Start small, think big
Private provider wants to run 2,000 schools, with John Lewis-style bonuses for staff
An education group established by two City financiers has unveiled the most ambitious plans yet of the academies programme - with the extraordinary target of running more than 2,000 schools and introducing annual John Lewis-style bonuses for all staff.
Clarendon Academies, which counts Martin Stephen, the former high master of St Paul’s, as chair of its advisory board, wants a far bigger share of the market than existing sponsors, which typically operate up to 20 schools.
By running at least 10 per cent of state schools, Clarendon, which has held lengthy discussions with the Department for Education (DfE), believes it would generate financial surpluses that would be ploughed back into education and teachers’ pay. Longer term, the set-up also allows those behind the project to receive bonuses if educational standards improve.
The plan raises key questions about the role of chains and the profit motive for teachers and for the companies bidding to run schools.
Clarendon has laid out its strategy as ministers focus on academy conversion for significant numbers of primaries that are considered to be underperforming. The first 100 such conversions were confirmed by the government this week.
Under the proposals, all of Clarendon’s schools would be modelled on the John Lewis Partnership, with staff considered part-owners of the business and taking an equal share of surplus cash that might be generated by efficiently running large numbers of schools.
While the group accepts that it would have to start small, its plan is predicated on rapid expansion. “The next evolutionary leap forward in the academies programme is to deliver tremendous economies of scale and deliver something that is much more efficient,” said Dr Stephen. “All the modelling that we have done shows that size is key.”
Clarendon would, in time, expect to pay staff up to 14 per cent of their salary as a bonus each year. By offering higher pay and making teachers partners, the chain believes that staff would have greater commitment to seeing schools succeed.
The plans, developed over the past four years, follow a report by the Policy Exchange thinktank last month, which also supported a John Lewis model for schools.
The thinktank, which has close links to the Conservative Party, and Clarendon are advocating a similar arrangement, which would see half of surpluses going in staff bonuses, with the other half reinvested in education.
The two men behind Clarendon, Nigel a Brassard, an investment banker, and Edwin Richards, a private equity expert, insist that their motivation is to improve educational standards, not turn a profit. However, the model they are promoting pushes the boundaries of the current ban on schools being run to make money.
Previously, councils or school sponsors have chosen to outsource the management of schools to private providers, which they are free to choose. Under Clarendon’s model, a business will be established to provide educational services, including all teaching staff. An independent charitable trust will be separately set up to sponsor academies, but it has already been agreed that the sponsor will buy its services from the business.
The group will also bid to run state schools still under local authority control or academies that have other sponsors but decide they need extra support. Clarendon has not yet identified the first school it wants to sponsor, but expects to make its first official bid to the DfE within the next few months.
Mr a Brassard said that the issue of profit was “irrelevant” to Clarendon and that there would be no “seepage” of money into the hands of shareholders. But longer term, their plans include performance bonuses to the directors if educational results improve.
“If there’s a return for me, it will be highly linked to performance and would be because of a step-change in education in this country,” said Mr a Brassard. The group’s plan is to take the best aspects of private and state education and combine them in a “scalable” model.
But Russell Hobby, general secretary of heads’ union the NAHT, said that any organisation would struggle to deliver quality education on the scale proposed.
“The existing chains are finding it very hard to grow by a dozen schools as they realise that running schools is much more difficult than it might look,” he said. “This feels like a vanity project or a business proposition, not a vision for education.”
Mary Bousted, general secretary of education union the ATL, said the idea of any group running 2,000 schools was “utterly horrifying” and would skew the education system. “There is also no evidence that teachers want to be shareholders in schools,” she said. “They are public servants and are motivated by that ethos.”
A total of 60 per cent of sponsored academies are or soon will be in chains of three or more, and a quarter of the 1,775 schools applying to convert to academy status are doing so as part of a chain, according to research published this week.
Three per cent of all schools and academies, rising to almost 10 per cent of secondary schools, will soon be part of a chain, the study for the National College for School Leadership says.
Researchers found that the expansion is being driven by schools - or other educational establishments such as colleges - sponsoring other schools.
Original headline: The financiers who want to run 2,000 state schools – with bonuses