The Schools Business

Matthew Bennett

George Osborne announced in the budget that all remaining local authority schools in England must become academies by 2022. The Education and Adoption Act 2016 will compel councils and school governors to co-operate in the forced academisation of eligible schools; remove any requirement for consultation with parents, governors or local authorities; and allow the education secretary to control the make-up of the ‘interim executive boards’ that oversee a school’s conversion into an academy. An amendment tabled by Labour peers, requiring that parents and others be consulted on academy conversions, was defeated by Conservative MPs.

There are still a few loopholes to be closed, however. One is the recommendation, set out in the academy articles of association published by the DfE in 2013, that all multi-academy trusts (MATs) should have two elected parent trustees or representatives, either on the board of the MAT or on each school’s governing body. The white paper Educational Excellence Everywhere makes clear that this prescription is to be dropped. School governance will be streamlined and professionalised, with scope for payment to ‘attract the very best people’: ‘as we move towards a system where every school is an academy, fully skills-based governance will become the norm’.

The minister responsible for school governance is Lord Nash, the parliamentary under secretary of state for schools. He and his wife Caroline, a former stockbroker, in 2006 set up Future Academies, which runs a small chain of schools in Westminster. The trust’s board has seven members, including Lord and Lady Nash. There are no parent trustees. The couple are also co-chairs of the board of governors of Pimlico Academy, the chain’s flagship school. Of the five other governors, three are also on the Future Academies board; there is only one parent governor. In 2013, Nash told the Independent Academies Association:

Personally, I’m not keen on big governing bodies. Lord Adonis asked me if he could cite Pimlico in his book because with seven governors we apparently had the smallest governing body in the country. This surprised me greatly as coming from the business world it would by no means be regarded as a small board of directors.

Nash says that governance has to move beyond the representation of ‘particular interest groups’ – parents and teachers – in order to draw on the ‘widest possible pool of talent’. ‘Running a school is in many ways like running a business, so we need more business people coming forward to become governors.’

The Academies Enterprise Trust controls 67 schools. Its chairman of trustees is Jude Chin, who worked at KPMG for thirty years and has experience ‘advising on mergers, acquisitions and stock exchange listings’. The chair of trustees of REAch2, which runs fifty schools, is a property developer, Peter Little. The board of the Kemnal Academies Trust (41 schools) is led by John Atkins, a former college principal; but the vice-chair, Aruna Mehta, was once a managing director at JP Morgan Chase, and another trustee, Ian Armitage, is ‘an experienced venture capitalist and private equity investor’. Ark, which runs 34 academies, has nine trustees; six of them are hedge fund managers, and none has any background in education (one of them, Lord Fink, was treasurer of the Conservative Party). The Inspiration Trust runs 14 schools in Norfolk and Suffolk. Its board is led by Sir Theodore Agnew, another financier – his background is in ‘business process outsourcing’ and private equity – who was once head of the DfE’s Academies Board.

Lord Nash is a former chairman of the British Venture Capital Association, and a co-founder of Sovereign Capital, a private equity firm with interests in education and healthcare. He was chairman of the private health and social care provider Care UK until 2010, when he joined the ‘red team’ of bankers and financiers helping Osborne to ‘think innovatively about the options for reducing public expenditure’, before moving on to the DfE’s board of non-executive directors (Agnew joined the board at the same time). Ennobled in 2013, Nash stepped down as chairman of Sovereign Capital and became a minister. He and his wife are substantial donors to the Conservatives, having given the party almost £300,000 between 2006 and 2013.

In 2002, Sovereign Capital acquired the Alpha Plus Group, ‘one of the UK’s most prestigious private education providers’. Over five years – the typical investment period of a private equity firm – they ‘increased pupil numbers by 44 per cent … and expanded pupil capacity by 1100 places’. Alpha Plus was sold to Delancey Real Estate Asset Management, in a deal reportedly worth around £120 million. In 2008, Sovereign bought the World Class Learning Group, which runs international schools. In 2013, after ‘strong organic and acquisitive growth’, the WCL Group was sold to Nord Anglia Education (‘the exit returns a multiple of 5.3x money invested’).

Sovereign is currently investing in Paragon, a work-based training provider which will receive more than £17 million from the government’s Skills Funding Agency this year, and the Astrum Education Group, which runs a number of private sixth form colleges and has ‘many opportunities for growth’. As Michael Needley, the leader of Sovereign’s education team, apparently told an audience of investors last year, education is a ‘tremendous sector’ for high-return investment firms. ‘Let's all go forth,’ he said. ‘Let’s all make hay.’

Read more in the London Review of Books

 Jenny Turner: School Privatisation · 7 May 2015

 Dawn Foster: Free Schools · 7 May 2015

 Thomas Jones: In the Classroom · 28 November 2002


  • 26 March 2016 at 8:30am
    cufflink says:
    This legislation will be as far reaching in terms of social structure as the 18th century Enclosure Acts; therefore it is imperative that it should be shaped democratically as the 'Disclosure Acts'. Parents and Public must know everything and be informed in a proper fashion and be supported by an Inspection Regime that applies scrupulous scrutiny not merely to performance but more importantly to the wider social impact as between schools.
    We cannot afford or countenance a further dose of PPI which will only embed Education in the mire of debt.
    Capitalism - and this is what is operating here, tends and wishes toward monopoly and by this our schools will be just so many Starbucks.
    Business management has only an advising role to play in education for Education is a Profession encompassing all the very best of social virtue in active meaning.
    Community is everything, and competition is the catalyst for division if taken too far.
    I am not a teacher but respect that profession as fundamental to the ethic of decency and fairplay in our lives. Three cheers for Mr Chips!

  • 26 March 2016 at 10:09am
    farthington says:
    In short, a catastrophe.
    The pace of this debasement is staggering.
    And are these experts in 'the filty lucre' happy to have their own children schooled in these shithouse conditions, or will they be sending them abroad or hiring private tutors?

  • 29 March 2016 at 6:58am
    Graucho says:
    I recall a speech where Mr. Cameron said he wanted the Conservatives to be the party of the "Go getters". Did people not realise it was us they wanted to get ?

  • 29 March 2016 at 5:25pm
    RosieBrock says:
    Fantastically informed piece - and hope you are commissioned to write a piece for the LRB magazine to include these and other facts and get them to a wider readership.. Complete outrage that public money which should be for kids education is being put into the back pockets of 'friends' of the Conservative Party as education becomes privatised. The opportunity for corruption is already great - and most recently where a Trust Superhead at Beechey was it,paid themselves £160K over 2 years from an intermediary company which had been commissioned by his Academy and paid £millions to provide 'services' -needless to say the £160K was not declared and was on top of his annual salary of £120K which he considered not high enough Department for Education claimed it was discovered because of robust governance procedures. Nonsense. It was a whistleblower who blew the gaffe. I await the moment in the future when the Sec of State signs off the sale of school assets from an Academy chain, particularly land, to bolster shareholder profit -as so many schools are potential cash cows for asset strippers. I know the NUT is fighting hard against. I hope Momentum will choose this issue as one of the three main priorities for campaigning nationally. They have asked and I have proposed it in Hastings where Ark is doing its damndest to narrow the future prospects of our children. I am a teacher's wife. Interesting situation in Kent where Conservative KCC and Medway are taking a stance against Academies. Of course, KCC supports selection and is the only county left that has selective Grammars. One of the few Comps in Kent, with 2400 students, Homewood, became an Academy (not yet within a chain) two years ago.

  • 29 March 2016 at 8:45pm
    John Cowan says:
    "Running a school is in many ways like running a prison, so we need more prisoners coming forward to become governors." White-collar crooks on parole would doubtless be a good choice, except that they don't want the job (and with the rise of impunity, there aren't enough to go around), so the schools will have to struggle along with the same crooks and dimwits as everyone else.

  • 29 March 2016 at 10:31pm
    Simon Bradley says:
    Worth remembering too that the Education Secretary, Nicky Morgan, worked as a mergers and acquisitions solicitor before entering Parliament. Ideal experience for pressing forward with the monetising and privatization of English education.

  • 29 March 2016 at 11:13pm
    Neil Foxlee says:
    An addition to this devastating piece, which makes me so helpless with rage that I'm going to have difficulty sleeping tonight.

    Perhaps the Tories' favourite example of a Multi-Academy Trust is the Harris Federation, named after the multi-millionaire Lord Harris, which runs 37 academies in London.

    Quote: “Chair Lord Phillip Harris of Peckham is a Conservative Peer and has donated a little over £2 million to the Tory party through his personal and business interests. This includes £50,000 to Boris Johnson, £120,000 to George Osborne, £145,000 to David Cameron to assist his Tory leadership election campaign.

    "Lord Harris gave David Cameron silver goblets for Xmas as well as a £3,500 hamper. Lord Harris is understood to be Cameron’s most influential backer and to have persuaded him to stand for leader of the Tory Party. At one point Harris was considered a possible treasurer of the Tory Party.

    "Chief Executive Officer Daniel Moynihan spoke at the Tory conference in 2010 and was asked to sit on a ministerial advisory group on the role of local authorities in education." (End quote)

    Moynihan’s current salary is c. £400,000.

    More at - from 2012, but obviously still very relevant, as is the website.

  • 30 March 2016 at 1:11pm
    davidnoelgardner says:
    Someone in England voted for this lot.
    All children entirely in the hands of private enterprise like mice fed into the profits lab.
    In this Orwellian nightmare private business profits will design and control all exams and testings, learning standards, text books, reading materials, indoctrination of children by stealth or otherwise will be in their hands from top to the very core of the minds of the nation's children who are the unfortunate majority outside the 1% who can afford to go to the established educational trusts, the public schools, where education rather than expediaency and fast track profits are what are in place.

  • 30 March 2016 at 6:35pm
    paul georghiades says:
    This lot are far too clever for the likes of us. Or rather, they have the Maximiser and we have not. Many of us are too busy trying to keep the food on the table and the mortgage paid to really take them on. We need some Converter of rage into action that applies wit, elegance and intelligence to the business of ridiculing their lies and demonstrating just how comprehensively the population is the slop in the trough of their feeding frenzy.Figuring this out would be better than the Radio 4 April Fools' Day Ideas game.

  • 31 March 2016 at 9:11am
    davidnoelgardner says:
    Britain needs an FDR to reconstruct.
    FDR had the guts and the force of vision and courage.
    He had the immense courage and conviction to take on the massive battles with the US Supreme Court and the Congress fought against all his visionary New Deal vision.
    FDR reconstructed the USA after the Wall Street crash of the 1930s and that is yet to save us after the crash of 2008.
    We are still ruled by the same people and forces that brought about the crash of 2008.
    Another crash therefore can be only inevitable.

  • 1 April 2016 at 5:11pm
    tony simpson says:
    16,000 more company schools should generate plenty of subscriptions for the Independent Academies Association, cited here. Curiously, however, it dissolved itself in July 2015. Why? The documentation online at Companies House makes interesting reading and is freely accessible. Hundreds of company schools had signed up. The IAA operated for a number of years from the same address as the Djanogly Academy in Nottingham. This started life as a city technology college in the 1980s under Mrs Thatcher, and was never part of the local authority. It has been failing children for decades. The key change for company schools (aka 'academies') is in acquiring legal status as a company limited by guarantee, usually owning the buildings, fixtures and fittings, equipment and other assets. Land may be more problematical, with the company school often paying a peppercorn rent to the local authority on an extended lease. As a legal entity, the company school can be sued. Legal fees, as well as accountancy fees, are rising substantially for company schools, not least because of nefarious conduct on the part of some so-called 'leaders'. Paying governors may prove a very slippery slope. What an example to set the coming generation.

  • 4 April 2016 at 8:08am
    davidnoelgardner says:
    The tragedy of privatization of schools,see, Sweden's fall.

    OECD, 04/05/2015
    Improving Schools in Sweden: An OECD Perspective says that the country’s performance in the OECD’s PISA survey has declined over the past decade from around average to significantly below average. No other country taking part in PISA has seen a steeper fall. In the most recent test in 2012, Sweden ranked 28 among the 34 OECD countries in mathematics, 27 in reading and 27 in science.

    "Reforms that came into force in 1994 allow pretty much anyone who satisfies basic standards to open a new school and take in children at the state's expense. The local municipality must pay the school what it would have spent educating each child itself—a sum of SKr48,000-70,000 ($8,000-12,000) a year, depending on the child's age and the school's location. Children must be admitted on a first-come, first-served basis—there must be no religious requirements or entrance exams. Nothing extra can be charged for, but making a profit is fine." The Economist, 12 juni 2008.

  • 5 April 2016 at 11:35am
    joeduggan says:
    Thank you for this brilliant article - why isn't this being sung from the rooftops ? I've referenced it and highlighted more about the makeup of Centre Forum here

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