Flow of Ideas

The Confederation of British Industry and the Business Takeover of Schools

A paper produced for The Flow of Ideas, 3rd June 2007

Glenn Rikowski, London


The new service delivery model advocated by the Confederation of British Industry (CBI) implies that the business takeover of schools is speeded up and becomes a more general phenomenon. The business takeover of schools involves companies running schools, education services in schools, various layers of school management or allied schools services (e.g. school improvement, and equal opportunities) on a contract with the aim of making a profit [1]. The CBI is worried about what Gordon Brown might do regarding the continuation of neoliberal policies in education and other public services, though I suspect that this is undue concern. What is this ‘new model’ of public service provision the CBI has in view?

The CBI Vision for Public Services

Certainly, the CBI appreciated the direction the Blair regime took public services in the UK. Richard Lambert, CBI Director-General, noted recently that:

“Before he became Prime Minister, Tony Blair used to say that although he didn’t expect business to love a Labour Government, has was determined that the relationship should not be one of fear and loathing – as had been the case in the 1980s and early 1990s. He has succeeded in this goal, and moved the party firmly away from the wealth destroying policies of the past. More broadly, he has started a process of badly needed reforms in the public services, but it’s been a case of too little, too late. As a result, business people feel that much of the massive increase in public spending over recent years has been wasted” (in CBI 2007a).

So basically: ‘could do better’, for Blair on public services, which translates mainly into ‘could do more and could do faster’. This assessment on the Blair record for public services came a few days after the CBI published its ‘Five-Point Plan for Radical Transformation of Public Services’ (CBI, 2007b). It is the first two reforms that suggested reforms that are most significant in terms of the discussion here. These are:

* The government should turn from being a provider of public services to a commissioner, and

* More competition and markets should be introduced into service provision (CBI, 2007b, p.1).

The implications for schools are that business play a greater role as providers of educational services in schools within a system where competition and markets predominate. The role of Local Authorities (LAs) would be to commission these services: run competitive tendering processes, assess the quality of bids, make decisions on these and negotiate contracts. LAs would have a role in monitoring the performance of businesses running schools services (terminating contracts where performance fell short), providing information to bidders and ensuring a ‘level playing field’ in the bidding competition, and providing data to public to hit the community accountability agenda also advocated by the CBI (in 2007c). The legislative framework for this would need to be developed, but the outcome would be that companies would play an increased role in running schools for profit. The CBI also sees a more significant role for voluntary organisation (charities, foundations) and also social enterprises too. The CBI model of public service delivery is summarised thus:

“Under this model, the government is responsible for defining [outcomes], commissioning and funding core public services, overseeing the balance of spending, assessing needs and monitoring the quality of delivery” (CBI, 2007c, p.34).

That LAs would have little or no role in running schools directly is precluded on the basis of the following principle enunciated by the CBI:

“In the creation of public service markets, government must draw a clear distinction between commissioning and providing services” (CBI, 2007c, p.35).

Hence, in situations where LAs were still running schools this distinction would be compromised. The CBI fear that where LAs are providers as well as commissioners of educational services and other public services then the temptation to rig the game and award contracts to their own providers might prevail. This is rich given that capital spending bids are typically assessed on foundations that favour Private Finance Initiative (PFI) proposals (see Whitfield, 2006). The CBI argues that the government ‘must develop a policy framework to ensure a level playing field and fair procurement process’ (CBI, 2007c, p.35). This should extend to ‘back office services’ which should be taken out of expensive city centre sites. Indeed, there is no reason why these may be ‘even in the UK at all’ (Ibid.). The spectre of LA administrative services being overseas (as with many Internet service providers) hardly sits well with the CBI’s pledge to ensure that local services become more responsive to local citizens (see CBI, 2007, pp.34-35). The CBI is obsessed to ensuring that private sector bidders are treated fairly:

“To often, the way a market is structured means providers from the public sector compete with an unfair advantage over their private and voluntary sector competitors; but sometimes the situation is also reversed” (CBI, 2007d, p.1).

The CBI could had added ‘especially in regard to the PFI’ to this last point, which it wants to see expanded substantially, and where private operators have a built-in advantage in the bidding process (Whitfield, 2006).

Shape-Shifters and Place-Shapers

The CBI has developed a philosophy of “place-shaping” for LAs. According to Neil Bentley, CBI Director of Public Services, there are ‘four key things which are central’ to this place-shaping philosophy which it wants the government to foist on LAs. These are:

1. A readiness to accept a role as service commissioners
2. Commitment to stimulating local markets
3. A willingness to embrace new ways of working, and
4. Recognition of the need to develop the skills and capabilities required to manage contracts (Bentley, 2007, p.4).

Bentley goes on to give examples where LAs are actually adhering to elements of this philosophy. In an earlier speech, Richard Lambert pointed towards some of the perceived obstacles to LAs embracing this kind of philosophy:

“Opponents of reform still man the barricades against the march of progress. Populist claims can still strike a chord, and the reputation of business often suffers when it does something as apparently unforgivable as making a profit” (Lambert, 2007, p.5).

He went to note the public distaste for profit; not surprising with some banks posting record profits whilst running down core services and with interest rates rising. Lambert also bemoaned the effects of ‘high-profile business failures’ too on the public perception of business, not naming Enron, of course. But he switches from this moaning and griping to the following rallying cry: “We must resist those who claim that the profit motive and public services do not mix” (Lambert, 2007, p.5). As unpaid labour, profit mixes very well with the interests of capital indeed – especially in public services in the process of capitalisation – and if state revenue can be transformed into profit, then all the better for our idealists of the rip-off. John Cridland, CBI Deputy Director-General, even had the gall to argue that the CBI’s new model for services delivery could have positive consequences for social justice (2007, p.5) – without providing any evidence for this.

It Really Does Work for Schools?

In a speech to a Barnardo’s Conference last December, Neil Bentley argued that there was evidence that the CBI’s developing model of services delivery could work for schools. He noted that:

“The 1998 Education Act gave government the power to intervene in failing LEAs. As a result, nine interventions were made [2]. In these outsourced LEAs, improvements have been impressive: the pass rate for five GCSE’s as grades A*-C has risen at three times the national average since 2000” (Bentley, 2006, p.6).

The implication is clear in the light of the CBI’s new model of services delivery and its “place-shaping” philosophy: outsourcing schools and educational services works [3]. From the CBI perspective, Gordon Brown’s new government will need to respond to this message on its business agenda for schools. My guess is that he and his government will so respond, but not at the pace the CBI and education business hopes for.

[1] For more clarification regarding what I mean by the ‘business takeover of schools’ see Rikowski (2006).
[2] The running of nine LEAs which were contacted out to an array of for-profit providers.
[3] The CBI published a report in early 2005 (CBI, 2005) that apparently indicated that the nine outsourced LEAs were doing better than the national average. However, Farnsworth’s (2006) groundbreaking research on the results on the nine outsourced LEAs throws doubt on the CBI’s hyped claims regarding their success.


Bentley. N. (2006) The Role of the Private Sector in Children’s Services, Speech by Neil Bentley, Director of the CBI Public Services Directorate, to the Barnardo’s Conference, ‘Commissioning Children’s Services, Moving Forward’, 14th December, online at:

Bentley, N. (2007) Improving Public Services: Commissioning from a range of service providers to meet the place-shaping agenda, Speech to the ‘Local Government Chronicle – Implementing the Lyons Inquiry’ Conference by Neil Bentley, Confederation of British Industry Director of Public Services, 16th May, online at:

CBI (2005) The Business of Education Improvement, London: Confederation of British Industry.

CBI (2007a) Tony Blair Won Business Trust as Prime Minister, but Public Service Reform is Too Little, Too Late, News Release, Confederation of British Industry, 10th May, online at:

CBI (2007b) CBI Publishes Five-Point Plan for Radical Transformation of Public Services, News Release, Confederation of British Industry, online at:

CBI (2007c) The 2007 Comprehensive Spending Review, A submission by the Confederation of British Industry, May, London: CBI.

CBI (2007d) Competitive neutrality in public services markets, Confederation of British Industry Business Summaries, 29th May, online at:

Cridland, J. (2007) Next steps: priorities for improving public services, a speech by John Cridland, Confederation of British Industry Deputy Director-General, CBI Public Services Forum, 16th May, online at:

Farnsworth, K, (2006) Business in education: a reassessment of the contribution of outsourcing to LEA performance, Journal of Education Policy, Vol.21 No.4, pp.485-496.

Lambert, R. (2007) Efficiency, Innovation and Public Service Delivery, Speech by Richard Lambert, Confederation of British Industry Director-General, to the CBI Public Services Summit, 24th January, online:

Rikowski, G. (2006) Rikowski, G. (2006) On the Capitalisation of Schools in England, Education Studies, School of Education, University of Northampton, 1st November:

Whitfield, D. (2006) New Labour’s Attack on Public Services, Nottingham: Spokesman Books.

© Copyright, Flow of Ideas, Ruth Rikowski and Glenn Rikowski. Website by [whiteLayer]
Call for Authors
Printer Friendly
Order by DateAlphabetical[Close menu]