It is time to create a true market to run Britain’s schools

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Tony Blair, Britain’s outgoing prime minister, would like the “city academy” programme to be one of the great achievements of his self-declared crusade to improve school standards. But the bold idea – tackle the perpetual failure of many inner city schools by rebuilding them and handing their management to private organisations – has been contaminated by the strange requirement that anyone wishing to run a school must do so on a charitable basis and pay a princely sum of £2m to prove their bona fides.

This has done the scheme no favours. It has helped to exclude many educational charities that have expertise in running schools but lack resources, or forced them into sometimes uneasy collaborations with wealthy partners.

Some of the colourful cast of deep-pocketed philanthropists who have come to dominate the scheme have been very successful – particularly well-off organisations with a purely educational mission, such as Absolute Return for Kids, a charity backed by London hedge funds.

Others have been less impressive, and attracted controversy by using academies to promote their cranky beliefs, including creationism in one case. The handful of public companies, such as the bank UBS, that have backed the programme say their interest in running the schools they support is limited.

Worst of all is the exclusion of organisations that have big am­bitions to run state schools but need to turn a profit, or at least cover their costs. That includes Britain’s CfBT, a charity, and Edison Schools, a company that has acquired vast knowledge of turning round schools in the US.

With such people excluded, the government has – amazingly – allowed local government to recover some control over what were meant to be “state funded independent schools”. A huge new wave of academies is now being jointly sponsored by town halls.

As with many other Blairite reforms, the scheme’s full potential has been held back by ideological antipathy among Labour MPs towards the idea of letting companies make a profit out of education – or even a surplus, for some of the frustrated not-for-profit suppliers.

Things might change. The opposition Conservatives have said they would scrap the £2m requirement, and the chance to extricate the programme from its association with the cash-for-honours scandal might also appeal to Gordon Brown, prime minister-in-waiting. But the politicians need to go further. They should create a true market in third-sector and private education providers to run Britain’s schools.

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