The Profit Motive in Education: Continuing the Revolution

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

Executive Summary:

  • The criticism of the ‘profit motive’ in education is unjustified: we should not be concerned about the corporate structure of organisations that provide educational services. Furthermore, while people are disparaging about the profit motive they ignore other self-interested motives operating within the education sector, such as those within teachers’ unions, government educational bureaucracies, and so on.
  • The school reform debate currently focuses to too great an extent on ‘school choice’. Instead, we need to focus on the supply side. By liberating the supply of education, we will see radical new ways to deliver education, including new ways of bundling education services. Those models that are successful will be scaled up rapidly if the profit motive is allowed to work.
  • The UK government is wrong to exclude profit-making schools from its free-school programme and it might fail as
a result. Allowing profit-making free schools would draw more capital into the sector; allow people who wished to take financial risks to do so while reducing risks for parents and other groups involved in setting up free schools; help ensure that the necessary site and buildings can be obtained and financed; and radically reduce the cost of regulation.
  • Non-profit foundations generally do not have the ability or incentives to scale up successful practices and roll them out widely. They are therefore not the answer to promoting high- quality education available to all.
Profit-making schools in Sweden have raised standards and provided a competitive spur to state schools. One chain of schools has increased teacher contact time by 50 per cent through developing curriculum materials that can easily be adapted by teachers.
  • The UK lags behind the UN in terms of developing good practice in education policy – despite the fact th