Flow of Ideas

Learning Investments: New Private Schools and New Labour Dilemmas on Educational Services Exports

Glenn Rikowski, London, 14th June 2007


In the 1990s, there was a fad in liberal educational research circles for stamping ‘learning’ on everything: the learning society, the learning city, the learning school, the learning company, the learning college, the learning dog kennel - and so on. Recent developments suggest a new concept of this sort: learning investments. On the basis of a recent report by Jon Boone (2007), there looks to be a new phase of building private schools in London, which may well spread to other areas. This article explores what this has to do with New Labour policy on the export of educational services in the UK.

Educational Services Exports

Of the £10,264.3 million of education and training exports generate by the UK in 2001-02 (Johnes, 2004), the schools sector played a minor role. It was higher education fees for overseas students which was the really big earner. Independent primary and secondary schools brought in only £217.8million.

New Labour, with the Department of Education and Skills (DfES) and Department of Trade and Industry (DTI) have aimed to boost the contribution of the independent schools sector to educational services exports for some time. The UK schools sector is viewed as an area for significant expansion regarding services exports by New Labour. Various initiatives through the DTI and the British Council and associated organisations have come and gone, but progress has been slow.

This has partly been due to uncertainty in the independent schools sector. First, the Charities Act of 2006 made it clear to the private schools that they had to demonstrate community benefit in order to keep their charitable status. Loss of charitable status would add significantly to the costs of running private schools as their tax breaks would be terminated. Some leading Labour MPs were calling for terminating the charitable status of private schools – but then, Labour has promised such for many years. Secondly, an investigation into fee-fixing by leading private schools, conducted by the Office of Fair Trading, rocked the independent sector (see Rikowski and Sissons, 2006). Interestingly, this exercise was aimed not at fixing fees at a rate higher than Smithian free competition dictated, but lower – as there was a perceived crisis in the market, with demand slowing. Thus, it was not parents that were getting ripped off by this practice but the smaller and less famous private schools lower down the pecking order who were being squeezed by market leaders. Finally, the depredations of the for-profit sector, in particular Cognita and GEMS, were making some private operators uneasy about the prospect of takeover and buyout on the one hand, and relatively low-cost competition on the other.

Meanwhile, the for-profit operators were seeking not just to buy up existing schools, but also to start up new ones, especially in urban areas, and particularly in London. Planning permission and unsympathetic local authorities (sometimes viewed as being ideologically opposed to such schools, and anyhow with no remit to aid them expand their operations, yet) were viewed as obstacles to this. But New Labour wanted to expand the for-profit sector as these schools would bring in more overseas school students. It might also put pressure on the old private schools (Eton, Harrow etc.) to voluntarily drop their charitable status and transform themselves into international ‘brands’ with franchising operations and suchlike (a road they seemed reluctant to go down).

The Ballymore Experiment

The ‘Ballymore Experiment’ is one way of trying to break the deadlock: to open up new, medium-to-high-cost (£4,000 per term) schools in urban areas thereby, stimulating expansion of the for-profit sector and increasing competition for traditional private schools. Ballymore is a property development company owned by Sean Mulryan (see Ballymore, und.) which wants to develop a primary school on the Leamouth Peninsula in London’s Docklands. It has been noted that:

“Mulryan has significant landholdings in the area [east London], and backed the Olympics bid in the hope that it would boost the value of his developments” (London Olympics 2012, 2007).

Mulryan is also busy winning over the hearts and minds of teachers and children in east London by offering them free sessions at the London Museum (Museum of London, 2007). The significance of Ballymore’s school is that it is:

“The first private school to be purpose-built in London for generations [and] has attracted 29 would-be operators in a sign of the growing appeal for investors of the for-profit- education sector. Entrepreneurs, international school groups and private equity-backed education companies are among those to have joined the rush to manage the new institution in Docklands, catering for three to 11-year olds. The scheme offers a potential solution to the twin problems that have bedevilled would-be entrants to the private schools market – the cost of land in the capital and the difficulty of securing planning permission in residential areas” (Boone, 2007).

Ballymore noted the “unprecedented level of interest” regarding companies wanting to manage the school. The Cognita Group is one of the 29 educational management organisations seeking to gain the contract. Given this, Ballymore has said that:

“… it would also look at building schools, including secondaries, in developments on the Isle of Dogs, Royal Docks, City fringes and Bishopsgate [all in London]” (Boone, 2007).

In addition, Rob Roy, of MTM Consulting, a company that helped Ballymore establish the development, argued that this kind of school was ripe for other towns and cities in the UK (Boone, 2007). Mark Skelton, of World Class Learning Schools (which runs 28 branches in various countries) noted that:

“… the building of new schools as part of urban redevelopment projects could be key to allowing more for-profit groups to enter a market that is dominated by long-established charitable schools” (Ibid.).

This last point is the key: New Labour wants to wean the ‘great public schools’ off charitable status, but in a way which forces them to become international megastars; top-notch brands in the educational firmament that brings significant export earnings to the UK.

The Long Term

Thus far, the old established private schools with charitable status do not seem inclined to come off the drip, drip of public funds via tax breaks which they receive for such status. New Labour’s schemes for getting them to collaborate with state schools in order to prove their public benefit are irritating but insufficient to move them towards full independence and for-profit status. However, developments in the for-profit sector such as Ballymore’s may force their hand. The expansion of the for-profit sector would no doubt have long term consequences for state schools; all that capital, land and expertise would seem to be denied to them. The Jurassic Shift towards the business takeover of schools would gain new tentacles.


Ballymore (und.) Ballymore: Transforming urban skylines – the Ballymore web site, at: http://www.ballymore.co.uk/site/ba_frameset.php

Boone, J. (2007) Clamour to manage pioneering school, Financial Times, 9/10th June, p. 3, online at: http://www.ft.com/cms/s/3d2044f8-1626-11dc-a7ce-000b5df10621.html

Johnes, G. (2004) The Global Value of Education and Training Exports to the UK Economy, Lancaster University Management School, April.

London Olympics 2012 (2007) Ballymore gets green light for three London developments, 20th May, online at: http://www.londonolympics2012.com/default.aspx?atk=475

Museum of London (2007) Newham schools go free at Museum in Docklands, Museum of London: Teachers Network E-newsletter, Issue 9 (summer term 2007): http://newsweaver.co.uk/teachersnetwork/e_article000763464.cfm?x=b11,0,w

Rikowski, G. & Sissons, P. (2006) Transcript of Glenn Rikowski interview with Peter Sissons about Independent Schools Fixing their Fees. BBC News 24, Saturday, 25th February 2006, London, Shepherd’s Bush. Online at: http://www.flowideas.co.uk/?page=perform&sub=TV%20Programme%20Transcriptions

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