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Abstract
This report gives an overview of the main trends affecting the role and relationship of the private and public sectors in education provision in Britain. Within the context of this report, this has been defined broadly to so as to include not only the structures and mechanisms of education ‘delivery’ but also cultures, behaviours and political approaches.
Due to the scope of the initial brief and the research available, this report mainly covers developments in England, though the majority of the themes discussed will be applicable across the United Kingdom.
This report is based on desk based research and interviews with experts in the field of education and public services (Appendix B).
The key themes to emerge in this report are:
o marketisation of state provision
o increasing role of the private sector in shaping the learning agenda
o uncertainty surrounding the extent of third sector delivery
o further development of a mixed economy in education
o effects of the internationalisation of higher education
The findings discussed in this paper are indicative of the key issues rather than a comprehensive review of all possible factors. In particular, the potential effects of the current financial crisis have been discussed where possible, though at the time of writing, there is insufficient information to fully understand its’ effects in the research area.
Keywords: education, politics, multiculturalism, culture
Full article
Marketisation within State Education Provision
The single biggest future interaction between the public and private sectors in education is the possible creation of a marketised state system. In the last 10 years, educational policy has moved away from the idea of competition between schools to collaboration. However, the Conservative Party has proposed supply-side reforms that would expand the number of school places (by 220,000), with the aim of creating greater levels of choice for parents. This would be done through the creation of ‘New Academies’, with capital funds being diverted from the Building Schools for the Future (BSF) programme. This expansion, in conjunction with declining numbers of school age children, would create a surplus of school places (as necessary for a viable choice system), forcing schools to compete for pupils (as funding follows pupils). Although the Swedish ‘free’ school model is referred to, the current Conservative proposals extend only as far as allowing parents and other non-profit providers into the market, but do not allow for the entry of for-profit enterprises into the state school sector. Whether this is considered in the future, depends on political sensitivities around perceptions of the ‘privatisation’ of state education. In the current economic climate, it is highly likely that the proposal would face strong opposition in the short to medium term, though if market reforms prove successful public opinion may shift. A possible shift in this wider direction may have been indicated by the government’s recent decision to allow private sector companies to run small schools for excluded children in a pilot scheme.
The involvement of the private sector could take two routes; for-profit providers establishing maintained schools or a voucher system to be used at either private or state schools. The former appears the most likely under the current conditions, and would most likely see the entry of private education providers already established in this type of provision abroad such as Edison (largest private operator of Charter schools in the US) and Kunskapsskolan (private operator of free schools in Sweden). A voucher system, similar to the Milwaukee Parental Choice Programme, may prove more publicly palatable (as the majority of independent schools are non-profit) and feasible, as it will enable the rapid introduction of a large number of providers without additional capital costs. However, such a scheme would be beset by thorny political issues such as whether parents were allowed to top-up their vouchers. In either system, children from disadvantaged backgrounds would receive greater funding (as is already the case). This may result in for-profit providers targeting this group (though perceptions of greater commercial risk may hamper this), creating a tiered system of non-profit providers in more affluent areas, and for-profit providers in low income areas.
The success of a marketised system is not however, guaranteed. At present, there is no clear evidential base demonstrating that choice and competition raises educational standards and outcomes. The research carried out to date has been limited and the findings mixed. In addition, research on the effect of choice and competition on segregation (whether on the basis of income, ethnicity and ability) has also proved inconclusive.
This means that it is likely to be ideology that will be the main driver of decisions on the role of competition and choice within public education, whether this be a belief in ‘market darwinism’, parental freedom, localism or perhaps a public finance efficiency drive. Another factor in the success of a marketised system will be how the possible side effects are perceived. For example, the line between segregation and personalisation may be blurred if parents seek to establish a school that meets a particular need, such as in Trevor Phillips’ suggestion that black boys would benefit from being taught separately. In certain American states charter schools utilise a positive discrimination strategy, targeting vouchers at the most disadvantaged communities, resulting in their school population being disproportionately African-American and Hispanic. However, it is unlikely that choice in England will see examples of segregation as witnessed in Holland, where Dutch parents sought to educate their children separately from immigrants, as schools cannot set admission criteria. However, it is possible that small niche schools could emerge that by virtue of their size and location will only serve a certain group, for example a small school in a middle class catchment area.
The side effects of marketised approach aside, such a system will require fundamental structural changes to the way education is organised. Some of these changes could be:
a. LEA funding linked to performance
b. capitation as well as funding following pupils (alternative to Conservative proposals once BSF funds are used)
c. LEA control over school funding and organisation removed
d. curriculum opt-out (included in Conservative proposals)
e. robust failure management system such as in USA and New Zealand
f. school opt out from national staff payment agreements
g. national school bus system (to facilitate choice for low income families)
h. lowering of barriers to entry
These changes will have a number of consequences. The education workforce will see the end of standard employment terms, probably seeing an increase in temporary workers and greater variation in teacher contracts as schools compete for staff. This can already be seen within the flexibility for academies to determine teacher pay (though they have not yet chosen to challenge national pay settlements) and the DCSF pilot ‘Power to Innovate’ to allow greater management freedom. Developing a suitable failure management process will be crucial, especially as it is highly unlikely that such schools will be permitted to close, but will therefore find themselves in a cycle of lacking funds to improve which then causes further deterioration as pupils (and therefore money) stay away. It is likely that the private sector will be bought in to provide ‘off the shelf’ failure management regimes in many cases, such as in 3Es Enterprises Kings Manor School. (The school was taken over by a non-profit offshoot of a local college, as parents did not want the school to close down.) To enable choice, a school bus system may be required for those who do not live near their preferred school, though this may see the introduction of co-payment into education as some have suggested pupils (except those on low-incomes) should be charged for the service. As mentioned earlier, the motif of education in the UK has moved from competition to collaboration. In a competitive environment, inter-school collaboration may look very different from how it looks at present, possibly with greater collaboration between smaller institutions than larger ones. The example of Hong Kong, (where the majority of schools are government subsided but independently run) suggests that collaboration would be focused within sectors (e.g. CoE with CoE) rather than across sectors (e.g. private with public), where no external mechanisms exist. However, a marketised education environment with varied provision may also run the risk of creating an unstable, piecemeal system with no coherent aim.
The role of the third sector within state education provision
There has been a growth in the number of faith based institutions providing education in Britain over the last twenty years. Faith based schools constitute about a third of the independent, maintained and Academies sectors. However, with public opinion largely opposed to state funded faith schools (with a minority opposing Muslim schools in particular) , and widespread public and political concern about ethnic segregation, integration and religious extremism, faiths schools and the organisations that fund/support them will come under greater scrutiny. In particular, concerns about independent Muslim and Evangelical Christian schools may lead to greater scrutiny of faith-based education and tighter regulation of the sector as a whole, especially as demographic changes indicate that children from these backgrounds are expected to constitute a greater proportion of the school age population in the future.
The third sector’s involvement in mainstream education is varied, though faith based organisations, such as the Church of England, account for the overwhelming majority. At present other forms of third sector involvement in mainstream state educational provision is limited, but look set to expand. Non-profit organisations have begun to engage directly, such as the Royal Society of Arts which has sponsored an academy in Tipton, which it aims to run in accordance with its’ own educational curriculum, and the Young Foundation which is presently developing a series of studio schools, which will teach the national curriculum to about 300 students through interdisciplinary enterprise projects and vocational learning. Third sector organisations (TSOs) look likely to be at the vanguard of radical approaches to education and learning, though the number of organisations with the capability and funding to engage in such projects may be limited. There are, however, newer forms of TSO, that may eventually establish a model that is more easily replicable. The Bolnore School Group and the Elmgreen Secondary School are foundation schools run by parents and carers who established themselves as charitable organisations.
In actuality, third sector involvement in public service delivery is still a largely unproven experiment, with the main drivers being central government rather than service providers, users or even TSOs themselves. Questions remain as to whether whether TSOs have either the capability, the networks or the willingness to provide public services, as well as where accountability for redress lies in the case of a service failure. The extent to which the third sector (beyond established faith organisations) will be a key player in education provision is therefore difficult to judge at this stage.
Where the growth of the third sector is likely to become most firmly embedded is in the contracted provision of supplementary specialist services to schools, such as that offered by Kid’s Company or Notschool.com, which exist separately from ‘official’ provision and caters to a specific need. Both major political parties have expressed their desire to involve the third sector in this way, though tensions may emerge if public spending is reduced and TSOs are relied on a substitute for government funded provision rather than as a supplement to it, especially where TSOs are engaged in a more complex relationship than just providing contracted services.
State Education Infrastructure Provision
To date the largest private sector involvement in education has been capital investment through PFI projects. As of October 2007, the Department
for Children, Schools and Families (DCSF) had signed 115 PFI deals, with a value of
approximately £4.8 billion (including the Building Schools for the Future programme which aims to be complete by 2020) . In addition, the Scottish and Welsh Governments had signed more than 20 education related PFI deals. However, this involvement could be scaled back for a number of reasons. Firstly, adverse economic conditions may see public spending cutbacks forcing a reduction in the scope of the project: BSF has already been scaled down once, from its original aim of renovating every secondary school to now renovating/rebuilding those in most need. Changes to government accounting rules have meant that PFI debts must be included on public sector balance sheets, negating one of the key advantages of PFI schemes for local authorities. There is now also the possibility that construction consortia may have difficulty in raising the capital required in the current financial crisis. Alternatively, government may seek to maintain public spending as an economic stimulus. In addition, the HM Treasury and Audit Commission evaluations rated PFIs positively for value for money and on-time delivery, compared with traditional procurements, suggesting that where capital projects are to go ahead PFI may still be attractive, though the era of PFI as the default choice could be over. This may be especially so as the Commons’ public accounts committee found that local authorities were poor at managing PFI contracts. Also, there has yet to be a long term assessment of PFI contracts’ effectiveness. A change to school building programmes could exacerbate attainment gaps, as highly mixed school estate emerges, with some schools teaching in modern facilities and others left behind in inefficient, poor quality learning environments. However, it is also possible that without a focus on capital investment, attention and funding will be shifted to innovations in learning which may have a larger impact on student attainment.
Academies
After PFI, the Academies programme is the next largest public private interaction in the delivery of state education, though arguably the most important as they are central to both political parties’ plans for education reform, despite opposition from parental groups such as the Anti-Academies Alliance. The programme looks set to undergo significant changes from its present form. Academies are essentially philanthropic ventures for private companies but they are not without risk, requiring as they do a significant financial investment and the possibility of reputational damage where performance is poor. Future involvement of the private sector is therefore not guaranteed, as demonstrated by the withdrawal of Amey from Unity City Academy in Middlesborough. Adverse economic conditions may lead other private sponsors to withdraw from either existing or proposed Academy partnerships, as well as creating a shortage of future private sector partners, hampering proposed expansions of the Academy schools. This coupled with changes to Academy requirements (replacing £2million sponsorship requirement with an endowment fund condition and other exemptions for non-profit organisations with an educational track record) suggest that academies will be increasingly sponsored by third sector educational organisations. At present 45 of England’s 88 universities have agreed to sponsor Academies and the Royal Society of Arts sponsors the Tipton Academy, amongst others. Strong political statements in favour of expanding Academies from both parties look set to embed Academies as the school model of choice, at both primary and secondary levels, though increasingly it appears that the role of the private sector in the programme may not be as dominant as it is at present. Other alternative school models such as trust schools may also prove to be avenues for further involvement by both TSOs and public service organisations such as PCTs. It is possible that the autonomy of the Academies model will lead to an increasing variation of teaching across the country, which may free teachers to innovate but equally could lead to a ‘learning lottery’. The development is, in conjunction with the variety of other possibilities
The role of commercial organisation in shaping learning
A factor that will undoubtedly further contribute to the diversification of learning is the interest of commercial organisations in learning and teaching itself. The perception that the global market divides into knowledge producers and knowledge users, and therefore the need for a knowledge economy workforce, is seeing third parties seeking greater influence over curriculums, pedagogy and educational policy. For example, the Paul Hamlyn Foundation’s Musical Futures programme will be influential in developing future curriculums for music in the UK, whilst technology companies such as Microsoft and Cisco see themselves as having an important role to play in transforming learning and education. Cisco recently published its’ own ‘white paper’ (Equipping Every Learner for the 21st Century) setting out it’s agenda of ‘Education 3.0′, whilst Microsoft’s involvement in BSF focuses on transforming learning as opposed to just providing IT solutions. This is also reflected in the influence employers seek over developing vocational qualifications that will create the workforce they will require for the future, as demonstrated in Hungary in 2004 when their Ministry of Education created an NVQ based on the first four semesters of Cisco’s Networking Academy Programme, the first such development in Europe. As the private sector becomes more involved in the contents and methods of learning, important questions will arise about the ownership of education and its purpose, the suitability of different models for different learners, and how diverse curriculums and learning models can be managed to maintain national standards. This, in conjunction with the opening up of vocational training routes and developments in on-line learning, could see private sector employers offer a challenge to the monopoly of schools on training and accreditation.
Private Tuition
Formal education is of course not confined to schools, with more than a quarter of 11-18 years olds having private tuition at some point in their school lives, with the fastest growing market being at KS1 & 2 (often primary schools children having intensive tutoring for 11+/grammar school entrance exams). Private tutoring in education remains popular, though there are mixed opinions as to its’ effects. Some research has found resulting academic improvements to be small, whilst others argue that tutoring in sports and arts as well as academics is creating an enlarging group of middle-class ‘renaissance’ children, widening educational attainment gaps. Established private providers such as Kumon and Fleet Tutors have been options for families able to afford them, though low cost providers are emerging onto the market, such as EduComp Datamatics (Career Launcher) and TutorVista offering on-line tuition from India for approximately £50 per month for unlimited sessions. This may see an uptake in the use of tutoring in lower income groups, though it is unknown whether foreign online tutoring will be popular or successful, bearing in mind differences in teaching style, learning cultures, the non-personal format and non-familiarity with syllabuses. An increase in the popularity of affordable tutoring could see new entrants to the education market. For example, Explore Learning offers after-school tuition in a branch of Sainsbury’s supermarket in Hampton, which may herald the entrance of supermarkets to attempt to enter the market. Following trends in America, the reach of private tutoring is now spreading beyond school age children to encompass pre-schoolers. Mainstream companies such as Kumon offer ‘pre-reading’ classes and help with reading and numeracy as anxious parents seek to enhance their child’s future school performance. Tutoring is also reaching upwards with an increasing number of undergraduates also utilising it. Private tutoring itself may also play a larger part in state provision. The use of private tutoring may have counter-intuitive effects. Increasing numbers of middle-class parents are choosing not to send their children to independent schools because they feel they are not diverse enough. Private tutoring may therefore increase the number of middle class children in state education, as it enables middle class parents to get the best of both worlds. Private tuition may even become part of mainstream provision, for example Aimhigher funding has been utilised by schools to send pupils for tutoring with an Oxbridge applications company, and government has pledged one-to-one tuition for pupils falling behind. However, technology such as social networking sites, videocams, VoIP, mobile phones and instant messaging may facilitate peer-to-peer alternatives to paid tutoring, where students collaborate to help and teach their peers and younger students, bypassing formal tutoring altogether.
Use of commercial teaching products within the state sector
Within the state sector, the involvement of private companies in delivering education services is mainly confined to the provision of services or products on a straight-forward retail basis, though this relationship may grow more complex over time. As the use of technology in public education increases schools will be dependent on commercial teaching systems and virtual environments such as Blackboard, Talk2Learn and software for whiteboards, school assessment and tracking pupil attendance. This may create an iterative relationship where products and solutions both respond to and shape user’s needs, influencing how learning and teaching develops. Where this is most important will be in the provision of school IT systems. Private sector IT providers such as Microsoft have already made large headway in their provision to UK schools, a trend that looks set to increase due their involvement in the BSF scheme. Microsoft, for example, is part of several BSF consortia, but has been referred to the European Commission by BECTA due to its’ restrictive licensing agreements and inter-operability restrictions. Schools may find themselves tied in to certain service and software provider (whether by design or practicality) forcing a de facto permanent relationship, suggesting that there will need to be regulation to govern such deals. BECTA is however, promoting the development of open source alternatives through the School Open Source Project, and the uptake of other open source platforms for education such as Moodle, and Linux (as has been adopted by Parkhill Junior School in Essex). It is unclear whether open source will be a viable option for most schools, bearing in mind its niche position within the market, specialised nature and unfamiliarity. Schools look likely to continue to have an increasing interdependence with IT providers, who will therefore have a role in shaping the learning environment that schools will operate within.
Marketing and Education
The sponsorship of school activity by multinational companies such as Nike, a trend that has gained ground in the United States, has not been evidenced in the UK beyond familiar promotional activities such as Tesco’s continuing Computers for Schools scheme, and more recently Morrison’s Let’s Grow seed distribution scheme. Attempts by Cadbury’s to promote its’ ’sports4schools’ programme and Walkers’ Books for School have been met with considerable antipathy where there is a perceived conflict of interest and there doesn’t appear to be much evidence that there will be a significant political or cultural shift in this area in the near future. However, more direct private sector partnerships may be used as marketing opportunities within schools, such as the Fitness Industry Association’s school outreach programme which encourages use of gym facilities by school children, recognising it as an opportunity to market gym services to parents and teachers. Companies may also see partnership as an opportunity to access resources or establish themselves in an particular area; Esporta established a gym within the grounds of the independent St. Edwards School, one of the conditions being use of gym facilities by students.
Private Provision of State Education
To date private companies have had a limited role in direct education provision and school management, one of the few being the American education company Edison, which is currently running Salisbury School in London. Other private sector management involvement has focused on the administration of nine failing LEAs (some of these contracts are now finished). There has been a worldwide growth in education services with several multinational providers emerging such as Edison, Nord-Anglia and GEMS amongst others, and venture capital firms are investing in school enterprises abroad. Within the UK, profit margins on running individual schools are unattractive, and so it seems likely that profit making providers would seek to establish chain schools if they were to enter the maintained market. This is the approach of companies such Kunskapsskolan (Swedish ‘free’ school provider, which is currently planning to sponsor a number of Academies) and Edison (the largest single supplier of contract schools in the US), creating viable profit-making schools through a pooling of shared operational functions, such as HR. If either a Labour or Tory government permitted profit-making institutions to run maintained schools, it seems likely that many of these companies would seek to enter the market. Their entrance would place added pressure on maintained schools, could possibly displace parental or third sector opportunities and also pose a challenge to the independent sector (both as a competitor for independent pupils and to independent schools looking to expand into maintained provision).
Cultural Influences of the Private Sector on State Provision
Expectations of schools have also begun to change, as increasingly they are being exhorted to be adopt an entrepreneurial culture within learning, and an entrepreneurial approach to community engagement and funding. This shift looks to be gathering momentum, especially as a result of the Extended Schools initiative and the BSF/PCP programmes. Southfields College in Wimbledon, for example, contains a public gym which employs pupils as staff, and seeks to utilise its’ school and extended service facilities as a revenue generators. A primary school that participates in the Eastfeast project earns £120,000 a year from its recycling programme. Pupils themselves may be fund-raisers for their school, for example, pupils in Durham who cultivate allotments for profit. Teachers themselves may also become marketable assets, as private and public organisations seek expertise in creating cultures of learning. At the most cutting edge schools may seek entrepreneurial opportunities abroad, such as in the case of Bristol Academy which has announced its’ intention to open for-profit branches in the Democratic Republic of Congo and Zimbabwe, following the example of independent schools such as Harrow and Dulwich College which have branches abroad. (In fact, within a competitive system, would maintained schools be able to reverse this and follow a higher education model, teaching paying foreign students as a method of bolstering income?) This shift in culture will have a profound impact on pupils, teachers and school leaders. Definitions of talented pupils may change, and if streaming in academic subjects continues to be common practice in schools, is it possible that pupils could also be streamed by their entrepreneurial flair? For teachers and school leaders a culture of enterprise will require a significant change to the culture of leadership as the roles of headteachers’ changes. However, this may come into conflict with a movement to reinstate an ethos of professionalism which views teaching as an intellectual rather than entrepreneurial activity, perhaps creating tensions over the core role of the school and education. This may perhaps see a division emerging within school leaders of pedagogues and business managers with an increasing involvement of non-teaching staff in school management, and the hiring of management staff from the private sector.
Independent Schools
Independent school provision in England continues to prove popular, seeing a rise in the proportion of privately educated children from 7.1%to 7.3% as of 2007, but a fall in actual numbers. However although the independent school sector has experienced continuous growth over the last 10 years, it has not expanded its’ intake in proportion with the increase in the number of children from professional/managerial backgrounds (who constitute three quarters of independent school intake). This may in part be due to a change in attitude of middle class parents who do not see private schools as socially and ethnically diverse enough. The structure of independent schooling in the UK also looks set to change as growth is forecasted in groups and federations of independent schools. However, where independent schooling has increased greatest is in provision for pre-school children as parents seek to ensure an educational advantage as early as possible. The growth of independent schools also has important consequences for teacher recruitment, bearing in mind that the independent sector employs a disproportionate share of trained teachers (especially in shortage subjects), who are also on average better qualified. An expansion of private provision may see greater stresses placed on teacher training and staff recruitment in state provision.
In the last five years, the number of independent schools that can be classed as being part of a chain has risen by more than a third to 156 at present. Three quarters of this increase was accounted for by commercial groups, such as Cognita and Alpha Plus, rather than by more established federations. It is predicted that these groups of schools will continue to grow, raising the number of children they educate from 3.5 per cent of all independent school pupils to more than 10 per cent by 2017.
Non-educational private sector organisations look likely to develop their own educational provision, possibly as ‘hothouses’ for talented children as in the case of the Premier League, which plans to establish six £25 million boarding schools for talented children. Could this prove an indicator for the start of larger talent recruitment programmes, culminating with sponsorship through higher education and a job for the best students?
Increasingly private schools are being brought into collaborative networks with state schools, through initiatives such as the Independent/State School Partnerships Scheme, which has funded 330 collaborative projects worth £10 million to date. Changes in the requirements to independent schools charity status have meant that the independent schools are considering opening more of their classes and facilities to state schools and the local communities. These closer links and the changes to the Academies funding rules, may encourage the movement of some independent providers into the public sector, such as Colston’s Girls School in Bristol which will become an Academy in 2008. However, polling indicates that only a small number of schools are currently considering this at present. As mentioned above, it is unclear what effect a more marketised state education sector would have on this collaboration, possibly creating greater collaboration between smaller institutions with varied provision and greater competition between larger providers.
Home Schooling
There are parents that have chosen to opt out of both public and private education, and it is estimated that 50,000 children are being home-schooled (exact numbers are not known as there is no duty on LEAs to collect this data), which is a trebling of numbers since 1999. This rise in home schooling looks set to continue, facilitated by the availability of online learning material and more flexible working patterns amongst the population as a whole. The proposed changes to enable parents to establish schools may create space for the formation of micro-schools of between 5 – 30 children, or small sized parent co-operatives as alternatives to traditional home-schooling approaches.
Factors in Higher Education
On the face of it, private sector involvement in the delivery of higher education in the UK is limited, with only one privately funded university in the country, the University of Buckinghamshire. In reality, however British universities are non-profit independent institutions not public sector organisations. The interaction between the private and public sectors in higher education can be spilt into two general themes; how will universities compete as businesses within a globalised higher education market and to what extent will the private sector determine higher education provision in the future.
Markets in UK Higher Education
The funding a British university receives from government is determined by the number of student places it offers, rather than the number of students it attracts, and it is possible that this funding structure may be challenged in the future. It is in the interests of oversubscribed universities to lobby for a more market based system, with government funding following students which would allow them to expand and generate greater income. Elite universities such as Oxford and Imperial, have indicated the possibility becoming privately funded institutions to raise more money, and so governments may alter funding arrangements in an attempt to prevent this.
The move to a market based, competitive environment may see the loss of departments such as chemistry, physics and modern languages if universities are able to make decisions based own their own self-interest, rather than the national interest. At present there are a number of impediments to a more marketised system such as a lack of information to inform the market and no mechanisms to allow funding to follow students.
There is also a risk that market based strategies may adversely affect the social dimension of higher education; universities will be driven by competition for institutional reputation (often determined by the quality of research facilities) rather then being driven by the needs of students or the knowledge society, leading to a diminishment of the contribution of higher education to wider society.
Certain elite universities, such as Oxford and Imperial, have indicated that becoming a private institution is seen a viable possibility. On the face of it this may be possible for elite universities, who could supplement the fall in British students with international students. This would however prove controversial, and could be blocked by government regulation for example specifying a minimum number of domestic students, though already universities such as Imperial have high numbers of foreign students (30% non-EU, 50% no UK total).
Higher Education: Public Good vs. Private Good
Whilst the wider societal benefit of higher education is acknowledged, it is increasingly seen as a private good that primarily benefits the individual. The start of this shift was signalled by the introduction of tuition fees in 1998, and appears to be gathering further momentum. This will have a number of clear implications for higher education. Elite universities, particularly the Russell Group, have indicated their desire for the removal of the current tuition fee cap and a review of funding arrangements. There is also evidence that students themselves also see their relationship with higher education institutions in terms of consumer and service provider, which may have unexpected consequences. A growing number of UK students feel that their university education is not value for money, which may prompt legal action as has happened in the United States and Australia. In a related point, teaching assessment may shift from being institutionally determined to being student determined, as students share negative experiences online and monitor teachers ‘e-trails’ of ability and expertise. Could these cultural shifts therefore cause the value of higher education narrow to qualification and competence rather than as a wider learning experience.
Public/Private Partnerships in Higher Education
In the past philanthropic involvement with universities has been the predominant mode of private sector interaction from the Gates Scholarship for Cambridge University to the controversial funding of the University of Nottingham’s International Centre for Corporate and Social Responsibility by British American Tobacco. Commercial companies have close links with many British universities particularly in fields with industrial applications such as chemistry, physics and biology, often funding research of particular interest to their business. More direct collaborations with the private sector are long established though not widespread or wide ranging, for example the Eisai research laboratory was opened within UCL in 1992, and offers student placements and funds PhD studentships at the University. However, direct partnerships between commercial enterprises and universities are emerging such as the current collaboration between Bristol School of Animation and Aardman Animation Studios, which involves the company co-directing the School and offering students industry links and opportunities. It seems that this will be an area of future growth as Universities seek to fund expansion, with such a policy explicitly promoted by Government. This may see a greater determination of course content by private collaborators and a utilitarian focus on research and learning with distinctly commercial benefits. The emphasis on the commercial applications of research is already evident by the fact ‘translationality’ is often a condition of research funding.
Such direct partnerships may be impeded by questions over the ownership of any intellectual property, which can be of great value. For example Cambridge University has a consultancy and contracting arm known as Cambridge Enterprise, which offers consultancy services from academics, leverages the Universities IP and offers seed capital to develop ideas originating within the University as does Imperial College (Imperial Innovations).
There are a number of policy developments that appear to pave the way for further private sector involvement in higher education, such as the Leith’s skill reports recommendation that employers should influence, or even determine, higher education offers and that the private sector should co-fund university expansion. In addition, government proposals to repeal the requirement for universities to be active in a number of areas could pave the way for the entry of commercial specialist universities, such as a Microsoft University. Indicators of commercial interest in directly providing higher education can already be seen in the example of advertising agency Weiden and Kennedy’s experimental advertising school, W12 and the Nokia & Srishti School of Art, Design and Technology Design Studio in Bangalore. Ultimately, in an increasingly educated world, integral to universities’ perceived value and reputation, may be not just be education but also the introduction to professional networks and job opportunities via it’s networks and activities.
Competition in a Global Higher Education Market
The biggest issue for universities will be competing as private institutions on the international market. International students will continue to be an increasingly important source of revenue for British Universities, growing from 110,000 in 1995-6 to 250,000 in 2006-7. Globally the number of foreign students is projected to increase, with students originating from India and China being the biggest group (accounting for just under a fifth of international students worldwide).
The number of international students originating from the UK continues to be low, though it is difficult to measure, as complete figures are not collected, though participation in schemes such as Eurasmus has fallen by a third since the 1990s. But this may not always be the case, as in America the number of students studying abroad has increased, especially those studying in China. Private companies in the UK, such as Degrees Ahead, act as agents for overseas institutions promoting foreign study as cost-effective once living costs and tuition fees are taken into account. As the quality of institutions in China and India improve they may prove attractive to some British students. As the market for higher education increasingly becomes viewed as global, is it possible that students who wish to study abroad will seek to utilise their share of government funding (currently subsiding British institutions) and instead use it to part fund study abroad. Could we see a move to an Australian style university system of vouchers and top-ups?
British universities face heavy competition from American institutions and will need to generate large revenues to keep pace in the higher education spending race (Harvard University’s endowment fund is larger than the total annual public funding for all universities in England). This has led to an entrepreneurial mindset in universities, many of whom now see themselves as educators with a global rather than national mission. However, British institutions now face competition from other European institutes adopting this approach, and from many ‘origin’ countries attempting to transform themselves into hosts (China will soon surpass Australia to become the fifth largest host country).
International student demand is for Anglo-Saxon type education (particularly American) provided in English. However, Asian language nations offering cheaper English language training has contributed to a small decrease in the numbers of foreign students studying in the US. In addition, whilst English continues to grow as the international language of choice, UK higher education may need to adapt to a student population that speak variant dialects that such as ‘Hinglish’ (India), ‘Singlish’ (Singapore) and ‘Chinglish’ (China). Students may therefore begin to prefer to learn in English speaking institutions where variant English is spoken rather than ‘British’ English, as it may better meet their immediate needs, such as finding local employment.
The need to compete as global research institutions may also see the formation of ‘megavirsities’ as multiple universities merge. There have already been a number of higher education mergers such UMIST and The Victoria University of Manchester merging to create the UK’s largest single-site University: the University of Manchester, the merging of De Montford and Luton to create the University of Bedfordshire and a number of others underway. Mergers across sectors may also be a viable path; in 2007 Imperial College merged with Hammersmith Hospitals NHS Trust and St Mary’s NHS Trust to become an Academic Health Research Centre, with Nuffield Orthopaedic centre currently proposing a merger with Oxford University.
Overseas Expansion of British Universities
An area of growth is the spread of American, British and Australian universities abroad, such the University of Nottingham in Malaysia and Ningbo (China), Xi’an Jiatong Liverpool University and Queen Margaret University’s plan to open QMU Asia in Singapore. In addition, UK universities have also begun to offer degrees via foreign providers such as the Universities of Wales and Teeside offering degrees through the private education provider AEC in Singapore. However, whilst these ventures are fee charging, many offshore extensions are loss leaders, serving to bolster throughput to domestic institutions or establish a longer term presence. These expansions could serve to destabilise British institutions if they fail to develop a profit-generating model or lose out to either domestic or other foreign competition.
E-Learning and Higher Education
E-learning is a continuing growth area in higher education, opening universities to competition from a vast array of providers from both public and private sector. The current value of e-learning worldwide is estimated to be $20 billion. American universities have been distributing lectures and course material via iTunes for some time, with Oxbridge recently following suit. British universities are in a good position to leverage their brand reputations, especially abroad, though it is not elite universities making most headway in this field. Whilst it appears that students appear to prefer a mixed model of teaching (e-learning and lessons) the example of Ultraversity (the e-learning wing of Anglia Ruskin University) highlights that a 100% online course is possible and that there is demand. It is possible, both domestically and internationally, that e-learning may allow students to mix and match – for example supplementing a local university course with an e-learning module from a prestigious university. A barrier for e-learning expansion, especially in Britain, is the lack of prestige that such qualifications hold, but in a crowded global job market they may prove to be of value.
Lifelong Learning
The dialogue of education has shifted in recent times, increasingly stressing the importance of education beyond the traditional structures of school and university, and advocating lifelong learning. This advocacy has two strands, with one emphasis on skills acquisition to create a highly skilled workforce, and another emphasising the social case for learning (individuals improving their capacities and abilities for their own benefit and well-being). Tension between these two agendas may affect the type of adult learning that is available and taken up, as highlighted by recent falls in arts and language learning, and possible negative impacts on wider mental health.
The role of the private sector in adult learning is currently well developed, with there essentially being an open market for adult learning providers, with courses for first qualifications (such as GCSEs, A-levels and NVQs) and numeracy/literacy funded by government. This area is largely moving in the direction of self-regulation, though how this will impact on standards, accreditation, and transferability of qualifications is yet to be seen. It is also worth considering the impact of a diverse learning market on potential learners: will there be sufficient information and support for students to assess which course/ qualification will best meet their needs?
Vocational Training
Following criticism that vocational training was failing to meet the needs of industry, the last decade has seen a flurry of activity designed to bring vocational training closer to labour markets. The role of private sector employers in influencing education within this context is therefore pivotal. Internationally, there are four broad models of employer engagement:
- employer involved (voluntarily or statutorily involvement through consultation and financing)
- employer modelled (training modelled on industry best practice)
- employer owned (sectors fund and develop their own training)
- employer driven (public/employer funded training responds to employer demand)
What underpins these different approaches is the purpose of employer involvement e.g. improvement of training supply, improvement of employers services etc. The current UK strategy is a voluntary employer involved approach, based on the understanding from the Leitch review that it is the training system itself that is the block to training. As a result employers have greater influence over qualifications and the shape of the market, focusing on increasing training supply rather than training demand. This has started to shift since Leitch, however, as government recognises the need for demand-led training to meet wider social needs not just employer needs (such as proposals to give employees the right to request (and have considered) training from employers).
Factors involving employers’ engagement with a training agenda are varied and there are tensions not just between employees and employers but also with policy needs. Both individuals and organisations are reluctant to invest in low-level qualifications, due to lack of direct need for more skills, poor returns on low level qualifications, availability of skilled migrants and greater numbers of temporary workers. Employers and employees want short specific courses rather than full qualifications though this then raises concerns over transferability and long-term benefits. At present, employer input into course content through Sector Skills Councils, faces a number of challenges. Defining what skills will be needed and what will be of economic value in the future is difficult due to the unpredictability of labour markets, suggesting that developments such as a market in varied learning products and personalised learning budgets, rather than just an increase in learning providers, would create a more responsive, demand-led learning sector. This also raises the question of balancing an employers immediate training needs (often job and role specific) with the longer term training needs of employees, and meeting demand where there is not a sustainable market to deliver it (e.g. it may be unprofitable to run training course in sparsely populated rural areas. Finally, a reliance on employment based training, leaves out those sections of the population not in employment, possibly increasing the distance between these individuals and the job market.
Alternate Learning Providers
The possible role of the private sector in education outside of the formal structures of school and university have been examined earlier in this report, though there interesting innovations that are worth highlighting. Outside of formal qualifications, learning and education is increasingly being seen within the context of lifestyle choices, with companies providing innovative solutions to meet this need. The US fashion chain Club Monaco ran a short public lecture series on modern culture entitled Urban Studies, whilst a London based store, The School of Life, offers not just courses but educational holidays, public lectures, private dinners with leading thinkers and even personalised ‘reading prescriptions’. The London events company, Intelligence Squared, runs debate events featuring academics and public intellectuals, selling tickets at £25.
Non-profit organisations are also moving into the alternate provision space: the fashionable author/publisher David Eggers has established a series of retail stores as part of his 826 Valencia literacy project (such as Echo Park Time Travel Mart and Michigan Monster Union), which offer a range of instore literacy training for 8-18 years olds as well as being retail venues. In addition, cultural organisations see education as a central part of their purpose; for example, education and learning is explicitly one of the main aims of the Tate Modern 2 developments.
In some areas of education, learners may rely on private providers to only host a platform for education, whilst they teach each other. Online projects such as The School of Everything (connecting learners and teachers), VideoJug (user created instructional videos), eHow (user created instructional content) and Horse’s Mouth (online mentoring) provide avenues for co-creation and peer-to-peer teaching, as opposed to the more one-way lecture websites such as TED or PopTech. This may have important consequences for the interaction between learners and ‘official’ educators, as students perceptions about who is a teacher and what their role is changes, as well as raising questions about how learners decide what sources are valuable and legitimate sources of information and teaching.
Conclusion
As this report demonstrates the role of the private sector in education will be of continuing importance over the next 20 years, carrying with it the possibility of profound change to the way education is both conceived and delivered in the UK.
Clear questions have emerged from the research into this report that will require further consideration by the participants in the BCH programme. As the role of the private sector extends from beyond service and product provision to actively shaping educational agendas, tensions may arise over the ownership and responsibilities of our education system. This will inevitably include wider philosophical questions as the purpose and nature of education, as well as understanding what type of citizens Britain will need in the future.
Market forces look likely to be a continuing influence on state provided education at all levels, with all levels of education provision having to survive in a competitive environment. The implications for both learners and educators are yet to be fully understood, though clearly both will need different skills and capacities to prosper. Whether marketisation as an approach remains unchallenged however is yet to be seen. The impact of the global financial crisis may cause public services to reappraise their relationships with the private sector, and many of the certainties of recent times may be undermined, perhaps decisively.
However the role of the private sector in education develops it is clear that its’ contribution cannot be discounted or overlooked. Utilising the private sectors strengths, whilst maximising the returns for learners will prove a challenge for all those committed to providing the best possible learning experience for children, students and adults. As the divisions and boundaries continue to blur, not just between private and public sectors but also between learners and teachers, it will be vital for policy makers and thinkers understand the potentials and the pitfalls of the public private relationship in education.
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APPENDIX
This report was informed by interviews with the following individuals, though the report does not necessarily reflect the views of the individuals named.
Interviewees
Professor Stephen J. Ball, Karl Mannheim Professor of Sociology of Education, Institute of Education
Valerie Hannon, Director of Strategy, The Innovation Unit
Professor Stephen Heppell
Tony Howell, Chief Education Officer, Birmingham City Council
Paul Roberts, Director of Strategy, IDeA
David Walker, Managing director of Communications and Public Reporting
This document has been commissioned as part of the UK Department for Children, Schools and Families’ Beyond Current Horizons project, led by Futurelab. The views expressed do not represent the policy of any Government or organisation.
From 9469 in 1995/6 to 5558 by 2004/5 – global
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Demanding questions: Employers’ needs must not decide what we teach, Bahram Bekhradnia, The Guardian, May 22 2007
Implications of the Government’s proposals for university title: or What is a University?, Bahram Bekhradnia, 2003
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