You say you want a revolution?


Yesterday, dealing a blow to the progress of the coalition’s free school programme, Deputy Prime Minister Nick Clegg pledged that for-profit schools shall remain banned. This is unfortunate. And it doesn’t make sense. Clegg’s ideological convictions are now clearly at odds with his progressive goals: without profit-making schools, a broad-based free school revolution that could increase social mobility and improve educational standards for all is unlikely to materialise.

Why worry about profits in education? The debate has so far focused much on Swedish for-profit schools, which by various commentators have been accused of decreasing standards. Is this true? Not according to my statistical analysis. In the best model, Swedish for-profit schools perform 16.3% higher than municipal schools, and on par with non-profit schools, in terms of average grades. Also, for-profit schools appear to especially benefit pupils from lower socio-economic backgrounds. I therefore find no evidence that profit-making schools would drive down standards. The opposite is true.

Furthermore, whereas 13% of all Swedish schools are for-profit, only 6% are non-profit. And while education companies start new schools and expand into new municipalities, non-profit schools do not. Instead, they become more selective. Without the profit motive, the incentive to scale up and replicate educational success is simply not there.

Let’s take a look at the programme’s track record to date. By the end of September, only twenty-four free schools will have started – of which four already existed, albeit in different forms. Furthermore, these schools will mostly serve middle class pupils. This is not surprising. The problem is that parents in poor neighbourhoods, unlike those in richer ones, rarely start or actively seek to promote new free schools. Currently, the free school programme suffers from a lack of incentives to enter the education market, especially in poorer areas. And the only way to ensure such incentives is to allow profit-making schools to operate.

The ban on profit-making schools also does not bode well for the effectiveness of the Lib-Dems’ cherished ‘pupil premium’, which would give education companies especially strong incentives to start schools in poor areas. By keeping the ban on for-profit schools, the coalition destroys these prospects.

Rather than pledging to keep the ban on profit-making schools intact, Nick Clegg and the Lib-Dems should pay more attention to available research. Nothing suggests that the British education system would be worse off by allowing for-profit schools to operate. Rather, without for-profit schools, a truly progressive free school revolution – which Clegg claims to support – is impossible.

Gabriel H. Sahlgren was a Visiting Research Fellow at the Institute of Economic Affairs and is the author of Schooling for Money: Swedish Education Reform and the Role of the Profit Motive. He recently graduated with a Starred First in Politics from Cambridge University.

Gabriel H. Sahlgren joined the IEA in January 2012 as Research Fellow. Having been active at several European and US think tanks, Gabriel is the author of the paper ‘Schooling for Money: Swedish Education Reform and the Role of the Profit Motive’, which received the Arthur Seldon Award for Excellence in 2011. He holds a BA in Politics from the University of Cambridge.

2 thoughts on “You say you want a revolution?”

  1. Posted 07/09/2011 at 02:56 | Permalink

    One can’t help wondering what some politicians are up to. Are they really trying to do good, maybe by satisfying customers? Or are they keener to demonstrate the ‘purity’ of their political principles, especially to party colleagues? Not permitting ‘free schools’ to try to make a profit is one example; and prison reform is another. I am sympathetic to Justice Secretary Ken Clarke’s emphasis on the need for prisons to do a much better job of rehabilitating prisoners. But his proposals seem to attract accusations of being ‘soft’ — as if being ‘hard’ was a virtue. One doesn’t need to be the wettest of LibDems to recognise that a young man who has got into trouble is going to have difficulty going straight and holding down a job on his release from prison if he can’t read, and has few skills. It really is essential to pay attention to long-term outcomes.

  2. Posted 13/09/2011 at 15:09 | Permalink


    I leant on your research for a similar article I wrote for Liberal Vision. It sparked an interesting debate with an education campaigner.

    Can you address her statement that “there is no reliable, peer-reviewed evidence that schools run at profit are better than those that are run by the state” (emphasis added)?

    I’m not disputing the quality of your work but, in the rarefied realm of academia, research that is not peer-reviewed tends to be dismissed.

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