools and teachers the current economic and education policy will do considerable harm to our education system. In my next post I will attempt further justification and begin to show how much increased spending on education would contribute to the nation’s finances.

Note: it is worth reading 20 February 2016 Andy Hargreave’s article in TES.

Other resources

Another article from 27 March 2016 The Independent Voices ‘Handbag economics’ and the other myths that drive austerity

Update 5 April 2016

Note: since writing this I have noticed that spending in secondary schools has been maintained in terms of proportion of GDP.

school spending percent gdp
School spending as a percentage of GDP (Secondary, pre-primary and primary, and tertiary)



However the Institute of Fiscal Studies analysis shows real terms per pupil spending cut over the life of the next parliament of 8%

ifs school spending
Source IFS