The Profit Motive in Education: Continuing the Revolution

Education reforms at risk unless government allows for-profit free schools

The government’s flagship schools reform policy will fail to make a substantial difference unless the government allows for-profit companies to provide free schools.

A new IEA report published today, The Profit Motive in Education: Continuing the Revolution, argues:

  • For-profit schools were the key to the success of education reform in Sweden.
  • 11% of children in Sweden now go to the equivalent of free schools.
  • More than 60% of Sweden’s equivalent of free schools are run as for-profit limited companies.
  • Merit value (the average value of marks received by pupils) across all Swedish compulsory schools in 2011 was 211 points (max. 320 points); in the equivalent of free schools alone it was 229.
  • Allowing for-profit companies to set up free schools is the key to increasing investment and competition in education.
  • For-profit providers would create the innovation that is desperately needed to improve pupil performance.
  • For-profit providers would promote co-operation across a “chain” of schools throughout the country with regard to teaching methods, curriculum provision, assessment and so on. Currently, this is rare in the state system. Such cooperation lowers costs and allows more investment at the chalk face.
  • For-profit providers could take advantage of economies of scale in overcoming the regulatory and bureaucratic obstacles faced by those setting up free schools.
  • As well as investing capital, for-profit providers would take the equity risk of failure.

In the report Toby Young, free school founder, argues:

“Thanks to the complexity o