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Business-Managed Democracy

“Business-managed democracies are those in which the political and cultural arrangements are managed in the interests of business”

Sharon Beder

Business-Managed Education

UK Outsourcing Performance

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In 2002 the Ofsted found that most of the LEAs which had outsourced their educational services were ‘poor improvers’ whereas most of them had been ‘good improvers’ before outsourcing. “Of the authorities which had outsourced services, five were rated as poor, three unsatisfactory and just one, Leeds, as satisfactory.”

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The London borough of Hackney gave Nord Anglia a contract to run some of its educational services in 1999 but it was not renewed in 2001 after the private firm had failed to achieve any significant improvement, according to Ofsted. A non-profit trust was then created to run the services.

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Cambridge Education Associates, which took over all of the education services of the London borough of Islington LEA in 2000 was fined hundreds of thousands of pounds in 2002 and 2003 for failing to reach target exam results, specified in its contract. The following year the LEA lowered the exam targets but Cambridge Education Associates still failed to meet them.

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Other private companies have also been fined for failing to meet exam targets and in some cases exam targets have been lowered. Services have been found to be deteriorating in some places as well. Perhaps the worst case was the London borough of Southwark which gave a contract to engineering consultants WS Atkins in 2001 to provide its educational services. This turned out to be “an unmitigated disaster”. Exam results fell to an all time low and financial management was inept.

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Within 12 months, it had lost every senior management figure in its original contract team, it had demoralised teachers and support staff, it had lost a vote of confidence by Southwark headteachers, it had crashed its mainframe computer systems, and it owed hundreds of thousands of pounds to creditors as diverse as part-time school secretaries and the PR firm it employed to recruit desperately needed teachers… The number of Southwark schools in ‘special measures’ – where the whole school is deemed to be failing – increased under the Atkins regime from six to eight.

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Within two years, Atkins withdrew from the contract, gleaning £2.2 million from taxpayers as an exit payment. Cambridge Education Associates took over.

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The failure of Atkins did not, however, stop the school standards minister from awarding a £1.9 million contract, the following month, to Jarvis Educational Services to advise on how to improve British secondary schools, despite it too being an engineering conglomerate whose Educational Services division had only been formed two months before and whose key personnel came from Atkins.

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Despite these experiences, a 2005 Confederation of British Industries (CBI) report proclaimed private outsourcing to be a success and advocated the expansion of private sector involvement. It based this claim on exam results between 2000 and 2004. However an analysis of the same data by Kevin Farnsworth at the University of Sheffield found that the CBI interpretation was faulty. He found that the improvement in exam results largely occurred before the services were outsourced and the improvement was greater under public management. Moreover the LEAs that improved most were those that had not been outsourced.

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