From January​ , there will be a new chief inspector of schools: Amanda Spielman, the secretary of state’s choice, whose appointment was confirmed in the face of fierce opposition from the Education Select Committee. Spielman has never been a teacher; her background is in corporate finance and management consultancy. More recently, she was on the original management team of Ark Schools, the UK educational arm of Ark (Absolute Return for Kids), an international children’s charity set up in 2002 by a group of hedge fund bosses.

Ark Schools now runs 34 academies in London, Birmingham, Hastings and Portsmouth. Of the eight members of the board – which oversees the governors of all 34 schools – five are hedge fund managers. None has any background in education. The chair, Paul Marshall, is the co-founder of Marshall Wace Asset Management Ltd, originally domiciled in the Cayman Islands until, in response to an EU directive, the bulk of the fund was moved to Ireland; the firm was briefly in the public eye in 2008 as one of the hedge funds blamed for short-selling bank shares during the financial crisis. A previous chair, Lord Fink, was once a treasurer of the Conservative Party, and is reportedly among the party’s top twenty donors, having given more than £3 million.

These people prefer not to make too much of a brouhaha about their money or their influence. Ark’s annual fundraising gala dinner, described by the Telegraph as ‘one of the most ostentatious shows of wealth in London’s social calendar’, was quietly dropped in 2013. Nonetheless, members of the network do occasionally find themselves in the spotlight. Last year, Lord Fink threatened to sue Ed Miliband in a row over tax avoidance, before admitting to the use of some ‘vanilla’ measures. After all, as he told the Evening Standard, ‘everyone does tax avoidance at some level.’

At a time when the freezing of the education budget has left ordinary schools facing their largest ever funding cut – around 8 per cent – Ark academies are protected by the largesse of their sponsors. A report by Schools Week claims that Ark Schools received £3.6 million of private funds last year – nearly £106,000 for each school in the chain. In the world of ‘venture philanthropy’, there’s nothing wrong with using profits generated offshore – most London hedge funds aren’t domiciled in the UK – to back a privately controlled chain of academies, whose exam results are then held up as an example to struggling local authority schools.

Paul Marshall’s hedge fund has a diverse portfolio – pharmaceuticals, IT, healthcare, retail – but education is a significant part of it. Marshall Wace currently has positions in Pearson PLC and the Scholastic Corporation, and last year it formed a ‘long-term partnership’ with the American private equity firm KKR, which is heavily involved at the cutting edge of the education business. KKR has big stakes in Cognita, a chain of private schools, and Laureate Education, which runs more than eighty for-profit colleges around the world. It also invests in Tarena International, ‘an innovative education platform combining live-distance instruction, classroom-based tutoring and online learning modules’ for students in China.

This sort of thing is known as ‘ed tech’. It’s an expanding market, worth up to $9 billion a year, where Silicon Valley startups – companies with names like Udacity and DreamBox, backed by angel investors and hedge funds – share the field with multinationals like Pearson. A lot of money can be made selling IT and software to schools, partly because the business of testing children is becoming increasingly automated. The UK’s latest test – the ‘multiplication tables check’ for 11-year-olds – is done entirely on-screen.

Another growth area is data management – or the computer-based processing of all those test results and school performance metrics. Systems like the one offered by the Boston-based Intellify Learning – ‘a state-of-the-art cloud-based platform that provides learning analytics and data management services’ – are an integral part of Ark’s ‘school improvement model’. The trust’s sponsor profile on the DfE website describes a ‘data-driven culture’, in which Ark’s ‘central team’ regularly receives ‘granular school performance information’ from the 34 academies. The information is analysed on Ark’s ‘data dashboards’, and used to ‘drive improvement’. This highly centralised structure, in which ‘decision-making processes’ are reduced to the analysis of purely quantitative data – predominantly test and exam results – is in no small part the creation of Amanda Spielman, graduate of KPMG and Nomura.

Ark is currently developing its own data management service. Called Assembly, it is ‘a secure cloud-based platform that connects existing school data systems’. (Ark knows the lingo.) The chain is also experimenting with automated teaching. Next year it will open a new school in Barnet, the Pioneer Academy. What the school will be pioneering is ‘blended learning’, which Ark defines as ‘the combination of traditional classroom-based teaching with online learning’. The new model has been piloted at Ark’s King Solomon Academy in the Borough of Westminster, and Ark staff have travelled to the US to visit the ‘reknowned [sic] Rocketship schools’.

Rocketship Education is a chain of charter schools – publicly funded but privately managed – in California, Wisconsin and Tennessee. Co-founded by a Silicon Valley entrepreneur in 2007, Rocketship targets the K-5 market – children aged five to ten – and has led the way in computer-based instruction with kindergartners. (You can see pictures of them on the internet, in their rows of candy-coloured cubicles, all diligently plugged into their glowing screens.) Ark expects that blended learning, which is often marketed as ‘personalised learning’, will ‘improve cost efficiency’. Rocketship has certainly achieved that: its former CEO, John Danner, boasted of 25 per cent savings in staffing costs.

There is one particular link worth noting between Ark Schools and these exciting developments in and around Silicon Valley. Ron Beller and Jennifer Moses, two former Goldman Sachs executives, have been closely associated with Ark since the beginning. They co-founded King Solomon Academy; Beller remains the chair of governors, and Moses, who sits on Ark’s global board, is vice-chair. King Solomon Academy opened in 2007. In early 2008, Beller’s hedge fund, Peloton Partners, collapsed, with the loss of some $17 billion in investments (the firm had been short-selling subprime mortgage-backed securities). The following year, Beller and Moses relocated to San Francisco, where they launched a new hedge fund – and, in 2012, Caliber Schools, ‘a new charter school organisation that will leverage technology in the classroom’. In the same year, they set up Ed-Mentor LLC, a venture capital firm specialising in exactly the sort of technology that the new schools are designed to ‘leverage’.

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