Introduction: What is Privatisation?
Privatisation is where services which were once owned and provided by the state are transferred to private companies, such as the transfer of educational assets and management to private companies, charities or religious institutions.
The UK government spends approximately £90 billion on education, which includes to costs of teacher’s salaries, support workers, educational resources, building and maintaining school buildings, and the cost of writing curriculums, examinations and inspections (OFSTED), which means there is plenty of stuff which could potentially be privatised.
Most aspects of education in the UK have traditionally been run by the state, and funded directly by the government with taxpayer’s money, managed by Local Education Authorities (local councils). However, with the increasing influence of New Right ideas on education, there has been a trend towards the privatisation of important aspects of education, both in the UK and globally. In other words, increasing amounts of taxpayer’s money goes straight to private companies who provided educational services, rather than to Local Education Authorities.
The Increasing Privatisation of Education
The privatisation of education started under the New Right Government (1979-1997), and continued under New Labour (1997-2010) and under the Coalition/ Conservative Government (2010 – Present Day).
Exogenous and Endogenous Privatisation
Ball and Youdell (2007) distinguish between exogenous privatisation (privatisation from outside) and endogenous privatisation (privatisation within the education system)
Exogenous Privatisation is all of the material on the previous page, but another important aspect of privatisation is endogenous Privatisation, which is basically marketisation
Both British and international companies taking over different aspects of the UK education system, some examples of this are:
The setting up of Academies. Since New Labour, the establishment of Academies has meant greater involvement of the private sector in running schools. Academies are allowed to seek 10% of their funding from businesses or charities, which increases the influence of private interests over the running of the school, and some recent academy chains such as the Academies Enterprise Trust are run by private companies, and managed by people with a background in business, rather than people with a background in teaching.
The Building and maintaining school buildings – Under New Labour A programme of new buildings for schools was financed through the Private Finance Initiative (PFI). Private companies did the building, but in return were given contracts to repay the investment and provided maintenance for 25-35 years. The colleges, schools or local education authorities had to pay the ongoing costs.
Running examination systems – The UK’s largest examinations body Edexcel is run by the Global Corporation Pearsons. Pearsons runs the exam boards in over 70 countries, meaning it sets the exams, it pays the examiners, it runs the training courses which teachers need to attend to understand the assessment criteria, and increasingly it writes the text books.
The Expansion of the Education Services Industry more generally. This is related to the above point – There are more International Corporations involved in education than ever before – two obvious examples include Google and Apple, both of which are well poised to play an increasing role in providing educational services for a profit.
Privatisation within Education (Endogenous Privatisation)
Privatisation within education refers to the introduction of free-market principles into the day to day running of schools. This is basically marketization and includes the following:
- Making schools compete for pupils so they become like businesses
- Giving parents choice so they become consumers (open enrolment)
- Linking school funding to success rates (formula funding)
- Introducing performance related pay for teachers
- Allowing successful schools to take over and managefailing schools.
Refer to the hand-out on the 1988 Education act for the strengths and limitations of this type of privatisation!
Arguments for Privatisation
The main perspectives which argue for privatising education are Neoliberalism and The New Right.
The Neoliberal/ New Right argument is that state-run education is inefficient. They argue that the state’s involvement leads to ‘bureaucratic self-interest’, the stifling of initiative and low-standards. To overcome these problems the education system must be privatised, and New Right Policies have led to greater internal and external privatisation.
The basic argument for internal privatisation is that the introduction of Marketisation within education has increased competition between schools and driven up standards.
The basic argument for external privatisation is that private companies are used to keeping costs down and will run certain aspects of the education system more efficiently than Local Education Authorities, even if they make a profit. Thus it’s a win-win situation for the public and the companies.
Arguments against the Privatisation of Education
The main perspective which criticises Privatisation is Marxism.
- See the hand-out on Marketisation for criticisms of internal privatisation.
If private companies have an increasing role in running the education system this may change the type of knowledge which pupils are taught – with more of an emphasis on maths and less of an emphasis on critical humanities subjects which aren’t as profitable. Thus a narrowing of the curriculum might be the result
Stephan Ball has also referred to what he sees as the cola-isation of schools – The private sector also increasingly penetrates schools through vending machines and the development of brand loyalty through logos and sponsorships.
There might be an increasing inequality of educational provision as private companies cherry pick the best schools to take over and leave the worst schools under Local Education Authority Control.
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While India boasts of having the third largest higher education system in the world, the reality is that the country is facing a severe shortage of skilled people who enter the workforce. The reason for such a contrasting situation is the extremely low quality of education in India, of course, with some notable exceptions, owing mainly due to a weak schooling system. A possible way-out from this situation is privatization of the education system, which, in India, is predominantly publicly funded.
Privatization of education has the potential to improve the quality of education as well as to reduce costs. However, to ensure access to education for all, the government must design an effective transfer-payment system. The transfer-payment system will ensure a regular periodic payment from the government to the guardians of the respective students enrolled in private schools to take care of the educational costs.
Although India’s national literacy rate currently exceeds 75%, a study by Pratham finds that only 53.4% children in Standard V can read a Standard II-level text, and that nationally there has been a decline in the children's ability to do basic math. Another study by NASSCOM finds that 75% of technical graduates and more than 85% of general graduates are unemployable. The problem with the present Indian education system is that it is delivering a huge quantity of output, in the name of educated populace, with poor quality.
This alarming situation is due to the unavailability of skilled teachers, the lack of determination among the existing teachers to teach effectively, the poor physical infrastructure in the country, and a low level of parents’ involvement toward their children’s education. The deteriorating trend in the educational system continues largely because of the lethargy and mismanagement of the public schooling system which accounts for nearly 80% of all schools.
Despite many efforts from the government to revitalize the public education system, the quality of public education is dwindling. Consequently, enrollment in private schools, colleges, and universities, is on the rise. For instance, a recent study finds that in the city of Hyderabad, 73% of families in slum areas send their children to private school. A general realization is that the return on investment in the private schools/colleges is much higher as compared to the government schools and colleges, with a few exceptions.
The reason this is possible is the difference in approach between the two. The public education system is accountable only to the government machinery. So even if the teachers in public schools don't deliver a good quality education, they don't suffer themselves because their jobs are secure. However, in the case of private schools, the management and the teachers are directly accountable to the parents. If they fail to deliver an expected quality of education, the parents would react and enrollment may fall. The teachers’ performance, thus, would affect the schools' income and reputation. So a private school has to deliver a good quality education. In fact, they, in general, do it better than majority of the public schools.
Another issue is the cost of education. Most public schools are richer than their private counterparts in terms of total expenditure (on record, at least) and incur a much higher expenditure on the teaching and administrative staffs’ salary. The private schools, on the other hand, are thrifty about infrastructure and, in general, pay much lower salaries to their staffs. Thus, on average, at a fraction of the expenditure of a government school or college, a private institution can provide a better quality of education than the public institutions.
So privatization of the primary and secondary educational systems can help ameliorate the situation by improving the quality of education while reducing the cost. But considering India's poverty status (roughly 80% of the population lives below the national poverty line), only a few parents will be able to afford the cost of private education, privatization of education will adversely affect a large section of the population.
Given the present scenario, an alternative system which provides a better education, without over-burdening the poor parents, needs to be put in place. Now the question is: What this system should look like?
One realistic way, I think, is to gradually privatize the schools and maybe the colleges, too. The government should take care of the educational expenditure by disbursing to the guardians the cost of their wards’ attending schools through transfer payments rather than funding the schools and colleges directly.
This way, private agencies will run the institutions, and the parents will be able to afford the cost. Since the parents will have a control over the money, they can decide whether or not to send their wards to a certain school or college. This keeps the benefit of the public education system – affordability – intact while bringing in the efficiency – high quality and low cost – of the private system. So privatization of the education system, with the government taking care of the costs, seems a good way-out for India.
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