Low cost private schools: any appetite?

Some of you may have come across the magazine that exists for those interested in investing in education. From time to time its journalists ring me up to ask about issues relating to the private sector in education As a business operator, albeit with TeachVac (www.teachvac.co.uk) using disruptive modern technology, I understand their need to assess opportunities and I happily share my thinking with them.

Recently, the magazine hosted a conference in London. Mostly, the topics discussed were in the higher education realm, an area of less direct interest to me at present than schools. However, there was a session about low cost private sectors schools and possible opportunities in England. Now that’s a topic of more direct interest to me, although they may not know that fact. Many years ago I undertook a piece of research for a client about the possible opportunities in the private school market for a low cost model at a time when school fees were rising sharply. My conclusion was that such a school might well struggle as it offered neither exclusivity nor the small classes that were both the trademarks of many private schools.

Has my judgement changed? Well, I haven’t done any in-depth analysis, so this is very much my first thoughts, but my hunch is that if anything the market is less propitious for new entrants than twenty years ago. With an expansion of selective state schools on the horizon, there may be opportunities in the primary sector, but less so in the secondary. Why pay for what you can achieve for nothing? Paying for tuition is also a cheaper option than paying for a school with some parts you won’t need.

Much could depend upon where the bar for entry to selective schools is set if the Conservative were to go down that path where they to be re-elected. Too selective and they will have little overall impact on existing comprehensive schools in most areas. Too low and we really have a return to the two-tier system of yesteryear. In that case, there might be an appetite in urban areas for fee-paying schools for those pupils that just missed out on a selective school, especially in a period of growth in pupil numbers. However, the existing fee-paying schools should be able to cope with that demand, especially if there were the transfer of some traditional entrants from these schools to the selective schools as parents feel they no longer have to shell out on school fees. You only have to look at what happens in areas with sixth form colleges with a high reputation and the distribution of fee-paying schools.

So, I think that I would be wary of thinking the future holds significant opportunities for the low-cost private school market. There might be some specific groups of parents still wanting to exit the state system but, while there is the chance of a free school paid for by the State, surely that would seem like a cheaper option for them.

Where I have always thought there might be a market is in the vocational skills area for the 14-18 age-group, especially if an institution is closely linked to the local job or apprenticeship markets. Even better, if you can persuade employers to subsidise the cost of the school in return for a fast track into the challenging sections of the labour market. The armed forces have historically understood this section of the market with their apprentice training colleges of yesteryear.

A school offering direct entry into the hospitality or travel industries, where the local further education college isn’t doing a good job, is one possibility. This section of the market also comes with less need for expensive building requirements associated with teaching the full range of curriculum subjects. So, find a niche that can be taught in traditional office type accommodation near a park or other outside space and in an urban area with good transport links and it might be worth creating a business plan; especially if the wages for lecturers can be low, but still better than when working as an experienced professional in the sector and you might have something worth taking further. But, there may well be some other opportunities in the education world for many investors.

The economic cost of grammar schools

Much of the Tory argument in favour or a return to a selective school system, with both grammar schools and secondary modern schools – whatever name you give them –  has centred on the  possible social mobility benefits of allowing children good at academic subjects to be socially segregated from their peers at age eleven. Those parents with the money have always been able to achieve this result by opting for private schools.

Now, I cannot oppose private schools, because how you spend your cash is up to you. How the government taxes it is up to the government. But, I do wonder what will be the fate of private day schools under a revamped selective system? Unless the Tories can come up with a regime that allows children from dis-advantaged backgrounds to be selected for grammar schools places the selective schools will become havens for parents that can afford to pay for testing to pass the entrance exams, as happens at present. Using the test of Free School Meals, existing grammar school almost universally do not admit children on free school meals, even allowing for the fact that many selective schools are in areas of relatively low unemployment.

So what happens if parents decide to switch from paying for secondary education to taking advantage of free schooling in grammar schools provided by the state? Well, someone has to pay for the cost of these extra pupils. Might the cost be as much as a billion pounds extra on the education budget once the legislation permitting grammar schools is enacted? After all, I am sure parents will see the economic benefits of not having to pay out school fees and will be pushing for such schools everywhere. It would surely be difficult for the government to win a court case that schooling was still a local service when so many decisions are taken nationally, including who has the right to open a new school and thus to try to deny a demand from a group of parents for a selective school whatever the local community as a whole wants.

Transferring the cost of educating a group of secondary pupils from the private sector to the state might be balanced by an increase in private primary schools just concerned with coaching pupils for entry to grammar schools. I have already alluded to the possible effects on recruitment to teaching in the secondary sector of re-creating a selective system, but it might also affect recruitment to primary school teaching.

There are poor schools in the present system, but the answer is to strive to improve them, as has happened in parts of London and not to turn back the clock to a system that clearly doesn’t work for the benefit of all children.

Perhaps Mrs May sees grammar schools in the same light that Mrs Thatcher saw the sale of council houses, a vote winner for the Tories and hang the consequences for society as a whole. If so, she should test the support through a general election sooner rather than later.

Grammar Schools -percentage of pupils on Free School Meals in rank order from highest % to lowest (from Edubase January 2016)

FSM %
12.4
9.6
8.5
7
6.8
6.3
6
5.8
5.4
5.4
5.4
5.2
5.2
5
5
4.9
4.8
4.5
4.5
4.4
4.3
4.3
4.3
4.3
4.3
4.2
4.2
4.2
4.1
4.1
4
4
4
3.8
3.7
3.7
3.7
3.7
3.6
3.5
3.5
3.5
3.4
3.4
3.2
3.2
3.1
3.1
3
3
2.9
2.9
2.9
2.9
2.9
2.9
2.9
2.9
2.9
2.9
2.8
2.8
2.8
2.8
2.6
2.6
2.6
2.6
2.6
2.5
2.5
2.4
2.4
2.4
2.3
2.3
2.3
2.3
2.3
2.3
2.2
2.2
2.2
2.2
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2
2
2
2
2
2
1.9
1.9
1.9
1.9
1.9
1.9
1.8
1.8
1.8
1.8
1.8
1.8
1.8
1.7
1.7
1.7
1.7
1.7
1.7
1.6
1.6
1.5
1.5
1.5
1.5
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.3
1.3
1.3
1.2
1.2
1.2
1.1
1.1
1.1
1
1
1
0.8
0.8
0.8
0.8
0.8
0.8
0.8
0.8
0.7
0.6
0.6
0.5
0.5
0.3
0.3
0.2
0

 

Should politicians lead by example?

This blog starts with not one but two ethical issues. Firstly, should we discuss politician’s children and specifically their education and secondly, should politicians send their children to state funded schools? These questions arise after media speculation that the Prime Minister is to send his son to a private school, thus saving the State several thousands of pounds a year on his education.

I would normally regard this as a private matter and fully support the right of parents to educate their children as they see fit. However, the Prime Minister has form in this regard since the discussions as to where his daughter would go to secondary school were all over the media in 2014. Indeed, according to the Daily Mail on line, in October 2014 he was in favour of the state sector. http://www.dailymail.co.uk/news/article-2796964/cameron-set-tory-pm-send-children-state-secondary-viewing-three-four-schools-wife-samantha.html Part of the headline read: No one should need to go to a private school, says Eton-educated PM.

The article went on to say

In an interview with Good Housekeeping magazine, the Prime Minister suggested the Government’s education reforms were designed to make private education redundant.

‘If you pay your taxes you shouldn’t have to pay all over again. There is no reason why our state schools can’t be among the best in the world, and some of them are,’ he said.

‘What is exciting is there this change not only in practice but also in culture which is all about excellence and wanting to be the best and wanting to get the best out of every child, and you are now seeing that in more and more schools.
Well that seemed pretty clear. So perhaps he can tell us why he has changed his mind? It cannot be as a result of the social mobility index the government published yesterday, as that rates London very highly for social mobility compared with say many seaside resorts. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/496103/Social_Mobility_Index.pdf

If the Prime Minister does opt out of state education for his son, what does this say about the government’s own academy programme?

Is it a slap in the face for hardworking teachers and other staff in our state schools that the person leading our public services doesn’t want to use them for his own family? Of course, London state schools might lose out under the funding review coming up shortly and their performance, which has improved dramatically over the last few years, might deteriorate over the next few years, especially if they have difficulty recruiting staff due to the pay cap in the public sector. We these the factors that help change Mr Cameron’s mind from eighteen months ago? We don’t know and, as I said, at the beginning, all parents have the right to decide how to educate their children. The State is the default position if you don’t, won’t or cannot take a decision yourself. But one cannot help but feel that leading by example is good for the morale of those that work in the public sector.

Side show attracts more attention than main event

Labour’s thoughts on the subject of private education received more coverage this week than their announcement on teacher supply issues put out the day before. Public fee-paying schools are a part of the political agenda and Labour’s call to remove business rate relief from such schools not prepared to go further in cooperating with schools in the state-funded sector avoided the thorny question of charitable status, but no doubt played well to voters that would prefer to see all children educated by the State.

My view has always been that the State in England lays the obligation on parents to educate their offspring. It has never mandated where or how that should be achieved. In an unequal society some parents can buy schooling. If they were forced to send their child to a local state school they would still buy tutoring, as many parents do at present, to improve the educational outcomes of their children. Preventing parents from spending money on education while allowing them to spend money on cigarettes, gambling and other potentially bad habits would seem illogical. However, we know that private schools produce better results than many state funded schools, just as selective state schools do. Interestingly, Tristram Hunt didn’t appear to say that such schools should share teachers with other state schools.

Labour’s carrot and stick approach to the private schools, ‘either help or pay more tax’ probably does recognise that with a teacher supply crisis looming in some subjects, and some parts of the country, private schools may be in a better position to recruit not just better teachers but actually enough teachers. The fundamental question is, therefore, as ever, how will schools that cannot recruit enough teachers effectively teach their pupils? Sharing a scare resource sounds fine in principle as a solution but is fraught with practical difficulties. I assume that private schools don’t have spare teaching capacity just waiting to be redeployed, so to use their teachers to help state schools they either have to employ more of them, potentially making the situation worse or create larger teaching groups – the very thing some parents are paying to avoid – or perhaps offer spare places in ‘A’ level groups where an additional one or two students might make no difference. But, that is no solution for the small private primary school.

The Conservative Party’s solution to the education problems around improving quality seems to be a discussion of more grammar schools. This suffers from the Oxbridge dilemma. How do you stop parents with money paying to secure entrance by improving the learning opportunities of their children before the test? This takes us back to where this piece started. Do parents have a right to pay for education if by doing so they advantage their children over others?

Finally, as Tristram Hunt failed to acknowledge, private schools are now a large export earning industry.  Id that something we wish to encourage or does it risk educating the children of our competitors in the global market place as the expense of children brought up in England?  Of course, one solution to the teacher shortage is to recruit more teachers from overseas, but how does that play in the present debate over immigration?