Making a profit from education

Academies Enterprise Trust (AET), the largest academy chain in England, has announced plans to effectively privatise an unprecedented range of school jobs and services.

AET plans to work with a private company to set up a separate joint venture.

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Unprecedented school privatisation would put profits before pupils

Profits could be put before pupils, and head teachers could lose control of vital services in 80 academies across the country, as part of a proposal for an unprecedented privatisation of school services

The facts

Making a profit from education

Academies Enterprise Trust (AET), the largest academy chain in England, has announced plans to effectively privatise an unprecedented range of school jobs and services. Services under threat include support for children with special educational needs, school finance staff, catering, IT and health and safety.

AET intends to set up a joint venture company that will either directly provide or manage contracts for a wide range of school services. Taxpayer funds for children’s education and school services that would otherwise go directly to schools will as a result be diverted to the joint venture and it will make a profit.

AET is a not-for-profit charitable company, how can they make a profit from schools?

AET plans to work with a private company (the front runner is Pricewaterhouse Coopers) to set up a separate joint venture.

The academy schools that AET run will then either have to pay the joint venture company for the services or funds for these school services will be diverted by AET to the joint venture. AET and their private partner will share in the profits made by the joint venture.

School roles and services are under threat

Money for school services that should go to the AET academies for them to spend will go instead to the joint venture company.

It will then provide a wide range of school support services: special educational needs support; admin; finance; IT; technology; school business management; leisure facility provision; sports facility provision; caretaking; catering; cleaning; grounds maintenance; health and safety and security.

AET estimates that the seven to 10 year deal is worth between £200 and £400 million. Crucially the joint venture company will be able to cut costs (and quality) and then share in the profits that are created.

A threat to children’s education

The services that are vital to creating a safe and vibrant school community will be privatised to a joint venture that has the main goal of making a profit.

AET have confirmed that the private partner they work with will be able to share in profits created by cost reductions; this means they can increase their profits by making cuts to school services over the lifetime of the contract.

Evidence shows privatisation is followed by cuts to jobs and that service quality suffers to boost profits. This will impact on children’s education, which will affect them for life.

A threat to school management

Heads and governors will lose direct control over large chunks of their budget, vital services and staff in their schools.

Under AET’s plans head teachers will be employed by AET, but the joint venture company will employ their school business managers and hundreds of other staff.

This could make it hard for heads to manage those staff, and may cause confusion over responsibility for matters like safeguarding issues and employment checks. It could also mean school business managers are asked to make decisions based on saving money for the joint venture company rather than in the interests of pupils.

Schools will have no choice

AET says AET schools will have no choice in whether to participate.

A threat to school staff

Staff carrying out the services that are privatised could be made redundant. They are also likely to face a prolonged period of uncertainty and as the history of privatisation shows, pay and pensions and terms and conditions for new employees will be eroded.

This will impact badly on staff morale and lead to a high turnover of staff in AET schools, neither of which contributes to a positive learning environment for children.

A threat to future generations

If this privatisation goes ahead, it will be the first time a wide range of learning and pupil support services has been run for profit. Unless it is stopped, it could be the first stage in a wider privatisation of schools.

That is why it is vital we act now to ensure AET and other private companies do not make a profit out of our children’s education and safety.